A 401(k) safe harbor non-elective with new comparability profit sharing plan covers both union and non-union employees. I confirmed with the CPA that the union employees are covered by a collective bargaining agreement that covers retirement benefits.

In addition the 2 owners and one of the owners sons is part of the union group - all three are HCE's.

The plan uses a new comparability profit sharing allocation. I am disagregating the union and non-union employees to test both.

For the non-union employees there are no HCE's.

For the Union Employees there are 3 HCE's. They want to max the two owners contributions up to the 415 limit with minimum contributions to everyone else.

The problem is not all the rate groups pass becuase 2 of the HCE's are younger than all the NHCE's (in the union portion).

In reading the ERISA Outline book it states:

2.b. Collectively-bargained employees. A disaggregated portion of the plan that covers

collectively-bargained employees is deemed to satisfy §401(a)(4) because of the deemed coverage

rule in Treas. Reg. §1.410(b)-2(b)(7). See Treas. Reg. §1.401(a)(4)-1(b)(5). Furthermore, when

testing a nonunion plan (or the disaggregated nonunion portion of a plan), the collectively-bargained

employees are treated as excludable employees in determining whether the rate groups covering the

non-collectively-bargained employees pass coverage, and the contributions or benefits for

collectively-bargained employees would be disregarded in calculating the applicable rate groups

under the nonunion plan (or nonunion portion of a plan).

Can I just max the two owners and give the rank and file union members and non-union members the gateway minimum? Do I even have to give a gateway minimum to the NHCE's - both union and non-union?

Any thoughts would be appreciated.

Hospitals often acquire or operate physician practices through separate subsidiaries. I am looking for information about whether governmental hospitals (e.g., established by a county) usually treat the subsidiaries as governmental as well and include the subsidiary employees in the hospitals' governmental plans or treat the subsidiaries as non-governmental and set up separate plans.

Anyone have experience with this issue?

Thanks.

I was wondering if anyone had experience with the ability of an employer to withdrawal from a multiemployer plan. Before withdrawal liability is assessed, may an employer contract out of a plan if they choose to stop making contributions? I am hoping someone can point me to a good source of information on the subject. Thanks.

Does the alternative payee (ex-spouse) from a QDRO have to have spousal consent, if they have remarried, when receiving their QDRO distribution from theirs previous marriage?

well, looks like I am scheduled to give a talk on "Cross-testing and the 401(k) Plan" at the Western Benefits Conference in Las Vegas (July 16 - 19)

Actually I am down twice, once on July 18 and then repeat July 19, so there is your chance to come throw tomatoes or whatever. all kidding aside, always look forward to the opportunity to meet anyone who frequents Benefits Link, so stop by and say hello if you make it! (Yes, I will probably sing the Louis Armstrong 'pension song'.)

Looks like I am also now the official 'scribe' for the IRS Q and As, so I guess if there is a real stumper of a pension question you can forward to me and I'll see it gets on the list. oh well, I can always give up sleeping.

Hello -

I'm 26 years old and married with 1 newborn. I am a teacher while my wife is a stay at home mom. We have very little to save for retirement but we still want to get started with something. My school district offers a 403b, but tied to a variable annuity or a loaded mutual fund with high fees. I've also looked into a Roth IRA but unsure of how much those usually cost to run. Is one better than the other?

Thanks!!!!!!!

Hello -

I'm 26 years old and married with 1 newborn. I am a teacher while my wife is a stay at home mom. We have very little to save for retirement but we still want to get started with something. My school district offers a 403b, but tied to a variable annuity or a loaded mutual fund with high fees. I've also looked into a Roth IRA but unsure of how much those usually cost to run. Is one better than the other?

Thanks!!!!!!!

Hello,

My brother and I run a small 501 c 3 and have 403b in place. 5 of 12 employees use the 403b by way of salary reduction. However, we would like to contribute company monies to the "participating" 5 employees(ERISA), no one else including ourselves. These contributions would be gauged on annual salaries, eg. 10% of the annual salaries.My brother and I would make up 65% since our salaries are higher. I read that top heavy does not apply to 403b's. I also read and was directed by Fidelity and other that there is NO problem here. I am just concerned with the imbalance of monies to the "key" employees. Help.

I have a Roth IRA, that was converted from a regular IRA in 1998. I want to withdraw some of the money that I originally placed in the Roth.... paid lump sum tax on the amount converted. I am 57 years old. Can I withdraw some of my original investment without paying a penalty or tax?

