We took over as a plan's TPA in July of this year.

The plan sponsor received a letter last week from the previous carrier stating that it passed tesing for 2007. There was one fix that has to be made because a participant's contribution from May 2007 was overmatched because the participant had taken a hardship and the deferral portion was returned, not the match. So $133.17 is supposed to be paid back to the company from the participant's match account.

What needs to be done regarding 5500s:

Does the 2007 5500 have to be ammended to reflect the change in employer contribution?

On the 2008 5500 would the $133 show on Schedule I line 2f?

Both?

Any other suggestions would be appreciated.

Also, would anyone know how to reflect this on the employer's tax return?

Thanks!

If you had purchased $1,000 of AIG stock one year ago, you would have $42 left.

With Lehman, you would have $6.60 left.

With Fannie or Freddie, you would have less than $5 left.

But if you had purchased $1,000 worth of beer one year ago, drank all of the beer, then turned in the cans for the aluminum recycling REFUND, you would have had $214.

Based on the above, the best current investment advice is to drink heavily and recycle.

It's called the 401-Keg.....

Does everyone agree that, pursuant to 409A's transition relief, I can amend a SERP plan (despite it's existing terms and 409A's general anti-acceleration rules) to state that it will be terminated this year, and all payments will be made next year in lump sums?

In advance, thanks for your comments.

The plan has the age maximum on dependent children at 25 (unless disabled). I found a dependent child over 25 that is not disabled on our plan. The child is 26 1/2 now. (no claims have been paid after age 25 by insurance company)

What is the plan obligation?

1) If the employee did not voluntarily remove the dependent from his/her coverage (did not notify us), are we obligated to send COBRA now? I wasn't sure if we were obligated, however we knew the child's date of birth.

2) If question 1 is yes: Is the employee responsible (if they decide to elect COBRA) for paying premiums retro from when the child was no longer covered up to now?

3) Can I remove an ineligible dependent with out the employees signature?

403(b) for a 501©(3) with matching contributions and they are interested in safe harbor to avoid ACP.

The Matching contributions must fall within the parameters of contribution minimums and maximums for matching contributions to avoid the ACP test under 401(m). These Matching contributions are not being used to automatically satisfy ADP since there is no ADP test.

Do these matching contributions used to satisfy ACP have to be immediately 100% vested?

I understand the other requirements for ACP safe harbor, i.e., no allocation restrictions, no hardship w/d need to be satisfied but wondering about vesting, since additional Matching in a 401(k) could satisfy ACP without being 100% vested. Thanks

Hello all,

I posted a question on here once before and got several great helpful responses, so I return with a few questions that I am hoping I can get answered as no one else seems to be able or willing to help.

I am considering investing in FAX in my roth ira, a foreign bond fund that kicks off a fair amount of distributions each month. I had previously invested in AAV, which was a canadian trust, it was subject to the 15% withholding, which I was unable to reclaim as it was in a tax sheltered account...

My question is whether or not the FAX fund would be subject to this same 15% withholding, as it really takes a chunk out of the returns and the whole purpose of this particular investment.

Is there anything else I should be aware of regarding bond funds in my roth IRA that this question shows that I am unaware of?

Thanks so much.

Kind regards to all,

Kevin

Does anyone have the cite for (I think it was) a DOL advisory opinion on the portion of attorney fees that can be charged against a plan for a termination?

Have a client who has managed to dig himself into a deep hole. Need a referral to an ERISA attorney in the Lawrence-Kansas City, KS area who can provide competent legal counsel and (almost certainly) prepare an EPCRS submission.

Thanks!

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