existing 401k/ps plan(top heavy)with all people included

we want to install a new p/s plan(new comp);where partners and some rank and file are included.

new plan passes 410b on it's own;likewise 401a4.

we are being told 401k MUST provide thvy to non keys.

we argue plans are not aggregated so top heavy not issue in 401k unless keys defer in 401k;which they are not.

Please advise

ty

I have a new-comp plan (everyone in their own subgroup) with a SHNE. Doc says SHNE should be 'at least 3%'. There is one key/HCE and everyone else is NHCE. We calculated that to give the owner the max PS, we would need to give 1.42% PS to everyone else (plus the 3% SHNCE) which happens to be the minimum required for the MCG test (4.42%).

One of the NHCEs terminated before year-end and is not entitled to a PS per the Doc. Therefore, they would only get the 3% SHNE but everyone else would get the 3 + 1.42 = 4.42%. Can you guess my problem yet ?

The MCG fails because of this one person. She is included in the MCG because she is entitled to an SHNE but, because she is terminated, doesn't get a PS. What do I do?

I can make the SHNE 4.42% for everyone since the language says 'at least', right? The problem is that it makes that extra 4.42% 100% vested. Do you agree with that?

But, do you think I can give that one NHCE a 4.42% SHNE and everyone else gets the 3% SHNE and the 1.42% PS? That would mean a different SHNE for different people.

Thanks in advance for any advice.

I have a 401k that includes after tax contributions (post 1986). I am considering rolling the plan over to a traditional IRA. The plan adminstrator said I will receive a check for the after tax amount in the 401k.

Can I rollover the after tax amount contributions to an existing Roth IRA?

Thanks In Advance.

Pete

Back in 1998, my client, a small school district, permitted an insurance company to pitch its 403(b) product to employees, and a few signed up and began making elective deferrals. A handful of those employees continue to be employed, and continue to make the salary deferrals. However, the company has not asked for any additional meetings with employees since then, and no other vendors have approached the school to pitch their products. In other words, the only time 403(b) showed up on the school's radar was one day ten years ago.

The district would like to terminate the "plan," but I am concerned that because the school district did not proactively go out and seek vendors to provide annuities, it may be saddled with exhorbitant penalties or compliance expenses.

Any thoughts on an appropriate approach?

I am tasked with finding out if using employer stock as a funding vehicle for matching contributions is a common practice. I am in a corporation now after spending many years in partnerships. They had no stock so it was never an issue. Some higher-ups here want to use company stock instead of real money (cash) to make their matching contributions. Any opinions, experience, or advice is welcome!

Thank you!

Plan provides the standard SH match - 100% match on first 3% and 50% of next 2%. The plan currently has a discretionary match formula that has a last day and 1,000 hours requirement. The plan is top heavy.

The goal is to provide additional matching contributions and not blow the TH exemption or the ADP or ACP test exemptions.

It seems as if the plan could be amended before the end of the plan year to remove the allocation conditions for the discretionary match, to cap the discretionary match at 4% of pay and to only match deferrals up to 6% of pay. As far as I can tell, I just need to spell out the caps and not necessarily the formula. I plan on the discretionary match being 2/3 of first 6%. The end result between the SH match and the discretionary match would be 166 2/3% of the first 3% and 116 2/3 % of the next 2% and 66 2/3% of the next 1%.

Does anyone (Tom Poje) see a problem with this? This is not my forte.

Has anyone seen a plan that allows participants to make a new time and form of payment election for each year of deferrals? In other words, participant elects a lump sum for deferrals made in 2010 and then for 2011 elects installment payments. Assume the new elections are made prior to the year in question, at the same time as the deferral election.

I think this works as long as the election is made before any deferrals are made pursuant to that election. It would be an administrative nightmare, but seems permissible. Any thoughts or experience with this?

When ranking employees based on compensation, do you cap the compensation at the comp limit ($225,000 for 2007) or do you use actual compensation (i.e. use $310,000 if someone made that amount)? Thanks in advance.

Milliman's newly updated help site for small public employers that qualify to use the Alternative Measurement Method (AMM), known as the streamlined or simplified approach, to GASB Statements 43 & 45 is now available. The site includes a free tool on the site to learn if your public entity is eligible for the GASB 45 AMM (and to use Milliman GASBhelp™ tool).

