In a self-funded plan, with a new amendment added to increase the waiting period to 12 months, can the plan offer optional limited benefit plan, paid for by the employer, for the 12 monhts waiting period at the end of which the employee would opt into the regular plan?

I have a takeover plan where one participant has a plan loan. There is no written loan policy for the plan. The loan papers she signed does not say anything about the loan being due upon termination of employment.

The owner is terminating the plan as of 9/30/04 and will be closing his business as of 11/30/04.

We were wanting to make distributions to the participants in October. Can I go ahead and distribute this participant's remaining account balance in October and give her until 11/30/04 (date of her termination) to pay back the loan? If she doesn't pay it back, then would the loan balance become a taxable distribution with no withholding?

Thanks for any help on this.

Does anyone know where we can get the text of obscure PLR's???

Small professional corporation has an SEP for one older professional and 3 or 4 young staff members. The owner has contributed $40,000 to the SEP in January for 2004, but now would like to switch to a DB plan and contribute considerably more money.

Can the $40,000 plus earnings be returned as an overage for 2004? If yes, how are the returned earnings calculated (just compute actual earnings?)?

Is it the case that SEPs are not like a Simple that you could not fund the Simple and a DB Plan in the same year, but you could fund a SEP and DB plan in the same year?

Could the $40,000 in the SEP be left alone for 2004 and then fund the rest of what could be contributed to a DB plan for 2004 into the DB plan?

Does anybody know of a web site that might have what I would call a "reverse" loan calculator whereby you input the loan amount, interest rate and payment frequency and the calculator determines the number of payments and the last (usually slightly different) payment amount?

This is for those participants who want to specify a specific dollar amount per pay period that they want to pay on a participant loan.

Thanks - any and all info, comments and/or suggestions welcome!

The employer maintains a 401(k) P-S plan with a match formula of 10% upto 5% of deferrals. They contribute the match on a payroll basis. Some of the participants have contributed 5+% to the plan, but their match is less than the maximum amount of .50% of pay. Normally the document states whether or not the match is based on annual compensation or payroll compensation. The problem is that the document does not state if the match is based on annual compensation or payroll compensation. Is there a default that should be used or does the client have discretion regarding the match and possible true-up? (We are the new recordkeeper and in the past, they have not made any true-up contributions.)

Any help would be appreciated.

if the account had fees and expenses in excess of cap gains and dividends, would you still issue 1099's? if so what would be the amount?

Scenario - ER maintains two plans, one safe harbor and one non-safe harbor for different groups of EE's. The non-safe harbor plan has a 150% match on first 3% of comp. and safe harbor match is 100% on first 3% of comp. If an HCE transfers from the non-safe harbor plan to the safe harbor plan, the aggregate match he or she receives for a year will be greater than the safe harbor match provided in the safe harbor plan. (150% match for part of the year and 100% match for the rest of the year.

According to notice 98-52, this violates the safe harbor requirement that on HCE can not received a greater rate of match an NHCE. See Notice 98-52 (Section IX.B.2)

Has anyone come across this problem and how have you dealt with it ? Has Notice 98-52 been superceded ?

Just seems odd to me that transferring an HCE from one employee group to another for legitimate business reasons could potentially disqualify the safe harbor plan.

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Also listed in message forum on http://www.lifelifters.com

Please help with calculating this person's vesting. We have differing opinions here at the office.

Fact pattern:

3 yr cliff vesting schedule

DOH = 2/15/02

DOT = 9/1/04

worked >1000 hrs in '02

plan switched to elapsed time vesting effective 1/1/03, was 1000 hrs before that.

How many years? 2 or 3?

How does one handle deposit overages? These overages are due to the employer sending in too much money, but from employee withholding deductions.

Company B purchases only the assets of Company A. Company B doese not have an existing 401k Plan but Company A does. The employees of Company A will be doing the same work for Company B. What does Company B do with Company A's 401k plan.

1) Can Company A's plan just stay in tact and Company B adopt the 401k plan??? How would this affect Form 5500 filing??? What TIN would be used and Company Name on form 5500 considering participants would be deferring under Company B's TIN???

