Are 409A-compliant definitions required to be spelled out in the plan document, or can the document incorporate them by reference? For example, would a plan that had a non-409A compliant definition of "Change in Control" be compliant if it provided that payments were made upon a CIC only if it qualified as a change in control under 409A?

This might be kind of obvious, but I'd appreciate any thoughts / opinions on what is required.

We have always treated our 401k plans that have hardship withdrawals and loans in the following manner....

If the plan allows loans, you must take the loan first before utilizing a hardship.

We have seen different web sites that say that if the loan payment is going to cause an additional hardship, that the participant can then go directly to the hardship route.

Any legal trusth to this?

In March, 2007, Ohio passed the Mental Health Parity Act. It is very similar to the Federal MHPA of 1996. However, the Ohio MHPA refers to "group health plans."

My question is, would a multi-employer, collectively bargained Health and Welfare Plan fit under the Ohio MHPA, or would the Ohio MHPA be pre-empted by the Federal MHPA?

Thanks.

Now that the Jim Holland issue is resolved, I am still stuck on the 6% issue.

Is a DB of 21% and a PS of 10% entirely deductible or must the DC be limited to 6% if the combination exceeds 25%?

(Context is 2007 and a non-PBGC covered plan)

I have a calendar 401k plan where an ADP refund for 2005 plan year was processed before March 15, 2006 where 10% was withheld for Fed Taxes. Particpant has a 2006 1099-R coded 'P'. Question - regarding the fed tax withheld - would the participant report this in his 2005 personal return or his 2006 return? The refund is includible in his 2005 income, but I'm not sure about the tax w/h and I can't find a definitive answer.

Mahalo!

Has anyone heard anything regarding Treasury's agreement to consider extending transition rules to 12/31/08 (announced week before last)? Is there any "word on the street"?

Joe

A governmental plan occasionally receives pre-tax contributions to the DB plan that later are discovered to be ineligible contributions (deducted from earnings that are not considered salary under the plan). The question is what 1099R code should be used for the return of these pre-tax contibutions. Thank you.

Have you needed to get information from FreeErisa.com? If yes, you've tried to logon and found that the website's been disabled, at least for the past few days, for maintenance and improvements.

Does anyone at the website know about Form 5500 due dates, and that the extension period for 2006 calendar-year plans will end tomorrow? Couldn't this website work have been delayed until after October 15th?

I'm trying to edit a very long Schedule D. Many of the EIN's and Plan Numbers are missing. I don't know any other way to access a DFE's Form 5500 and look up the information.

My husband and I were divorced this past June, 2007. A QDRO Order was included in our Divorce Decree.

I am the 'Alternate Payee' and agreed to receive a specific sum of my husband's 401K -- $11,000.00. (Approximately half.)

Here are my questions, as his Company has now approved the Judge's Order:

1) They have informed me that I can take a 'lump sum payment' which I plan to do, unless you advise otherwise.

2) They have stated that I will not be subject to the 10% Early Withdrawal Penalty. Is this true?

3) I do not understand the tax situation. Will a certain percentage of taxes be automatically deducted from my $11,000.00 and sent to the IRS? If so, will it be 10%, 20%, or more? Also, I've read that 'some' States also deduct a certain amount for State Income Taxes as well. I live in South Carolina, and have not been able to find out if SC is one of these States...?

4) We are both under retirement age. I have, however, been on Permanent Social Security Disability and FERS (Federal Employee Retirement (Disability) System) since 1991 due to a terminal illness that is now in remission. Does my Disability Status have any bearing on the taxes to be assessed to me?

(FYI): Before I married my husband, my yearly income from Disability was/is approximately $12,700.00. I did not have to file taxes for several years, until we were married; then, a certain percentage of my Disability did become taxable because of his added income. Now I'll be able to return to filing just my income again, for 2006 -- plus the $11,000.00 from the QDRO. I'm worried because I do not have a clue as to my income tax bracket and also, if the $11,000.00 will cause me to owe taxes.

Any information anyone may give to me will be greatly appreciated.

Thank you!

Debbie in SC

What is the IRS position on the (100%/150% CL minus assets) Deduction Limit for a new plan?

I heard some murmurings that for this purpose the IRS considers adoption of a new plan as an amendment increasing the benefits (going from zero benefit to some benefit) and therefore this special dedcution does not apply?

If the new Proposed Treasury Regulation 1.125-2 applies to plan years beginning on or after January 1, 2009 and the prior Proposed Treasury Regulation 1.125-2 was withdrawn, what rules apply to the plan year beginning on or after January 1, 2008? Can I rely on the new Proposed Treasury Regulation?

I have a client that was recently acquired in an asset acqusition. In the process of deciding what to do with the Plan, it was discovered by the new TPA that the Employer failed to adopt the final 401(k) regs but in addition, was operating under plan provisions that were clearly out of line with the intent of the employer and the plan's operation. Really weird problems like the employer had requested the prior TPA amend the eligiblity requirement for participation in the 401(k) deferral benefit but the TPA just amended all eligibility (very weird "amendment" also, like a paragraph that said eligibility was changed, no signature, no board vote, etc). The client really was not very detailed regarding document review and assumed the TPA was capable for amending their own prototype (very small doctor's office) and proceeded to operate in line with their intentions to amend the 401(k) eligibility but leave the 1 yos and age 21 for other ps and match eligiblity.

