I have a client that needs to put a Safe Harbor in place for this year and I know October 1 in the dropdead date for starting the plan. However, no 30 day has ever been given. Is it too late as of September 16th to implement this plan?

IRS & Trreas issue Hurricane Relief for Qualified Plans and 403(b) a/c s

IRS Announcement 2005-70

I just got a call from a client who has a copy of a letter taht the SSA sent to a former ee of the plan. The SSA told her she MAY have $550 in this plan. We have been the TPA since 2002 and have no record of this ee (she term'd in 1991). My guess is that she was put on the SSA the first go around as an "A" and then never put on again as a "D" when she was paid out. If memory serves, when we were doing the C/R forms, we still had this SSA schedule.

What do we need to do to report to the SSA that this former ee no longer has benefits in this plan? I do not have a copy of the letter at this time, and we are working with the client to get valuations from the 1990s (free erisa had 5500s available back to 2000). Thanks for the help.

Heres the story....An Ex-employees is on COBRA and the wife was declared Disabled. So they get the 29 months. The wife dies. What happens to the Ex-employees COBRA. In addition, let me know what happens if she died before or after the 18 months. Thanks in advance

We have a client in a high-turnover/low wage industry who is considering adopting an automatic enrollment provision for their 401(k) plan. Current eligibility is age 21 and 30 days service, with entry at the beginning of the month coincident with or next following satisfaction of the eligibility requirements. One problem we identified is the difficulty of providing "reasonable" and "effective" notice of the opportunity to make an election, considering that the service requirement for eligibility is so short. Does anyone see a problem with a provision maintaining the current eligibility requirements, but providing that the automatic salary deferrals will begin at a later date, such as the first of the quarter coinciding with or next following the date of particiation date? (Example: DOH 1/15, entry 3/1, automatic deferrals begin 4/1). I realize that in some cases entry and automatic deferrals would happen on the same date.

Thoughts are appreciated.

Our loan policy states the term of the loan may not extend beyond the participant's normal retirement age as dfined in the plan. Is this requirement specific to our loan policy or is this a requirement?

If you have a 3% non-elective safe-harbor contribution that you're also utilizing in the cross-testing calculatins, can you still impute permitted disparity for the general test ? If you can't for the safe-harbor portion, can you still impute for the regular profit sharing piece ? (I realize logstically it might be a nightmare to impute for one piece but not the other, but still curious if it's available).

Under EGTRRA, top heavy accruals for non-keys are not required if no key employee benefits during a plan year.

What if the keys's accruals are less than 2%? Unlike DC plan, for DB plan, the Code says 2% regardless of the keys' accrual rates!

Just wanted to check if there is anything put out by the IRS which says otherwise i.e. the non-keys accrual can be at the highest accrual rate for the keys.

Have a safe harbor 401(k) client who offers the basic SH match to those who contribute. One participant has reached her employee deferral limit of $14,000. Will the company be required to continue the safe harbor match contribution off of her gross wages until the end of the plan year? Or, does the safe harbor match stop since she is no longer able to contribute her employee deferral amount?

HCE deferrals were limited to 8% earlier this calendar yr. Mid-yr we received a letter saying that is now up to 10%. However, even at 10% we will still be well under the $14,000 limit for the calendar yr, and would like to do a "catch-up" deferral to bring YTD deferral up to 10%. Plan administrator is saying that is not allowed. What do the regulations say? Is there a specific section of the regulations to which you could refer me?

June 30, 2005 year end, HCE defers $10,000 for the plan year. ADP test fails and $4,000 is reclassified as a 2005 catch-up contribution to avoid refund.

It appears that it would be necessary to advise the HCE that his 402(g) limit for the calendar 2005 year is now $14,000, not $18,000 as he may think. Would you agree?

If he continues to defer $18,000 for the calendar year, then it also would seem that he would have a 402(g) violation for 2005 that must be corrected by 4/15/06. Of course, unless the Plan Administrator advises him that his 05 catch-up was already used in the testing, he (and his accountant) would be unaware of the violation. Quite possibly, this would not be brought to his attention until the 6/30/06 plan year is tested. Thus the consequence would not be the "double taxation" as it usually is in the case of a 402(g) violation not timely corrected.

Am I missing anything here?

Suppose Joe has no accrued PTO, gets 2 weeks in a year from his employer, and decides he wants to donate this.

