Our client has a regular 401(k) plan AND ROTH 401(k); and we know we have to calculate the RMD on the TOTAL value of the acount.

When they take the distribution, are they required to take a portion from the ROTH? OR can they take the entire RMD from 401(k) ONLY?

Good Morning,

I wanted to know if anyone knows of a good source for someone (myself) who is looking to improve their knowledge in the Plan Design area. Things like types of plans, Plan Docs, Testing/5500, Safe Harbor, etc. I have an extensive background in investments and really want to shore up my knowledge in areas I am lacking.

Any online courses, etc

Thanks! Mike

I need some clarification on the uses of the phase-in percentages for 2008. Am I correct that for plans that were not under Deficit Reduction for 2007, the phase in of 92% is used in the following circumstances?:

1. In determining whether to subtract credit balances from assets for Benefit Restriction purposes, if the plan is 92% funded then you do NOT subtract the credit balances.

2. However in determining the funded percentage of the AFTAP for Benefit Restriction purposes, you do NOT use the 92% phase in.

3. In determining whether to set up a shortfall base, no base is established if the adjusted assets are at least 92% of the Funding Target (generally this is the accrued liability under projected unit credit method).

4. Once it is determined that a shortfall base is to be set up, amount of the base (the funding shortfall) is 100% of the funding target less adjusted assets. IN other words, you do NOT use the 92% phase in once it is determined that a shortfall base is to be set up.

Comment? Corrections?

Prior to the issuance of the final new 403(b) regulations, there were PLRs that approved the use of vesting schedules for employer contributions under 403(b) plans. However, new regulation 1.403(b)-3(d)(2) provides that all contributions must be fully vested, and that the portion of the plan that fails to meet that requirement will be treated as a 403© annuity. The regulations then provide that when the contract becomes fully or partially nonforfeitable under the vesting schedule, the part that has become vested can generally be treated as part of a 403(b) contract. Therefore, apart from needing to maintain separate accounts for non-vested amounts, it does not really seem like much of a big deal to still have a vesting schedule in a 403(b) plan. Does anyone have any thoughts as to why it would nevertheless be better for 403(b) plans with vesting schedules to go to full vesting next year?

I have a suite of Excel "Actuarial" functions that include calculators for annuity rates and social security benefits that were developed by a co-worker many years and many versions of Excel and Windows ago.

I am finding that the annuity calcuator now occasionally encounter errors when run in Excel 2002 on some Windows XP installations (but not others).

I have been dutifully updating the COLA, wagebase, covered comp and old wage base tables each year, but with this year, whether due to limitations on the size of the array or the Excel/Windows installation, the Social Security function is returning "#VALUE!" errors

I am interested in either finding a source for obtaining updated replacements OR finding some VB programmer who might be willing to debug/update the current coding in exchange for the source code.

Does anyone have any suggestions?

Please settle and argument for us. The QDIA Notice is required anytime there is a QDIA in the plan. It applies to plans "with" and "without" ACAs, EACAs, or QACAs.

Thanks.

Although I used to work in the 'ee benefits field (which is how I know about these message boards), right now I am just acting as a private individual trying to decide whether and how much to invest in the 457(b) plan [or is it a 457(f) plan? -- I can't tell from my statements!] of my current employer-- a 501©(3) hospital -- after maxing out its 403(b). I understand that, for the plan to qualify under 457(b) or (f), the assets MUST be subject to the hospital's creditors should the hospital become insolvent.

My question is whether anyone has ever known an ACTUAL case where creditors tapped a non-profit's 457 plan assets? (In actuality or theoretically, does or would the 457(b) or 457(f) designation make any difference in this respect?)

I know there are no guarantees (by definition, in order to get the tax deferral!), but I'm trying to ascertain the realistic probability of my deferrals being taken by future creditors (in the event of 'er bankruptcy), based on past and present 457 plan experiences during employer bankruptcy.

I've looked online at other sources and just can't seem to find the answer to my question. I hope you can help. Thanks in advance.

A 401(k) Plan's TPA is proposing that dividends allocated to the Company Stock account be used to buy company stock at a discount. Publicly traded company. Has anyone seen this? Issues?

Has anyone heard any rumors about subprime mortgage ERISA litigation?

Can I switch from a high 5 career average to a "high 5 in the last ten years" average if I preserve the accrued benefits in place. Does anyone know a cite that backs this up?

If a plan selects Target date funds as their QDIA, do they have to base the target date on the plan's NRA, or can they base the target date on a uniform age for all participants, such as age 65?

For instance if a participant will reach the plan's NRA of 55 in 2030 and reach 65 in 2040, do you have to invest that participant in the 2030 fund or can it be the 2040 fund (assuming all proper notices indicate age 65 is the basis for the investment)?

