Hello all! I am a former recordkeeper, but have been out of the business for awhile. Where is the best place or best resources to learn recordkeeping so I can start applying for jobs again? Any help would be greatly appreciated.

might be taking work with a governmental agencey

they put a % of your base salary (pre tax) into a deferred comp program 457 or 401a

now i have some money in my 401K from my previous employer...

can i transfer that to the 457? can i leave it were it is? what are the benefits?

what happens if i leave the government agencie...do i still get to move the money??? tax pentalties????

enlighten me thx

thanks...

Can a profit sharing plan have an in-service distribution age requirement of age 21? I know it sounds absurd, but from what I read, the age for in-service w/d can be any age prior to NRA. Does this sound OK?

From reading Rev Proc 97-9 I get the impression that you could not convert a regular 401(k) plan to a SIMPLE 401(k) mid-year. Would you agree that it can only be done for the beginning of the next calendar year?

I posted this on the nonqualifed deferred compensation board.

As everyone knows statutory stock options under Section 422 are excluded from the reaches of Section 409A. What I'm not so sure about is whether you have to use a 409A valuation method to keep those statutory options out of 409A or whether you can still use the Section 422 regs to value the stock. The following paragraph from the preamble seems to contradict itself:

"Several commentators expressed concerns regarding the determination of the fair market value of the underlying stock. Some commentators requested that the valuation rules applicable to incentive stock options be applied for purposes of the exclusion from section 409A. Under those rules, if the stock option would otherwise fail to be an incentive stock option solely because the exercise price was less than the fair market value of the underlying stock as of the date of grant, generally the option is treated as an incentive stock option if the issuer attempted in good faith to set the exercise price at fair market value. See section 422©(1). The Treasury Department and the IRS believe that this is not the appropriate standard for determining whether stock rights are subject to section 409A. Incentive stock options are subject to strict limitations on the amount of such options that may be granted to a particular employee. See section 422(d). In contrast, there are no such limits applicable to nonstatutory stock options, and grants of nonstatutory stock options often far exceed the limitation applicable to incentive stock options. In addition, section 422©(1) explicitly provides for the good faith standard with respect to incentive stock options, while no such provisions exist within section 409A or its legislative history."

Have a safe harbor 401(k) plan with the 3% QNEC. Physician group where each physician's PC has adopted the Plan. A physician for one of the PCs passed away during 2006 and the spouse is refusing to fund safe harbor contribution attributable to the physician's eligible compensation. What happens to the Plan if this contribution is not made bearing in mind the participant is highly compensated?

Thanks in advance.

Regarding participant directed loans - If a Plan limits loans to one loan at a time, hardship only, from deferral source only, and on and on, is this considered an investment restriction? Also, what about participant directed loans that are not illustrated on the quarterly statements provided by the Recordkeeper (TPA reconciles loans at the end of the Plan Year). If these loans are attached to a Plan that requires quarterly statements, do you feel that we would have the update the loans on a quarterly basis, or just provide the last available data?

Combination plans, where the deferrals are individually directed, but the profit sharing assets are commingled in a Trustee directed account - We have several of this sort and they have up to 10 accounts, with several pages of investments. Does anyone have a good method of providing this data on the quarterly statements?

All comments are welcome.

I don't believe this is addressed anywhere in the reqs. Is anyone using a loan tracking or repayment system or process that calculates interest on a daily basis? We think "no", and normally we don't care about the exact date when a payment is made. All payments are through payroll deduction, so the repayment date is always close to the date. Do you only start tracking interest if the loan goes into default?

Has anyone heard/witnessed/ or know the legality of the ability to have participate directed cb plans?

would allowing a participant to individually invest their "hypothetical account" make the plan a cb, not a db?

Also, if it is possible, what are the administration headaches involved?

As somebody who works primarily with other types of qualified plans, I thank everybody for their messages on this board as I have been a regular visitor over the past few months because of a 403b prospect. I wanted to run a scenario by all of the other professionals on this board to hopefully get some feedback.

My prospect has a 403b which has been in place for some time. This plan is set up with a large mutual fund company and each employee has thier own custodial account. The plan offers an employer contribution of a flat % of salary once the employee is 21 years old and as long as they are expected to work 20 hours per week. The plan has no document, the employer contributions have never been tested (ACP), and the plan does not file a 5500 (They file a 5500 for their cafeteria plan).

Does the fact that they file a 5500 for the cafeteria plan with the "Pension Benefits" box checked mean they do not need to file one for the 403b? Should the Er contributions have been tested all along or is this not required as this is not a match? Since this is an ERISA plan, can the plan specifically exclude Ee's who work under 20 hours from receiving the Er contribution?

I am sure they need a document. What types of penalties are involved for not having one, or what types of penalties are involved for anything else they are doing wrong???

Any advice/suggestions are much appreciated. We do have a compliance officer on staff that I am going to consult with as well, but I am also looking for thoughts from other experts. Thank you.

