While this seems like an easy question, I'm having difficulty identifying the current IRS user fee to request a 430 funding waiver (which I've never before done). Any help would be appreciated.

I'm trying to finalize a document for a non-electing church plan and I'm tempted to get rid of the Top Heavy language. Every time I start to hit the delete key, I pull my hand back. Maybe because something in my subconscious is screaming don't do it. Your help would be appreciated or I'll never get to the end of this document.

Can anyone tell me whether former employees/participants or beneficiaries receiving benefits under a plan are included in the "total participant" number in calculating the turnover rate? I have found discussion about whether you include both vested and nonvested participants in the calculation, but nothing on whether former employees are included. My instinct tells me that they should not be included - only active employee participants should be included. I would welcome any of your thoughts.

Company A has a NQDCP. Company B has a NQDCP. Company A announces intent to acquire Company B. Deal set to close February 2009. Goal is to freeze Company B plan (no new deferrals, but no payout upon change of control) and allow Company B participants to defer into Company A plan. Company B does not want to roll balances into Company A plan.

I can't figure out how Company B employees can get into the Company A plan until 2010 since upon closing plan aggregation rules would apply so no 30 day rule. The only possible suggestion is if participants make a timely election prior to 12/31/2008, then 2009 deferrals go into the company B plan until closing and then post-closing deferrals go into the Company A plan.

The final regs permit a service recipient to terminate and liquidate a 409A plan for any reason as long as certain requirements are met (1.409A-3(j)(4)(ix)©). One of those requirements prohibits the service recipient from terminating and liquidating if the termination is "proximate to a downturn in the financial health of the service recipient". Does anyone know of any guidance on what that phrase means? Just about every company is experiencing some financial downturn right now. I suspect that as long as the service recipient is able to meet its obligations under its other plans (e.g., adequately funding their defined benefit plan) that they can terminate and liquidate their NQDC, but I'd love to see some commentary supporting this. Thanks.

What are the 409A implications in the following situation:

Under 457(f), exec vests in right to lump sum amount (say, $100k) at age 60 (which will occur in 2009) and will receive payment upon separation from service, but will get it (i.e., vest) prior to that if involuntarily terminated. Employer and employee want to renegotiate the amount of the lump sum down to $50k before the end of 2008. Can that happen w/o causing problems? There will be no deferral of comp until 2008 b/c SROF hasn't lapsed. Assuming the timing and form of payment isn't changed (no acceleration and distribution rules not violated) is this just a permissible substitution without consequence?

I am dealing with the following situation:

2 ERISA-covered 403(b) plans. One operated without a document for years. Neither plan, in the document or in operation, complied with ERISA QJSA requirements.

We are trying to decide if this can be corrected under ECPRS. I do not see how it can be a Plan Document failure if there is no Plan Document, and because Rev. Proc. 2008-50 defines Plan Document failure as a plan provision that violates 401(a) or 403(a), neither of which these plans did. I also do not see how it can be an Operational Failure, because it is not a "Qualification Failure...that arises solely from the failure to follow the terms of the plan providing for the satisfaction of the the requirements of 402(k) and 401(m).

Any thoughts?

Let's say a client had a Volume Submitter document, with an Advisory letter, effective date of the plan was 1/1/02. Type of plan doesn't matter - let's say a MP plan with some fancy provisions for the sake of argument.

The VS provider stops sponsoring such a document - goes out of business, whatever. Let's say in 2005. So the client amends to a PS plan with another provider who has IRS approved VS or prototype document, with different provisions than the document that was in place from 2002-2004.

Now the client goes to restate. The new, approved 2008 document is not only a different type (PS as opposed to MP) but even the MP plan available from the current provider doen't match the provisions under which the plan operated from 2002-2004.

How do y'all handle this? I could see this coming up for incoming plans, or perhaps for plans which leave and they subsequently come back asking for docs/amendments. Do you take your current document and just amend back to 2002, which seems ridiculous, or must you do some sort of custom amendment, which will of course make it so current plan can't rely on the opinion/advisory letter as a determination letter? Other thoughts/solutions?

I expect this might come up a bit in months to come.

My wife has a solo 401k and is now retired. We are contemplating moving some of her qualified IRA money into the 401k to get the IRA balance down before performing a Roth conversion (her IRAs contain some after-tax contributions).

My concern is that if the stock market recovers after we bolster the 401k, we could exceed $250K there and be required to file Form 5500 or 5500-EZ.

I suspect that we'll be eligible to file 5500-EZ but hope to hear verification in a reply to this post.

How onerous is Form 5500 or (hopefully) 5500-EZ?

The forms do not appear in TurboTax, which I normally use. Consequently, I'm somewhat intimidated.

Thanks,

Michael

I am interested in hearing from recordkeepers (or others with knowledge from a recordkeeper's perspective) who as part of their service offering include one or more money market investments within a plan's fund line-up.

