Now that the proposed regulations are out implementing the PTE, I have approached several potential Investment Advisers to to prepare proposals to provide fiduciary advice to participants. All of them have said they are interested and would be willing, if they could identify and engage an independent auditor that would satisfy the audit requirements of section 408(g)(6) of ERISA and the compliance of investment adviser arrangements.

Do you know of any auditors that are geared up to to perform this work?

Thank you in advance for your replies.

I'd really appreciate informed opinions as whether the following Exam question is correct or is in error:

Data for Question 4 (1 point)

An employer sponsors defined benefit Plan A, which covers salaried employees only. The employer suspends benefit accruals in Plan A effective December 31, 2006. A partial plan termination is deemed to occur on that date. The employer then establishes a new defined benefit Plan B that covers all employees effective January 1, 2008.

Consider the following statement

Vesting service in Plan B must include all years of employment since the effective date of Plan A.

Is the above statement true or false?

(A) True

(B) False

The official answer is A (True). I think it is false because only a termination, not a partial termination or a freeze causes a plan to be considered a predecessor plan within the meaning of 411(a)(4) say the DB answer book, the ERISA Outline Book, and anything else I can find.

Is there some DB-specific rule in some weird place that I am overlooking? Help would be really appreciated.

It has been too long since I've administered a plan with 415 excesses. I've learned that gap period income does not apply. But, my question is, what if the participant experienced a loss? I think I remember that annual addition excesses are not reduced for loss. Is my memory correct?

Thanks in advance!

Have an employee with voluntary after tax balance who has terminated employment and wants rollover. New brokerage account does not want after tax contributions.

If all but after-tax is rolled over, is the after tax still considered tax fee in year of distribution, since its a complete distribution?

Employee is only 52 if that has a bearing...

Thanks

We have a separate plan for our active employees and retirees. If we terminate coverage for certain groups under the retiree plan, would we be required to offer COBRA for those recent retirees (e.g. those who became retirees less than 18 months ago)? I realize the retiree plan ceasing to provide coverage is not a qualifying event, but am a little concerned whether the failure to return the COBRA election forms is an effective waiver? The COBRA election forms do state that if you fail to return the form, you lose your right to elect COBRA. Any thoughts?

With 4 companies listed under a 401(k) MEP doc, if the sponsoring company (company A) wants to terminate the plan and the 3 other participating companies (companies BCD) want to install new 401(k)s to continue benefit,

1) What is the proper procedure for terminating from the MEP so that BCD can adopt a new plan? Remove by resolution/amendment from the MEP first, then adopt new plan? Or can the sponsor (A) terminate the MEP which defaults to BCD's removal from MEP and they start their own respective plans with no wait period?

2) If it is necessary to remove BCD from MEP first prior to MEP termination as the best course of action, is it necessary to restate the MEP at this time to adopt new language for BCD removal?

3) Similarly, when terminating the MEP, is it necessary to restate the MEP at this time to adopt new language?

Does anyone have a client that intends on implementing this provision for health fsas under the HEART Act?

If yes, how does the money get distributed from the plan? Also, an employee that is called to active duty is entitled to all or a portion of the balance in the employee's account - does this mean the amount contributed to date, minus any reimbursements, or the entire amount elected for the year?

Any thoughts/guidance is appreciated - thanks.

We have a situation where we have a QDRO, the alternate payee has died and did not name a beneficiary. In paying the benefits due the AP, do we just pay to the AP's estate (which is what we do if a participant does not name a beneficiary and has no spouse, etc.)?

Let's stick to a calendar year plan with January 1 valuation date for discussion.

It is clear that 2007 contributions made in 2008 are included in plan assets for determining the UVB. It is also clear that after 2008, prior year accrued contributions must be discounted to January 1. What is unclear (as my evidence will show) is whether or not 2007 contributions made in 2008 are discounted back to January 1, 2008.

ASPPA (No. 8-10) says "no." More important, instructions for completing the PBGC forms explicitly say "No" ("For Premium Payment years beginning in 2008, such prior year contribution are included without discounting"). Now, technical releases from both Deloitte and JP Morgan say "Yes." More important, I do not see in PBGC regs. that there is a discount exclusion for 2008.

Frankly, an exclusion for 2008 seems totally inconsistent with how the PBGC has historically treated accrued contributions for premium calculation purposes. On the other hand, the PBGC may be serving grace to those end-of-year valuations.

Will someone with fresh batteries in his flashlight please shed some light on this dilemma?

