The issue is that EPCRS allows for recoupment, in fact seems to require it, yet the Supremes have said legal restitution is not allowed for an ERISA 502(a)(3) claim by a plan fiduciary. My question is in the overpayment by plan operational failure category when the plan's language does not provide for recoupment of such, rather than recoupment by provisions provided for in a plan document.

In 2002, the Supreme Court decided Great-West. It is a subrogation case, but its language and effects have been much broader. Ogden, in the 5th, specifically stated that there is no federal common law right to restitution as a legal remedy against plan participants after Great-West. Neither Great-West nor Ogden's holdings were limited. Thus, if the participant has dissipated the funds, and the plan does not provide for recoupment, the plan cannot recoup from future benefits as a self-help remedy. How does that square with a fiduciary duty to not pay out more funds than a plan should?

That leaves a state law contracts claim, but Great-West refused to address whether such would be pre-empted by ERISA. Pre-emption may be colorable because recoupment does not appear to fall within the exemptions from pre-emption. If so, Great-West appears to eliminate a Plan's ability to recoup, unless funds have not been dissipated (or the provision is in the plan, which then is a contract or extra-judicial remedy according to Northcutt in the 7th Cir.).

EPCRS, Rev. Proc. 2006-27, App. B 2.05, addresses recoupment (including overpayments other than 415 excess payments).

Has anyone run into this situation, and/or found any legal authority specifically addressing either the Great-West v. EPCRS issue or the pre-emption issue? I know there are other posts about recoupment, but none seem to address these issues. Thanks in advance.

New member, first post. Looks like a great resource. I searched but did not find anything that deals with this.

I understand it is allowed to contribute to both a 401K and a Roth IRA, but I can’t find anything specific on how the maximum annual Roth limit is affected by the 401K contribution, assuming AGI is under the limit.

Assuming a 25 year old freshly minted engineer is contributing to, but not maxing out a 401K, and with gross income in the 40-50K range, is there a way to determine how much he could contribute to a Roth IRA?

Thanks in advance.

Long story short: I recently quit my job and called the company that the 401K is through to see how long it would take to get the check (paperwork was already turned in). I had the plan ID number (from my employer), but aparently that wasn't the info I needed. I called my employer back to get the correct info, but they wouldn't give it to me. They said that all I need is the plan ID and my SS#. I called the 401K company several times with this info, and each person I spoke with told me that I need more info.

So, my question is: Does my previous employer legally have to give me that info?

Thanks!

Do you include an outstanding loan balance in the calcualtion of the Required Minimum Distribution?

Are actuaries generally requiring written elections from clients regarding PPA funding elections before signing AFTAPs for 2008?

I'm referring to asset method, phase in election, lookback month, etc.

Anybody willing to comment on how this process is generally being handled, i.e. formally or informally? Are there any advisories or published guidelines on this subject?

We're requiring formal elections in advance and I'm wondering if others are doing the same. Thanks for any comments.

Would a sponsor that decides to offer only Index funds in his 401(k) Plan be intending to comply with ERISA 404©?

We have a 1 person/owner takeover DB plan. The prior firm did not certify to the AFTAP by 4/1/08 so the plan is "deemed" to be restricted in accordance with section 436, ie, no benefit accruals after 1/1/08 and no lump sums allowed.

The problem is that the plan is close to being overfunded and we need to distribute assets as soon as possible. The AFTAP would have been well over 90%(-10) to allow for no restrictions if certified timely. We are in the position now to certify the 2008 AFTAP at this time, which is also well over the threshhold for benefit restrictions.

Questions:

1. If we certify to an AFTAP now for 2008, how does the plan become "unfrozen" and allowed to accrue and payout? For a deemed freeze on 4/1/08, is there an amendment required to reflect this? If yes, do I now do 2 amendments, one for the freeze on 4/1/08, and one for the "unfreeze" now?

2. Can his payout after the new AFTAP reflect a benefit accrual retroactive for 2008 year, and the 2008 COLA?

Any comments would be appreciated.

Thank you.

A participant in a PS/401k plan has requested a hardship distriution for medical expenses. Upon questioning her, participant stated she has financed her outstanding medical bills. Can she still receive a hardship distribution for the unpaid amount of the medical bills?

A person is very young but making $350,000. I want to install DB & DC Plans. If the DB contribution is 25% or greater I am pretty clear that she can contribute another 6% under the Profit Sharing Plan for a total of 31%.

If the person is so young that the DB contribution is, say, 20% can you then contribute 11% to the PS?

