This may have been addressed before, but I can't find anything in the forum....

I have a client who has had 100% immediate vesting for their employer match. They are moving into a new doc with me and would like to change their vesting from 100% to 50%, 75%, 100% over a 3 year period.

I realize that you cannot take away benefits from a participant after it's been communicated to them, but can the employer create a new source, "new employer match" where from 1/1/07 on, the new vesting schedule will be attached?

The employees who are already employed as of the new doc would be deemed 100% vested already and any new employees that they hire in 2007 would go on the new vesting schedule.

Is this allowable? I have read sec 1.411(a)-8 and I think it is.....any other regs out there relating to this?

Thanks!

We have a deceased participant in a 401(k) plan whose spouse is the primary beneficiary. The participant's account balance is approximately $500.00. The spouse refuses to sign the distribution election form from the investment provider (Great-West), so the investment provider will not distribute the funds until the form is signed by the beneficiary (per their legal department).

This has been an ongoing issue for almost five years.

Any suggestions on how to get the money out of the account, or is it even possible without the spouse's signature? Or do we have to wait until the plan terminates until a force-out will occur? Any other issues we need to look at here?

Any input would be greatly appreciated. Thanks!

I've looked at EPCRS and the instructions for DOL's on-line calculator. In each of the examples, it appears that they are illustrating the aggregate amount of late deferrals. In performing the actual calculations, wouldn't you have to determine each participants' late deferral amounts separately to determine their portion of lost earnings?

We recently received updates to the IRS rulings regarding debit cards and in the updates it's boldly stated that the IRS has not in the original nor the latest updates approved a "use the card to purchase now and chase later" approach to claims substantiation at merchants without health-care related Merchant Category Codes.

Typically, most debit card vendors allow an employee to use the card at certain merchants without health-care related merchant category codes, on the assumption that such a practice is OK if after-the-fact substantiation by employees is requested by an administrator.

However, if the merchant has a health-care related merchant catergory code, this practice is permitted but subject to some conditions.

My question is, how are other administrators handling this ? Do you feel it is OK to allow this process even though the IRS has not permitted it or are you restricting the card usage to only those merchant with health care related merchant category codes ?

I am talking to a prospect that currently has a tiered match of 25¢ on the $1 to 4% and a $1 / $1 match from 4-6%. I seems like in my studies a few years ago, I remember something about a test on how much the matches can increase over prior levels, and it seems like this wouldn't pass. (Each time I search anywhere like CCH, I get that SH Enhanced Matching formulas cannot allow for a tiered match that increases at all, but this plan is not a SH. I also see discussions of matches being tiered based on things such as years of service and how you'd have to test them for Benefits Rights & Features, but again this plan doesn't do this.) I've looked through the Pension Answer Book, 401(k) Answer Book, Coverage & Non-Discrimination Answer Book and others, but am only finding discussions of the above.

Anyway, I've found on a few sites that increasing tiered matches aren't allowed in Prototype plans (at least Standardized), but with no references. I also e-mailed someone at Corbel and he said that he seems to remember the same type of rule but can't find it either, but also said that you cannot use their prototype to do it.

So, my question is: Am I losing my mind and there never was such a rule? If there was, is it now gone? If there is and it is still in effect, where would I find it??

husband/wife owners in same plan divorced and qdro issued. husband's amount transferred to wifes account balance. No 1099R issued, correct? Thanks.

Linda

We have a section 125 flexible spending plan for health and dependant care.

we also give employees the choice to receive cash instead of the medical benefit. should this amount they receive be taxable?

A client with a DB plan is interested in adding a Age plus Service based PS plan. Deductibility isn't an issue. My concern is regarding non-discrimination. The DB plan is a standardized prototype plan. Can the plans be tested separately for non-discrim?? I'm fairly sure they can, but the one thing i come back to is the average benefits test. Would the DB benefits need to be included when performing the ABT on the PS plan??? Thanks.

My only brother died unexpected recently.

He was divorced three times and didn't have any children.

He would often tell me I was his only survivor and ask my SS to be sure he had it correct.

He would often get into a discussion on dieing and I could not listen. This death has been extremely hard.

I am the only family he has. I am married and have one daughter but that is the extent of our family.

He worked for one of the airlines that is in bankruptcy.

They had recently taken all there compay match back because it was matched with company stock.

He has worked for them almost 25 years.

I was given a list of numbers to call for his benefits and the life insurance has already been sent to me.

The Fidelity told me to send a death certificate when I received one,and the first one had incorrect information on it his birth day was wrong. It took another few weeks to get a new death certificate.

I live in a different state so I have applied to be his administrator and that should take effect the first of Nov.

Well I called Fidelity when I got the death certificate to see if there was anything else to sent and the woman I talked to said the beneficary had already been notified.

I questioned her and she said my SS number was not down and she didn't see my name.

I ask how they could notify a beneficary without a death certificate.

Anyway I called the company he worked for and talked to benefits and they could not tell me anything except to call fedility back and talk to a supervisor.

When I made the second call that same day. the man would not tell me anything except where to send the death certificate. He did at one point tell me the account would be set up under my SS.