The site also includes educational information about GASB Statements 43 & 45: articles, an online glossary, and FAQs that answers questions, such as:

* What does GASB 45 require employers to disclose on their financial statements?

* Do I have GASB 45 liability -- OPEB liability?

* What are potential consequences of not following GASB 45?

* Does GASB 45 require OPEB prefunding?

Visit the site at www.gasb45help.com »

Are HSA accounts similar to retirement accounts in that they are protected from creditors? What about a tax levy? Can you point me to something in the regs?

I'm working with a non-publicly traded ESOP with an 11/30 PYE. An employee who terminated in 2006, anticipating that the stock price will decline, finally sent in his distribution election form to rollover his stock & cash to an IRA. He also submitted a Put Option form to Put the stock back to the corporation in return for a 5-year note. He signed and dated the distribution form and Put Option form on 11/24/08.

As trustee and recordkeeper, we proceded to pull the stock from our vault to send it to the transfer agent and sent the IRA account opening paperwork to the participant.

The stock was reissued as of 11/28/08 to the IRA but didn't get back to me until Dec. 1st. I still have to send the stock along with the Put Option to the company after we determine whether or not the participant must sign the back of the certificate.

Here's my question...will his distribution and subsequent note payable from the company be at the 11/30/07 price, or the 11/30/08 price since we are now into a new plan year? Does the pricing hinge on the date of the Put Option or the date the stock is delivered to the company, the Put is accepted, and the note payable is prepared?

The plan document isn't specific to this situation coming up. The Put Option does specify that the stock will be valued as of the preceding year-end stock price.

Thanks

Participant turned 70 1/2 in 2007, so he must take his first distribution 4/1/2008. This is a db plan and we want to use the annual annuity method.

He has not yet taken his RMD, so now that we're late, how do we calculate his distribution?

Do we calculate the annuity payable on 4/1/2008 and then credit it with interest to the next distribution date? or should we just calculat the annuity payable now?

In a related question, if we pay out the annuity now, do subsequent payments occur on this distribution date, or is the next payment due 4/1/09 (since he should have taken the last payment on 4/1/08)?

Do terminated people with balances have to get the QDIA notice, too? Or just the people currently employed?

Participant who terminated in 2003 turned 70 1/2 in august, so this is her first year for an RMD. The plan has a 9/30 plan year end.

She elected to take an inservice w/d in May of about 2/3rds of her account balance. She was going to take the rest of her balance when the 9/30/08 valuation was completed.

I have worked on the trust accounting for the plan while waiting for the employer to confirm their P/S contribution for the PYE 9/30/08. the plan, like many, has suffered losses. As a result, this EE doesn't have the necessary funds left in her account to cover the RMD. What now?

We are running our network on citrix and have been unable to get the document registration serial number module to work. Is there anyone out there running on citrix who may be able to help?

Thank you!

I have a client with a 401k plan originally effective in 2001. Problem is they are a governmental entity and doesn't meet the requirements for a "grandfathered" governmental 401k plan. I have reviewed the correction procedure in the EPCRS and just want to confirm my understanding of it. It appears that the correction procedure under VCP is to cease all contributions and "distribute" the assets in the form of rollovers to the new plan (I am guessing a 457(b) plan). Is this correct? Has anyone else filed a VCP submssion for this type of failure? Thanks in advance for your comments.

I just wondered if you would be adding a forum for those studying for the ERPA exams. I'm not going to be taking them myself but I imagine there might be people interested.

Just a thought.

For eligible 457(b) plans for 501© non-profit organizations (not Governments), assuming no ER contributions.....

1. Are these plans exempt from Sec.409(A)?

2. Must the plan document specify what constitutes 'Substantial Risk of Forfeiture' once the EE separates from service, or do the assets simply sit in the account awaiting a request for distribution from the former EE?

3. Are account balances subject to Minimum Required Distributions at 70.5?

4. If so, can these MRD's be delayed while the EE or contractor continues to work for the ER?

5. May the plan allow for 'unforeseen' hardship in-service withdrawals?

6. If so, would there be a 10% premature withdrawal penalty if the EE is <59.5?

7. May the plan allow for loans?

Thanks

BruceM

If a plan has an AFTAP below 80% is there an exception to the benefit distribution restriction that allows the plan to automtically freeze and be able to make lump sum distributions? The AFTAP is above 60%.

Is there something online or perhaps a thread/post someone could link to here that provides a summary of rule changes for 2009?

Thanks