A participant in a Multi-employer H&W Plan got divorced. Under the terms of the SPD, he was to notify the Plan immediately about this event. He did not do so. The Plan did not find out (and had no way to find out) that he was divorced.

His ex-wife subsequently incurred medical bills which were submitted to the Plan for payment. Still believing that the ex-wife was the participant's beneficiary (as his spouse), the Plan made those payments.

It was not until three years later that the Plan found out about the divorce.

The Plan would like to bring suit against the participant for the money it paid out due to his failure to notify (as required by the SPD).

A couple questions:

1) What basis does a Plan have to pursue such an action against a participant; and

2) Should the action be brought in federal or state court?

I have done research on the issue and have come up empty-handed. Just wondering if anyone else has run into this situation and how they addressed it.

Thanks a lot.

I apologize because I am sure this topic has been covered, but have yet to find all the answers to my questions.

I currently have a 401k worth about 50-60k from the company I worked at until 2005, when I went back to school. Since I am currently in school with no income, I want to rollover my 401k to a Roth IRA before the year is over because I have no income this year. A few questions:

1) Could someone tell me the logistics of getting this done; I have the appropriate forms to fill out from my old company and will fill out the forms from my new institution. Will my old company send the money directly to the new institution where the IRA will be held? More importantly how are the taxes paid when this rollover occurs? I would assume I owe 10% of the first $8000 (or so), 15% on the next $20000, etc.... but how do I know the exact amount and can I take this amount owed out of my 401k? Otherwise I don't have the money to cover the taxes.

2) I understand that the rollover must first go to a traditional IRA and then from the traditional IRA it can go to the Roth. When are the taxes subtracted, at the time of the 401k rollover to the traditional IRA, or is that tax free and the taxes are subtracted when the money is transferred from the traditional IRA to the Roth IRA?

3) Does my money have to remain in the traditional IRA for a certain amount of time before it is rolled over to the Roth IRA?

4) Am I allowed to start up a Roth IRA with this amount of money, or can I only transfer $4000 to the Roth IRA?

Any other simple logistical information that you can provide is greatly appreciated. Please contact me if I left out any pertinent information.

Thank you in advance.

In reading PPA and then reading the QDIA Regs and the Auto Enrollment proposed Regs, some questions arise. Note that EACA= Eligible automatic contribution arrangement and QACA=Qualified Automatic Contribution Arrangement:

1. To take advantage of the ERISA preemption over state laws, and the 90 days distribution rules, and the 6 month failed ADP Test timing, a plan must meet the EACA rules, correct?

2. Are all QACAs also EACAs? Why would anyone have a QACA that is not a EACA?

3. Must a EACA use a QDIA (qualified default investment alternative)? If so, doesn't that effectively mean that all auto enrollment plans MUST abide by the QDIA requirements?

4. While it is true that a plan may not take distribution fees from a QDIA in the first 90 days after auto enrollment for those getting distributions upon "reversing" their enrollment, the auto enrollment proposed regs seem to allow distribution fees in exactly the same scenario. Does that mean that a plan CAN take distr fees if the auto enrollee had not used the default investment but instead had chosen a particular fund(s) after his enrollment?

MANY THANKS

Writing from a small nonprofit org, trying to implement the rules correctly but we're very short-staffed to do research, so if anyone knows an answer, I'd be so appreciative:

We've offered a 403(b) to our employees for years, with an elective pretax payroll withholding which we then remit to the 403(b) administrator, who deposits and invests the funds. One of our employees has just opened a ROTH IRA instead, and when I asked the payroll provider to set this up, they set it up as a pretax withholding as well. When I called to ask them to change to after-tax pay, I found they had never heard of ROTH IRA, and they asked me where they should report it on the W2 at year-end.

I've searched the IRS website, which has an FAQ that says "contributions to a designated Roth account must be separately reported on Form W-2 in accordance with the instructions thereto." I've read through the W-2 instructions but all I could clearly glean was that the contributions should still be included in taxable income, but no clear info on whether/how to report in box 12.

If anyone has any experience or guidance on this, it would be a huge help, we really want to set this up appropriately but I don't have the time or expertise to research much further, was expecting the payroll company would know what to do.

Thanks in advance for any suggestions!

I have a 401(k) PS plan that is cross tested and each partner is their own group. The ER wants me to write a memo to the partners instructing them to decide how much deferral and p/s contributions they would like to contribute for the year. I cannot actually say that it is up to the partner to decide what they want to do because obviously, we don't want the p/s contribution to appear to be a CODA. Any suggestions on how to write something up so the memo doesn't look like we are telling them to determine what they want to do for the year?

I had read that 403b plans would need to start doing full 5500 filings as part of the new 403b regs. However, I now can find nothing on the topic. Can anyone tell me where I can find information regarding this.

For periods ending before Dec 31, 2007, if a key employee has an NQDC election that is linked to a qualified plan election can the key employee take the distributions at the same time or is he still subject to the six month delay for his NQDC benefit?

I am the TPA on a plan that received a settlement check from Pilgrim Baxter. I have gone on the Pilgrim Baxter Fair Funds Settlement website and the DOL page regarding this settlement. I cannot find one specific allocation method posted on either of these sites. The PBA site says, if info is available to allocate based on account balances at the time (98-2001). The fund company where the settlement came from claims to have no records of which particpants elected these funds at the time, and the company has no info either.

