401ktest.com is giving away one-year subscriptions to TPAs. http://www.401ktest.com/pages/announcements.asp

Just passing along the info. for anyone who might be interested.

Thanks,

Fender5150

OMG I must have spent an hour on this post only to hit the wrong button and lose it all!! I'm just gonna give the abbreviated version.

I am a 41 y/o single mom from Ohio. My daughter was admitted into the hospital from 6/20-6/29 in serious condition. I was approved for FMLA which covered the hospitalization as well as intermittent FMLA @ 2 days a week. I returned to work on 7/2 then had to call off on 7/10 when she started getting sick again which was covered under the intermittent. No attendance problems prior to this. I have my own FMLA case in which at the beginning of the year I was diagnosed with congestive heart failure. I was approved for intermittent as well; however, I make all of my appointments during MY time, very rarely does it cut into work time.

I work for a large call center which is notorious for its cliques. I am not part of this clique. I was recruited by the company, I was not looking for a job when they sought me out. In my professional career I have never gotten into any type of trouble, I have won awards and always received high marks on annual reviews.

My managers had a meeting with me on 7/11 which was all one sided and they did not stop until they totally degraded me and had me in tears. My VP was not there and there was no HR representation. In short, I was yelled at, insulted, and told that I need to stop taking off work. When all this happened, they shared no details with anyone, just that I was out of the office. They told me that my peers and my team want nothing to do with me. I was told in the next dept. meeting that I am to publicly thank my peers for "picking up my slack", I was told I was a major disappointment, that I'm not the leader they need because I've had to miss, that I've totally destroyed my team and I'd better stop missing work. They then said "you can submit your resignation and we'll part friends". I turned that one down.

The week that I returned I was scheduled to work the 4th of July as well as the weekend. Since I'm salary I don't get overtime so we have to take "comp days" which I did. I was told that I had alot of nerve taking comp time since I had just been out, that I didn't deserve it and that I need to come in this weekend since Icalled off FMLA 1 day this week. It's my understanding that with FMLA, it is not required that the time be made up nor can they take this kind of action for FMLA approved absences. (And all of these statements made are VERBATIM - I am not rephrasing anything).

I was also told I'd better watch my back because they'll be watching me closely - and they are. They are absolutely on a witch-hunt. Between that and the horrible things said to me, I'm an emotional wreck. I've had several anxiety attacks, I cry most of the day and when I'm not I'm fighting it. I cry on the way home. I cry myself to sleep. I cry in the shower because I dread the day at work, worrying about whether my belongings are going to be in cardboard boxes when I get to work.

Again, this is just the abbreviated version so there are details missing, but hopefully I've covered the highlights. I had to call our Benefits hotline to ask some questions about my FMLA cases and they told me that I absolutely need to contact my HR manager about all this. They feel that the company is violating FMLA but didn't give specifics. I've requested a meeting with HR but at the same time I'm TERRIFIED that it will result in even more retaliation - all this over an Act that is supposed to protect your job, not threaten it. I'm just trying to understand what kind of recourse I have or if any of the things said / done by my managers is unacceptable. My peers are being very cold towards me and my managers have done nothing to back up or explain why I was out so I feel they have created a hostile work environment. Plus they've told my associates that if I can't be there then I have no business putting anyone on corrective action - they actually tore up a written warning I had done on one of my people for unacceptable work performance - and they tore it up in front of her. So to her that simply said she can do whatever she wants and if I try to take action all she has to do is go running to my manager. Another of my people told me that she was told by my manager to go to her if she needed something. That just makes me look bad as well. What they dont realize is I keep copies of everything so I can show that the corrective action was legitimate. And I've also documented everything that has occurred recently.

We have several locations and I feel my working relationship with the managers and some of my peers is completely destroyed because of the hostility. I just want to transfer to at least a different location, but my year isn't up until January and I know I won't last that long. Even if I don't find another job, I'm sure they'll find a reason to fire me whether its justified or not. I just need some advice. I don't know if this kind of behavior is allowed or what I should do.

Anyone have any thoughts on there being a substantial risk of forfeiture (for 457(f) purposes) resulting from a requirement in a 457(f) plan that a pre-condition to getting the benefit is that a participant must give the employer a waiver of all rights to sue the employer?

To make it interesting, let's say that there's no service requirement, just the notion that you forfeit the benefit if you're not willing to execute the waiver at the time that you are otherwise entitled (in a 409A compliant way) to the benefit.

