We currently drop dependents who are no longer full-time students. Do we need to then add them when they decide to go back to school? Some dependents are then having multiple events due to not having the required number of credit hours and administration has become a nightmare. Any thoughts to make this easier?

As I talk to the various actuaries/programmers about when/if they'll have a 417(e) J&S annuity factor program for those plans where the true normal form of benefit is a subsidized 100% J&S benefit, it's apparent that this is a cumbersome programming effort not likely to be completed immediately. What would you think of the following approach for a calendar year plan where there is a 2008 termination and client is pushing hard for a lump sum distribution to be paid immediately (plan allows for it too).

1. Since current plan document in 417(e) section of actuarial equivalence still references 30-year GATT rates for 417(e), pay out on pre-PPA 06 417e rates per plan document (Our plans don't just reference 417(e) in general; there is extra language that ties it to old 30-year treasury bond rates).

2. If ultimately later in 2008 it can be shown that old 417(e) rates used to pay out someone in early 2008 produce slightly higher PVABs than new mortality table & segment rates do, which I think will generally be the case, then I think we've both followed the terms of the plan and met minimum thresholds on lump sums (417(e)). Yes, we may have paid a small amount more than we would otherwise have to but if client is ok with that.....

3. If ultimately later in 2008 the new mortality table (post PPA 06) more than compensates for the higher segments rates so that new 417(e) PVAB is GREATER than old 417(e) PVAB, then we'd have to do an additional true up distribution and also amend the plan to reflect the new rates (the amendment will be needed anyway at some point so that's nothing extra really).

What do you think ? I'm going to try to delay lump sum distributions on subsidized J&S plans until some annuity tables for J&S can be developed, but if push-comes-to-shove have I violated anything going the route above given the plans haven't been amended yet for new 417(e) language and aren't auto-amending plans in the 417e area of the plan doc.

EBIA has a premium access service. Does anyone know whether that service allows users to ask questions of other benefit professionals? We have a person handling cafeteria plans that wants to subscribe & use it as meesage (like this one) to ask cafeteria questions. I doesn't look to me like the premium access does that, but figured I could double check.

Thanks in advance for any guidance.

Did PPA in some way invalidate this procedure? My specific question is whether a new 2007 DB plan that has a 12/31/2007 val date can change to BOY 1/1/2008 and be subject to automatic approval under 2000-40.

Any help would be appeciated.

1) Does the new rule that allows a participant to diversify employer stock only apply to publicly traded stock?

2) Does this apply to an ESOP with only employer contributions?

3) Do the same rules apply to a 401k with employer stock?

4) Does anyone have a link to the final regulation as it relates to this issue?

Thank you very much for any help.

Either I'm crazy -- or just in need of a break from my testing -- but I'm positive I remember recent legislation (I thought it was the Final 401(k)/(m) regs) that made matching 401(k) catch up contributions mandatory. Does anyone have any idea what I'm talking about or do I really need this long weekend?

The safe harbor standards require that the recipient of a hardship distribution be prohibited from making deferrals to the plan and all other plans for 6 months. "All other plans" includes the employer's nonqualified deferred compensation plans. It is my understanding that 409A prohibits the suspension of deferrals once an election is made. Does this mean that employers with NQDC plans subject to 409A can't use the hardship safe harbors for their 401(k)?

We have 401(k) plan that was formed as a spinoff from our prior company. (The company split in two, we each have our own stock now.) How do we determine HCEs for testing purposes? Should we consider HCEs from last year prior to the spinoff when we were all one company? Last year we were employed by the original company, which is not who we are now. (We were all employed by A, it split into A (continuation of A) and B. We are B.)

Thanks.

I am a trustee and custodian supporting independent RIA firms, and am often asked to provide information on TPA's that provide their services without requiring that they act as custodian or manage the particpant assets themselves. Is there a web site that might list these firms along with contact information? Thanks.

What is the AFTAP for a new plan in 2007 with no past service liability and a beginning of year val date? 100%? 0%, None of the above?

Is it true that there is no presumption for 2008 available, meaning that a 2007 val and a 2008 AFTAP must be completed by 4/1/08 to avoid the restrictions?

