Former participant in a P/S Only Plan (10 years ago it was only a P/S Plan, now it is a 401(K) Plan as well) was 0% vested in his P/S account balance when he terminated. Entire account balance was forfeited per document at the time of termination.

Now the participant has been rehired 10 years after original termination. Per document it seems that the 0% vesting along with having been gone for more than 5 years (5 consecutive breaks-in-service) creates a situation where former participant is treated as a new employee and must serve the eligibility period all over again.

Vesting seems to be the issue that needs some feedback. The 10 year gap period clearly restricts the use of post-break service from being credited to pre-break service, but as we read the document it appears that there is nothing that prevents the pre-break service (two vesting years of service) from being included in post-break vesting calculation going forward. Thus, he will begin with vesting service of 2 years and move forward upon rehire.

With regard to the pre-break vesting service crediting, does this sound like a likely treatment given the fact pattern above?

Thank you for any feedback and insight.

What does the bite out of the lower right-hand corner of the suitcase (?) in the list of new posts/active topics mean? That I've posted under that topic?

Can anyone suggest a plan administrator's manual for 403(b) plans?

Well I'm in a bit of a bind. I was just told that I had an IRA opened for me about 16 years ago by my father. He put money in it and fostered it for a while. But through his moving out west he can't find any of the info on it. And with his current age he can't remember what firm he was with. I have looked everywhere and can't find a lead. Is there any way to find a lost Roth IRA?

Will the EBSA accept a scanned version of the schedule B or do they require the original signature from the actuary?

I've got a couple questions...

1) are required quarterly contributions due for all plans that are less than 100% funded? or

2) is it just for underfunded plans with souls over 100 or is it 500?

Thank you,

Andrew

I have been putting off taking the ASPPA DB test for years. Looks like I need to get started on it. This is the second time this has come up this month.

A prospective client is making a lot of money now. He wants to put in a DB plan and fund it to the maximum this year and next.

Can we put on a 401(k) Plan also?

Is it true that they could have a 3% SHNEC plus a 3% discretionary nonelective Contribution. Will they also be able to defer the 402(g) limit?

What is the 415 limit on a combination like this?

Also, do I need to watch out for the gateway requirements?

Is a Funding Deficiency considered to be a negative Carryforward Balance in calculating a 1/1/08 AFTAP ?

A client has told me that he's been advised that he may make a 2007 contribution to the company defined benefit plan for a person who received no W-2 for 2007. Does someone have a cite to support this?

A little discribtion: This is a sole-proprietorship run by the husband. His wife was an employee in prior years, through 2006. She was not paid during 2007/2008. He is now funding the defined benefit plan for 2007 (his tax return is on extension until 10/15/08) and he tells me that per his discussions with pension folk (not his paid advisor though, who is currently not available), that he can make a contribution for the non-employee / wife.

Has anyone located or seen a draft of the "new" 402(f) notice? If so, please tell it I am looking for it.

1.401(l)-2 of the Treas. Regs. states that, in performing an integrated profit sharing allocation calulation, the maximum excess allowance for a plan year is the lesser of: 1) the base contribution %; or 2) the greater of: a) 5.7% (as required to be reduced if the integration level is different that the taxable wage base) or b) the % rate of tax under OASDI, currently 6.2%, (also as required to be reduced for fractional taxable wage base concerns). Therefore, if, for example, an integration calculation is performed with a base contribution % of 7%, the regs seem to indicate that the maximum excess allowance could be as a high as 6.2%. However, I have never seen anything greater than a 5.7% maximum excess allowance allocation in any prototype plan or considerd within any general discussion of the topic. Is there a problem with exceeding the 5.7% limit that is not evident from simply reading the regs?

I am trying to upload vesting information to John Hancock. I do not have the module that lets RA link to them.

Does anyone know of a report that will print in an Excel compatible format and have the vesting for Discretionary nonelective seperate from Safe Harbor?

Would a 5330 need to be filed if a participant went over the 402g limit in 2007 and the refund was not processed until July of 2008?

A plan has a partnership as an investment and received a capital call. by mistake one of the owners of the plan sponsor sent the money for to satisfy the capital call. now he needs to be reimbursed by the plan. how can he do this without running afoul of the PT rules?

