I am the Alternate Payee and I was married to the Participant for 32 years (including 5 years after he retired) - at the time he retired he elected to receive a monthly benefit payment. Since then we went through a dissolution and our QDRO states that I receive 50% of his monthly benefit. During our marriage we had cashed in MY 401k, therefore when we split up, I asked for 1/2 of his pension and he agreed. I have since re-married and he just re-married a couple of weeks ago. He now wants me to give up my monthly benefit since I have a job and my husband has a job (he and his new wife have no jobs). I feel that during our marriage (when I was and still am employed the whole time) - it was OUR house, it was OUR 401k that we cashed in and used, and it was OUR 401k that I am now receiving monthly benefits from. I am not even considering "changing" our existing QDRO BUT I would like some advice on how to answer him without going into an all out war. I actually think the Participant was trying to change beneficiaries to his new wife for his pension. I wish I could have taken a lump sum but I had no choice since had already designated a monthly benefit payment at the time he retired.

Questions:

1. Can a QDRO be revised and how costly is that and would we have to hire lawyers?

2. The QDRO states in one section that "the amount awarded by the order shall be paid for the participant's lifetime until the earlier of: (i) the death of the participant, or (ii) the death of the alternate payee. The alternate payee shall have no rights in or to any amount of the participant's accrued benefit under the Plan not assigned by this order. It then goes on to say that "The alternate payee will be entitled to receive benefits following the death of the participant to the extent provided under the form of payment in which benefits are currently being paid to the participant." Are these survivorship rights?

3. Can he change beneficiary rights to this QDRO? I don't want to deny his new wife of anything that is rightfully hers BUT at the same time, I don't want to screw myself either.

Life situations can change in a heartbeat! Any advice would be appreciated.

Doctor owns 100% company - wife works there and gets W-2. Company gets taxed as a sole prop

The doctors gross comp gets reduced by 50% FICA and contribution.

Does the wifes comp get reduced also becuase of attribution? Even though she is not the owner - he is?

Thanks

From my reading of the EOB, I have come across a special rule for processing the ABT for coverage testing. Specifically, it states that if an employer maintains both a DC and a DB, then the ABPT can be calculated separately for both plans (with some caveats). Can someone clarify this rule? Is it as simple as assuming that the ptps in the DB plan only have a zero in the DC plan (for ABPT)? If they are in both plans, does this mean that the ABPT is calc’d solely on the figures in the DC plan? So, if I were to employ this rule for my DC plan, then I would not need any financial information from the DB plan provider, correct? All I would need would be a census listing with the indicative data (if the pops were different) or a count of those who were in the DB, (Not in DC), who met the elig requirements of the DC. Does this sound right?

Finally, if the plans needed to be tested together for the ABPT, is the calculation as simple as converting the DB EBAR to an allocation % and adding it to the alloc % of the DC? (Or converting the DC Alloc % to an EBAR and adding it to the EBAR of the DB plan?)

Any comments/help would be greatly appreciated.

I know a hardship should only be taken after all distributions and loans available to a person are taken.

However, I've read that a loan doesn't have to be taken if it creates additional hardship. Where is that stated in the regs or guidance?

And secondly, what if a loan wouldn't cause add'l hardship, but one is already taken, yet more is available. For example, a person took a $5,000 loan last year for 5 years. Now she wants a hardship. However, since the loan was taken, an additional $4,000 has been added to her account. Would she have to refinance the existing loan for an additional $2,000 before a hardship could be taken? Or does the existence of the first loan satisfy the provision that all distribs & loans must be taken before a hardship can be done?

Publicly traded ESOP plan provides for distributions to participants in the form of cash or stock. It has been interpreted to mean that a participant who has shares of stock in his or her account can sell the stock and receive cash from the trustee, which has happened. The sponsor wants to terminate the ESOP and require participants to take the shares of stock in their accounts in kind, and eliminate the cash option. Can this be done? The regs don't seem to permit exactly this but if anyone has a different opinion let me know.

Can the effective date of an EGTRRA amendment be "current date" (such as 11/26/08)?

Looking for sound advice for this situation.

TY 2006 made excess contributions to ROTH IRA, paid the 6% excise penalty upon income tax filing.

TY 2007 made excess contributions to Roth IRA, paid 6% excise on TY '06 excess contributions and 6% excise on '07 excess contributions upon income tax filing.

TY 2008 will make excess contributions to Roth IRA, will still have to pay 6% excise on '06 and '07 contributions, but due to market conditons, value of Roth has lost ~ 50%.

401(K) is fully funded, and excess contributions are due to exceeding MAGI limits for Roth eligibility.

The Roth IRA does predate 2006, however majority of contributions are '06 or later.

Do not want to really give up on the Roth, because of tax free earning potential, but the 6% excise adds up, especially when the underlying securities have declined so much in value.

What is the best option?

Now that PPA has new restrictions on payout for underfunded plans what happens to the old restriction rule on (lump sum) payout to any of Top 25 HCEs? Was that rule repealed by PPA? Since there is no such thing as current liability now, one can't compute the Assets/CL ratio anyway!

By the way, which Code section had the Top 25 HCEs rule?

Here is the situation:

A plan's 2008 AFTAP is 96%. but it's 2009 AFTAP will be well below 60% if the stock market stays at the current level - uge loss on assets. An HCE is terminating whose PVAB is $600k and represents 70% of the plan assets.

Under PPA, he can be paid out during 2008 but not under the old top 25 HCEs rule!

If an existing plan is adding a new EACA feature effective 1/1/2009, are you providing an "annual notice" to all "existing" eligible participants by 12/2/2008 for the 2009 plan year (like you would for an annual safe harbor notice) or does the annual notice for existing eligibles begin for the 2010 plan year.

