WE just took over a db plan and were told prior actuary "erred" by 17 years on a principal(retired) age

(the age was increased incorrectly by 17 years deflating the PVB dramatically.

It probably would have caused deficiencies in some years;and PBGC premiums are off also.

Should we go VCRP or just correct going fwd.

Plan will be terminating either as distress term or by owners waivibg benefits

ty

Plan currrently states 100% match up to 6% of comp; HCE's are limited to 7% deferrals. We have multiple people making over $245K. The max they could defer is $16,500 (assuming no catch-up); payroll is capping their match at $14,700, since the doc states cannot exceed 6% of comp & comp is limited each year. HCE's don't understand why they cannot get the full 100% match of 6% of their salary. Is there an easier way to explain this to them???

5-year Employment agreement, effective on June 30, provides for discretionary annual bonus payable within 2 months following end of an "agreement year" (i.e, after each subsequent June 30), if certain goals are met and if employee is employed on the date of payment. However, another section of the employment agreement provides that if there is a termination of service for any reason (including for cause), the employee will be entitled to a pro-rated bonus amount based on performance as of the termination date, payable within 30 days after the termination date.

This agreement doesn't even involve deferral elections, but it appears to me that it may involve 409A. Even though the first provision indicates that the payment is subject to a substantial risk of forfeiture until payment, and thus would be a short-term deferral, the second provision suggests the right to the bonus vests ratably over the agreement year (even though amount of the payment is not determinable). Assuming both employee and employer have a calendar year, some portion of the bonus will be paid later than the short-term deferral period, and therefore will be subject to 409A

If this payment is subject to 409A, is it noncompliant?

I posted this topic yesterday but for whatever reason it has disappeared.

An employer has a non-ERISA 403(b) plan. All they do is forward deferrals to various providers. We have a plan document ready, but can't get the existing providers to cooperate. They won't even respond to our attempts to contact them. I believe we can (or actually must) tell employees that we will not forward deferrals to any provider that does not agree to comply with the terms of the plan document. Can the employer seek out one provider to that agrees to comply with the plan without creating an ERISA plan? This appears to be permissible under FAB 2007-2 as long as the employees can transfer the existing contracts. Of course, we would permit the employees to locate new providers and would gladly forward deferrals as long as they agree to the terms of the document. Any input or advice would be greatly appreciated.

A new one man plan grants past service. The owner and only participant is in his 80's. He is vested in his benefit. Plan is effective 1/1/2007, so on 1/1/2007 the participant has an accrued benefit.

Since he was already past 70 1/2 on the plan's effective date, is his RBD 12/31/2007? or is it still 4/1/2008?

Thanks!

Hello out there! I'm currently looking for some ideas on software that I can buy to analyze 401K's for integrated testing and cross testing to optimize 401K benefits for owners. We want to act as our own TPA eventually.

The plan has been amended to allow for rollovers to an inherited IRA by a non-spouse per PPA. Do I now have to withhold the 20% federal tax if the beneficiary is not rolling the money over?

Can someone point me to the code section that says you are subject to a 6% excise tax for an ineligible rollover?

(Participant rolled entire 401k account before RMD was taken, and I need to show someone that there is an excise tax if the amount is not removed)

Thanks!

Sorry, I know this was discussed in Aug - Sept (http://benefitslink.com/boards/index.php?showtopic=39608&hl=excess+amounts) but I want to discuss a little further since I've now run into the same thing. Several participants have made deferrals that are under the 402(g) limit but greater then the 15% plan limit. None are eligible for CUC.

The previous discussion talked about retroactively amending the plan for the higher deferral % using VCP. But, if you do that, does it present you with an even greater compliance issue in relationship to those 300 other participants who were not given the opportunity to participate at a higher %? Under 2008-50, section 6.06, can the amount be refunded and treated as taxable in the year of distribution?

Thanks.

PAL

Can anyone name some court cases that have upheld sanctions for nonamenders who attribute the unamended status of their plan to the negligence of third party administrators? Please give tax court or other appropriate citation information.

We have a client who wants to know if an a newsletter highlighting certain plan provisions that is given out at enrollment and the SPD can cross reference one another and together constitute a SPD. Anyone familiar with this?

We have just taken over a plan and are unable to determine what their Trust ID was?

Since the Schedule P is no longer required, we cannot tell from the prior year's Form 5500.

The Schedule R reflects the ID number of the prior recordkeeper/broker that took care of distributions, tax withholdings and tax deposits.

The client is not sure of the Trust ID.

We looked in FreeErisa, but the older returns are archived.

Since we cannot confirm, would we creat a problem by applying for a new Trust ID?

If there is an old Trust ID out there, would it create a problem if a final was never filed for that Trust ID?

I would appreciate any guidance. thank You

I've heard someone talk about "dissolving" a Roth IRA. Any idea what they might be refering to? If it's all after tax money what affect, if any, would a dissolution have if no further contributions were going to be made?

Everything I read says the deadline for a calendar year DC plan to adopt 401(a)(9) was December 31, 2003. But -- I have an old DC amendment checklist that indicates January 31, 2004 was the deadline. It was sooooo long ago and I cannot recall why I have that alternative date. I cannot find it on CCH or in the ERISA Outline Book. Perhaps my younger pension self was led astray by some side comment. Does anyone remember this alternative deadline?

I was thinking of amending a client's plan to a cross-tested allocation for the plan year ending 12/31/08. To make this work, I would need to also amend the NRA from 55 to 65. Since the plan has last day accrual, I don't see an issue with changing the allocation method. Does anyone believe there would be an issue to change the NRA during before the end of the plan year? Thanks.

I have 3 individuals with an excess match for 2007- we match each weekly payroll and the payroll in which they got their bonus last Dec which brough tthem to their deferral max of 15500, gave them the match on whole pay for that week

1 person has 12 cents, another $8 and a third $1,000

All 3 are HCE

Can I just distribute the $1,000 nad treat the other 2 as < $50 deminimus rule under the ECPRC procedure

I esp do not want to forfeit 12 cents from our CFO's account<gr>

thanks

As of 1/1/08 we can bypass the traditional IRA when rolling over regular 401(k) money, and go straight to the Roth IRA. I can find nothing that designates how we report this on the 1099R when coming out of the 401(k). Can anyone confirm that it is simply reported as a code G rollover or tell me otherwise? Does the receiving custodian then have to report on Form 5498 the taxability of the incoming rollover?

I have a new participant -

I want to allow him to contribute 13,800 this year so he can take full advantage of the ER match. (He's over 70 so isn't really interested in making contributions for any other reason.)

He may have contributed under another plan earlier this year (I'm not sure) but I AM sure that he has received a full distribution of his account balance under the prior ER's 401(k) plan (which will be shown as income for tax purposes I assume).

What's the worst that could happen if I let him contribute the full 13,800 and he overcontributes for 2008?

I'm wondering if the under age 70 1/2 IRA rules apply to a person wanting to set up a SIMPLE IRA.

Can anyone shed any light on what Section 8.02 of Rev. Proc. 2007-71 means? I would like it to mean that a vendor does not need to make a good faith effort to bring a contract into the plan if the contract does not receive contributions after 1/1/09 and the participant severed from service before 1/1/09. The language is not all that clear, though, and this interpretation seems incongruous with the general intent of the regulations. Any thoughts would be much appreciated, as would insight as to what approach vendors are taking with regard to participants who sever before 1/1/09 and are part of a non-contributory contract.