401(k) plan has a match formula of 100% of salary deferral up to 2% of compensation; however, only those who defer at least 4% of compensation are eligible for the match.

There is a potenital BRF issue, but I'm not sure how to test for current availability.

Two possibilities come to mind:

1) Test based on the fact that everyone had the ability to defer at least 4% of their compensation. Therefore, the matching formula was available to everyone, even if they did not defer at least 4%.

2)Test based on the deferral percentages for each participant. Only those who deferred at least 4% were eligible for the match, so they are the only ones benefiting for the availability test.

Any thoughts or other ideas?

Thanks!

Does anyone know of a third party we could outsource this to? We are looking at this type of plan as alternative to severance plan.

We are looking for new defined contribution health plan software (including HSAs, HRAs, and even FSAs). Does anyone have any thoughts/experiences/recommendations they are willing share?

Can someone on disability withdraw from their 401(k)?

Did anyone watch the ALI-ABA seminar Monday (8/25) discussing the new EPCRS? If so, what surprises did you take away aside from these:

• Joyce Kahn (Manager of the EPCRS Program) said that she has only come across one egregious failure for which the IRS did not approve correction. That means either that there are not any really bad acts out there, or that the really bad actors don't come in under EPCRS, or that the EPCRS staff is pretty lenient. The surprise, to me, was that Joyce said it.
  
• Joyce took the position that if a safe harbor plan fails (for example, if the safe harbor contribution is not made within 12 months after the end of the plan year), then the natural consequence contained in the regs--i.e., that the plan no longer is a safe harbor and must pass ADP--does not apply, and to correct you must make the late SH contribution (with interest). I think what she meant is that you can't rely on passing ADP if you fail to make the safe harbor contribution timely, because you would simply get out from under the SH contribution obligation without following proper procedures (such as in the "maybe"--supplemental notice--non-elective SH contribution situation). I would suspect, however, that if failure to timely make the SH contribution resulted in failure of the ADP, and correction of that ADP failure under VCP would give the NHCEs more than making the SH contribution would give them, then she would require that the failed ADP test be corrected rather than that the SH contribution be made.
  

Anyone else have any comments, surprises, insights from watching the seminar--either about the seminar itself or about the new EPCRS--that they want to share? (I haven't gone through all of the new EPCRS yet, but it apparently is much more friendly and has relaxed some requirements and added some new corrections.)

IDP DBPP cycle E, received a letter in 2003, but it did not cover EGTRRA. Do I have until 2010 or did I miss a submission deadline already?

We have a 401(k) Plan that consists of Pre-Tax deferrals, Roth deferrals, Wage Rate contributions, and a 4% Match (note: the match is only allocated to non-prevailing wage participants). The plan document states that "all matching contributions are QMAC's".

It is my understanding that we can include up to 10% of each participant's Wage Rate contributions in the ADP test pursuant to 1.401(k)-2(6)(iv)(D); however, in addition to this, are we permitted to include the 4% match / QMAC in the ADP test?

Any input on this would be greatly appreciated!

Thanks.

My outsourcing vendor has gone pretty far into a selection process and identified this company as the preferred vendor. Problem is we've never heard of them before and have conducted a few COBRA RFPs in the past 15 years.

Has anyone heard of this COBRA vendor? If so, can you please provide some high-level information on them -- the good, the bad and the ugly would be helpful.

Thank you.

You can rollover an contributory IRA to a 401(k) Plan - but can you rollover a rollover IRA from a qualified plan to another qualified plan?

Thanks

Is the due date of wage rate contributions to a Prevailing Wage Plan on or before the extended due date of the company's tax return (e.g., September 15th for a calendar year corp) or is there a rule that says the deposits must be made on an ongoing basis within a few days of each payroll (like with 401(k) deferrals)?

Thanks!

One doctor has a corp and a 5 year old 401(k) Plan with the usual 21 and 1 year and dual entry dates.

New doctor will start a corp and the 2 corps will form a partnership. They would like the new EGTRRA document to waive eligibility requirements for the doctor and his wife by waiving requirements for anyone employed on or before October 1, 2008.

How exactly would this work? What would we do with the nurse hired 2-01-08. Would we just let her in on October 1st or is there something else we would have to do for her? How about the receptionist hired November of 2007?

I have read that this is a Benefit, right or feature that must be tested for coverage.

On 12-31-08 testing:

Who is benefiting?

Who is not benefiting?

Who is excludable?