Thank you for any assistance you can provide.

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Comments here are welcome!

Union employees participate in a program where they contribute (after tax) to a death benefit fund. Upon the union ee's death, the surviving spouse rec'd a death benefit. Is this reportable on 1099R. There is no "formal" plan and it is not life insurance. Thanks.

Time to do some lump sum term calcs for 2008 calendar year plans. Theoretical example/question that hopefully will serve for the methodology:

If I have a retiree at age 65 (plan's NRA also is 65) with a lump sum option, is the annuity factor at 65 a summation of the following annuities: (a) 5 year temporary life annuity at 1st segment rate, plus (b) 5 year deferred temporary life annuity payable for 15 years at 2nd segment rate, plus © a 20 year deferred life annuity at 3rd segment rate ?

If the above is correct, if I changed the terminated participant's age to 55 would it just be the same above annuity summation but discounted 10 years at the 2nd segment rate (let's assume no pre-mortality table and no forfeitures on death).

I'd appreciate any confirmations or corrections.

Have a takover plan that stopped their descetionary match mid year. When we recieved year end information it was discovered that they continued that match for the Union employees only...we did not know they had union employees in the plan.

Union employees are not excluded from the plan. They are on a Relius prototype document.

The 410b test passes because the employees got matched for the first 7 months, but the %'s are not the same for all employees.

Is this legal? Can you exclude non-union employees from a employer contribution?

What are the options here???

The new final 403(b) regulations provide that tax-free transfers can take place between investment contracts if certain conditions are met. One requirement is that the participant account balance immediately after the exchange must be at least equal to the account balance before the exchange. Does anyone know if this means that annuity providers can no longer impose any charges if a participant is making a transfer to a different firm's investment contract under the same 403(b) plan?

Help. I'm contemplating purchasing a new computer. While I know my way around the block with applications, I'm of little use with hardware and operating systems. My only decision is to buy a PC rather than a MAC. In my business applications, I use a lot of antiquated systems such as Multimate Word Processor, Paradox (DOS version), and programs written in FORTRAN. In short, a lot of DOS applications. For pleasure, I use ITunes, Windows Media, Real Player, music splicers, etc.

I currently operate a 4 year old HP Pavilion which has served me faithfully but I'm hesitant to push the envelope.

(1) I have heard a lot of grumbling about Windows Vista and how dredful it is. Of course, those who grumble are unable to articulate that they can no longer run certain applications. I note from just playing around on the computers at Best Buy that Vista does offer a DOS shell so would suspicion no problem. Clearly, the layout and commands are different.

Has anyone experienced problems with VISTA?

Can I buy a new computer loaded with VISTA, remove VISTA, and load XP? I've heard you can't do this.

(2) I note that Dell still offers computers with XP. I've heard grumblings about Dell but again no specifics. Money is secondary to reliability and from what I can see from Dell, by the time you get done on a high-powered computer, you haven't saved much. Any Dell users like to give testimony one way or another?

Any comments will be especially appreciated and if you have concerns about making them public, please email me at:

arochman@att.net

Thank You,

Andy Rochman

St. Louis, MO

Hello:

A client filed an IRS Form 13750, Election to Participate in Announcement 2005-80 Settlement Iniative with respect to a 412(i) Plan. The Closing Agreeement recently received states that "[t]his Agreement provides no relief from any other penalty that may apply, including penalties under Code Section 6707A."

While I understand that the IRS has no authority in choosing not to assess this penalty, I realize from IRS Notice 2005-11 that the penalty can be rescinded after it is imposed. I was wondering if the IRS has sought to impose this penalty in other situations. I know that in the cae of certain non-management ESOPs, the IRS has chosen not to assess the listed transaction penalties under Code Section 6707A.

Please remember that this situation deals with a Closing Agreement under the Global Settlement Initiative and not from an audit of the 412(i) Plan.

Thanks in andance for your consideration. Ed

We have a former client with under 10 employees (some HCE, some NHCE), who a adopted a DB plan in December 2004. I've seen the original signed documents. They left us in March 2005, or thereabout. They now have come to us like a prospect and they want to know if we'll help them set up a new DB plan, claiming they never adopted one in the past. I can think of no possible way, ethically, that we can ignore the prior plan and agree to take this on this as a client.

Comments?

There are several types of investments that satisfy the QDIA requirements.

However, one investment that would not be a QDIA is if a Plan used a money market account as a permanent (more than 120 days) investment.

If we are in agreement with my above comment, then does this mean that using a money market account as a permanent default would not receive liability protection and thus an employee can sue an employer for such a default investment?

Thanks.