Seems to have a lot more substance, particularly in the tax-exempt context, than the use of a non-compete as a means of preserving a SRF. Also, because such waivers typically apply to claims known and unknown to the employee, it seems harder to attack on a facts and circumstances basis than the non-compete scenario.

Employer stock, when distributed from qualified plans as a lump sum enjoys NUA. Is this true for nonqualified plans? My guess is no since the grantor has been reporting realized and unrealized gains and has been paying tax on their corporate returns. Please advise. Thank-you.

I have a client with a Prototype Keogh. The Prototype Sponsor dropped the client and no GUST or subsequent amendments were made. The missing amendment was found on audit (otherwise clean). The proposed sanction is $8,000. Section 14.02 of Rev Proc 2006-27 provides that minimum sanction is sanction under 14.04 for non-amenders found on DL Application. The GUST non-amender fee is $3000. This is new in 2006-27. I got an immediate (next day) rejection of an offer of $3500. Does anyone have any recent experience with Audit CAP sanctions for non-amenders?

I deal primarily in DB plans, and am getting more experience in the DC area, so I always like to double check things I can't find in writing.

We have a potential new client that had a safe harbor 401k. I think that due to his lack of education on how the plan worked, he got frustrated with his TPA and adopted a resolution to terminate the plan in May 2007. As I understand it, none of the participants have made distribution elections yet, though they were notified of the plan termination.

To add confusion to the mix, the client has a new financial advisor who thinks the plan is a good deal for him, and would like to salvage it if possible.

In a 401(k), can you simply adopt another resolution revoking the termination provided that the participants remain 100% vested? Anyone know where I can obtain more information?

Thanks!

Are elections to receive or defer rmd's actually necessary under current regulations?

Also, a participant elected in 2004 to defer her rmd. She has reduced her hours to under full time, though over 1000. Can she choose to start receive her rmd, or must she wait until actual retirement, or reduction of hours under 1000?

Is there a possible scenario where a voluntary salary reduction only 403(b) arrangement can come under ERISA?

An ESOP has adopted 404(k) provisions. In my role as a recordkeeper for this plan, I'd like to make sure I understand what is being done correctly.

For the 2006 plan year, they paid in cash the full amount of the loan payment. They also paid in cash a dividend, which is to be put into a suspense account and then applied to the 2007 loan payment. This dividend can be broken up into what would have been the allocated and unallocated parts.

The documentation says, "Any cash dividends attributable to company stock allocated to participant accounts shall be utilized to pay plan obligations under a loan only if the accounts to which such dividends would have been allocated receive a respective allocation of company stock for the plan year for which the dividends would have been allocated, with a fair market value not less that the current value of the dividends."

Previously, the unallocated portion of the dividend would have been applied to the loan and release of stock shares. Currently, with the annual loan payment being made in full in cash (no unallocated dividends being used), there is larger than normal shares being allocated to those eligible to share in the contribution. I can then compare this allocation amount, maybe the fair market value of the amount attributable to what would have been the unallocated dividends(?), to the value of what would have been the allocated dividends. However, a terminated participant would not be eligible to share in the contribution, and would therefore not have any allocation that would compare to what would have been the allocated dividends, not satisfying the documentation. Any thoughts on how to approach this?

Second question...meanwhile, a year later, gains attributed to the cash deposit of the suspended dividends... can they also be used to pay down the loan? (similarly if there is a loss would the paydown just be less?)

Thank you

does anyone know if wrap around plans are still alive under the final regulations. cant seem to find a mention of them and they were mentioned in an example in the proposed regulations.

Husband and wife are both in a plan. Both over 80. Husband dies.

Since the money then goes to the wife, would RMD calculation be the total account based upon her age or would separate RMDs continue to be calculated?

Thanks

Since there seems to be a tension between ERISA 204(h) and use of a 412©(8)/412(d)(2) amendment, I'd like to see what folks think. Let's say you have a 2007 calendar year DB plan. In January of 2008, client decides that he cannot afford the plan cost. So, you do a 412©(8) amendment, reducing the formula and recognizing the reduction for funding purposes for 2007.

Now, of course, you cannot reduce a benefit already accrued. No problem with that concept. My question is:

Is the EFFECTIVE date of the amendment 1-1-2007? If so, how do you reconcile this with the requirements of ERISA 204(h), which requires notice prior to the EFFECTIVE date of the amendment?

Or, do you make the effective date, say, February 15th of 2008, but RECOGNIZE it for 2007 for funding purposes?

204(h) language seems pretty clear, and following this the amendment couldn't be effective in 2007. The regs under IRC 11.412©-7 seem slightly less so, but seem to indicate that the effective date of the amendment itself must be effective in 2007.

