Hi Everyone,

Until this morning, I would have been 100% sure that the only corrective action for ineligible deferrals without amending the plan (for whatever reason, whether it be a suspension due to hardship or wrong entry date by plan sponsor) would be to use the deposit as a prepay in the plan and have the employer make the participant whole through an additional payroll check (to withhold the necessary taxes).

However, after speaking with a colleague, it was pointed out (and I also researched) that VCP allows you to treat these deferrals as a corrective distribution and pay the (ineligible) deferrals and earnings out of the plan and report with a 1099R??

I wanted to make sure I read and heard correctly, because it sounds very weird to me!

Thanks for your thoughts/comments.

Vicki

these are a mixed lot (not westerns)

one of them, for example is an Alfred Hitchcock

1. ZIT IN NECK AE

2. NINE GREW NO OTHER FIT

3. EXIT OLD HEART DREAM

4. HELLO NEAT PAW

5. I WON REWARD

6. RARE KIDS FOOL HEARTS

7. SIR PACK US JARS

8. BUS GETS SHORT

9. THINK WASH ON DAMPER SHEET

10. MT PONY WATER

11. IN MATH THEN

12. GOD NORTH LIFERS

Our plan permitted a participant to take out a loan. The plan provides that all loan payments will be made through payroll deductions. The 401(k) Plan administrator issued the loan check but did not pass on the paperwork to payroll to set up the payroll deduction for the repayment of the loan. In a recent plan audit we found the error. Can this be self corrected? Is it participant or administrator error or both? Can the plan sponsor deem the loan to be in default and require the participant to have a deemed distribution. What is the best path to take in this situation?

54.4975-7(b)(5)(iii) has a cryptic requirement that payments with respect to an exempt loan during a plan year not exceed an amount equal to the sum of contributions (and earnings on the contributions) received by the ESOP during the year or prior years less such payments during prior years. I'm trying to figure out what the purpose of this requirement is? All I can figure is it is an old attempt to keep other plan earnings like dividends from being used to make loan payments. However as we know 404(k) specifically allows that. Back in 1985 the above reg. was in the code but the 404(k) section allowing dividends to be used for loan payments was not. Am I missing something or is the above the proper explanation?

A company has retained a large investment firm to provide plan services. Part of the package includes investment advice. However, some participants would rather use the services of local firms. Therefore, the employer has requested proposals from some local investment firms to provide investment advice only. Employees would not be able to invest plan assets with these firms. They will probably end up hiring 2 local firms for employees to chose from (other than the big firm where the assets are currently held). Employees have the option of paying for the service out of pocket or with their plan assets.

Does anyone see a problem with this type of arrangement? What if a participant gets bad advice from one of the local advisors? Since the employer hired the local firm, does that increase the company's liability if a participant's investments take a nose dive?

Would it be better if the company does not participate in hiring any local firms, but tells participants who want the advice of a local firm that it's up to them to go out on their own and pay for their services out of pocket?

An employee is knowingly claiming a dependent that isn't eligible for coverage under our self-insured GHP. Can the plan share this info. with the plan sponsor (i.e., the employer)? I can't find an exception in the privacy regs. (fraud?) but think there certainly should be one. Any thoughts? Thanks in advance.

A client forgot to contribute a participant catch-up contribution in December of 2003. The auditor found the problem and it was reported on the 2003 5500. It was deposited into the plan, along with lost interest, in October of 2004. A 5330 was never submitted. Now I have a DOL letter recommending applying under the VFCP program to receive a no action letter. I have tried to contact them but have not received a reponse.

My questions:

Could I just file a 5330 now? Would that solve the problem? If so, what year should I file? 2003? 2004?

Is it necessary to go through the VFCP program. It seems there are many risks with the program. Any suggestions on how the application should be organized?

Thank you -

participant died 3/30/06 would have been 79 on 4/24/06. last year her 2005 rmd was based on age 78 with a divisor of 20.3. calendar year plan. would i use the divisor for age 79(19.5) for her 2006 rmd and switch to husbands divisor next year. husband is beneficiary who is also 79 this year.

Have a public but bulletin board traded company client who wants to permit its 401(k) contributions to be invested in company stock. Are there limits on this? Any new legislation in this area? Thanks

Howdy pardners. go to the front of the brandin' iron class if you can unscramble all of these.

