Hello All,

We are a closed mid-sized plan with a mainframe system to track pay, hours and purchased time. We are looking for a replacement. We have about 1400 active participants. Payroll function are handled on a separate system. Can anyone suggest names of firms to provide computer systems that, at a minimum, track pay, hours worked, purchased creditable service and basic demographics on plan participants?

Thanks in advance,

Jim

If a company is a non-ERISA Church plan that uses a Group Custodial Agreement in lieu of a plan document.

Can the company implement specific hardship provisions (e.g. using safe harbor reasons, requiring employees provide proof of need) without an amendment?

Let us assume that I have a 2009 quarterly contribution requirement of $200,000 per quarter. Let us also suppose that I have a 2008 remaining FSCOB of $800,000. Let us suppose that on 4/1/2009, the Plan Sponsor elects to use the FSCOB to satisfy the 2009 quarterly requirements.

Assume that our 2008 AFTAP was 95%, so on 4/1/2009 it goes to 85% which means no 436 restrictions. Then on 8/1/2009 we complete the 2009 valuation and determine that the AFTAP is 65%. However if we burn $400,000 of the 2008 FSCOB (which is mandatory) then this AFTAP would increase to exactly 80%. But, we have already elected to use the FSCOB to meet the 2009 quarterlies. What are our choices?

1. Too late to burn any FSCOB for AFTAP purposes, since all $800,000 are already "spoken for" due to our FSCOB election?

2. We burn the balance of the FSCOB remaining as of the date of AFTAP certification which would leave no further FSCOB remaining for the final 2 quarterlies of 2009 but would avoid any 436 benefit restrictions because we our AFTAP for 2009 would increase to 80%?

3. Anything else you can think of?

Can anyone name some tax court cases upholding the importance of an updated plan document? Please give specific citations if not inconvenient.

Does anyone know of any lawsuits where a plan sponsor (e.g., an employer who had retirement plan) sued a third party administrator who had the duty to update the plan for new laws and said third party administrator did not perform that duty?

A company implements a 401k plan year with its first plan year being 12/1/07 through 11/30/08.

The employee earns compensation of $20,000 for December 2007 and defers $15,500 into the 401k plan for the plan year beginning 12/1/07.

The employee is set to earn $20,000 for November 2008.

The employee wants to defer $15,500 of the 11/2008 compensation to the 401k plan under the premise that it is within the 2008 tax year limits.

Is this permitted?

Or is this not allowed under the premise that the deferral limit for the plan year ending 11/30/08 was met back in December 2007 and thus not allowing any more deferrals for that plan year?

Thanks.

Can someone please confirm that it would be permissible to setup a new one participant defined benefit plan for a sole proprietor effective 12/31/07 with a 12/31/07 to 12/30/08 plan year and use the pre-PPA funding rules for the first year. The deduction for the plan year ending 12/30/08 would be taken on the 2008 tax return. This would avoid the use of the PPA funding rules effective in 2008 and result in a larger contribution for the first year.

1/3 owner (Guy) of Glass Company. Defers max ($15,500) in Glass 401(k) Plan. No related other owners.

Same guy: 100% owner of Stone Company. Defers max ($15,500) in Stone 401(k).

Guy wants to pick which plan will return the 402(g) excess.

Looks like Glass plan will fail ADP (breaks), but the Stone plan will pass (solidly).

Can Guy have the 402(g) excess refunded entirely from the Glass Plan? If so, will any of that deferral count in Glass plan's ADP test?

Anyone have a link to the tables in IRS Notice 2008-85, in csv or xls format?

P.S. I did not see anything here: http://xtbml.soa.org:8080/xtbml/jsp/index.jsp

Can anyone point me in the direction of a checklist for a model investment management agreement for an ERISA plan?

Thanks!

Can anyone point me in the direction of a checklist for a model investment management agreement for an ERISA plan?

Thanks!

I'm writing this because I'm curious about the number of potential problems out there, and because I want to make a one-time offer to small businesses who are subject to the ADP test for the first time ever.

Did your company change to a Non-safe-harbor plan this year? If you answer "yes", don't give the name of your company IE: Don't attract that kind of attention to yourself. I'm just curious if the reports are exaggerated. I hope they are!

I have read some articles talking about 401ks that are not funding matches due to uncertain economic times. This means many companies will be subject to the ADP/ACP test for the first time. HCEs (who never heard of anti-discrimination rules) will be forced to take a large refund next year, unless something is done before the end of the year.

To help mitigate this problem, I’m offering a 3 month subscription to my ADP/ACP testing site for $29.

401ktest.com is designed to accommodate companies with 200 employees or less. It works with larger companies, but some of the features become hard to use; like the feature allowing you to (drag and drop employees from one category to another) during the testing process.

Don’t let the price scare you. This site works! I was just told yesterday that it functions better than the more expensive sites. It’s been up and running for 14 months now.

Without preliminary testing, this spring could be a compliance nightmare for newly adopted non-safe harbor plans!

To the moderator:

If this is the wrong way to make this offer to your readers, please contact me regarding a more appropriate way to get this information out before Christmas bonuses are written, and officers make that last big contribution to their plans.