If I have no records of which employees elected these funds at the time, what is the best way to allocate? I was thinking to just allocate pro rata based on the ending balances as of last plan year end.

Has anyone run into this before? Or does anyone have any advice/information?

Thanks.

A participant (30 yrs old) in a 403(b)(7) lives with parents who own the house and pays the mortgage - so this is the participant's principal/primary residence. Father loses job and may have problems paying mortgage and may get a foreclosure notice. The participant requested a hardship w/d to prevent foreclosure. It will be denied until an actual notice is provided, but should the family receive the notice down the road, will this qualify as a hardship?

Any thoughts are welcomed...

I have a small client who always waits until the last minute to get us the information to complete the 5500 form for his Profit Sharing Plan. (yeah I know, one of MANY small clients, actually). In any event, this particular client wants me to set him up with EFAST filing so that we don't have the worry about getting him the form timely to physically sign and file by midnight on October 15th.

I know that the EFAST-1 form needs to be filed, I assume by the client? Would I then be able to file his return from my office if he provided me with the password data he receives? Is there a way for us as a TPA to obtain authorization as TPA?

We obviously don't sign any of the 5500 forms which leads me to believe that for now anyway, each client that wants to do this must be set up individually, is that correct?

I figured with everything going the e-filing way in the future, it is time to start this with some of our smaller clients so that we can get the feel of how this works before it is required.

Any thoughts appreciated.

Has anyone figured out how to convert JH's year end .pdf reports to excel? We have to key the gains by hand and we have alot of JH plans. We're trying to figure out a way to cut down on keying. I know they have a TED download but you have the set up over 150 funds (via an import) into Relius. We don't care about the funds. We also do not want to import beginning and ending balances. I was just wondering what everyone else is doing.

Thanks!

A peculiar question has arisen with respect to 415 lump sums. My answer was b) but wondered whether others might have the alternative opinion and why one or the other is correct. It has been my belief that the 415 maximum lump sum has nothing to do with vesting.

A participant is 80% vested and his benefit is not limited by 415. However, his lump sum is limited as follows:

Plan actuarial equivalence 100,000

GAR minimum floor 125,000

5.5% 415 lump sum 120,000 (assume the 105% calculation is not an issue)

What lump sum is payable to the participant?

a) 80% of the greater of (100,000 or 125,000) but not to exceed 120,000

100,000

b) 80% of the lesser of (120,000 or the greater of (100,000 or 125,000))

96,000

Can a 70 1/2 year old participant contribute to Simple IRA Plans, Roth IRA's, Regular IRA's, SImple 401(k) plans, etc?

Thanks

I did a search but can't find this particular question. I have also been through both the General instructions for forms 1099 and the specific 1099-R instructions.

There is a death benefit distribution that was paid to the decedent's estate in 2007 (no beneficiary designated, no spouse, no family). It's not a huge amount...just over $3500. Participant died in 2007 - a personal return (1040) will be filed. Participant made roughly $16,000 in payroll in 2007.

I know that I use the code "4" on the 1099-R form. My question relates to the amount boxes on the form. The gross distribution is $3,500, but what do I enter into the "taxable amount" box, if anything? The box is there to check for "taxable amount not determined", but I was advised some time ago that checking that box is "frowned upon" and the Service wants the plan to make every attempt to determine the taxability of the distribution.

I know I'm probably overthinking this whole thing, but I want to be sure the forms are accurate.

per the plan document severance after separation from service is not compensation under the plan. however, what if as part of the severance agreement the employer is still paying the ee's health insurance. does that change anything? the termination date might be different.

Plan has a participant whose last day of service was just before Christmas of 2006. In early 2007 her husband got ill and she stayed home with him to care for him and then he passed. Both she and the employer were under the impression she would return to work - however, after her husband passed she had to have her own surgery and ended up not working any hours in 2007.

The employer believes she has every intent of coming back to work and he would bring her back if she does - but he cannot guarantee she will return.

Is she "retired" for purposes of the definition of the RBD? In reviewing the ERISA outline book it states there is no clear cut definition of being "retired" - other than to assume the employer-employee relationship has ceased. This participant had deferred distribuiton in prior years - but she was always considered and active employee. I just wonder if anyone has an opinion on this issue. Should she have to take the RMD or not?

does anyone have a sample?

I've dummied up a safe harbor notice the best I can, looking for any comments if I have missed anything, etc.

the highlighted parts pertain to the auto enroll requirements (unless as I say I have missed something. )

If I wait for the govt, well it might be forever.

Does anyone know when IRS will mandate amendments to IRA agreements for PPA changes? I thought IRA docs would have had to have been amended by now. Any insight is appreciated. Thank you.

In a previous thread, "cause" as a substantial risk of forfeiture was debated extensively, and I'm not trying to rehash that question. My question is, would a termination by the employer for cause be considered involuntary for purposes of the separation pay plan exemption? The question arises because the SRF rules qualify the phrase "involuntary termination" with the phrase "without cause," but the separation pay exemption rules do not use the qualifying phrase "without cause" in connection with "involuntary termination." Considering the thoroughness of the regs, it seems to me that leaving the phrase out was not an oversight and an involuntary termination with cause may qualify for the execption.

Any thoughts / comments?

There is nothing written that says a participant over 70 1/2 cannot participate in a 401k plan correct? They are just still subject to RMD's right? But they are allowed to continue deferring?