I understand that a new distributable event cannot be added to an arrangement that has "deferred compensation" (as defined in 409A) if the addition of that event could cause the timing of the payment to be accelerated. However, is there any problem with adding a distributable event that could cause acceleration of the timing of payment if the benefits under the arrangement are exempt from 409A pursuant to the 2 1/2 Month Rule. For example, suppose I have an agreement that has deferred compensation that is paid within 30 days of a change in control. This would be exempt from 409A per the 2 1/2 month rule. Can I amend the arrangement to add termination of employment as a distribution trigger? Though the termination of employment could occur before a change in control, thus accelerating payment, is it ok to add the termination of employment trigger since the arrangement I am amending is exempt from 409A?

Any thoughts would be greatly appreciated.

Is a vacation purchase program run outside of a cafeteria plan (and thus not subject to Code Section 125) whereby an employee can elect to purchase five additional vacation days considered "bona fide vacation leave" under 1.409-1(a)(5) and thus not deferred compensation?

Has anyone ever heard of a Delaware Series LLC?

If so are there any different control group testing issues around this?

Thanks,

willow

Need advice on how to be approved for a Hardship Distribution from my ESOP account. My employer is giving me a difficult time about approving a Hardship Distribution from my ESOP account. Our Plan summary does allow Hardship Distributions. Does anyone know who gives the final approval for the distribution...the Administrator or the Trustee? My wife has been unable to go back to work, she has been home taking care of our autistic son. We had charged up our credit cards paying for medical bills that the insurance co. did not pay because of the autism diagnosis and also for many types of therapies, speech, occupational, private tutors etc...... After 5 years of expensive therapies and hard work he is doing very well and has just entered a regular school. It was worth every penny to us. However, we are now over 100k in credit card debt. We have been struggling for these 5 years but have managed to make the minimum payments. Most recently, interest rates have risen and minimum payments have increased and the company I work for which had been thriving for over 10 years is now doing badly and my income has decreased about 30 to 40 % and the future looks bad. I have held out until now to request the hardship distribution but my company is giving me a hard time. He says the Trustee will not approve the Distribution based on our situation. I want to pay off these bills before I am unable to make the payments any longer. I do not want to ruin my credit, file bankruptcy or get anywhere near foreclosure. Any advice is appreciated

Need advice on how to be approved for a Hardship Distribution from my ESOP account. My employer is giving me a difficult time about approving a Hardship Distribution from my ESOP account. Our Plan summary does allow Hardship Distributions. Does anyone know who gives the final approval for the distribution...the Administrator or the Trustee? My wife has been unable to go back to work, she has been home taking care of our autistic son. We had charged up our credit cards paying for medical bills that the insurance co. did not pay because of the autism diagnosis and also for many types of therapies, speech, occupational, private tutors etc...... After 5 years of expensive therapies and hard work he is doing very well and has just entered a regular school. It was worth every penny to us. However, we are now over 100k in credit card debt. We have been struggling for these 5 years but have managed to make the minimum payments. Most recently, interest rates have risen and minimum payments have increased and the company I work for which had been thriving for over 10 years is now doing badly and my income has decreased about 30 to 40 % and the future looks bad. I have held out until now to request the hardship distribution but my company is giving me a hard time. He says the Trustee will not approve the Distribution based on our situation. I want to pay off these bills before I am unable to make the payments any longer. I do not want to ruin my credit, file bankruptcy or get anywhere near foreclosure. Any advice is appreciated.

In 1995, Client promised executive 2 weeks use of a hunting lodge for each year for 30 years if the executive remained employed until December 31, 2004 (love that date, don't you?). Certainly looks like a vested right as of 12/31/2004 that would be grandfathered under 409A. The 1995 document also allowed the employee to elect at any time to cash out his right to use the lodge in the future for a specified dollar amount (which is reduced each year that he uses the lodge). The entire arrangement still looks grandfathered to me (whether there is constructive receipt because of the cash out right is another story). Anyone disagree?

I have a current participant in a 401(k) plan who turned 70 1/2 in 2007 (not a 5% owner). Formerly worked for the USPS and still has a balance there. The USPS sent him a letter saying that he now needs to take RMDs.

Am I reading correctly that he could take the RMD for 2007 and roll over the remaining balance from USPS to current employer's plan and delay further RMDs until after his retirement from current employer? Plan does allow rollovers, so no problem there.

Thanks in advance.

The final regs require a single time and form of payment for each payment event. What constitutes a single form of payment? Specifically, would an amount paid upon separation from service in 12 equal monthly installments be the same form as an amount paid upon separation from service in 6 equal monthly installments?

I have a client with a calendar plan year and a 5/31 corporate (fiscal) year. They would like to condition receipt of the profit sharing contribution on being employed on the 5/31 following the end of the plan year. Please note that compensation would be measured during the calendar plan year, it is just that that employee would have to be employed on 5/31 to receive the profit sharing contribution.

Do you think this is permissible to have allocation conditions that are beyond the plan year? I could not find any guidance on this issue. Thanks.

Probably discussed before, but I only saw it regarding annuities.

Participant lives and works in State A, which requires 5% withholding on distributions that are subject to the 20% federal withholding. Participant quits and immediately moves to State B which has no state income tax. Participant requests immediate distribution.