For plans that added the feature as of 1/1/2008, we only gave a "pre-participation" notice to all eligible EEs who did not make an affirmative election to participate in the plan and newly eligibles. We are now giving the "annual notice" to all existing eligibles for the 2009 plan year. My gut tells me this was not correct. Thank goodness we are still under proposed regulations.

Thanks!

I hired in with a Construction company on 2/28/05 under the ESOP plan. Their plan year ends on March 31 of each year.

I was laid off the following year on 3/05/06 (one year and 5 days later) due to lack of work and then recalled back for work on 4/18/06 (5-6 weeks later). When I was rehired, I asked the Company Controller if all my seniority continues from my original employment and he confirmed that it would. As proof, I did not have to wait another year for my 401K, etc.

Now I am being told that I did not qualify to participate in the plan for the fiscal year from 3/31/06 thru 3/31/07 because I was not employed on 3/31/06 even though I worked well over 2,000 hours that year. Can they do that? I mean, just because I was not employed on 3/31/07, I don't qualify? Can anyone help me?

I think this topic has been covered here but I can't find the thread.

Rephrasing the regs:

Reg 1.430(d)-1(f)(4)(iii)(B) appears to state that to value the distributions subject to section 417(e)(3), change the mortality to the Applicable Mortality from the annuity starting date (and not the interest rates).

Reg 1.430(d)-1(f)(4)(iii)©. If the lump sum is greater of lump sums determined under the plan assumptions and S417(e(3) assumptions, then the present value must be adjusted if the PV of the distribution is greater than the value determined under 1.430(d)-1(f)(4)(iii)(B)!?

What on earth does this mean?

Does it mean, the PV of benefit for valuation purposes is:

(1) PV of monthly benefit using the approach in ....(iii)(B) plus

(2) Excess of the PV of lump sum over (1)?

I don't think this equals the PV of lump sum at age z using the valuation segment rates!

Couldn't one simply use the PV of lump sum which is likely to be greater than the value per the method in ....(iii)© as long as the 417(e)(3) rates remain below the valuation rates! Are they ever likely be higher than the val rates?

if existing simple ira;can sponsor establish in 2008 a db or a p/s?

We know you cant establish simple ira if you have anither plan;what about vice versa?

DB Plan was termianted, PBGC filing made and IRS favorable letter received. Client sent out distribution forms, and could not locate 4 former employees after appropriate due diligence (let's take that for a given at this point). Client sent PVABs of the 4 missing participants to the state under escheat statute. We are now completing PBGC Form 501. How much trouble will we get into with the PBGC when we answer the question about locating all participants "No" but we don't indicate that we are sending $$ to PBGC?

Looking for a provider (preferably a mutual fund family or discount broker) who offers a "prototype" SEP versus IRS Form 5305-SEP. Client also sponsors a 403(b) Plan, so cannot use IRS model form.

Thanks!

Say a plan sponsor implements a new DB and a new 401k PS plan.

Say the DB plan provides past service credit up to 5 years.

If the plan is tested for non discrimination testing on the accrued to date basis would the following make sense?

DC plan account balance is based on one year of service since it is th eplan's first year.

DB plan is based on service to date (up to 5 pre participation years as well).

Plans are cross tested on using accrual method.

This results in relatively low accrual rates from DB plan since the accrued benefit is spread over all years of past service and the accrual under DC plan is spread over only one year of service.

Thanks.

I received an e-mail from an AXA advisor who is trying to move some of a 1 man DB plan's assets into an annuity contract. I don't have a problem with the annuity being int he plan, but the Contract agreement has provisions that AXA is requiring the Actuary and the TPA to agree to by signing the contract.

My actuary has refused to sign the agreement, and I can understand why. I've never seen anything like this before, and I'm wondering if anyone else has ever seen anything like this before?

If the plan document has language in it referring to the "act" and the act is identified in the plan's definitions as ERISA, is the plan, by default, an ERISA plan?

This looks like a pre-approved Corbel volume submitter document without any changes to pre-approved language.

Does anyone self-administer their Section 125 flexible spending account? If so, do you use any special software; what about nondiscrimination testing and plan docs?

We have 117 employees, about 40 participate in this program. Thanks.

Under PPA

Assume new plan.

Say you have a beginning of year valuation (we'll use 1/1/08) and determine that the maximum deduction is 100,000 as of 1/1/08.

Can this figure be increased at the effective rate of interest until 12/31/08 as a maximum?

That is, if eff int rate is 6% could it be $106,000 for max deduction?

Other views?

Thanks.

Okay. Have a client who is reimbursing for medical insurance, co-pays and dependent day care from a basket of funds that consists of only employer money. No ee money involved. They set this up without any input from us -- their frame of reference was Pub 15-B.

Employees are NOT given cash for unused amounts, but those amounts can roll to the next year.

There is no "formal" document on this just a blurb in the benefit information that they give to new employees.

First of all, not quite sure how to handle the situation as a whole. Wouldn't the choice of medical costs vs daycare put me in a cafeteria type of document world with total EMPLOYER funding? Could I do an HRA in this type of situation (as opposed to an HSA -- which they don't want)?

Then, my original question before I started with the fact that Pub 15-B (on page 6 of the 2008 version) says that the exclusion from taxable income rule "applies to contributions you make to an accident of health plan for an employee.." It goes on to state that the exclusion "also applies to payments you directly or indirectly make to an employee under an accident or health plan for employees that are...[for] payments or reimbursements of medical expenses..." The next subheading states that "[t]he plan may be insured or noninsured and does not need to be in writing."

This is where I am getting hung up. Any help or comments would be appreciated?