Basic facts are as follows.....

Participant (P) was married for about 15 years and divorced his first wife (W) in 1995. The divorce decree awarded W a one-half interest in P's defined benefit plan and ordered a QDRO be drafted. No QDRO was ever forthcoming.

In August, 2005, P made application for an ancillary disability benefit with the plan. The administrator noted that a divorce decree had been filed and contacted both P and W concerning the need for a QDRO. Pursuant to the procedures an administrative hold was placed on the portion of the benefit payments that appear to belong to W.

P is now remarried to W2.

Questions...

1. Can W submit an order that provides for a separate interest? P is in pay status, but only due to disability. The J&S notice is not submitted to a disabled pensioner until he converts to a normal retirement at age 62. Is she limited only to a stream of payment order? (This does not make much sense...if he recovers tomorrow, all benefits would stop...then W would be left in a lurch).

2. Should the plan ignore the fact that P is in pay status and request a separate interest order that is payable upon P's attainment of early retirement age? The intent of the benefit is to assist a disabled pensioner, not to provide a subsidized windfall to the non-disabled ex-spouse. W would still get her portion of the benefits accrued through the date of divorce.

3. Should the plan ask for some sort of hybrid order that gives W a right to a proportionate share of the disability benefits, and a separate interest in the normal accrued retirement benefits?

Am I completely off base...?? As indicated in the caption, this situation has me thoroughly confused.

the plan passed the ACP test, yet a couple of participants received too much match, does the plan need to transfer the excess plus allocable income to a forfeiture/holding account and if the transaction does not occur prior to 2 and a half months after the close of the plan year, is the plan sponsor responsible for the 10 percent excess tax and filing 5330? if so, could they not pay the tax with the forfeited funds?

thanks

I have read through the threads and thank all of you for lots of good stuff! However I have a few remaining questions about general testing cash balance plans.

Are the following the basic permissible methods to general test a cash balance plan:

On a benefits basis - Take the current allocation and project it to NRD using the interest credits defined in the plan document. Then convert the projected balance at NRD to a life annuity using the actuarial equivalence definition in the plan document. Divide the resulting benefit by the testing compensation to get the EBAR.

On a contributions basis - the safe harbor of 1.401(a)(4)-8©(3) - Take the current allocation and project it to NRD using the interest credits defined in the plan document. Then get the present value of this, discounting back to the current age, with standard interest and standard mortality. Divide this present value by testing compensation to get the equivalent allocation for testing.

We administer a small pension plan sponsored by a medical group. The three physicians in the group want to allow their children to work part time.

Currently, the pension plan has no age or period of service requirement. One of the doctors has his two children (ages 11 and 13) doing filing 3 hours a week. They have no problem with them being covered by the plan.

Generally, we have told employers that they cannot consider employees under age 14. However, in reading the department of labor Federal Labor Standards Act on-line, they indicate there is an age exception for children working in a business for their parents.

For plan purposes, we think there could be a potential discrimination in operation issue. That being a 13 year old son or daughter could work and be a participant in the pension plan, but an unrelated nonhighly compensated employee age 13 could not even be employed and therefore not be considered for participation in a qualified plan. We are inclined to amend the plan to have an age requirement.

Has anyone experienced this before?

We have an ex-employee eligible for COBRA move out of our medical plan coverage ara

Do we need to get coverage for him ?

In light of the regulations requiring separate account tracking for tax and withdrawal rights purposes, will you be recommending that your clients not offer or remove hardship withdrawal and loans for Roth 401(k) accounts?

Do you think there is a nondiscriminatory feature issue if regular 401(k) elective deferrals can be accessed by hardship withdrawal and loans, but the Roth 401(k) account cannot?

We are looking to consolidate 3 Trustees into 1 for our defined benefit plan.

Does anyone have a good RFP for a Trustee serach

What type of fiduiciary "due diligence" is necessary in selecting a new Trustee or satying with 1 of the 3?

We have a plan that has 2 locations. A participant moved from one location to another in January 2005. When she moved, the payroll company forgot to enter her previous deferral % (3%) into their system. Therefore, she did not have deferrals and therefore the company match as well for over a year now. (She just realized this when she went to file her taxes!) Under the plan's matching formula, she would have received a match of 1.5% of compensation.

According to what I have been able to find, the suggested correction is for the employer to make a QNEC equal to the ADP and ACP of the NHC's for the year. However, the ADP for the NHC is 3.68% and the ACP is 1.57%.

It doesn't seem fair that she would receive more in contributions than she would have if the mistake had not been made.

Any comments or suggestions?

401(k) plan w/ a match. There is an hours requirement and active at last day of the plan year requirement for the match.