Sponsor of Money Purchase Pension Plan wants to increase the contribution for the 2007 Plan year (a calendar year). Is there any issue with amending the Plan after the close of the Plan Year to provide for a greater contribution (assuming the contribution is timely made for deduction and funding purposes)?

Under Section 824 of the Pension Protection Act of 2006, certain taxable amounts can be directly rolled over to a Roth IRA beginning in 2008, if certain requirements are met regarding modified adjusted gross income and tax filing status (if married). It is not clear to me from the statute and the legislative history, however, whether indirect rollovers are also permitted in that case; i.e., if a participant receives a taxable distribution in cash (after 20% withholding), can that amount be rolled over to a Roth IRA within 60 days of the distribution? Can anyone provide a cite one way or the other?

The Plan Sponsor of a MPPP allowed a hardship distribution because the distribution application form (a QRP prototype forms) had a hardship distribution check box on it so naturally the plan sponsor and participant thought it was allowable. The participant was 52 years old and not of NRA or ERA. Oddly enough the MPPP permitted employee contributions, but I don't think the participant had any money in his employee contribution account. The adoption agreement was silent on whether hardship distributions were allowed but the prototype document stated something like "if this is a profit sharing plan, then in-service and hardship distributions are permitted" and from that I infer that this means they were not allowed in the MPPP, no matter what.

Is there a way to correct this within EPCRS? I know there is a correction mechanism for 401(k) plans in that the plan sponsor would just amend the plan, but this is seemingly unavailable for MPPPs. If not, any recourse at all?

Our document states for any plan year a participant made both Roth and elective pre-tax deferrals, the administrator operationally may implement an ordering rule procedure for the distribution of excess contributions.

When calculating the associated earnings, would you only look at the earnings for the source you are distributing or would you look at the combined earnings for both the pretax and Roth contributions for the year?

We have a terminating 401(k) Plan with 86 missing participants with no last known addresses, but with small plan balances. We will be seeking an IRS determination letter for the Plan. The Notice To Interested Parties will need to be distributed to all current and former employees with vested benefits under the Plan, so the missing former 86 need to receive the NTIP. Does anyone know to what lengths we must go to locate these former employees to provide them with the NTIP? The requirements of DOL FAB 2004-2 regarding locating missing participants appear to apply in the context of sending out the distribution materials, not the NTIP. We've already exhausted the first 3 search methods and are left with using the IRS or DOL letter forwarding service at a cost of around $1800. My concern is that we'll incur that cost twice -first to send out the NTIP and again to send out the distribution notices after we get the determination letter. It's my understanding that neither IRS or DOL discloses the actual adresses to the requester. Any suggestions are appreciated.

Ne w to health plans..but if you have a plan that has cafeteria, HSA and a transportaion benefit.....

Is there any regulation that excludes the transportaion benefit from the testing?

Has anyone worked on the calculation of the AFTAP for an EOY val in accordance with Notice 2008-21? It appears you are allowed to use results from 2006 but are limited in adding back 2006 contributions. The Notice talks about a 90%/110% calculation to determine that limitation, but it seems a bit confusing. Any input would be appreciated.

My parents need to take distriputions on their IRA's (He 77, she is 74). I need to know how or where I can get a table or calculation to figure out how much they need to take out of the IRA for each person this year?

Thanks for your help.

If a 401(k) plan permits Roth 401(k) contributions, and if a non-spouse beneficiary becomes entitled to receive a distribution of Roth 401(k) money upon a participant's death, can the Roth 401(k) account be rolled over to a Roth IRA? A literal reading of 402©(11) would say "no", as 402©(11) only refers to traditional IRAs, but to me it does not make sense to have part of the distribution be ineligible for rollover, and I was wondering if anyone had seen guidance from the IRS.

I have a plan that excludes bonus and overtime from the definition of compensation. My results show a difference of 6%.

The test has a paragraph that says as a rule of thumb, results 3% and under are considered de minimis. So, I think I have a non-passing test and I am not sure how to proceed.

Another person in my office thought if the Comp Ratio test "failed", you could run the ABT. And if the ABT passed, you were o.k. I couldn't find anything specifically stating that in the reg. books. I did find some information that said if audited, it would pretty much be up to the individual auditor to determine if failing amount is de minimis or not.

Has anyone had this situation before? And how did you handle it?

Thank you,

Rachel