Plan Effective Date 01.01.2003. Adoption Agreement says voting rights w/r/t Employer Stock Option passed through to participants. This was not employer's intent. Trustee has been voting such shares as employer intended. No "material items" were subject of a vote during this period. Can this type of operational failure be corrected under SCP via retroactive amendment?

When should (or should not) line 7f of the 5500 equal line 7g?

The plan is a MPP plan with no excluded groups of ee's. This would mean that all active participants are also receiving a benefit and should therefore have an account balance at year end, right? Along SSA and retirees and a few deceased participant balances in the plan The record keeper is coming back with some variances between the numbers and we can't really figure out what the cause would be.

I have a client who does not believe that they are required to file a 5500 for their voluntary group vision plan. The premiums are 100% EMPLOYEE paid, and there are over 100 participants.

I believe that a 5500 should be filed, but was hoping to provide applicable documentation on the subject.

Any help would be greatly appreciated!

With regard to lump sum distributions, would someone born after 1/1/37 be able to utilize 10-year averaging and capital gain treatment?

What is the fed reg/law that discusses 10-year averaging and capital gain treatment?

The reason I ask is that the tax notice from 2006 addresses lump sum distributions to those born after 1/1/36, but I would like to know if that changes each year and can not find any specific information.

We recently took over a client that has a 401(k) Plan. We found out after the fact that the owner's spouse own's a separate company and sponsors a Simple IRA. They have minor aged children which makes them a controlled group. They were told by their prior TPA that this was allowed since when tested together, they passed 410(b) and 401(a)(4). Is this OK, or is my client prohibited from having a 401(k) and must he also provide a Simple IRA? If the 401(k) was not allowed, what do we do to bring them back into compliance?

I have a new calendar year 401k Plan that started deferring contributions 11/1/2006. Employee deferrals are the only contributions made to the Plan. The plan fails 416 for the initial 2006 plan year. Compensation is defined as calendar year earnings. Plan has 7 active participants as of 12/31/2006 of which 4 are Key EE's. Does Plan need to make TH contribution to non-Key for 2006 as well as 2007 since it is the first plan year?

Aloha nui!

I have a plan that started using automatic enrollment and immediate eligibility as of 7/1/06. The plan only applies the automatic 3% to employees hired after that date it does not look at exsisting participants. The plan does not increase the amount automatically each year. It will remain 3% unless the participant elects. Also the plan provides for a default investment to an asset allocation portfolio based on the participants age absent of any election from the participant. The plan will not utilize the safe harbor options that is available for automatic enrollment plans.

I can't seem to find guidance on what if any type of notice I should be providing. Currently the employee is receiving the form to opt out or change the election at the time of employment since the plan provides for immediate eligibility.

I can't seem to find consistent language.

Thanks

-Stacy

I have been asked to prepare an amendment to allow one participant to receive a PS contribution who is inelegible due to hours (1000 hour requirement in doc). I have not prepared anything like this and I am unsure how to begin. A colleague referenced a 411(d) amendment, but I have been unsuccessful in finding a sample amendment similar to what I am attempting to do. Any suggestions, thoughts, cites?

Thanx!

I know QNEC's can be used to satisfy various deficiencies when it comes to nondiscrimination testing, but if all of the yearly nondiscrimination tests are passed, does the employer have the option to use QNEC's as an added bonus feature for employees (assuming the "bonus" allocation to employees' accounts is nondiscriminatory in nature)?

Can the Employer also choose to add a little extra to employee's accounts in one year (via QNEC's) and then decide NOT to the next year, due to low profit margins? Or are you required to continue giving out QNEC's at the pre-determined percentages once you start the plan.

Thanks for your time guys.

I understand the Service's position is that a cross-tested plan by a non-corporate employer cannot specify one self-employed person to be a cross-tested group. That would be a non-qualified CODA.

What about a categorization that given the data for a given year results in just one self-employed person qualifying for that categorization, but may in other years result in two or more self-employed persons being in that group?

I'm trying to determine some options I might have in a couple of plan design areas, and I've had a little trouble finding the answers in my attempts at searching through the IRC.

If I want to classify a few levels of employees, are there other ways to segregate groups of employees other than salaried employees vs hourly? And are there any possible effects/restrictions I can impose upon matching contribution %'s via these classifications? For example, is it possible for managers to receive a higher MC % relative to hourly employees MC %? (bear in mind, nobody involved with the 401k, not even the managers, would be considered a "HCE")

I was also trying to look into ways of crediting prior service (service recorded before the effective date). Are there a few ways to do this? Or do you simply have the ability to credit up to 5 years of prior service, period.