How do y'all handle this? The common-sense approach, for me anyway, would be to have the effective date 1-1-2007, but this would contravene the plain language requirements of 204(h).

Grrrrrr!

We usually only file extensions for the 5500s we have not completed by July 31. However, now that the extension doesn't need to be signed, I was going to file extensions for all my clients. This way if they don't file them before July 31, they will have the extension. Is this a good or bad idea? Any drawbacks I'm not thinking of?

I think I've been in this business too long. Can someone tell me if for the 415 Annual Limit do you include the catch-up deferral amount? i.e. 15,500 + 5,000 + 29,500 = a total of 50,000 to max a owner out in 2007. I thought that was the case, but someone told me differently, in that the $45,000 for 2007 includes the catchup for age 50 & over.

We have a DB Plan that offers several distribution options upon retirement, with the usual suspects (single life annuity, QJSA, lump sum distribution and a hybrid lump sum and annuity).

The client wants to eliminate the last option (the hybrid lump sum and annuity). It never advertised this benefit under the plan (guess there was no SMM) and I don't believe anyone has taken his/her benefit as a hybrid payout. This leads me to two questions:

1) Eliminating this option certainly would violate 411(d)'s anti-cutback provision; and

2) How do you correct the failure to advertise a benefit offered under a plan?

It isn't like you can cut a benefit on the grounds that since no one knew about it, no one will be penalized. Have any of you ever come across a situation like this?

We are a TPA that has a client, structured as an LLC that has a 401(k) plan. One of the member sent me this e-mail yesterday

"I am not sure that ** understands that we are members of the LLC. The payments made to us by ** are considered guaranteed payments and each of us pay self employment taxes on the gross amounts. I file my taxes off a K1 I receive from **. My understanding is that we did not change the plan documents from those with PayChex. Under that plan doc I was able to make my contribution anytime prior to April 15th of the following year for the prior plan year. "

I have not been able to find anything that extends the deferral date to the next year for members of the LLC to show it credited in the previous year. I am drawing a plan. Thanks for any responses.

We've come across a Corbel document that seems to define the years of service to be counted for the top heavy minimum benefit as years while the employee was a participant. It's been a while since I've had to do such a calc, but I seem to recall that all years of service need to be counted for TH min benefits, even those before the employee was a participant - isn't that correct?

Also, the actuarial equivalence in this doc is defined as the "applicable mortality table as prescribed by the Secretary of the Treasury" which I believe is the 94GAR table. However, the interest rate is defined as those used for 30-year Treasury securities. Weren't these the interest rates that used to be called the "GATT rates"? I have several bookmarks for referencing these monthly rates, but the rates shown frequently conflict with similarly defined rates published in newsletters. Can anybody recommend a website that reliably reports the rates needed to calculate such lumps sums?

In one-person plan, the owner is up against the 100% Hi 3 limit and the plan has excess assets of $100k based on the pre new final 415 regs Hi3 limit. After 12/31/07, the excess will increase to over $300k.

The owner is past NRA and his Hi 3 is unlikely to increase in the future.

To reduce further increase in excess assets, a proposed solution is for the owner to take in-service distribution and rollover his money. Owner’s wife will start taking wages and will enter the plan to use up the assets remaining in the plan.

Anyone see any problem with this solution?

With the new QACA plans that will be available next year, is it possible to have the automatic deferral enrollments go in as Roth deferrals? (I'm not asking if it's a good idea, just if it's possible.)

Situation: a one-person plan has been overfunded. The person has been receiving a monthly annuity for years and now wishes to take a lump sum. The person's benefit was at 100% of Hi-3 compensation. That Hi-3 has not increased since.

Obviously, the change in the payment structure causes a new annuity starting date. The new 415 regs provide that prior distributions are actuarially adjusted and counted toward the 415 limit. However, the final regs aren't applicable until 1/1/2008 in this case (calendar year limitation year).

So, my question is what is your opinion about ignoring the final regs and going back to the pervasive thinking before they were issued? I know my opinion then was that when a person was at a Hi-3 limit, because that limit didn't increase as the person got older, prior annuity distributions didn't count against the 415 limit.

I found this thread along that line of thinking:

http://benefitslink.com/boards/index.php?s...or+distribution

My thinking is there wasn't really guidance beforehand and these 415 regs, while not effective yet, do provide the IRS' line of thought on the subject. I would be largely inclined to follow the methodology spelled out in the final regs.