A plan participant has exceeded the 415 limit for the Limitation year of 1/1/07 to 12/31/07. Now, the plan document says that the correction method is to refund the elective deferrals (with attributable earnings). However, it doesn't specify how those earnings should be calculated.

Now, I know that the Final 415 regulations say that a plan sponsor should use EPCRS to correct a 415 failure, but I believe that is effective for 1/1/08 Limitation Years. So for this situation, the plan sponsor is still using the direction from the plan.

I looked at the old 415 regulations - in §1.415-6(b)(6) - and all it says is that the 415 refund should include "gains attributable to those elective deferrals and employee contributions". Again, no specific instructions on how to calculate the earnings.

So I went to Sal to see what information was in the ERISA Outline Book. In his section on returning excess annual additions (in the 415 chapter), he just says "gains credited on the excess amount should be distributed along with the excess amount". Not much help.

So one of my co-workers said that Appendix B of the EPCRS has 4 different safe harbor methods of calculating earnings - and that the plan sponsor can use any one of those methods in calculating the earnings on the excess annual addition refund. However, it specifically says in this section that "This section 3 does not apply to corrective distributions or corrective reductions in account balances."

So I guess my question is this - how is it determined how earnings should be calculated on an excess annual addition refund? Does the plan need to be more specific? Has the IRS issued any guidance - seeing as how there is nothing specific in the 415 regulations?

Employer has hired consultant to create a web-based retirement calculator to assist participants with calculating how much they should save to achieve a desired standard of living upon retirement. The consultant will charge a one-time set up fee and ongoing annual maintenance fees for this service. The calculator will provide information for both DB and DC plans for Employer.

Can the expenses related to this be paid from plan assets? If so, how allocate among the DB and DC plans?

Thanks.

I have been lucky enough to not have to prepare any RMD calculations under the final 401(a)(9) regulations up to now, so forgive me if the answer is obvious.

My client has a frozen defined benefit plan with a rollover account. He turns 70.5 in 2008 and is required to begin distributions by 4/1/09. His accrued benefit (sla) is $3,125 as of 12/31/2007. He just sold his practice, but maintains the corporation that sponsors the plan and will be receiving accounts payable throughout 2008. Because of this, he is looking for a deduction for 2008 and will likely amend the plan's benefit formula effective 1/1/08 by 3/15/09 in order to acheive a deduction. After this, he will be closing the corporation and terminating the plan during 2009.

He is interested in knowing what his RMD's will look like with respect to the defined benefit plan until the termination occurs. My understanding is that he will begin to take a monthly distribution of $3,125 per month by April 1, 2009 through December 31, 2009 (this is his RMD for the 2008 calendar year?). When the rollover occurs, an amount equal to any remaining payments of $3,125 through the end of year that weren't made because the plan terminated prior to their date of payment plus either 12x the new monthly benefit as of 12/31/2008, or an amount equal to his lump sum divided by the applicable factor will not be eligible for rollover and will be taxable to him. In effect, he is taxed for 2 RMD's during 2009.

Is this correct?

I am assuming that the rollover account within the DB account is being handled correctly.

Does anyone know where the IRS is on processing determination letter requests? Their website says that they are currently working on "on cycle" Form 5300 applications postmarked January 2007: http://www.irs.gov/retirement/article/0,,id=150182,00.html

If this is true, they are more than a year behind.

I submitted an on cycle 5300 for a DB plan in early March, 2008. Their confirmation letter said that we normally could expect to hear from them within 145 days. Having yet to hear anything, I called and spoke with an IRS agent today (September 23, 2008) who said it had not been assigned yet and could not tell me when it would be assigned, referring me to the above site. Does anyone have any first-hand knowledge of how long the applications are taking for processing?

Is there a new rule that when offering a lump sum sponsors are required to show the immediate annuity version of the 75% J&S even when it is an optional form and not the normal form for married participants? The QJSA always had to be shown at the immediate age, not sure about the optional form.

Does the Heroes Earnings Assistance and Relief Tax Act of 2008, HR. 6081 apply to all plan types? such as 403(b) and

457(b) governmental plans?