We have a client who terminated from his former plan and would like to withdraw his 401(k) funds. The plan document says that termination distributions will be processed two years after the last valuation date.

Several sources have said this can't be right post EGTTRA & GUST, but no one has been able to find anything saying otherwise. So far I have located the following DOL guideline:

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ERISA provides specific rules governing when you may or must begin receiving your pension benefits. First, ERISA sets the latest date by which the plan must permit you to begin receiving your benefit. Under this rule, payment must begin by the 60th day after the end of the plan year in which the latest of the following events occur:

(1) you reach age 65 or, if earlier, the normal retirement age specified by your plan;

(2) the end of the 10th year after you began participation in the plan ends; or

(3) you terminate your service with the employer.

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Advice?

Thanks!

FalynnDFW

A client has 21 non-excludable employees. Obviously, 40% is 8.4.

Is there any rationale to enable 8 to be used (the regulation does not specify greater than, at least , etc.) when determining how many employees must be covered to pass 401(a)(26).

Personally, I feel most comfortable with 9.

Thanks for any and all responses.

Plan charges active ees for QPSA coverage

Ptp turns age 35 in 1988

Are you allowed to charge QPSA coverage before age 35

Election date is 9/1/187, date of marriage

I am assuming ptp was given proper ntoice, etc... priro to age 35

thanks

Hi,

ER ceases all contributions to SIMPLE plan as of end of 2004 and put a 401(k) in place 1/1/05. Does the SIMPLE need to be officially terminated prior to 2005 in order to avoid the exclusive plan rule or does the fact that no EE accrues a contribution under the SIMPLE make it okay? I seem to recall this is the case.

Additionally, I presume that if EEs have participated in the SIMPLE for 2 years, they can roll their money into the 401(k) regardless of whether they or the plan have terminated since there is no restriction on SIMPLE distributions. Is this a correct understanding? My SIMPLE knowledge is a bit lacking.

thanks much!!

A Sole Proprietor with employees and an existing PS plan (NOT 401(k)) wants to add a Safe-Habor K feature before October 2005. I believe that is permissable as long as there was not previously a K feature.

For the employees, the SH contribution must be based on pay from (at least) the effective date of the feature to the end of the year and their K contributions will necessarily be limited to 100% of pay after the feature is added.

But, what about the owner? Since his income isn't determined until year end, can he count the whole year's income? Does he need to pro-rate his income? Pro-rating would seem most equitable, but is it required? I assume that his draw doesn't figure into the calculation.

Calendar year 401(K) Plan has one employee who's payroll records show 995 hours for 2004. The employee called me up and told me that she actually worked 1004 hours in 2004 and wants to start defering. If you subtract the hours worked in 2003 and paid for in 2004 and add the hours worked in 2004 but paid in 2005, the total is 1004.

Is she eligible? yes, no, or it depends on the document. (I can't find anything in the document on this) I think she has to be in. ( For what that's worth)

I would like to hear from other administrators. How much work do you go through to figure this out exactly or do you just go by payroll records? I'm wondering if I should have on my checklist to take a close look at anyone between 980 and 1020 hours. As hard as it is to get census info from some clients this could be a big ...challenge.

I have a client, Company B, that is purchasing company A (assets). Company A maintains a 401(k) plan and Company B maintains a Simple IRA. For the 2005 plan year can this employer maintain both the 401(k) plan and the Simple IRA or do the newly acquired employees have to join the Simple IRA? Since Simple IRA's do not have all the testing requirements of a 401(k), if both plans are maintained, which testing should be done with both plans?

Assume a company contributes to HSAs established by employees (without relying on 125 rules to avoid the comperability rule).

Assume also that two employees are not, in fact, eligible for HSA contributions as follows:

Employee A - covered by spouses first dollar coverage and Medicare

Employee B - has a change in family status between open enrollment and January 1 and changes her election (but is not processed until after 1/1)

I know that Q&A 82 of Notice 2004-50 provides that an employer may not recoup "any part of the employer's contribution the the employee's HSA" (which I find pretty clear), but I have a client (and a provider) indicating that they think the employer can raid the HSA account and take back the employer contribution from these employees.