I sent the death certificate reg mail and waited and the other day I called and still the person I get on the phone says they don't see my name or SS.

I called back and ask for a supervisor and they would only say that it would be a while before everything was worked out.

They would not tell me that I was the beneficary. My brother was always telling me that I was and how he wanted to be buried.

Now I don't know what to think. I am going to be the administrator and he has been divorced for over three years and he wanted to be sure the ex wife didn't get any of his benefits.

The last call the supervisor at Fedility said I would be getting a letter but on previous calls they said only the beneficary would be getting a letter.

But then I was told that the beneficary had been notified.

So every call I am told something different.

I am concerned and don't know where to go for help.

I never expected my brother to die like this and with the loss of him and trying to handle things I am so stressed.

Why would different people at Fidelity tell me so many stories.

The first person that told me the beneficary was notifed there was not even a death certificate because they had just corrected the mistake and the second one was at the court for me to open up the administration.

Please help.

SAndy

Upon the assumption I would be using pre-tax money to finance a SIMPLE IRA, I contributed for the 2 (there are only 2) employees in my company. My accountant later decided not to use this as a contribution making our contibutions post-tax contributions. As I understand it, if I was to withdraw the money, I would have to pay a 10% penalty. Is there anyway I can avoid the 10% withdrawl penalty or paying tax a second time when I choose to withdraw it in years to come?

Our pension plan gives credit for earnings up to a certain limit. Any earnings above that limit are not credited to the participant even thogh the employer is contributing on all earnings. Is this proper?

I have had the QDRO prepared and now the ex wants a change. I am military, not yet retired, and she will receive a percentage of my retirement pay. No arguement there. She wants survivor benefits.

I have remarried.

The ex has remarried. She is under 55 yo.

The divorce decree does not specify survivor benefits.

My thought was once I remarried, any survivor benefits, if I chose them, would be to my surviving spouse. Secondly, because it was not specified in the divorce decree she is not entitled.

Is she entitled to SB?

Thanks

1) The 457(b) plan in question is on a Oct 1 to Sept 30 plan year. Does the 457(b) limit ($15k in 2006) apply to the plan from Oct 1, 2005 to Sept 30, 2006; or is the relevant timeframe Jan 1 to Dec 31, 2006? For example, could particpant max-out in Sept 2006, the last month of the plan year, and then contribute another $15k in October 2006 (thus maxing out for the next plan year), even though that would be a total of $30k during the calendar year?

2) Are there any filing requirements (or other requirements/disadvantages) to changing a fiscal year 457(b) to a calendar-year plan?

I apologize if this has been asked and answered.

An individual (not a 5% owner) with accounts in several qualified plans plans to retire on 7/1/07 over age 70 1/2. To avoid having to take small MRD's from each plan, he wants to roll over the accounts to an IRA. If he does this in 2007 (before his retirement), would he be able to roll over the entire accounts into the IRA? Or, will a portion of each payment be considered the MRD for 2007 (first minimum distribution year) and therefore not eligible for rollover?

Thanks for any help you can give.

Employee is 60 years old and self terminated from employment. Now wants lump sum distribution. Is the distribution code Normal distribution [7] or Separation from Service but Exempt from 10% penalty [2]?

Suppose you have a 1 participant DB with unit benefit of 8% per year, where the participant will have 10 years of participation at NRA. Furthermore, lets assume he accrues $1,200/mo. each year. If they froze the plan in year 3 and want to unfreeze in year 5, does the 133 1/3 rule apply to his prior accrued benefit or the last increase in accrued benefits before the freeze?

They would like to increase the benefit going forward.

Thanks much.

Out of a Simple 401k and Simple IRA, which one would you choose?

This article http://www.research401k.com/simple-ira-401k.html says

"Employer contributions to a Simple 401k & Simple IRA account are subject to different rules. For example, Simple 401k accounts are subject to a Compensation Cap of $220,000 per year for the year 2006."

While the Simple IRA is not subject to this compensation cap. So if you're a high income earner, you would choose the Simple IRA instead of the Simple 401k?

Does anyone have or can direct me to a sample notice to employees for an automatic enrollment provision. This is NOT the safe harbor auto enroll - the employer will be contributing 2% match. It is just to increase participation. Thanks!

1) Does seasonal work (ie timber companies) count as employer or employee driven initiated separation? The employees always had the option to hire back the next spring but it's possible that some were not hired back at behest of employer. Doubt that number reached the 20% threshold though.

2) If a TPA says that a partial plan termination has occurred and all subsequent paperwork shows effected participants at 100% vested but there is no amendment and no determination filing was done...was there indeed a partial plan termination? Can it be determined later that a partial plan termination did NOT occur and the vesting reverted back which then leads to forfeitures? Even though participants may have received multiple statements showing them as 100% vested?

edited note: I'm not trying to get anyone out of anything...#2 is the situation that actually occurred and I'm trying to figure out if it was handled correctly or not.

The trustees of our Taft Hartley pension plan altered the trust agreement so that only they can remove or appoint a trustee. Now neither the union nor management have any control over the trustees. Is this proper? If not what can be done to restore to management and the union the ability to appoint and/or remove trustees?