There are 5 participants who are not on the ACP test because they do not satisfy the match requirements, therefore they are not eligible for the match and are not included in the ACP test. They ARE however, included in the ADP test.

Assume the ADP passes and the ACP fails. One option is to shift deferrals from the ADP to the ACP. If this shifting is done, is it okay to keep the 5 participants above off the ACP test?

Since we're now including deferrals on the ACP test and these deferrals do not have a requirement, I'm wondering if these 5 people need to be included on the ACP test.

Any thoughts?

A profit sharing plan was merged into another profit sharing plan effective January 1, 2006, with "assets and liabilities ... transferred to [the surviving plan] as of that date." What is the current thinking on whether the disappearing plan needs an audit and Form 5500 for the one-day period of January 1, 2006? I found some posts from 2002-2003 on this, but wondered if there is anything more recent.

I've had a couple of situations in which a participant decides to just stop making payments on the loan, recognizing that it will be considered a deemed distribution.

What I'm not sure about is whether it is also a prohibited transaction.

Does it make a difference if the plan does not permit in-service withdrawals?

Does it make a difference if the participant is not a party-in-interest?

I'd been taught previously that this would be a prohibited transaction because (a) they are no longer following the loan provisions by not making payments quarterly, and (b) the plan does not permit in-service withdrawals, so it can't be recharacterized/offset. My co-worker says differently.

Which of us is correct?

POSTED ON 401(k) BOARD YESTERDAY (but hardships may be appropriate here as well) -

Anyone have experiences/thoughts about adopting or administering this provision. We are worried about a run on hardship distributions if it makes it too easy to avoid plan loans.

Final 401(k) Reg Section 1.401(k)-1(d)(3)(iv)(D) provides "Employee need not take counterproductive actions. For purposes of this paragraph (d)(3)(iv), a need cannot reasonably be relieved by one of the

actions described in paragraph (d)(3)(iv)( C ) of this section [insurance reimbursement, asset liquidation, stopping elective deferrals, other currently available distributions and nontaxable loans] if the effect would be to increase the amount of the need. For example, the need for funds to purchase a principal residence cannot reasonably be relieved by a plan loan if the loan would disqualify the employee from obtaining other necessary financing."

We have participants who can't afford loan repayments. They want to argue that loans would drain their cash flow and create more future hardships (or alternatively that loans would be defaulted and that would create tax liens and new hardshipt).

What do people think about how broadly to interpret this new provisions of the final regs?

What is a "Super" Safe Harbor 401(k). How does it differ from a traditional SH 401(k)? Is this referring to new comp?

Does anyone know of a pre-packaged set of DC/DB plan administration forms I could purchase? What I have in view are new business/conversion, distribution/contribution processing, information request, plan termination, testing results, etc. related documents

Thanks!

Does anyone have a recommendation for a valuation expert to prepare a valuation for the stock of a closely held energy corporation? This would be on a minority interest and they have had difficulty finding someone who understands their business.

Suppose a non-PBGC DB plan terminates with less than 100% funding. Assets were allocated per section 4044 of ERISA. Suppose the same sponsor subsequently established a new DB plan. What benefit is credited under the prior plan to each employee under the new DB plan? Is it the benefit previously accrued or the benefit previously paid? (If an employee had a $10,000 annual benefit accrued under the plan, but was paid the equivalent of a $6,000 benefit do we take $6,000 or $10,000 into account in determining what the current plan's 415 limitation is?) Is there support for your conclusion?

Thanks.

Is a govermental plan required to mail a notice to annuitants when the NET PAY amount of their pension changes?

A widow has been receiving MRD's from her late husband's retirement accounts the last couple of years. For 2005, she did not receive the required MRD. Will she be required the pay the penalty for not taking the MRD even if she is under age 70? What needs to be done?

401(k) Plan reported on Form 5500 for 2001 and 2004 amounts of 401(k) deferrals and loan repayments that were not deposited timely. (As many as 55 days late.)

Plan underwent a DOL audit. Auditor calculated lost opportunity cost and lost interest for each late payment. Plan Administrator deposited the lost earnings early in 2006 at the conclusion of the audit as per the DOL’s calculation.

We are now calculating the excise tax due. If I understand correctly, the excise tax is 15% of the lost earnings/opportunity cost. Is that correct?

Now, my real question: Do we have to file two Forms 5330, one for 2001 and one for 2004? If so, wouldn’t they both be considered delinquent, creating additional penalties? Also, instead of completing Part IV manually, can we just attach the spreadsheet showing each date and amount?

Thanks for any and all responses.

We are talking with a prospective client about their 401(k) Plan.

They want to change the eligibility in their plan from a one year service requirement to no service requirement. Their current provider is telling them that they can't do this without terminating the plan.

I was under the impression we could amend plan eligibility.

what am I missing? thanks.