Does anyone see their argument or do you agree that the employee gets a windfall.

Thanks for your help!

Can anyone point to any surveys of retirement plans sponsored by private colleges and universities. Prevalance of DB plans. Contribution data for DC plans. Similar information.

Thanks for any suggestions.

DC Plan has J&S language and provides a few different forms of annuities as options. Right now we have to manually set up an excel template, unique for each client, to calculate the estimated annuity amounts for each option available. Obviously very time consuming. Is anyone aware of any software packages that will calculate this automatically (outside of Relius or some similar system)? What do other people do with this situation?

I am looking for inexpensive online courses for 401(k) training and/or certification. I was just given resonsiblity of administering and maintaining my companies 401(k) plan with limited knowledge of 401(k). My company will pay little or nothing for this so the cheaper but reputable the better.

Anyone who can help. Thank you.

Can an individual use an FSA to pay for their over the counter meds if they are participating in an FSA? Thanks!

I've tried to glean what I can from searches within this forum, but would appreciate a confirmation or rebuttal on the following. "401(k) and 403(b) plans apparently can co-exist in certain non-profit organizations but with only one employee deferral limit (14k for 2005). Other than the one deferral limit, is there any other aggregation between these two plans in any other area ? (e.g., does 415 limits only apply to the 401k plan since the 403(b) isn't a qualified plan) Presumably discrimination testing applies to each plan separately if at all for the 403(b). Thx.

Has anyone successfully imported a file from Hartford? I haven't been able to get it to work and think I'm not using the right file. If you have done it, what file from Hartford should I be using?

Here are the facts. A and B are employers and are members of a controlled group. Participant terminates with A to work for B. I know that this is not a "distributable event" and the participant is not able to take a distribution from the Plan. What the Participant would like to do, however, is move his money from Plan A to Plan B. Is there some way to do this?

Custodial 403(b)(7) plan, not TRUSTEED! The auditor is requesting a certification to allow a limited scope audit (similiar to trusteed qualified plans).

My understanding is that this is not only not applicable, but cannot be done.

Any suggestions or input (specifically regulations sitations)?

During its December open enrollment window, a plan requires employees to re-designate their beneficiaries and has clearly communicated (in mandatory employee meetings and written communications) that prior elections will not be carried forward.

The plan provides that the beneficiary must be designated in accordance with procedures set forth by the plan.

A significant number of employees did not update their beneficiaries.

Does anyone have any concern with paying benefits to the default beneficiary (spouse or estate) rather than a previously designated beneficiary?

Any past experiences would be helpful.

Can anyone confirm for me that I could prorate comp for a participant entering a Safe Harbor Plan on 07/01/04, for both the Nonelective safe harbor contribution and the profit sharing contribution.

My understanding is that I can prorate even though the plan is top heavy; however I need to be certain that between the Safe Harbor contribution and the Profit Sharing Contribution the participant receives a total of 3% in Employer

contributions based on the participants annual Compensation.

Thanks

I am sure this has been asked, but appreciate a comment. Have X-tested plan that is not top heavy. No SH requirement. Plan has last day and 1000 hrs. If a participant has < 1000 hrs and is employed, he still needs to get the min. gateway?

If yes, then what do you do about the document. We use Vol Sub. through Corbel

Thanks

I have a single employer that maintains a dollars times service defined benefit plan for their union employees per their collective bargaining agreement. The plan covers about 18 retirees, 25 vested deferreds and 12 active participants; it is only about 60% funded.

The union has now come to the company and asked for a 401(k) plan. They want to terminate the pension plan and start up a k plan.

The company does not have the money to fully fund the pension plan-about $500,000 would be needed, maybe more with the current low interest rates.

I know they always have the option to freeze the plan and continue to fund it until such time as it can be terminated in a standard termination, but would it also be possible to terminate now in a standard termination if the union agrees to accept reduced benefits? Would the retiree benefits have to be fully funded, and only the deferred vested and active benefits reduced?

I'm just not sure if there are more options for this type of plan since it is negotiated with the union.