Received a declaration of trust for a plan, which is switching collective investment fund providers. Seems as though all of the big issues (mapping, notices, general fiduciary concerns, PT issues, etc.) would have been worked out by now. So, what's left to review about this document. It seems like a form document used by multiple fund providers. What am I missing?

An employer had a few late deposits of 401(k) contributions. The lost earnings amounted to around $60. The 5330 excise tax adds only about $10 to that. 15% of $70 is $10.50.

I did not see it in the 5330 instructions, but is there a $100 de minimus excise tax when using 5330 for late deposits?

Thanks

I have never worked with DB plans and know very little about them. We have a prospective client who has an active DB plan which he is wanting to terminate. He then wants to adopt a SH 401k DC plan and rollover the DB balances into the new plan. His former TPA will handle terminating the DB plan.

There are five employees who have reached retirement age and are receiving benefits from the DB plan. They are also still working 1000 hours a year. Can these five employees be excluded from the new SH 401k plan? One of the five is an HCE.

What is handled differently in the administration of this new plan? Are the contribution limits the same?

Thanks for any advice.

I either have a puzzler or else I am missing something important regarding the intersecting provisions of ERISA's blackout period notice requirements and Reg BTR, both of which were sprouted by our pal, the SOX Act.

Imagine, if you will, a 401(k) plan with a company stock fund -- the plan sponsor is a public company. Periodically, participants are precluded from making volitional trades in the company stock fund during routine blackout periods associated with earnings releases, etc. These are brief periods (<3 days) usually, and are disclosed in various places including the company's insider trading policies.

Suppose further that the company perceives a need to limit trading in its stock by employees generally because of the possibility that they might possess inside information due some some extraordinary event -- new product release, unexpected business development, acquisition proposal, etc. The limitation would be attributable to the federal securities laws and would therefore arguably not be a "blackout period" for purposes of ERISA. However, the limitation would cause a blackout period for purposes of Reg BTR, which does not include an exception for limitations relating to compliance with the federal securities laws. So, the initial thought would be that an 8-K would be due under Reg BTR to report the trading limitation.

While this sort of thing might not be an everyday occurrence, it seems like it should happen with some regularity when public companies with 401(k) plans permitting company stock investments deal with unusual business events. However, there does not seem to be a great quantity of 8-K filings reporting this sort of thing, and this lead me to think that either: (1) there is some other basis that I have not found for avoiding the filing requirement; or (2) many or most companies are simply ignoring the requirement, and the SEC is not doing anything about it.

Anyone have any thoughts about this?

Have a question I've never dealt with directly before and would appreciate any general thoughts or advice as to the way most plans / employers treat these situations.

Have a large client with a few large foreign subsidiaries (Canada, UK) that are all part of the Plan Sponsor's controlled group but are not, obviously, included as "Related Employers" in the 401(k) Plan. The subs instead have their own country-specific pension programs.

If a U.S. employee participating in the 401(k) Plan transfers permanently to one of these foreign subs (i.e., changes residency, begins participating in foreign sub plans), is there any reason not to treat them the same as any other terminating employee under the 401(k) Plan. That is to say, wouldn't they become entitled to a distribution upon the transfer to a foreign subsidiary that is not a "Related Employer."

The Plan document generally permits distribution upon a severance from employment with the Employer (which term includes those Related Employers that have been added to / adopted the 401(k) Plan). The term "Employer" does not include "Affiliated Employers" or those other members of the controlled group that have not signed on as Related Employers. Accordingly, it seems to me the Plan would consider any transfer to a foreign sub the same as a routine termination of employment for Plan distribution purposes.

Does this seem correct / routine. One thing that bothers me about this is that the Plan does recognize service with an Affiliated Employer as Years of Service for vesting credit. So people transferring into the U.S. from a foreign sub would get credit for their service with the foreign sub under the Plan. However, someone leaving the U.S. for a foreign sub will presumably cease participation and vesting in the 401(k) Plan and possibly forfeit a portion of their account even though they continue working for an Affiliated Employer.

I know the reason for giving service credit on the front end is a bit of a different issue but just wondering if there is any reason why somebody leaving the U.S. for an Affiliated Employer should be treated differently from a routine termination. For example, should the transferred employee continue to accrue vesting credit and not have a distribution right as long as they remain employed with the Affiliated Employer?