In today's EBIA weekly, there is an article about a case involving an adopted child and it includes a reminder about ERISA's adopted children mandate. "ERISA group health plans covering dependent children of participants or beneficiaries must provide the same benefits to such children who are placed for adoption that are provided to natural children of participants or beneficiaries. The mandate applies whether or not the adoption has become final..."

The first part makes perfect sense, since a dependent is a dependent once covered, so what kind of a dependent shouldn't matter, but I don't understand the part about whether or not the adoption has become final. If the adoption isn't final, then how would the child be covered? If the adoption isn't final, then it just seems to me that they wouldn't be considered a dependent yet and couldn't be covered yet. At what point in an adoption would the child be eligible for coverage?

Is there no longer a 409A message board?

Anyway, as everyone knows statutory stock options under Section 422 are excluded from the reaches of Section 409A. What I'm not so sure about is whether you have to use a 409A valuation method to keep those statutory options out of 409A or whether you can still use the Section 422 regs to value the stock. The following paragraph from the preamble seems to contradict itself:

"Several commentators expressed concerns regarding the determination of the fair market value of the underlying stock. Some commentators requested that the valuation rules applicable to incentive stock options be applied for purposes of the exclusion from section 409A. Under those rules, if the stock option would otherwise fail to be an incentive stock option solely because the exercise price was less than the fair market value of the underlying stock as of the date of grant, generally the option is treated as an incentive stock option if the issuer attempted in good faith to set the exercise price at fair market value. See section 422©(1). The Treasury Department and the IRS believe that this is not the appropriate standard for determining whether stock rights are subject to section 409A. Incentive stock options are subject to strict limitations on the amount of such options that may be granted to a particular employee. See section 422(d). In contrast, there are no such limits applicable to nonstatutory stock options, and grants of nonstatutory stock options often far exceed the limitation applicable to incentive stock options. In addition, section 422©(1) explicitly provides for the good faith standard with respect to incentive stock options, while no such provisions exist within section 409A or its legislative history."

A client of mine has a DC plan that has been in existance for one year and a DB plan tht has been in existance for one year.

Since the DB plan never had any prior NHCEs they use all past service in the calculation of accrued benefits.

For the second plan year we will be adding an NHCE.

So the plan will have 2 HCEs and 1 NHCE for the 2nd plan year.

In doing the non discrimination testing we will plan on using the accrued to date method for the DB plan.

1.401(a)(4)-9(b)(2)(iv) seems to indicate that the same measurement period must thus be used for the DC plan for consistency purposes. That is, I could not use the annual method for the DC plan if I use the accrued to date method for the DB plan.

Is my understanding on that point correct?

If so, then I will use the accrued to date method for the DC plan as well, which I presume will be based on the 2 HCEs account balance at the end of the first plan year plus the second year allocations divided over a measurement period of 2 years, since even though they may have worked ten years, there have been only two years of allocations. Is that correct?

However, the DB plan can have ten years (i.e. all past service) in the measurement period since the accrued benefits are based on all past service.

Thanks.

Plan deposited deferrals late. As I understand, there are two "interest computations". First, there is the interest adjustment needed to make the person "whole". Second, there is the interest needed to compute the penalty tax for Form 5330 under self correction.

I would appreciate any comments you might have on these computations. Also, where is the table found that defines the interest rates needed to compute the excise penallty tax, and which rate do we use?

Thank you for your help!

I'm trying to locate the final regs on line that contain the information regarding a Safe Harbor plan not being able to "fall back" on ADP/ACP testing if they fail to make a SH contribution.

Can someone point me in the right direction?

I'm currently in a debate with a cohort. I believe that an employer can do just about any thing they want to under an HRA as long as everyone is treated the same, no A/D tests are failed, the plan does not favor Key or HCEs, and the plan is in writing and communicated.

Example: HRA is effective 5/1 and states that it will pay 1,000 toward the 1,500 deductible of the Major Medical plan.

I say that the plan can allow credit for deductible expenses incurred back to 1/1 (as long as it's in writing, communicated, and meets requirements noted above).

My cohort says no. No expenses can be allowed prior to 5/1, the eff. date of the plan.

Who is right?

I have a client that has sold his practice (not his Corp) with 4/30/07 effective date. His employees will be working for the new DDS and the new DDS is not taking over the retirement plan. The retirement plan will remain open so our client can continue to fund for himself going forward.

Question: I know the participants become 100% vested due to partial termination but do they get paid out as of 12/31/2006 valuation or is an interium valuation required as of 4/30/07?

Thanks!

The sponsor of a DB plan wants to freeze benefits for current participants and close the plan to future new entrants. The plan is underfunded on an accrued benefit basis, so the there is no potential for reversion, which means that the special rule of 1.411(d)-2(b)(2) is satisfied. Does the freeze of future entrants create a PPT under the general rule of 1.411(d)-2(b)(1)? If so, who has to be brought up to 100% vesting? The people who are the cause of the PPT are not participants, and the actual particiapnts are not affected by the PPT.

If an employee transfer from nonunion employment with healthcare coverage back to union employment with lesser healthcare coverage, must the employee (and his or her covered beneficiaries) be offered COBRA?