Any problems with the following? A DB plan that offers voluntary lump sum payment at time of termination was frozen 1/1/2004. The AFTAP as of 1/1/2008 was 63% (though not certified). Assets have tanked (surprise). The Plan Sponsor would like to defer payment of lump sums until Plan investments have healed. The Plan would be amended in 2008 to unfreeze the formula effective 1/1/2009. As of 1/1/2009, the AFTAP is now 52% so no benefits can accue during 2009. Further, no lump sums can be distributed in 2009. As of 12/31/2009, the Plan is amended to freeze benefits as of 1/1/2010. No lump sums can be paid until the AFTAP is certified to be 60% and full lump sums cannot be paid until the AFTAP is certified to be 80%.

If a loan from the Roth source ends up being a deemed distribution, what are the tax consequences? The contributions have been in the account less than two years.

I can't find a good source that addresses this and sure appreciate any help.

Thanks!

jimmy

Does anybody have any information they would be willing to share regarding excess contributions in a tax exempt 457(b) plan that were not refunded by April 15 of the following year? Did you go ahead and make the plan an ineligible plan, which appears to make everything taxable, did you do the refund and are holding tight, did you attempt to discuss with the IRS?

Thanks!

If anyone has experience drafting a 401(k) church plan for a client and may want to pick up a referral, please contact me.

A client would like to set up a new defined benefit plan for 2008 allowing for the maximum deductible contribution. The client is a sole proprietor with no other employees. The client has past service and very high compensation in prior years.

In the case of a new plan in 2008 with no past service benefit, the minimum and maximum contribution would be the same since there is no Cushion Amount. However, if the formula is based upon years of service, then as of 1/1/2008 the accrued benefit would be 1/10th of the 415 dollar limit. The accrued benefit as of 12/31/2008 would remain unchanged from the beginning of the plan year since the participant accrues 1/10th of the 415 dollar limit as of the first day of the plan year. In this scenario, we get $0 as the Target Normal Cost and the minimum contribution is basically the 7-year amortization of the Funding Target. Under the new PPA funding rules, the maximum contribution is equal to the Funding Target, plus the Target Normal Cost, plus the Cushion Amount which is equal to 50% of the Funding Target, all reduced by fair value of assets. Everyone agree so far?

Lets assume the plan is designed such that a single lump sum is an optional form of benefit and the normal form of benefit is a single life annuity.

My Question: For purposes of determining the Funding Target, it appears that our valuation software uses the plan’s Actuarial Equivalence factor (1994 GAR at 5.0%) to calculate the lump sum at NRA and then discounts back to attained age using the funding segment rates. Does this make sense in the case of a participant who is at the 415 limit? Shouldn’t the lump sum at NRA be calculated using the 1994 GAR Mortality Table at 5.5% and then discounted back to attained age using the funding segment rates?

Furthermore, if we used an unreduced 100% joint and survivor annuity as the normal form of benefit, how should the Funding Target be calculated? It appears that our valuation software is using the plan’s Actuarial Equivalence factors (1994 GAR at 5.0%) assuming a 100% joint and survivor annuity as the normal form to calculate the lump sum at NRA and then discounts back to attained age using the funding segment rates. Does this make sense if the plan is designed such that a single lump sum is an optional form of benefit?

Any guidance, thoughts and comments would be appreciated.

Just had a handful of safe harbor 401(k) plans walk in my door. They are all on the same prototype document and the prototype sponsor has received IRS approval for its EGTRRA document. Given the timing, I was considering whether or not the safe harbor notice could be given for the plans without having to amend and restate them prior to Dec 31 (or Dec 1 depending on how you see the issue). We maintain all of our documents via a Sungard volume submitter document. In the midst of working on amendments/restatements of current clients' safe harbor 401(k) plans I am mindful of a sponsor not only having to provide the safe harbor 401(k) notice but also having to execute an amendment to specifically invoke the particular 40(k) safe harbor contribution it will be using for the coming year. Hence, my issue as to the takeover plans -- can I just provide safe harbor notice and either look to amend and restate prior to December 31, 2008 (or some time prior to April 30, 2010?) or do I need to have an amendment specifically identifying the safe harbor to be relied upon. If an amendment is required setting forth the actual safe harbor contribution to be used in addition to the safe harbor notice, then it would seem that such an amendment may affect the ability of the plan sponsor to rely on the 6 year cycle. Any help is greatly appreciated.

I retired after 26 years in a Public Safety Retirement System and entered a Defered Retirement Option Plan, where an amount of money based on the same method of calculating my retirement is placed into an account while I remain on the job. The money earns 8.50% interest. I stay on the job and agree not to acrue any additional bennifits for 5 years. I married for the first time after 2 years in DROPS and after 1 year I am getting divorced. Is my wife entitled to any of the money in the DROPS account. My plan does not address this and I can't find any case law on this. I live in Arizona. I have another 14 months before I have to leave the job.

Lets say I have a plan that is 95% funded in 2008 and qualifies for the transition rule. Therefore, I have no shortfall amortization charge since I was > 92% funded.

However, I think I still owe quarterlies in 2009 because I had a funding shortfall in 2008, even though I didn't have to amortize any of it.

Agree?