Is anyone aware of a sample or model supplemental unemployment fund documents or summary plan descriptions that I can review?

Company A participates in a multiple employer plan. Company A will be merged into unrelated Company B, and its employees will participate in Company B's 401(k) plan after the merger date.

If Company A withdraws from the multiple employer plan on the day prior to the merger, will that be considered a "plan termination" so that its employees can receive distributions from the multiple employer plan under the "plan termination" exception of 401(k)(10)?

I think "yes." If Company A had sponsored its own plan and terminated it before the merger, 401(k)(10) would have permitted distribution. The only thing different here is that the multiple employer plan is not terminating because it will exist for other employers after Company A ceases particpation.

Alternatively, if it's not a 401(k)(10) plan termination, is the merger itself considered a "severance from employment", even though the Company A employees will work for Company B after the merger date ?

I'm new to 401Ks having just set up a new plan at a new company and having no 401K experience so please bear with me.

At my employer's instruction, I set up a plan with no matching but leaving the window open for future matching. I have told all employees that we will review matching when we get a clearer idea of this year's financial situation.

Now I have heard from one of our first employees that our boss signed a contract with him giving him a 3% match. My boss says that we can do this for him but not for the others because an Employment contract trumps other rules. Is this right that we don't have to treat everyone equally? Doesn't seem right to me. Expert advice please.

A tax-exempt entity sponsors a 457(b). The plan allows the participant to make an election regarding the form of payment. The participant elects 4 annual installments. The participant left employment in December 2002, but before that, in July 2002, an election was made to delay the distribution until March 1, 2007. The employee is now at another tax-exempt and they are discussing doing a direct 457(b) transfer.

Since March 1, 2007 has already gone by, the first installment (of the 4) is "considered to be made available" and is thus taxable in 2007. However, the participant has never utilized their additional election option to further delay distribution. With regard to their remaining 3 installment payments that are due, could the participant make such an election now to delay those distributions?

I looked under 1.457-10(b)(6)(ii), "in the case of a transfer between eligible plans of tax-exempt entities ... the transferred amount is subject to §1.457-7©(2) (relating to when amounts are considered to be made available under an eligible plan of a tax-exempt entity) in the same manner as if the elections made by the participant ... under the transferor plan had been made under the receiving plan."

Does this section of the regulation lock the 4 installment option into place in such a way that the next 3 installments cannot be delayed?

Also, was it ok that the participant made the election to delay payments even before they left their old employer?

I have stock held in a DRIP program (pfizer, not that it matters...). I was wondering if it is permissible to have a certificate issued for some number of shares and then to deposit that stock into my roth IRA account. Is this allowed or do contributions have to be in cash? What about taxes on the gains while held in a taxable DRIP account? Any answers or insight would be most appreciate. Thanks

I'm at the point where I will not be able to contribute to my Roth IRA for 2007 because my income is over the limit. In order to provide the same effect, my financial advisor would like me to open a Variable Universal Life Insurance (VUL) policy. I am single and do not need extra life insurance, and I don't like the idea of insurance acting as an investment.

Are there any other alternatives available for me that will replace the Roth IRA other than the insurance? I also have a 401k, but like the idea of tax-free income in retirement. Any input would be greatly appreciated.

Assume an employee executes and submits a salary deferral agreement, but deferrals are never withheld from his compensation. Doesn't the employee have some responsibility to make sure deferrals are taken out and contributed to the plan? If this failure lasted for a 3 year period, it seems like the employer's liability should be limited to something less than 3 years...perhaps to the first year alone? Help!

A health and welfare fund subject to 1.501©(9)-2 is made up of employees. A related business of non-employees wants to join the fund. However, according to that regulation, the non-employees can make up no more than 10% of the VEBA.

1) How is the number of employees calculated?

1a) Is it just straight number of employees, or are spouses & dependents included?

2) Is the number flexible, or is it set at a certain time?

Thank you.

We have a guy in who left employment but was deferring on severance pay after he left. I told them that it was a gray area and technically they're not supposed to defer on severance, but it thay allowed it, they had to give him the SH on that pay, too. They opted not to and to return the deferrals. can they do that and would you return earnings, too. ?

Prefacing this by saying I'm not a DB guy so pardon the ignorance...

Tax client of ours added a DB plan to DC-New Comp plan. Deductible contributions more than doubled and client talked about how 90% of contributions are going to him and his wife. Which of course drew our attention. Client has always "pushed the envelope" in terms of tax issues. Now we are wondering if he is doing the same with this approach to retirement planning. At our request, the client provided us with current year allocation schedule and we have found that the plans are New Comp and Cash Balance plan.

