Anyone aware of an exception to 204(h) notice requirement for a money purchase plan that is being terminated and sponsor is liquidating in bankruptcy?

Does anyone know what the definition of "withdrawal" is for purposes of ERISA Section 4063? Under Section 4063, a substantial employer is obligated to notify the PBGC of its withdrawal from a multiple employer plan and is required to do some other stuff too. The term "substantial employer" is pretty clearly defined, but I am having great difficulty locating the definition of "withdrawal" for purposes of Section 4063. It may be a facts and circumstances standard applied by the PBGC, but I can't even find that. Any help would be greatly appreciated. Thanks!

Law firm has one 401(k) plan for Partners & Staff and a separate 401(k) plan for Associates. Partners & Staff plan passes coverage and ADP on a stand alone basis. Associates Plan must be aggregated with Partners & Staff Plan for coverage and nondiscrimination. In order to keep Associates out of the Partner & Staff Plan "required aggregation group" for top heavy purposes (so Associates don't have to get a top heavy minimum contribution), Partners & Staff Plan runs a separate ADP test and passes. However, when a combined ADP test is run, it fails. Does it matter that the Partners & Staff Plan passes ADP separately? Don't the HCEs in the Partners & Staff Plan have to get ADP returns based on the combined test anyway?

In a pension related context, if someone refers to "the blue book", what are they talking about and is it something available in libraries?

Thanks.

As to partnerships and LLCs that sponsor cross-tested plans that do not identify allocation groups, what practical steps are you taking to assure that the employer contributions for partners and LLC members do not rise to the level of a disqualified CODA? I.e., what practical steps are you taking to dispel the notion that partnership contributions that vary in amount among partners is not the result of their individual choice? Treas Reg sec 1.401(k)-1(a)(6)(i).

What factors does the IRS look to in this regard on audit?

This seems particularly tricky given that the deduction for the employer contributions made for a particular partner or LLC member are allocated to him or her rather than treated as a partnership (entity) expense as is the case for contributions to a DB plan. Treas Reg sec 1.404(e)-1A(f). This takes from the rest of the partners any financial incentive not to allow the individual partner to make the decision of how much will be contributed by the partnership for that partner.

I've prepared written partnership and LLC resolutions that state the partnership contributions are decided by the partnership and not the individual partners, but such seem quite self serving (and vulnerable by reason of such).

When does the IRS Publish 417(e) segment rates? Is it in an IRS Notice at the end of the month following? Thus, are the June segment rates published at the end of July. In such case, how has Datair already reported them in their handy-dandy table. Are the rates published sooner or did Datair compute them? If the IRS publishes in such fashion, how in practice would you administer a plan whose lump sum basis changes monthly?

Handy-Dandy Datair Table: http://www.datair.com/rates.htm

My question is whether a company is required to offer the benefits of its 401k plan to the workers of separate company that is under common control. The factual scenario is as follows:

Corporation X (S corp.) is owned 100% by a husband and wife (51% H and 49% W) and has three employees (H, W and another individual). Corporation X has a 401k profit sharing plan and all three employees participate. Corporation Y (S corp.) is owned 100% by H and has ten leased workers but no employees. All management services for Corporation Y are provided pursuant to a management agreement with Corporation X.

Because Corporation Y is under common control with Corporation X, is Corporation X required to offer the same 401k plan to the leased workers or, alternatively, is Corporation Y required to offer the same 401k plan to the leased workers?

Any thoughts would be greatly appreciated.

If a foreign parent cororation with no US employees directly owns 100% of the stock 2 unrelated business with employees in the US, do the two US businesses constitute a controlled group of corporations?

Plan is using a "group annuity contract" to provide for individual self-directed accounts. Insurer is a DFE, so each "fund" has a plan number. As I understand, each fund (with value) is reported on Schedule D. When completing Schedule H must you again list each fund separately as an "Asset Held for Investment" or can you simply group PSA values together (like loans or self directed brokerage accounts) for this reporting?

Also... How does use of a "DFE Fund" reduce Schedule H reporting? What is the logic of Schedule D, anyway? It has always seemed to be a waste of paper to me.

Thanks!

Would an employer be considered a party in interest to a plan if one of its employees is a participant in a plan but the employer is not the sponsor? For example, Corporation X sponsors a profit sharing plan (Plan X) which has two members A and B. Corporation Y employs A and B. For purposes of the prohibited transaction rules, would Corporation Y be a party in interest to Plan X by virtue of being the employer of A and B (who are covered by Plan X) - or does this rule only apply to employers of employees who covered by a plan because of their status as employees of such employer.

I have checked the guidance and commentary that I have available and can't find the answer. It would seem to me that it would only apply in the case of employers who sponsor the plan, but, read literally, the alternative argument could be made. Any guidance you may have would be much appreciated.

Does anyone have a cite that details the actual timing for adoption of final required amendments at plan termination?

