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.

A curent client sold their business May 2007. The company has a calendar year profit sharing plan. The company is still "active" for tax purposes, etc... Is it correct to assume the plan valuation/reporting can be done as of 12/31/2007 using prorated compensation/415 limits from January 1 - May 15th?

Plan year is calendar year. Is it absolutely too late to start a qualified auto enroll plan on 1/1 for an existing 401k plan?

A plan has 1/2 year eligilibity and semi-annual entry dates. A participant was hired 6/1/2007 and worked for four months and then went on medical leave. She will not be back by December 31, 2007. Do the service spanning rules apply in this case and will she be eligible to enter the plan on 1/1/2008? I know that service spanning applies for absences less than 12 months, but I wasn't sure if this would apply to her situation because she won't be back on the first date of eligiblity. Thank you.

Can anyone explain the rules regarding moving NHCE into a rate group with an HCE in order to pass testing? I have been told you can do this but it sounds a little fishy to me. I don't understand how you can give people in the same class different allocation rates-or do you have to amend the document? If so, when does it have to be amended by and do you list those people in a class by themselves?

Does a plan sponsor need to carry an ERISA Fidelity Bond when they have more than 1 plan (401k and a DB plan)?

Could the bond have both plans names and all parties involved?

A plan came to us with a participating employer. There were two companies owned by the same one owner.

7/24/2007 the owner notified us that effective 7/31/2007 he sold the company that was listed as a participating employer in the the plan document.

The one owner delayed in contacting us further as we asked for more details.

Today, the company that was sold still has participants deferring into the other company's plan.

When the sale of a participating employer happens, must the partic. employer have their own plan setup in time to have their deferrals go into this new plan? Or can they contiue to defer until their own plan is setup?

Deferrals made after the effective date of the sale, how does this affect the 2007 testing and 5500?

Any guidance or other things to consider is appreciated.

Thanks in advance.