2) Can Company B just terminate Company A's plan and create a new plan under Company B's TIN# and let Company A's participants rollover to Company B's plan or rollover to an IRA??

What is the best option for Company B on what to do with Company A's 401k plan????

Also how would any transaction affect the Annual Form 5500 filing for Company A's Plan???

I have a client in an area devastated by Hurricane Frances. They have a 9/30 plan year end, and have requested an extension of their open enrollment. All of the meetings had been cancelled, their server was down for 10 days, and all their forms were swept away. They have just reopened their office, but don't think they can get it done in the next 12 days. They would like to give the employees a 10/31 deadline, but not pay claims incurred prior to the date on the election form. Does anyone think such relief is possible? Thank you.

A company received a draft top hat plan in 2001. It was never adopted and key employees never received copies of the plan or its terms (which included vesting and forfeiture provisions). Participants might have been orally told that bonuses would be paid. Of course one key employee may be terminated for cause. If top hat plan were established, benefit would be forfeited. If just an oral promise, forfeiture terms can not be imposed. Any thoughts. Thanks. Ed

Just met with accountant for plan sponsor who showed me past admin work for a possible takeover.

1040 Tax forms were wrong. Participant was advised to borrow back all the pension contributions, by way of the pension administrator who accomodated the transaction.

Big deductions for a db plan for two 35 yr olds. The TPA wrote to explain how all the prohibited transactions would be done.

I agreed the admin looked wrong. Then I checked the DOL who did not receive any of the prior 5500 forms. Thus, the copies of 5500 for db that were given to client and signed by client were never filed. The forms did not disclose the loans.

In addition, the forms did not show the actuary's cert. so I cannot ask if there was a valid enrolled actuary's work done.

My attorney says that the client can ignore the invalid past work at their own peril. Or, much better to go back and correct 4 past tax returns and 4 5500 filings, go into CAP, and sue the old TPA for damages for all the back penalties and underpaid taxes.

Any suggestions on handling this situation?

Does an ERISA - covered 403(b)(7) plan (custodial account) need to provide QPSA and QJSA benefits, or is is treated like an individual account plan that need only provide that the account is payable to the spouse unless waived?

I need a few questions answered:

A company currently sponsors a Simple IRA plan. The plan has been in place for over two years, but not all of the participants have been in the plan for at least two years. The comany would now like to close down the Simple IRA plan and become an adopting employer of a multiple employer (PEO) plan. My understanding is that the Simple IRA can only be closed at the end of the plan year, and then those employees who have been in the plan at least two years could roll their balance over to the new PEO 401k plan (if they wanted). However, those employees who have been participating in the plan less than two years cannot roll their money to the new PEO 401k plan. What options do the participants with less than 2 years participation have? Can the plan close down at this time? or does the company have to wait until everyone has been a participant for two years? Any help you can give is appreciated. Thank you.

The owner and sole participant/employee of a profit sharing plan that has been filing 5500-EZs every year recently got divorced and now his ex-wife is an alternate payee with a segregated account balance in the plan.

A colleague tells me that the plan can still file an EZ. I'm thinking that since the alternate payee is afforded the status of a beneficiary (e.g., getting copies of SPDs, SARs, a certificate showing her balance) a 5500 should be filed until the year after she is paid out. Who is correct?

DOL Advisory Opinion 2001-09A discusses computer generated asset allocation models as investment advice and the provision of such advice would constitute a PT if Sunamerica provided such computer models.

Does anyone know why the provision of computer generated asset allocation models constitutes advice and not education? As far as I could tell, participants didn't have to accept the results of the computer program.

All of you professional TPA's out there probably have a quck answer for this one.

Are you the payer, and do you use your own EIN, when you issue Form 1099-R/Form 1099-MISC?

I'm looking at TD 9010, 07/26/02. It seems that if a TPA exercises any sort of managerial or oversight duties -- for example, determining the amounts of distributions rather than merely writing checks at the direction of the plan sponsor -- it's required to use its own EIN on Form 1099. And, do the same rules apply to both retirement and welfare benefit plans?