Does Joe work for 52 weeks, get paid 52 weeks of comp., with the employer paying 54 weeks of comp. in all--52 to Joe and 2 to Katrina victims?

Does Joe work for 50 weeks, get paid 50 weeks of comp., and take 2 wks. unpaid leave, with the employer paying its normal 52 weeks of comp., but with 2 of it now going to Katrina?

Does it matter--will either scenario work?

Are there other alternatives? Suppose Joe works for 51 weeks and takes one week of unpaid leave? Do the Katrina victims still get 2 wks. of comp. from Joe's employer?

Thank you.

Plan Sponsor has multiple payrolls (weekly, biweekly, semi-monthly). 401(k) contributions (& ER Match) are remitted to trust once per month, primarily to accomodate the fact that there are multiple payroll schedules. Contributions are therefore invested in participants' accounts just once a month.

Are there significant issues with DOL deposit rule re: "segregating from ER general assets in reasonable timeframe"? Payroll taxes are paid more frequently than monthly. Contributions could easily be segregated from general assets more frequently. What if contributions are remitted on payroll basis, held in a master trust account, and still invested only monthly? Should master account be interest bearing?

Anyone have any strong thoughts on this?

I am in a discussion with my client's financial advisor who says you can have a "last day rule" in a Cross Tested 401k plan with a 3% non-elective SH. This plan has age 21, one year of service for eligibility. No early entrants.

I have explained to him that all terminated participants must receive the Gateway Allocation since they are receiving the 3% SH contribution. In the case of this plan the terminees would need to receive an additional 2% PS contribution to reach the Gateway.

This financial advisor says that out of all the TPA firms he works with, our company is the only one requiring this. I know I'm not crazy, but can anyone give me a cite to show him?

I've searched several times, but haven't had any luck finding what I need to prove my point. Thanks.

My client is questioning how (and whether) to comply with a NMSN. The facts: Client has a collectively bargained group health plan. The Plan provides health coverage for union employees and their dependents, as long as the dependents are truly dependents - that is, the employee has to provide more than 50% of the dependent's support. There are provisions in the Plan for making a determination that a dependent is in fact eligible for coverage under the Plan. Employees have to provide birth certificates or otherwise prove the required level of support. The problem that has arisen is with NMSN sparked by a custody battle, where the Employer (also the Plan Administrator) has received an NMSN for a child, and they have no record of the child's status as a dependent of the employee, so they don't know whether the child is truly qualified to be a participant under their Plan. The NMSN doesn't give them many options - it's pretty much deemed to be qualified as long as it identifies the participant and gives names and addresses. Of course, the NMSN can't require the Plan to provide a benefit that the Plan wouldn't otherwise provide, but how does the Plan Administrator communicate that to the court or issuing agency using the NMSN? How can they just request additional information without being seen as failing to comply with the NMSN? Does anyone have experience with these?

Thanks for any assistance, and I apologize if this question has been answered elsewhere - I didn't find it through a search.

forfeitures are used to pay plan expenses.

is the penalty tax considered a plan expense for this purpose?

I have a rather large client who now wants to start paying out a bunch of his previous terminees. There is a guy who terminated in 1997, but is now in prison for life. What do I do now? I can't necessarily send him his distribution paperwork. Has anyone run across this before? No one here seems to have.

Any and all assistance you are able to give me is much appreciated.

I am preparing an application under the DOL VFC program as well as seeking an exemption under PTE 2002-51. My client failed to timely make participant contributions for one employee from mid-February through the end of March, 2004. All the contributions were made by March 31, 2004. I am trying to find out who are the "interested persons" that should receive the Notice to Interested Persons under the PTE requirements - just the one employee that was affected or all plan participants. And, if all plan participants, is that all current plan participants or all participants at the time of the breach? Thanks.

Does anybody know of a case wherein retirees sued for lifetime retiree health benefits claiming that such benefits were made part of the purchase agreement? I seem to vaguely recall reading something about this in the not so distant past, but i have been unable to find a case. Any help is greatly appreciated!

What is form 11 K and do all plans with employer stock have to file it with the SEC? I did a search on benefitslink as well as the SEC, but cannot find explicit instructions as to whether all plans need to file it annually.

My plan is a 401(k) with employer stock offered to employees through all sources (through deferrals and match)

thanks!