OK, so we have to add a new payment alternative to our DB plan (by the end of this year, I think) - a 75% J+S. The only J+S we have now is the 50% and we require that the spouse sign off if the employee wants something other than the 50%.

Question: Suppose the employee now wants to choose the 75% J+S. Can we just pay it or must we get the spouse to sign off?

PS - Does anyone know what problem is solved having to add a 75% J+S to our plan?

We have a SH 401(k) plan that allows employees to defer after 3 mos., and requires employees to satisfy a 1-YOS requirement to receive a nonelective contribution (individual allocations).

Can we give employees who have worked less than the 1-YOS the 3% SH, and not the gateway minimum? Essentially, can we apply the otherwise excludable rule to employees with less than 1-YOS?

I thought I was clear on this rule until I read the ERISA Outline Book. [page 9.41 of the 2008 edition, paragraph 4.a.6.a]. Several of our employees have read this paragraph and it seems to contradict itself regarding the use of disaggregation when you allocate SH and/or TH mins. Can anyone clarify what he's saying?

Any input is appreciated.

When a multiemployer plan has only one employer, does it automatically then become a single employer plan just by way of the definition of a multiemployer plan? I thought I read somewhere that once a plan was a multiemployer plan, it always carried the multiemployer label (for PBGC, funding, etc. purposes), but I cannot now find any authority for that (so maybe I dreamed it up). Any guidance would be greatly appreciated!

In looking at the website, I am confused. Is the EGTRRA Volume submitter software available for stand alone PC?

If yes, can you tell me what the file is called?

In looking at the EGTRRA Volume submitter document, the adoption agreement has 24 pages of 7 appendices, (some of which need to be signed). In the past I have put the adoption agreement in the first section of a 3-ring binder.

I am looking for ideas on how to organize this.

I am going to try to write a table of contents. But since each appendix starts numbering at 1, that will not be great.

Another thought, some of the appendices may not apply. Do we need to give those to the client? When I give the document to an IRS auditor: do I need to include the appendices that do not apply? My first thought is no to both questions. But they are part of the approved document, so I'm not sure.

Related question: This year I am going to keep an electronic copy. Do people keep signed or unsigned copies, electronically?

I have hard copy research files on a variety of ERISA issues going back to the early '90s.

Nowadays I just save PDF files directly from Benefitslink, to digital files organized according to topic.

I am looking for suggestions on what to do with the old hardcopy research files.

Discard because they are just so old?

Cull the "gems," scan those and save to new digital files, and toss the rest?

Just wondering how other attorneys and practitioners have handled this.

Got a non-profit with both a 403b and a PS plan. We want to combine the two plans under the 403b to halve administration costs (sort of) and still be exempt from the ADP test.

Can you Merge a PS plan into a 403b? Or do I have to terminate the PS plan (and trigger full vesting) and allow participants to rollover?

A client has a frozen DB plan and had a recent death of a participant. The named beneficiary wants nothing to do with the proceeds. It's described as "Kriptonite" to them. Apparently the relationship is an old one and the participant changed her beneficiary on the ESOP and 401(k) but may forgotten to change the frozen defined benefit plan participant. What does the named beneficiary have to do to keep from receiving the proceeds and in the process causing problems with their current relationships?

Thanks

We have a 401(k) plan that currently has allocation conditions on the PS contribution of 1000 hours and also has a last day requirement. They currently use full year compensation to determine the allocation for first-year participants and they have semi-annual entry dates. They want to retroactively amend the plan back to the first day of the current plan year (January 1, 2008) to remove the 1000 hour and last day requirement, and also change first-year compensation to be from date of entry instead of full year. I know amending out the 1000 hours and last day requirement is no problem, but is it okay to change the first-year compensation to date of entry or is that a violation of the protected benefit rules?

You cannot change an allocation formula if a participant has already earned the right to receive it and I know that by having a last day requirement, nobody earns the right to receive the contribution until the last day of the plan year, so in this case, if the answer to my first question is yes (definition of compensation is a type of protected benefit) then is amending the compensation definition okay because the plan has that last day requirement? What about the fact that we're amending the last day requirement out in the same amendment? Is that okay too?

In general, is the definition of compensation even part of the 'right to receive the allocation formula' rule? (For example, in a plan that doesn't have a last day requirement.)

Hopefully, I've made that clear.

I know I may not be in the right area here but I couldn't find anything for Profit Sharing only plans. I have someone saying that if a Profit Sharing plan has the ability to take Hardships than they must be amended for the final 401(k) 401(m) amendments. My question is...how could a Profit Sharing plan have the ability to take Hardships? Aren't hardships only available from elective deferrals? Would hardships impact whether or not the final 401(k)/401(m) amendment would be needed?

My client "P" was purchased by "S". P still exists and pays its remaining two employees, both NHCEs (one was the former owner of P until it was purchased) and has a 401(k) profit sharing plan. S has no plan at all.

I'm trying to figure out if I'll actually need to pry S's information from them (they've been terribly tight so far) in order to run coverage tests (the grace period is running out). Won't it automatically pass because no HCE's are benefitting? I'm just having trouble wrapping my head around this. Thanks.

And... just thinking ahead, it will cause a world of complications if S decides to put in a plan just for the S (that is, those who don't work at P) employees, right?