I have a situation where the client reported incorrect Employee Deferral figures for 2006, and in turn after the 2006 New Comp contribution was made in 2007, a few participants went over the 415 Annual Addition Limit of $44,000 for 2006. How should this be corrected?

Example:

Original: Corrected

EE Deferrals: $14,000 EE Deferrals: $15,000

New Comp PS Cont: $30,000 New Comp PS Cont: $30,000

Total Contribution: $44,000 Total Contribution: $45,000 ($1,000 over 415 Limit)

My employer (a hospital) is acquiring another company (a physician practice). We want to bring the employees of the physician practice into our 403(b) Plan. We also want to give them credit for vesting service for their time working at the physician practice, prior to our acquisition. Is there any problem with doing that? Anything that we need to be careful of?

Thanks.

Non-electing church plan is freezing DB plan. I know ERISA 204(h) Notice is not required. What kind of notice and medium is typically provided to participants concerning reduction in future benefit accruals?

Endorsement split dollar arrangement has been in place for at least 5 years. Is it possible that a portion of the policy is grandfathered? If so, how would you figure out how much of the benefit is grandfathered?

Employer sponsors a DB plan for union employees.

Employer is offering an additional $800 monthly payment (for 10 years) as an early retirement incentive (the "Window Benefit"). The Window Benefit will be on top of the benefits the participants have hitherto earned under the plan.

The CBA states that any early retirement incentives offered by the Employer are not subject to spousal consent. I'm not sure whether this CBA provision can hold up though since Code section 401(a)(11)(A) says that if the participant doesn't die before his ASD, his "accrued benefit" must be payable in the form of a QJSA.

Does anyone know whether this Window Benefit is part of the participants' "accrued benefit" as that term is used in 401(a)(11)(A)?

An S Corp with a year end 12/31/06 is currently on extension. It is my understanding they have up until the due date of the return including extension to make their profit sharing contribution they deducted on their tax return. The extension is granted up until 9/15/07 - Can they make the contribution on 9/15/07 and actually file the tax return before the due date of the extension? or does the filing of the tax return terminate the extension?

I am looking for authority to support the investment of one Rev. Rul. 81-100 collective investment trust in another Rev. Rul. 81-100 collective investment trust. Such an investment is not covered by Rev. Rul. 81-100 or 408(b)(8). Any help? Thanks.

If I have an office in Buffalo, NY with only 4 employees, do I still need to file a 5500?

If the ISO grant is:

150,000 at $.81 vest over 3 years

Does this exceed the $100k rule? I am confused on this. I was calculating by multiplying the option amount by price and then making the excess options NQ's.

If someone has an excel sheet or web site that would help me calculate.

Any insight would be great!

Regarding the participant notification requirements for automatic enrollment - if a participant is given notification on their date of entry and allowed the 30-day opt out period, is this sufficient? Can the level of automatic contributions be withheld for payrolls during the 30-day period OR is the 30-day notification period defined as the 30-day period prior to the participant's date of entry?

THANKS!

I have been contacted by an attorney with a question I have never had. He has a physician client, a Puerto Rican native, who is moving permanently to the US. He has what sounds like a prototype money purchase pension plan with a Determination Letter from PR Dept. of Treasury. He wants to establish a U.S. qualified plan and transfer the substantial assets from the PR trust to the US trust.

Can this be done?

Does anyone have experience with an employer reducing compensation to pay long term care premiums pursuant to a comp agreement for physicians that says the employer may reduce salary to pay "expenses." The employer wants to deduct the premiums for the long-term care for the physicians and doesn't want the benefits to be taxable to the physician. This doesn't seem right to me and sounds like a cafeteria plan election, which long-term care is not a qualified benefit under 125(f). I'm afraid if the IRS interpreted that way that they would also run afoul of the nondiscrimination rules under 125. Any help would be appreciated!

Thanks

I have a new plan which uses prior year testing according to the document. I know I can use 3% as the first year percentage for the ADP portion. This may be a dumb question but what do I use for the ACP portion? Thanks

I know that the form 5500EZ requires that the plan sponsor have an EIN... the EZ will not accept a SS#. BUT, up to the point where the sponsor must file the EZ I cant see that it is required that the plan sponsor must apply for an EIN. A self employed individual filing a Schedule C can use their SS#.

So... am I safe to understand that (as stated above) a SoloK client does not have to apply for an EIN for their business until they are required to file the EZ?

Thanks

In the park HR.... evil empire in the basement. Fun ball to watch.... hope it lasts!