I'm thinking that the participant is probably not yet a resident of State B and the income should be State A income, and therefore, subject to the mandatory 5% withholding. However, I don't know this to be the case, and the person handling the withholding says no, without any particular cite.

I know that there is a federal law that prohibits states from taxing payments made to folks in a state where they do not live. Does it require that they live there for a certain amount of time, or does it apply the next day?

We have company who is wanting to establish a SIMPLE IRA for their group (Company 1) The co. is a S-Corp with 5 Owners (assme A, B, C, D, and E), owning the company at 20% each. Two of the owners own interest in a Research Firm which is an unrelated business not receiving referrals or customers from Company 1. The two owners do not do any service work for Company 1.

There are 3 other companies with similar ownership opening Simples at the same time. Each are separate entities but do share the same owners.

I will try to summarize the ownership a little clearer below:

S-Corp #1

Owner A - 33 1/3%

Owner B - 33 1/3%

Employee X - 33 1/3%

S - Corp #2

Owner A - 25%

Owner B - 25%

Owner X - 25%

Owner Y - 25%

S - Corp #3

Owner A - 25

Owner B - 25%

Owner X - 25%

Owner Y - 25%

S - Corp #4

Owner A - 33 1/3%

Owner B - 33 1/3%

Owner Y - 33 1/3%

Owners A & B are covered by an unrelated 401K plan and are maxed out. And again, they do not do any service work for these companies.

My concern is whether this is an affiliated service group?

Thanks!

Upon review of prior records for a new client, we discovered that the ADP failure giveback was not completed for YE 12/31/2003. Since the distribution will be after 3/15/2004, a 5330 must be filed for the amount of the giveback.

Focusing only on the 5330 problem - does another 5330 have to be filed in 2005, and another in 2006, and another in 2007 for the same failure?

In reviewing EPCRS on this item (QNEC or 1 for 1 correction) I don't even see the 5330 mentioned, let alone multiple forms as would be due for late deposit of contributions, or bad loans.

Thank you all.

I was sent a letter from the IRS back in June that stated I owed them over $4,000 as I had taken a contribution of over $14,000 in 2005. What occured was I closed an account at a brokerage and had the 14K sent to me then I put 7K in another brokerage. I had originally put 2K a year in a traditional IRA back in the early '90's for 5 years then converted to a Roth IRA in '98. I paid taxes over the next couple of years so I assumed that my distribution was legal. Now the IRS wants to collect interest before my dispute is settled. Would my basis be 10K as this my total amount that I've contributed?

After having worked for both small (read: ground floor start-up) and arguably the two most successful multinational consulting firms, I'm more than conceptually ready to best all of them in the area of health & welfare benefit plan auditing. That said, it's my belief that a small firm that includes a generalist health & welfare consultant (actuary or not) would be viewed as more well-rounded, and I'm currently considering the thought aligning myself with a partner who has several years of (demonstrably) successful experience.

Where would one go to find a forum to expose themselves to others having significant consulting experience and might be interested in taking on the world?

Thanks very much in advance!

When a single premium group annuity is purchased to settle benefit liabilites for a PBGC covered terminating plan, there is a requirement to provide a Notice of Annuity Information and Notice of Annuity Contracts.

Does this requirement apply to an ongoing PBGC covered plan that is settling liabilities for a group of retirees through a single premium group annuity but is not terminating?

My client has a match formula where they match 100% up to 2% of comp after you've completed 2 years of service. When you've completed 3 years of service, the match formula jumps to 100% of deferrals up to 3% of comp.

It passes the ACP Test. Still, is this match formula allowable???

Thank you!

Just curious whether anyone has completed the Qualified Plan Financial Consultant (QPFC) designation through ASPPA? What are your impressions of the curriculum? Do you feel that the designation is begininning to be recognized in the industry? I am considering going for this next year.

Thanks!

Hello! I am new here, but with all the questions I have it should become a second home! My husband has taken a job offer that does not include insurance (though the employer raised his salary to effectively cover premiums on a self insured plan). We have your typical group insurance and are looking into cobra, and the cost of comparable plans to the one we have.

What we are looking at is a copay driven plan with a 1000 dollar deductable per person 3000 max out of pocket for our family of four. It looks like maybe we can do an HSA, but I wanted to ask you all if I am even correct! I don't know if it qualifies as a "catastrophic" plan. There will certainly not be the 10,000 deductable.

A 401(k) Plan is being merged into another plan due to acquisition. Recordkeeper A transfers plan assets to Recordkeeper B, BUT Recordkeeper A does not send actual participant records, including investment elections, to recordkeepr B until several days later.

As a result of the late participant record transfer, participant accounts were invested in a money market account at recordkeeper B for several days and were not allocated to the participant directed investments in a timely manner. Recordkeeper A had commited to transfering the participant records within 24 hours.

Does the DOL have any guidance out on how to calculate missed earnings? I know the IRS has the EPCRS with some example earnings calculations, but is there anything from the DOL?

I am running some preliminary calculations for a client and I have been asked to run the max for the owner who is over 50. The plan is a 401(k) PSP with a non-elective safe harbor. Owner's comp for 2006 (they asked me to use the 2006 comp for the estimate) was over the limit, and still is, so that's ok. They indicated that he would maximize his deferrals (401(k) feature was added in 2007) to $20,500. My boss checks everything that goes out, and I have the owner's total of P/S, Deferrals & S/H at $50,000. He thinks it should be $50,500. Who's correct?