Unscramble these words and phrases to find the names of ten renowned Western movies.

1. ETHYL HAD GOOD BUG TEETH

2. LOVE RAIDS

3. ENTRANCING MIME YELL'D

4. A HIP FRIEND'S LIGHT

5. BOOM TENTS

6. WE JUST HATE SEA WOOLLY

7. TIGER RUT

8. VENT IF GAME SCENE THIN

9. DRAIN GOER

10. A THIN GRIEVIN'

In order to make a hardship withdrawal our plan states that it is allowed "when such Participant lacks other available resources". What must the participant do to show this?

We have a client that sponsors a large welfare plan. They have never filed Form 5500. It has been in existance since before 1988. We are going to file through the DFVC program. Has anyone else had any experience with filing returns that go back that far? Yuck!

Hi,

I am new at processing QDRO's. We received a signed order which our actuary determined is "qualified" however, the order permits the alternate payee to designate a beneficiary before commencement of benefits which we cannot do.

My question is do I write a letter saying it is qualified but we cannot accept said language, or do I write that it is not qualified because of said language.

Thank you,

A company has retained a large investment firm to provide plan services. Part of the package includes investment advice. However, some participants would rather use the services of local firms. Therefore, the employer has requested proposals from some local investment firms to provide investment advise only. Employees would not be able to invest plan assets with these firms. They will probably end up hiring 2 local firms for employees to chose from (other than the big firm where the assets are currently held). Employees have the option of paying for the service out of pocket or with their plan assets.

Does anyone see a problem with this type of arrangement? What if a participant gets bad advise from one of the local advisors? Since the employer hired the local firm, does that increase the company's liability if a participant's investments take a nose dive?

Would it be better if the company does not participate in hiring any local firms, but tells participants who want the advice of a local firm that it's up to them to go out on their own and pay for their services out of pocket?

I have been retired for about 4 years and would like to start drawing out of my 457 Qualified Deffered Comp. Funded plan on a monthly basis. In completing the form, there is a "spousal consent" section. Unfortunately, my spouse and I disagree as to whether or not to take the funds. Since I earned it, should I not be able to withdraw some of it without spousal consent? It hardly seems fair to have the fund that I comtributed to be held hostage by someone who had nothing to do with its existance. Can I still get the funds without the signature if the plan administrator has signed the application? Is this really LAW or just a way for the fund manager to keep the funds in their account. Can someone advise with sources to back up answers?

Thank you,

Why would a person get a letter from social security letting them know they might be entitled to a pension? And if the company that they mentioned is no longer in business would you know of how they could find out if they are entitled to a pension?

When setting up a New Comparability PS plan using DBRAs to replace a DB plan, and rather than meet the Broadly AVaible GAteway, we will meet the 5% or 1/3 gateway. Can one group receive an allocation of "the greater of the DBRA or 5% of comp" or would each participant receiving the DBRA need to be their own group?? I'm not sure if my question makes sense, but any help would be appreciated. Thanks.

There should be a simple way to find out the answer to my question, but I haven't found it yet, so am turning to this board for help.

I'm just trying to figure out the estimated cost of filing a Form 5500. I understand that the filing fee may vary, depending on which schedules are required.

But I'm trying to help a client understand the cost ramifications of filing separate Forms 5500 or of doing a wrap plan.

If anyone can point me in the right direction, or provide a ballpark estimate of the filing cost of a Form 5500, I'd be most grateful!!!

Thank you.

Can anyone provide me a valid reason for an attorney nearing retirement age (4 years left or so) with two young attorneys and 3 admin staff members who are all participating in the plan would want to terminate a SARSEP? Said attorney has said he's fairly comfortable where he's at in the retirement plan picture and isn't looking to maximize his contributions and isn't even fully funding the SEP portion.

My first thought was coverage but it's a small firm and turnover is non-existant. Two of last three hires have been the attorneys and they likely won't be hiring any more soon. I'm thinking that short term this plan is pretty darn good.

What about after retirement...When two attorney's are expected to take over the firm. Plan only continues if it's a stock purchase and not an asset purchase, correct?

thoughts?

Can top heavy contributions have a vesting schedule?