I don't want to take up too much of your time, so if you can even direct me to the right sections of the IRC that would be a great help. Thanks so much.

I had a rollover IRA account at a brokerage until March 1-2006. They then opened another kind of account where they were charging half the fees for a trade. When I talked to them, they assured me that I could move my rollover IRA into this account and it would still be an IRA account. Now, they are sending me a 1099 and are treating it as a withdrawal. I am in my thirties and this would be a huge tax burden for me. I never touched the money in the new account, never made any withdrawals from or deposits to it either. How do I fix this? I would like to go back to having my money in the rollover IRA as before. Thankyou for your help.

Ria

ok -here's the situation: Plan has 1 month eligibility & uses prior year testing. NHCEs ADP was 2.5% in 2005, HCEs ADP was 5.00% in 2006, so far so good.

NHCEs who were contributing termed in 2005. More NHCEs became eligible in 2006 (after 1 month) but are not contributing. The NHCE ADP as of 12/31/2006 is 0%.

Can I use the otherwise excludable rule to say that there are actually no NHCEs "eligible" in 2006 or do I let the HCEs know that they cannot contribute at all for 2007?

For some reason, I cannot keep this straight in my head; I think because I don't work on enough prior year testing plans...

Hello,

I am brand-new to benefits administration and am the administrator for employee benefits for a small company of under 30 employees. I have been trying to get clarity on the topic of Summary Plan Descriptions. I understand that it is required that the plan administrator provide these to employees for their retirement plan, welfare benefit plans and cafeteria plans within 90 of the employee's eligibility date for the plan. I have been told that an SPD and Plan Document are simply a different name for the same thing and are required when the company is self-funded. I have also been told that in a fully-insured situation that a Certificate of Coverage or a Master Group Policy is the only document required. Is this information correct? I ask because in gathering these documents I have been able to secure an SPD for our Cafeteria Plan, 401K and STD & LTD; whereas I am having a difficult time securing anything more than a Certificate of Coverage for our Health, Dental & Life. Our company is fully-insured. If I do need an SPD for the latter, is that the responsibility of the insurance carrier or is our company's responsibility to supply?

Thank you!

Company X maintains a nonqualified deferred compensation plan permitting certain employees to defer all or part of their compensation with a separate election permitting the deferral of the employee's bonus payment which is made in early March. Assume that Employee L is elitgible to participate in the nonqualified deferred compensation plan and that s/he elects to defer 0% on his/her regular compensation and 100% on his/her annual bonus, and that the election was made in compliance with Code Section 409A. Assuming that L has exceeded the Taxable Wage Base before the bonus is paid and that his/her gross bonus is equal to $100,000, $98,550 is contributed to the nonqualified deferred compensation plan and $1,450 is withheld as FICA tax. Can the amount withteld as FICA tax be considered a 401(k) contribution and require the employer to make a matching contribution (to the extent that the deemed 401(k) contributions does not exceed the plan's matching contribution formula)?

Have a client that is getting rid of their Simple in favor of a 401(k). Participants have already contributed some to the Simple for 2007. I'm wondering for the 2007 Plan Year, which contribution limits would apply - those for Simple or 401(k). I'm not so much worried about the participants going over as I am the owner and spouse who contribute the maximum each year.

Along these same lines, would the employer have to make the usual 3% to the Simple then on comp up until date the 401(k) is actually effective? The 401(k) will include a safe harbor nonelective of 3%. Could the employer just deposit that based on the entire year comp rather than doing a portion of the year to each to satisfy the Simple contribution and the SH nonelective? Of course, the doc would have to state that for the first year, partial comp applies, correct?

I manage a DB plan that does not have a lump sum cash out option for participants. My Company is thinking of adding one. Where can I get some plan design survey data that will give me information on things like number of plans with what kind of options they offer? I'd also appreciate any comments on adding this type of distribution option to a DB plan.

A participant has an IRS lien against her wages that states that she cannot make 401(k) deferrals from her paycheck (presumably until the lien is satisifed). However, she now wants to take a loan from her existing account balance. This is not mentioned in the lien specifically (I'm hoping to get a copy of the actual lien soon so I can verify its contents), but should the employer allow the loan? Any suggestions?

My first thought was that they should call the agent/office who issued the lien, but they don't seem eager to do that...

What are the employer's options as far as implementing auto enroll? Obviously, the employer can apply auto enroll to new hires. But, how can it be rolled to those who already met eligibility? What about those who previously elected out or elected a % less than the default...can we make them reenroll?

Hello,

A client is considering adding a PS source to their 401k plan and would like guidance on rules, regs, types of allocation formulas, etc. Anyone know of a good resource? Thanks