I am working on a determination application for a PSP and I have run into many hurdles along the way. Basically to make a long story short I am would like to see if anyone has a GUST restatement timeline or knows of where I can find something like that. I have read through all the Rev Proc's and GUST restatement briefings and I am not 100% positive I am understanding the timeline. Thanks.

I have a money purchase pension plan that requires distributions of entire account balances before age 70 1/2. The plan also contains the necessary language regarding required minimum distributions. A participant who was past the required beginning date recently applied for retirement and requested a rollover of his account balance to an IRA. (The participant's account balance was not distributed on the required beginning date because the plan had an incorrect birthdate for the participant). The participant was advised by the plan administrator that this was not an eligible rollover distribution because it was a required distribution under 401(a)(9) and plan rules. He was told he would have to take a distribution of his entire account and the money could not be rolled-over.

The issue from my point of view is as follows:

If the plan has the required minimum distribution language and a provision that calls for distribution of entire account balances before age 70 1/2 there seems to be a conflict. In my opinion, it would be reasonable to calculate the participant's rmd, pay that to him, and roll the remaining account balance directly to the IRA. I guess what I am saying is that if the RMD language is in the plan, shouldn't the participant be allowed to take advantage of these rules?

I would appreciate any comments.

i know he cant do it but i have to give them an explanation. the best i can come up with is that ERISA provides that participants must either be employees or former employees and that a trust cant be a participant because it is not an employee. only an actual person can be either an employee or a participant. does anyone have anything better??

Can a plan sponsor rely on a participant's written certification regarding the amount required to satsify a hardship or should the plan sponsor have written documentation to verify the amount?

In days gone by, we told plan sponsors that some kind of documentation of the hardship amount was necessary. A medical bill, eviction notice, etc. But I haven't been able to find anything definative that such documentation is necessary. Was that just a conservative approach to plan administration or is written proof required by a regulation, revenue ruling, etc somewhere?

What happens if an employer offers a Safe Harbor 401k and in the year decides that they cannot do the mandatory match? Also can you amend a Safe Harbor 401k to be a Traditional 401k mid year?

Hi,

Is it legal for a hospital offer a discount/reimbursement to employees on physician services rendered to said employees children? This would be in addition to a 50% reduction of the remaining balance of hosptial charges after insurance?

Thanks

can an employer beyond 70 1/2 continue to make SEP contributions?

Question for all of you that work with QDRO's more frequently than I do: I am an associate attorney, and at a previous firm, I did a fair amount of QDRO review for employer - basically I advised whether the submitted DRO's (sometimes in draft form, sometimes already signed by the court) were "qualified." On occasion, I also assisted a divorce attorney in drafting DROs (or reviewing them) for divorcing clients. It is my memory that, when working for the divorcing party, I always reviewed the Marital Settlement Agreement (MSA) or divorce decree, to ensure that the QDRO reflected the correct division of retirement assets. However, I don't recall regularly seeing (or requesting) the MSA when doing QDRO review for the Plan Administrator/Employer.

Now I'm at a new firm, and there is more QDRO work now coming my way from two Plan Administrator clients. My supervising attorney here says that it has always been his practice to request the MSA as part of the QDRO review for Plan Administrator clients.

My thinking is that the divorcing party's attorney has the responsibility to ensure that the DRO, as drafted, comports with the MSA, and that the Plan Administrator's review is more properly limited to the extent that the QDRO satisfies the requirements of 414(p) and comports with permissible payment terms under the relevant plan.

My boss, on the other hand, says that the Plan Administrator is responsible for administering the Plan, and that this INCLUDES being sure that the QDRO, as drafted, comports with the MSA.

Seems to me that it may be tricky to always request an MSA copy, especially in the case of proposed versions of QDROs.

Any thoughts out there? Is his preference to ALWAYS see a copy of the MSA quite usual and reasonable? It seems to me to go a little too far, but I'm willing to be corrected.

We have an HCE who terminated & rolled his 401k account to IRA that is due a refund due to our test failing

What needs to be done to get this out of IRA

How is the taxation handled in IRA

are there any excise taxes for IRA?

thanks

We are a small TPA and are exploring adding either a debit card or value added card to our FSA accounts. Does anyone have any reccomendations on a quality vendor for either type of card?

when determining ownership percentages, is the % of total shares used or the % of vested shares?