someone just told me that for db plans where the spouse's age is less then 10 years different, I can't use the uniform table... Is that true?

Is changing a 412i plan to a traditionally funded DB considered to be a change in funding method?

If the employer excludes certain otherwise eligible employees from participating in the company's 401(k) plan, do those employees still count (as "zero") in the ADP test? They are not statutory excludable employees; its just that the employer choses to not allow them in the plan. They still pass 410(b), but must they still be included in the ADP test?

Thanks

We have a large client (3500 participants and $65 mil in assets) who made late deposits in January 2006 for deferral and loan payments withheld in 2005. We filed Form 5330 on these late deposits and the earnings amount was $112. The earnings were put in at the time the late deposits were corrected.

Their attorney advised them to file VFCP to ensure compliance. I think that's overkill. I would appreciate comments or anecdotes.

Thanks.

If a plan is wholly invested in a Group Annuity Contract would it be inconsistent to also have a Trust Agreement in place? Without the Trust Agreement (or trust provisions) the duties, powers, liability, etc. of the Trustees are not set forth.

The Trustees are both named and Trustees by virtue of being the contract holder.

While I've been able to find references to plans that both had a GAC and a Trust Agreement, I wasn't able to determine if there were either "true" trust assets in addition to the GAC or if the contributions hit a trust before the GAC or like in my situation the Trust Agreement would primarily outline Trustee provisions.

Thoughts?

I have been using accumulated value of life insurnace policies for S412/404 calculation. I have come across cases where actuaries have used accumulated or cash surrender values.

A plan with life insurance is under audit and the IRS is saying that the value of the insurance contracts should be determined in accordance with Rev. Proc. 2005-25, which outlines the methods for valuing the insurance contracts that are transferred to a partcipant etc.

Is there any guidance on determining the value of life insurance contracts for S412/404 calculations?

Thanks for your help.

If we freeze our DB pension plan is there any going back on it? Can we un-freeze it a few years later? Are our only two alternatives (a) leaving it frozen or (b) terminating it?

Has CMS ever promulgated any fines or penalties to be assessed against plan sponsors who fail to provide the Medicare Part D Notices of Creditable or Noncreditable Coverage to active employees (who are otherwise entitled to a notice)?

I can't seem to find anything on the wonderful thing that is the CMS website.

Thanks.

Buyer maintains a 401(k). In April of 2008, it will acquire Seller, the sponsor of a Simple IRA. I've read 408(p)(10) and understand (I think) about the transition period permitted with respect to the Simple IRA. I've also seen some discussion about the fact that Simple IRAs must generally be maintained for a full year. But does that rule still obtain in an M&A setting? Would the Simple really have to be maintained through year-end 2008 on side-by-side with Buyer's 401(k)? If the Simple IRA were a 401(k), it could be terminated on the eve of closing, so that Buyer could get on with life and have all its employees in the same plan immediately. Why should the result be different with a Simple IRA? And if Buyer does have to maintain the Simple IRA through year-end 2008, how does that impact its 401(k) testing??

Would love it if anyone wanted to share their thoughts about most common way of handling this situation. I need to know how this story ends!

Corrective QNECs (as provided in EPCRS) for excluding an employee from electing and making deferrals under the 401(k) plan need to be made. Problem is, language in our prototype plan document only permits QNECs to fix ADP/ACP problems. Do we need to do anything to permit the corrective QNECs under the plan?

I contacted an individual at the DOL today about top hat filings for NQ plans. He mentioned that each plan included on the statement must have a unique plan number, and that the number should coordinate with all of the plans sponsored by the employer. For instance, if the employer established two plans in prior years, and then establishes a new plan effective January 1, 2008, the statement should indicate that the new plan is plan 003. He said it also makes sense to name the plan, although naming the plan is not required in the regulations. We have never numbered our plans, but have simply identified them by unique names. Please let me know if you have any thoughts on his understanding of the cumulative numbering requirement. Thanks.

The 401(k) has a very liberal self directed investment policy. A few of the HCEs want to invest in a vehicle that is limited to only high net worth individuals. While the plan does not prohibit the rank and file from investing in the same vehicle -- the investment itself is not available to them due to the high net worth restriction.

Can the plan permit the HCEs to invest knowing that the NHCEs could not invest due to the investment's restrictions?

In an employment agreement, an employer granted an employee a 75k deferred comp right payable at termination at the employee's election under terms of a NQDC plan that would be created.

So, now I'm drafting the Plan and see a big problem -- the initial deferral election (the employment agreement) did not sufficiently limit time of distribution options. A deferral occured under the employment agreement but the plan is in violation of 409A because a time of distribution election was not made in time.

I don't think any transition rule allows a late deferral election. I was hoping the correction program might help, but I don't see any help there either.

Would love to hear any thoughts.

Don't typically deal with SARSEPs - tend to find them anything but "simplified"!

However, Employer has a "grandfathered" SARSEP adopted via IRS Form 5305A-SEP. It is my understanding that:

1. Such a "model" SARSEP is automatically "deemed" to be top-heavy (i.e., to avoid the Employer's having to make a T-H determination each year).

2. The required top-heavy minimum contribution for eligible Non-Key Employees is a % of comp equal to the lesser of 3% or the highest deferral percentage of any Key Employee.

3. If no "discretionary" employer contribution is made to the SARSAEP for all participants for a plan year, then the eligible Non-Key Employees still have to receive a top-heavy minimum - or if an employer discretionary contribution is made that is less than the required top-heavy minimum, Non-Keys would need to receive an additional contribution amount, so that their total employer contribution equalled the T-H minimum.

Correct - or no?

Thanks!

Can a corporation which pays federal income tax be both a welfare benefit plan sponsor and welfare benefit fund under IRC Section 419(e)(3)(B)? If not, why not?

Question about minimum distributions:

Assume participant is required to take minimum distribution withdrawals for this year. Can this individual waive or modify the federal and or state tax withholding? Also, withholding refresher would be appreciated - rollover eligible drives all of the tax withholding options on distributions, yes?

Many thanks,

Matt

Went over to the JBEAs website to get the reenrollment form, and discovered that the Form 5434-A for download still references the prior cycle. Sent an e-mail to the board and they had the following response:

The new form is not ready yet. It will be posted on the website in January. Renewal forms for the upcoming renewal cycle will not be mailed.

Please do not use the the renewal form currently on the website.

Heads up that they will not be mailing the forms out for renewal this time around; must download them yourself.

Are safe-harbor contributions (3% non-elective, basic match and enhanced match) available for in-service withdrawals at age 59-1/2?

What about hardship?

I should know this but I can not find a cite.

The plan document would have to provide for this, but I need a cite that says what can or can not be done.

Thanks.

New client wants to establish a Profit Sharing Plan. Business is a Fast Food restaurant. They have a large number of employees who are under 21, and/or part time. If I set eligibility to participate at 21 and 1, are there any coverage or discrimination problems? I just reviewed 410 (b) ant that seems OK, but I thought I might be missing something.

I am looking at 1.457-4(e) re: excess deferrals for a governmental plan but can't figure out how excess deferrals are reported (w-2 or 1099-r or both)?

if participant has excess deferral for 2007, does he/she get a w-2 for the amount of the excess deferral (plus earnings) for 2007. or does he/she get a w-2 (for 2007 calendar year) for the excess deferal amount and a 1099 (for 2007) for the earnings on the excess deferral?

thanks to anyone who can help.