I've read through a few things on the Cash Balance plan but as one might think they don't talk about the areas where the laws can be pushed and potential for abuse might exist. What I'm afraid of is that someone sold him on something along the lines of an abusive 412(i) plan but using the Cash Balance plan as it's vehicle. Is this something that could possibly blow up on him down the road? Is there a possibility of a reversion of some sort? If there is potential for problems down the road, is there something that will specifically point me to where to look to see if this plan falls within the acceptable versus nonacceptable realm? Do I look at coverage? Turnover? Inability to fund long term?

I want to be clear that I don't think the client is specifically doing anything wrong or that the investments are inappropriate, just that the plan may not necessarily be in his best interests in the long term. I think that we would be remiss if something were to be looming on the horizon and we didn't let him know; even though we weren't specifically engaged on the retirement plan piece. Could be perfectly legitimate and we clap him on the back and say good job. Just want to make sure.

Thanks in advance...

Top heavy 401(k)/profit sharing plan.

Company does not want to make a contribution.

Can key ee's over 50 make catch up contributions without triggering the need for a TH company contribution?

I represent a large defined benefit church plan that is a non-electing church plan (not subject to ERISA). I am struggling with the application of the prohibition on in-service distributions prior to normal retirement age in the context where a participant terminates employment with a covered church entity and immediately becomes employed by another entity that is affiliated with the same church, but which does not participate in the same plan. Assume for purposes of this question that both entities are either a church or a qualified church-controlled organization. I understand that the controlled group rules of 414©apply for purposes of the prohibition on in-service distributions from a pension plan, but we don't have any real guidance on how to apply the controlled group rules to a church plan (see Proposed Regulation 1.414©-5). Does anyone think I have a problem if we allow a pre-NRA distribution to a former employee who is still working for "the church," but not for a church entity that participates in the same Plan? Thanks.

We are looking at taking over a 401(k) plan with a calendar limitation year and a 1/31 plan year. Testing and plan allocations have been based on calendar year compensation and deferrals.

The client is interested in amending to a Safe Harbor Match 401(k) as soon as possible. If the change is made 2/1/08 would the match formula be applied to the 2008 calendar year compensation or the compensation from 2/1/08 to 1/31/09?

Would the best approach be to have a short plan year ending 12/31/07, so that the limitation and plan year match?

Hello-

A group health plan currently has a $1million lifetime maximum. One benficiary of the plan has satisfied their lifetime maximum. The group is looking to move carriers to a plan w/ a $2 million lifetime maximum. They are wondering whether they can exclude this beneficiary from coverage since he already satisified the lifetime maximum under the prior contract. He would be otherwise eligible for the plan. If they don't exclude him can they count the prior $1 million against the new $2 million maximum?

I see problems w/ respect to HIPAA nondiscrimnation by excluding the beneficiary entirely , but wanted to get some additional opinions.

Thank you!

Am still getting used to the new layout on message threads. Is there any way to epxand so that you don't have click on each posting in a thread?

Has anyone ever heard of a plan basing a rehired employee's eligibility on whether they still maintain a balance in the plan from their prior service? The document states that BIS rules do not apply to eligibility.

Background: two EEs worked 1+ YOS for ER and terminated. ER merged into a new company, with a new profit sharing plan that requires 1 YOS for a PS contribution. The EEs are rehired after the merger so they have no prior service with the new ER, but they had both been eligible for the former ER's 401k, which has since been merged into the new ER's plan. New ER counts their prior service for vesting but determines that only one of them is eligible to receive the current PS allocation.

Because one of the EEs still had money in her account from her prior tenure, she was deemed an existing "participant" and given a prorated share of the PS contribution for the year of rehire. The other employee had either not contributed previously or had already taken distribution of her account so she did not have a current balance in the ER's plan when she was rehired. Because of this, the new ER determined that she was not a former participant of the plan and is requiring her to complete a new YOS.

A State has a law that requires employers in the coal industry to remit monies to a pension fund on behalf of coal workers employed in that state (and to make matters more complicated, some are union and some are non-union employees).

Is there any reason to think that employers could disregard these state-mandated contributions when doing 410(b) discrimination testing?

We are a TPA with a prototype plan. Our document does not allow for life insurance as a plan investment. We have a new client that is getting ready to move their recordkeeping business to us. Their plan currently has some participants with life insurance in the plan. If the participants are under 59 1/2 and not eligible for a distribution from the plan, how do they remove the life insurance from the plan? Can the participants still purchase the contracts by paying the cash surrender value into the plan in exchange for having the policies transferred? With this go in as after tax? What other options do they have? Thanks for any assistance!

Is there a regulation on the term a 401k loan can be taken for a primary residence?

I thought it was always 15 years...

I have a db plan where each participant (all plan participants are HCEs) has a separate rollover account in the plan. The plan sponsor wishes to continue the db plan but allow everyone to take their rollovers to IRAs or cash out... Does anyone see any problems with this? Is this allowable? Do they have to wait until NRA?

Figured it out... but i can't figure out how to delete