IRS Notice 2007-28 (basically, I think) says to ignore the first 6.00% of Profit Sharing contributions. So can she make 6% of ignored contributions and then 5% to get to 25% (11% total to the Profit Sharing?)

Or is the extra 6% available only if the DB contribution is 25% or more?

Thank you

This may be a dumb question but I haven't seen a definitive answer out there...

Can a 409A plan provide for different payouts upon different events. for example, you get 100% of amounts that we set aside if you leave because of disablity or age 65 retirement, 90 % if there is a change in control, 80% if you we fire you for no good reason and 20% if we fire you because you were a rotten employee?

Would the answer be different if the agreement just said you get 100 k for disability or retirement, 90k for change of control, 80k for term w/o cause and 20k for term with cause?

Also, could you have different payout schedules for each of these occurrences (eg lump sum for disability, 5 year installment for disablity, 10 year for term w/o cause and 15 year for term w/cause)?

Thanks.

I don't have all the facts on this one yet, but the business owner and his wife have failed to deposit amounts withheld for their personal Simple IRA contributions and employer match "for several years". Apparently they have had a couple of employees over the years and have deposited those employee's contributions and matches, just not the owner's and wife's.

Does anybody know if this would be considered "misuse or diversion of plan assets", making this error ineligible for any correction program?

If so, any ideas as to how to proceed?

A client with a June 30 year end for health insurance has a medical reimbursement cafeteria plan on December 31 year end. He asked me if he should change the 125 plan to June 30 to match.

I can't think of a reason they need to match. Am I missing something?

Is it possible for an employer (hosptial) to sponsor both a 403b and 401k at the same time? There is one HCE that will be severly limited in the 401(k) for deferrals. (I don't the think they want to add the safe harbor to the 401(k))

Would it be permissable to set up a 403(b) in addition to the 401(k) so that the HCE could put max out his deferral in the 403(b)? Additionally, if we set the 403(b) as a deferral only plan, can we avoid having to do the 5500?

Obviouisly I don't know much about 403(b)s. Any input would greatly be appreciated!

Thanks!

We have a husband and wife that each own their own businesses. The wife owns 100% of a medical practice and the husband owns 100% of an executive search firm. The husband is barred from owning a mediacl practice due to the lack of an MD; would these two businesses still be considered a controlled group?

Ok Tom I need your assistance...

I have a client that is a PEO and has 80+ divisions (employers). There is a crystal report I modified that gives me the list of divisions, however it will only list the divisions for which there are employees in the database. When I add new divisions (prior to adding any of the corresponding employees) I like to review a listing of the divisions to be sure I have them all and entered all the new ones.

Can you think of a way I can get the report to print all of the divisions and not just those with associated employees or is that not an option?

Thanks in advance

Under the 401(k) regs, an employee who takes a hardship withdrawal may not contribute to any other plan of his/her employer for 6 months following the withdrawal. But, under Section 423's universal availability rules, all employees must be able to participate in a company's ESPP (with certain exceptions).

So, if an employee take a hardship withdrawal on a 401(k) plan and then cannot participate equally his/her employer's ESPP for 6 months, does that violate the ESPP's universal availability requirements?

I'm assuming that Congress wouldn't set up a safe harbor for 401(k) hardship withdrawals that would directly conflict with another code section (i.e., 423). But does anybody know of any authority on this issue that essentially says that complying with 401(k)'s hardship withdrawal safe harbor does not result in a violation of 423's universal availability requirement?

Thanks in advance.

We are considering adding a plan imposed limit on HCE deferrals for a plan we administer. Has anyone seen an instance where the actual percentage limit is not specifically written into the plan? Can it be stated as a formula (i.e. "the actual deferral percentage of the NHCE group from the prior plan year, plus 2%"), or even as "an amount to be determined each plan year by corporate resolution"? Would any elective deferrals over this limit be able to be re-classified as catch-up contributions?

Can a MPPP merge into a 403(b)? I see that assets can be rolled from 401a into 403b but we are specifically looking to merge.

I am new to health and welfare benefits practice (main focus has been pension plans). If an employee who becomes disabled uses up all sick pay, vacation pay, and then remaining STD benefits, and then becomes covered under an employer sponsored LTD plan, at what point (if any) is there a separation from employment with the employer? Thanks in advance for any quidance.

someone asked me this and I don't deal with IRAs, but anyway:

"I have an IRA that consists of an auction rate bond that I cannot sell. The bond does not pay enough interest to to meet the min distribution I am required to withdraw. What should I do?"

I guess, in other words, if you have all assets tied up in non liquid assets, how do you pay a min. distribution.