2007-44 says a terminated plan may be filed no later than the later of (1) one year from the termination effective date or (2) one year from the date on which the action terminating the plan is adopted.

If a profit sharing plan is going to terminate as of 7-31-08 is it sufficient to have the final termination amendment including EGTRRA and all other provisions applicable as of the termination date adopted by 12/31/08? Or by the due date for filing the employer's 08 tax return? Assume that the ER will not file a 5310.

Any input is most appreciated!

A participant in a 401(k) plan requests and obtains a hardship withdrawal to purchase his/her principal residence. Because the contract of sale included a condition that the home pass an engineering inspection, which it failed, the participant was able to cancel the contract. Now, the hardship no longer exists. Assuming that the withdrawal and the disappearance of the hardship occur in the same plan year, should the plan simply reverse the withdrawal to avoid reporting the distribution?

If a participant was eligible to participate in the plan 4/1/08 and the employer forgot to give them the SPD and enrollment form, what are the repercussions to the employer?

Thanks!

Does anyone know the bear minimum that 401(k) sponsors have to disclose to participants under ERISA in regards to investment and expense information when the participant requests it? Is there anything beyond the annual report summary required by section 103?

A 401(k) plan provides for a safe harbor employer contribution of 3 percent. It wants to make an additonal employer contribution for only certain employees (lets assume a nondiscrminatory group). Is this permissible?

A new employer ( guy who bought the previous owners business where the employees were in a SIMPLE plan ) want to continue/start up a new simple for the prople that have worked there for several years - with no eligibility for all those there on the start date.

For new employees down the road he wants to put in the 2 year eligibility requirement.

Is this allowed ( amending plan ) ?

Any other ideas if it is not allowed ?

Thanks,

Bob

The plan made matching contributions on payroll by payroll basis. At the end of the year they had matched on compensation that exceeded $225k. I see an EPCRS correction for 401a17 that allows the plan to move the excess into suspense to be used to reduce next year's match. My question is about the ACP test for 2007. Is this excess that is due to 401a17 included in the match used to determine the ACR for the HCE?

I have a client (a public school) which sponsors a 401(k) plan. Client has just told me that although it does not have a 403(b) plan, it does allow its employees to contribute to a 403(b) that they had prior to becoming employees of Client.

Is this permissible?

This week I had to help someone manually review and delete 15,000 spam emails that had accumulated over roughly 10 months.

Given:

1) it would be easier to setup a new email address for this person.

2) it would be likely that the person would do the same things that started the spam and would end up in the same situation, so #1 isn't really a perfect solution.

3) I'd like something that I can control from my PC to ensure that the spam filtering isn't turned off.

What I'd like:

I'd like something that can run remotely from my PC (presumably via POP3 access). I used one program about 4 years ago that would check the server, flag and delete known spam. Then when I'd run Outlook, I wouldn't even see the spam had been there. I'd like to be able to later review what was deleted and possibly restore any "false positives".

I've done web searches and have found a few programs already. But I was hoping someone else might be using one and have a specific recommendation or two.

PS - should add that this is for a home user account, not for a server. Although... if there's a particularly good server solution that's not too expensive, we could bounce the mail thru my brother's website, so let me know.

Let's first look at a typical situation.

Producers working exclusively for a brokerage will typically receive a draw against expected commissions. The brokerage and the producer will agree to adjust draw from time to time, either in anticipation of a big upcoming sale or decreased volume. In theory, excess draw is refundable to the brokerage after separation, but that rarely happens in practice.

I would love to say that a producer's deferral election is timely if it is made prior to the year when the draw is paid and that draw is earned in the year when paid. In other words, treat the draw as a salary payment. However, the final regulations are specific that commission-based services are considered rendered either (1) in the year of a sale if all sales are treated that way, or (2) in the year the customer pays the premium. There is no discussion of "draw."

The issue is that if draw is treated as commission, the commission sources for the draw, advanced from brokerage general funds, actually come from many sources:

1. premiums paid to an insurance company which then pays the brokerage which them pays the producer. (This can take months and span two calendar years.) Under the regulations, the producer's services are rendered, I assume, when the insurance company gets the premium, not when the employing brokerage receives payment from the insurance company.

2. premiums paid on a payment plan (i.e. quarterly). In this type of case, I assume that each customer payment is considered a separate "sale", so services for a sale of a policy will be considered 409A "services" in each year when customer payments are made. So a sale paid for with a single premium is a 409A service in one year, and a sale paid for with monthly premiums is a 409A service in each month.

3. premiums paid in a later calendar year, against which the brokerage has advanced draw. If the draw is a commission, services are performed in the year following the payment of the draw.

The more I look at this, it just seems that draw is more like salary rather than commission, simply because it has been paid and the possible repayment obligations do not convert draw into a 409A commission for puposes of timing the deferral election.

So what's the practical way to deal with this in a 409A-compliant deferral election? Can the producer just say "defer 100% of my draw in the next calendar year" and take the position that draw is more like salary than "commissions."

George