Does anyone have any insight into the situation where a recordkeeper selects for (or requires) the plan to utilize a specific money market fund due to custodial relationships and basic plan recordkeeping/operations? I am interested to know if a recordkeeper that essentially selects that investment for the plan comes under scrutiny as an investment manager through the SEC or any other regulatory body. The recordkeeper is in a situation where it needs to have an available money market for its daily operations (default investments, forfeitures, ...) and it selects one of the money markets that the custodian makes available through the custodian's platform BUT does not want any investment liability or to be viewed as managing that asset for the plan.

Also, I am interested if anyone has insight into trying to provide a money market investment (within a participant directed plan) that has FDIC insurance coverage. What options have you found in having that type of FDIC insured investment on the plan fund lineup.

Lastly, it appears that the large operations tend to have a captive Money Market group that manages a money market account AND the product platform utilizes that investment as the plan's money market investment. Does anyone have knowledge from the perspective of a recordkeeper who may try to mimic such a "large house" investment by combining various money market investments to come up with a blended money market investment. Is there any prohibition against a recordkeeper creating/maintaining such a blended money market investment OR in other words must such a blending of investments be done under the umbrella of a trust company or a Registered Investment Advisor (RIA)?

Any thoughts regarding this tricky issue are appreciated.

If electing the full yield curve instead of the segment rates, are the monthly choices the same as when electing the segment rates....the month of the valuation date or one of the four prior months?? Or are the options different if electing the full yield curve?? Thanks.

I have a client who failed the ADP test in 2006. The client did not process the corrective distribution. It is now 2008 and the client has chosen the one-to-one method. Question: When posting the contributions to Relius, what year do I post the contributions? 2006 or 2008? How do I get around the 415 Limit for participants who are no longer employed as of the correction date?

Thank you

We're a startup nfp/public charity and I heard recently that we could choose between a 403b or a 401k for employees. Is this accurate and what are the benefits of one over the other?

We currently have 4 employees, all with existing 401k that could be rolled over. I don't think we can afford to provide any match funds in 2009, but we hope to do as soon as we are able. Two of the current employees are fairly savvy investors while two are passive contributors. That ratio will skew toward passive investors as we grow.

We expect to grow exponentially in the coming years, and need a plan that will easily grow/adapt as we add employees...

Suppose an employer provides generous profit-sharing contributions every year, such that to maximize the employer contribution, a participant must contribute well under the elective deferral limit in order to maximize employer contributions. In any given year, a 415 violation would occur and could be corrected by providing a refund of the excess amount to the employee. However, if the profit sharing contribution is predictably high year after year, can the employer continue to allow the employee to contribute the maximum in elective deferrals (even knowing that 415 violations are likely to occur) and simply correct any violations through EPCRS by returning the excess employee contributions? If you answer no, how would you advise the employer to proceed to allow the employees to maximize deferrals within the plan?

Issue 1. Obviously not all of the provisions created by ERISA or the applicable sections of the IRC have to be in a plan document. Despite that, plan documents are still BIG documents that (1) regurgitate some of those provisions, (2) incorporate others by reference and (3) leave the remaining provisions out of the document completely. How do I (or anyone) know which of those provisions MUST be regurgitated in a plan document, which may be incorporated by reference and which MAY be included in a plan document, but are not required to be included?

I know there are different types of plan documents for purposes of the IRS D-letter program. If the type of plan (e.g., prototype, VS or individually designed) is relevant to the answer, how?

Issue 2. A qualified plan, once installed, may be amended from time to time at the election of the plan sponsor (a so-called discretionary amendment). There is no reason that I can see why a plan sponsor cannot amend its plan retroactively unless doing so is specifically prohibited by law (e.g., the law prohibits an amendment from taking away vested or accrued benefits). However, the IRS has said in recent guidance that discretionary amendments must be adopted no later than the last day of the plan year in which they become effective. Huh?

Thanks so much for your help!

A participant actually read the SAR provided to them

They want a copy of the full annual report...what exactly are they privey too? Is it a copy of the 5500 and that's all?

Thanks

Need help calculating contribution for second year of plan.

Can I amend a church's money purchase plan to accomodate a match formula rather than a fixed percentage to all eligible employees? Can the term "eligible employee" be defined as one who makes salary deferrals into the church's 403(b) plan in addition to the usual age and service requirements?

I have a small medical practice client that has a calendar year SH 401k plan with age 21/One YOS, semiannual entry dates. I have not restated them for EGTRRA yet. They added a new doctor 9/2/08 and they want him to be able to participate in the plan 1/1/09. Then they want to change the eligibility back to One YOS.

I was thinking that I could amend the plan effective 1/1/09 to allow entry after 3 months of service, and enter the 1st day of the following month. This would let one additional part-time person into the plan, plus possibly any new hires during 2009.

Then I would restate the plan for EGTRRA and change the eligibility back to 21/One YOS effective 1/1/10.

Does this sound reasonable?

In our GUST Volume Submitter plan documents we were allowed several choices of when a forfeiture would occur. We have always used "after a one (1) year break". Now for the EGTRRA Volume Submitter restatements, our document provider is telling me we can no longer have that option. Are any document providers allowing for a forfeiture to occur after a one (1) year break?