In addition when this prior TPA updated for EGTRRA, they selected provisions that were just wrong such as indicating that participants did not have investment discretion (they had always since inception), that the Plan did not intend to comply with 404 ( c ) (when it had in the past and continued to from the employer's perspective), etc.

I admit the client just took this adoption agreement and signed and when the new TPA pointed out the errors and recommended amending, the client kind of frooze and did respond.

In July 2007 the client was acquired and termination was the next step but in the process of making the termination decisions the TPA advised the lawyer that the document was random and asked how to proceed. I was in the process of writing the lawyer (not a ERISA lawyer) about alternatives for VCP submission to be included with the TPA's response regarding termination alternatives (to submit or not to submit). I understand the lack of the 401(k) final regs could probably fall under the operational failure but this is the first time I read the Rev. Proc. and was wondering what to recommend regarding the random errors.

Finally, the errors did not result in other operational errors and there is no other corrections other than the Scrivner errors and the failure to timely adopt the 401(k) final regs amendment.

Soo, should I proceed to corrections with this question or can someone address this here. Thanks for any help.

A Plan had 2006 Employee Deferrals. No Match was made at the time of deferrals.

Matching contributions are at the sole discretion of the Employer.

The Plan Doc states:

(1) Matching Contribution Formula: For each Plan Year or other contribution period in which a Matching Contribution is made, such Matching Contribution may be made in any specific dollar amount (including zero) and/or any specific percentage (including zero) of Elective Deferrals, as determined by Employer.

The Employer now wants to allocate a $20,000 ER Match to only those employees who deferred during the year on a Pro Rata basis

Is this allowed, since we are past Plan Year End 2006?

What non discrimination testing is requirerd?

Any other issues that I am missing?

Thank you!

I have kind of an unusual situation. We have to set up a new cash balance DB plan by the end of the year under our union bargaining agreements, effective as of the beginning of the year. I understand that generally, the first contribution that would be required under the minimum funding requirement is 8 1/2 months after the end of the plan year. We are setting up our plan to have a short plan year from 1/1 to 6/30, and then 7/1-6/30 plan years after that. So, even though we don't have a plan document finalized yet, we have already had a plan year end and an actuarial valuation showing 0 assets! When do the contributions requirements kick in? 8 1/2 months after 6/30? Or do we have to start putting in quarterly contributions as of Oct 15th since we aren't fully funded for the short plan year? I am having trouble finding any guidance on how to start up brand new plans.

and now, the good news from the DOL - this is from the DOL's website. at least they have backed off on non participant direction plans.

"...in view of the foregoing, and pending the issuance of further guidance, the Department is providing the following additional guidance. Plan administrators of individual account plans that do not provide for participant direction of investments will be treated as acting in good faith compliance with a reasonable interpretation of section 105(a)(1)(A)(ii) of ERISA when statements are furnished to participants and beneficiaries on or before the date on which the Form 5500 Annual Return/Report is filed by the plan (but in no event later than the date, including extensions, on which the Annual Return/Report is required to be filed by the plan) for the plan year to which the statement relates.

This guidance supersedes the guidance provided in FAB 2006-03 as it relates to the dates for furnishing pension benefit statements to participants and beneficiaries of individual account plans that do not permit participants and beneficiaries to direct the investment of assets in their individual accounts."

We have a client, who is a church controlled organization who had an ERISA 401k plan. They were filing 5500 and following the standard ERISA plan procedures. They have since came to our organization who specifically handles church controlled organization, and have determined that they should have never been subject to ERISA and should have been considered a "church plan."

We've taken all steps to transition them to a "church plan," document wise. Since the plan was not terminated, do we need to do anything regarding their Form 5500, because this filing will no longer be needed under a "church plan" status? Who do we need to inform?

Thanks!

I'm sure this topic has been covered before, but I can't seem to find search results. Anyway, if a plan is merged and the final plan year is less than 7 months, is the audit still required? CFR 2520.104-50 allows a merged plan to be a reason for a short plan year. However, this section discusses the deferral of the report, but perhaps not the elimination of the report. Would the surviving plan have the responsibility of audit after the merger? I'm a little confused on this issue. Thanks.

I just saw the thread on subscribing to a forum and it looks terrific. I have a problem in that I signed up a long time ago using an email address that gets so much spam, I don't want to use it. Is there a way to change my email address?

Please bear with me as the ESOP is new ground for me and I am leaving a company 70 percent vested in one.

From what I have seen is it correct that I will not expect to see any pay out of this account for quite a few years..?

Is that up to the discression of the company that I am leaving ?

What is the maxium time frame that they can wait under law until payments start..?

Your information is much appreciated -

Schedule B only reflects contributions made through due date 8.5 mos after plan year end (per IRC 412 and IRS Schedule B instructions).

What about add'l contributions an LLC makes who is on extension through 10/15. Say they made the minimum funding requirement of 80k by 9/15/07, then add an add'l 20k on 10/5/07 under 404 limits. The extra 20k doesn't show on the Schedule B but should it be included on the Form 5500 ??

Thanks for any thoughts.