In 2005 a participant takes a plan loan to be used for the purchase of his primary residence, but elects to only carry the loan out for 5 years.

In 2006 the new house now comes with a new baby, and the participant would like to lower the payments on the plan loan.

Assuming the loan program allows for a 15 year payback on principal residence loans, is it possible to refinance the existing loan for 14 years, since the original loan could have had a 15 year payout? Or once the election was made for 5 years on the existing loan, is the participant stuck with that?

Thank you for any guidance.

Good Morning All,

I am trying to do some benchmarking regarding creative benefits for one of my clients. I am interested in seeing what kind of Out of the Box Benefits are being offered by companies these days (i.e., free massages at work, gym memberships, smoking cessation benefits, etc..)

Any and all suggestions are greatly welcomed.

Thanks.

Good Morning All,

I am trying to do some benchmarking regarding creative benefits for one of my clients. I am interested in seeing what kind of Out of the Box Benefits are being offered by companies these days (i.e., free massages at work, gym memberships, smoking cessation benefits, etc..)

Any and all suggestions are greatly welcomed.

Thanks.

at the bottom of the main board it says today's birthday is

Blinky (age 14). sounds 'fishy' to me.

A plan sponsor would like to offer the option of allowing the participants to elect life insurance coverage in their 401(k) plan. If the insurance company requires a minimum premium and/or face amount in order to write the policy, can this result in a failure of the benefits rights & features section of 401(a)(4)? My sense is that it will fail BRF because the insurance would be available as a percentage of pay for the owner which is much lower than what is available to the NCEs as a percentage of pay.

Hi,

I'm just starting out with this so take it easy on me.

My employer's plan has a max 401(k) limit of 15000 per year.

I would like to contribute the following:

15000 to 401k

4000 to Roth (I would open this one on my own via ETrade)

Total: 19000

Or do i have to contribute like this

11000 to 401k

4000 to Roth (ETrade)

Total: 15000

Husband and wife each have an LLC... can they have one plan between them? Why wouldnt they be able to?

A DBPP covers two employees. As the corporation that maintains the DBPP is owned by an irrevocable trust, both individuals (husband and wife) are considered to be NHCEs. The irrevocable trust is controlled by an independent trustee. They are the only two employees of the corporation that maintains the DBPP. These two individuals own another entity that does have common law employees that do not benefit under the DBPP.

The Company is interested in terminating the DBPP and the DBPP is currently underfunded. Is it possible for the two participants to waive the portions of their benefits that are unfunded?

I understand if these individuals were HCEs they could waive a portion of their benefits. Please do not comment on the 414 irrevocable trust issue. I am aware of the concerns with respect to that issue.

Thanks. Ed

I have an ER who is party to a CBA. I have learned that the Fund Administrator is going to audit the plan for years 1999 to 2005.

1) can an audit span this far back? i know a plan must be allowed to make annual audits but is there a "statute of limitations" for past years; and

2) in 2002, the ER was audited from 2000 through 2002, at which point we were informed that there was a deficit for 2002. we offered to settle and they declined to pursue it. is there a laches argument to be made or must we pay?

can anyone get me pointed in the general direction of the appropriate Code and/or Act sections?

thanks in advance.

I've got a client that had a plan that was in bad shape.... 12% participation with minimal interest in it. Through the help of a new financial advisor, decent education, the addition of a match and a change in the asset choices we've upped the participation to 50+%.

However, the "old" money is with the old custodian. As of July 1 of this year they've been running with both recordkeepers. Client wanted to seperate the two processes and was willing to foot the cost so who are we to argue...

Now we're going to consolidate the accounts. What I'm hoping to do is issue a blackout notice but at the same time provide them with a transfer request form that allows each participant to request a liquidation and transfer prior to the end of the blackout period. Since we're only talking about 6 people, the thought is that all would move their money voluntarily and we won't have to wait the 30 days.

Anything wrong with this? Do we have to wait until 30 days to request the transfer???

401K plan has eligiblity as follows: 1st of month following one month of service. For employees who enter on the first, the 401k deduction is being taken out of the first paycheck following, which is a paydate of the the 4th or 5th for services rendered in the last two weeks of the prior month. The employees are eligible and have met an entry date but the deduction is being taken out of a paycheck for service rendered prior to eligiblity. Any thoughts?

The PPA liberalized the withdrawal rules for pension plans by permitting in-service withdrawals upon attaining age 62. In reading the Technical Explanation it refers to "pension" plans permitting such a distribution.

May be taking this too literal but what about a MPP that was merged or amended into a PSP/401(k) - that MPP account balanced that was transferred had to follow the withdrawal restrictions of RR 94-76. But that MPP account balance is now part of a Profit Sharing Plan. It would seem odd that the MPP account balance that was transferred and now part of a PSP would not be available subject to this new rule but just wanted to check.

this message has been edited.

dear sir:

if you wish to advertise you are more than welcome to do so under the proper the forum.

100% owner/participant has a DB plan where the only other participants are her husband and her father. Would the plan be required to have PBGC coverage, a fidelity bond and file a 5500, or is the father also deemed to own 100%? Likewise, would the father, who's over age 70-1/2, have to take required minimum distributions while he's still employed? All help is greatly appreciated.

Just took over a new plan that uses a corbel document (prototype). We don't have the trust portion, but the adoption agreement does not have anything on terminated participants that are rehired. Does anyone know how corbel document handles the following:

Participant terms in 2003, with break in service. He was paid out in 2004(100% vested). Rehired in 2005. Does he become automatically eligible upon rehire with a 2 year break and fully paid?

Thanks

Does the recently enacted Pension Protection Act give any sort of safe harbor relief to cash balance plans with respect to non discrimination testing? Or do we still have to go through the 401(a)(4) testing exercise?

I'm looking at the Treasury regs regarding a corrective amendment necessary to pass the Average Benefits Test for 2005. 1.401(a)(4)-11g. Our intention is to increase benefits for the NHCEs to a level that will pass the test for 2005. The regs say the corrective amendment may retroactively increase accruals as if they were adopted and effective as of the first day of the plan year. Do you think we have to redo our beginnning of year valuation which will increase our funding requirement ..Or do you think we can execute the amendment, leave the valuation and funding as it was before the amendment and complete the testing as though the amendment were effective as of 1/1/05.

A tax-exempt local government money purchase plan has a GUST document, which uses a vesting schedule that starts at 0% for years 1 and 2, and does not fully vest until year 8. Normally this would not be permitted, but is there an exception for government plans?

An client of mine is setting up a new 401(k) plan. He is an unincorporated dentist with 5 employees, including his wife. Initial plan assets, including rollovers, will total about $200,000. He and and his wife will have about $150,000 of the total. He called his insurance carrier to purchase a bond and was told $1,000 of coverage (the minimum) was enough rather than $2,000since his and his wife's assets are not included in plan assets for bonding purposes.

I have never heard this before, and can find nothing to support this position. Can anyone shed some light on this? Thanks.

FSA has Employer contributions. If an employee is terminated and elects FSA COBRA, does the employer have to fund remainder of their 'Annual election/contribution'? For example, employee elects a $1000 salary reduction for the year. The employer offers an additional $800 (so the total Annual Election is now $1800 for the year). If the participant terminates mid year and has contributed $500 of their own salary and the employer has put in $400 thus far, is the employee now required as part of their COBRA premium to compensate for the amount that the employer did not put in as of yet and include this in their COBRA payment? Any assistance would be appreciated.