I have seen posts with 2 different opinions and just wondering what's the correct way to handle this.

401(k) established in 2001. For the 2005 & 2006 Form 5500 the incorrect EIN was used (typo - one number off on the end). Do you file 2007 with correct EIN and reference the incorrect # that was used for the past 2 years in Question 4 of the 5500 OR go back and amend the 2005 & 2006 form 5500s including schedules?

Thanks for any input.

Client A has maintained a Simple IRA for several years; it attempted to terminate the Simple IRA mid-year and, in so doing, stopped elective deferrals for three and a half months. Having been counselled that it cannot terminate the Simple IRA mid-year, it is resuming plan operations for the remainder of 08 and will correct under VCP. I've spoken with an IRS agent regarding the proposed correction and received positive feedback. The question arises, though, regarding what interest rate we should use for purposes of calculating earnings.

Section 6.10(4)(B) of Rev. Proc. 2006-27 (which is not directly relevant (i.e., different type of error) but instructive nonetheless) states that, given the assets are held in IRAs, "there is no earnings rate under the . . . Simple IRA Plan as a whole. If it is not feasible to make a reasonable estimate of what the actual investment results would have been, a reasonable interest rate may be used." It is not feasible for us to determine what the actual investment results would have been. In fact, the IRA custodian is still "researching" whether it will be able to accept the earnings (which, of course, they must take for the Plan to complete its correction).

What interest rate do you believe would be most reasonable?

SAW THIS ON ANOTHER DISCUSSION POST: I HAVE EXACTLY THE SAME ISSUE: MY PLAN HAS TO CONVERT TO AN AGE 62 RET FROM AGE 50 RETIREMENT,

quote<<<<<<

I believe that Notice 2007-69 states that The Sponsor has to adopt a good faith interim amendment to comply with 401(a) 1(b)(2) and (3) effective no later than the first day of the first plan year beginning after June 30, 2008 and the plan is operated in compliance with such amendment as of the amendment's effective date.

Applied to my case for Plan A (Plan A has a current ret age of age 50 and 1/1/ plan year), this means that we will have to amend the retirement age to be Age 62 (from Age 50), and the latest we can do this is January 1 2009 (effective Jan 1 2009).

So in the meanwhile till 1/1/2009 arrives, can the client just ignore the above Notice and continue contributing at higher contribution levels as per retirement age 50. This is assuming that the plan runs no risk of over-funding.

quote>>>>>>>>>>>>>

My wife was recently laid off and doesn't have a large 401K. Can she, and is it worth it, roll this money into a Roth?

I have 7 doctors, all LLCs in their own right, who now have formed a PLLC. Not sure how this may affect having a PLLC-sponsored 401(k) plan:

1) If any of the LLCs sponsor a plan currently, is this a problem?

2) One of the 7 docs has a physician-spouse, also an LLC, who has her own plan. Is this an issue?

3) Are we looking at a controlled group? A multiple employer plan?

Help! My brain hurts.......

Unfortunately I've seen little specifics regarding the actual mechanics and best practices of dealing with disability benefits in M&A and would welcome practical advice. Our situation is an asset deal where buyer will be hiring all of seller's employees at closing and seller will disappear. Seller intends to terminate all of its benefit plans (including short and long-term disability benefits) as of closing. Buyer's disability plans require individuals to be actively employed for at least one day before being eligible for coverage. What happens if seller's employee is out on short-term leave at closing. Employee hopes to return and Buyer intends to hire all of Seller's employees, including the one out on leave, but the employee gets worse, never returns to active employment, and would generally qualify for long term disability benefits. Does Buyer have to cover the individual under its long term disability plan if it otherwise agreed to recognize service with the Seller for most purposes? Can Buyer deem the individual to have been actively employed and thus eligible for coverage under the LTD plan?

Plan has a partiicpant who is interested in taking a hardship to pay back taxes. This plan has the AccuDraft prototype 401(k) (Basic Plan 01). The plan allows for hardships for the typical reasons, outlined in Section 5.19(b): medical, post-secondary ed, to purchase primary residence, to prevent evection or foreclosure on primary residence, funerals, and "any other immediate & heavy financial need as determined by the administrator in a uniform non-discriminatory manner." I asked TAG if this participant's request could be granted, as per above, and the response I got was no. I think what TAG is trying to tell me is that the plan should not have both the safe harbor standards and a facts & circumstance option. Tag cited announcement 94-101. This plan document, while not created by us, was dated 1/1/04.

Anyone out there use this document, and if so, would this request be permissable?

Thanks, gang!

Does the retirement age in a 401(k) Profit sharing Plan (with no Joint and Survivor options, or should I say no annuity options?)

have any significance other than that is the age when everyone is 100% vested?

Does an agreement that says that vesting occurs only after 3 years of service, that payment occurs as soon as the service provider is vested, and that the service recipient has the authority to accelerate, meet 409A?

I would think it would be ok (would not violate 409A), because the agreement is never subject to 409A because it's always excepted under the short term deferral rule, so that there's no prohibition against the service provider accelerating vesting and payment.

On the other hand I have this nagging thought that maybe it is a problem, because the service recipient has the discretion to determine the timing of payment and taxation.