In a SEP plan, the employer has possibly left out an employee that was due a contribution for 2003. He had an extension on his taxes until aug 15, 2004. if the ee is due a contribution, i assume the contribution has to be made. but since it is after aug 15, can the employer still take a deduction on his tax return? and what is the process of making and reporting a late contribution?

thanks for any help..

For a 401k or p/s plan that is not subject to the J&S rules, do you think thqt spousal consent is needed for a hardship withdrawal?

On the surface, it appears not to be needed. However, one of the conditions for the j&s rules to not apply is that the death benefit go to the spouse (unless waived). Wouldn't allowing hardships without consent eat away at this right?

Any guidance w/b appreciated!

Due to a merger, company stock in the 401K plan is scheduled to be exchanged for cash about Sept 1st, with a blackout date of August 30. Notice of those dates is dated August 6th, not postmarked until August 20th and not received until August 23rd. This does not give a participant (and former employee) very much time to complete their planning about withdrawing company stock from the plan, selling it and taking advantage of paying only 15% capital gains tax on the NUA, regular tax on the basis, and a 10% penalty for being under 59 1/2.

My understanding is that Federal law generally requires that a participant in a 401K plan be given at least 30 days notice of any pending blackout period.

Does a participant have any recourse when they receive much so less than 30 days notice?

A participant is in a state sponsored contributory DB plan that qualifies as a "government pick-up plan", therefore employee contributions are pre-tax. If the same employee also benefits under a private employer 401(k) plan I would assume that the 402(g) limit under the plan (13k for 2004) is not affect by pre-tax contributions under the gov't DB plan, is that correct ?

the return was sent back for failure to include the audit report but it was returned over a year ago. at this point are the penalties the same as the penalty for not filing the 5500? in my view the penalty would be the same as the penalty for not filing the report.

Company X maintains a self-insured post-retirement medical plan for eligible former employees. In order to be eligible, the employee had to habe been eligible for an early or normal retirement benefit under X's defined benefit plan, disabled for at least 2 years or terminated under a severance arrangement after having met certain age and service requirements. Those former employees satisfying these criteria must also have at least 10 years of service with the employer.

To control the extent of its subsidy, Company X amended its plan to provide that

(1) those who had attained age 40 on or before a specified date would have the Company subsidy calculated under a formula, with those having a certain number of years of service becoming entitled to a subsidy of about 80% of the premium cost.

(2) Those who not attained age 40 as of a specified date and whose age and service did not equal at least 50 as of that date, had their Company subsidy calculated as follows: the Company created a hypothetical account to which it contributed $1,000 for each year of service with the Company, Each year, the Company would contribute the $1,000 as increased by a specified percentage. Upon becoming eligible for port-retirement medical, X would apply the hypothetical account at the time of the employee's eligibility to pay its portion of the premiums for post-retirement medical. The retiree was responsible for the difference. Once the account was exhausted, the former employee paid the entire premium.

(3) Employees hired or rehired after the specified date had no company X subsidy being responsible for the entire premium, although they would be eligible for the group rates.

Is there any issue on the general rules for eligibility for post-retirement medical under 105(h)? Does the Company X method for determining the extent, if any, of X's subsidy for post-retirement medical violate the eligibility nondiscrimination rules of 105(h), the benefits nondiscrimination rules of 105(h) , both or neither?

My client sponsors a qualified retirement plan. The plan has received a draft QDRO requiring it to make payments pursuant to a child support order. The attorney who drafted the proposed QDRO claims that the distributions are subject to the 20% income tax withholding rules applicable to eligible rollover distributions. Is he correct? Thanks.

I read this forum from time to time to get an idea of how Benefit's Managers think, but it always depresses me because half the posts seem to be about how to exclude people, how to legally reduce benefits, and how to retain privileges for the bigwigs while shafting the rank-and-file.

From time to time, I also read interesting articles about how bias and illegal action can be covertly accomplished through HR. For instance, check out this recent article on how black-sounding names can hurt job applicants:

http://abcnews.go.com/sections/2020/Busine...s_040820-1.html

I wonder: do Benefits Managers ever worry about conflicting pressures of their employer, the law (the spirit as well as the letter), and the right thing to do? Has there ever been a major class action lawsuit that was specifically aimed at Benefits Managers? Are there any notable examples of whistleblowers or people who have taken an important stand to protect the more disadvantaged segments of the organization they serve?

$200,000 or $205,000?

Thank you.

Can you have an Employer Profit Sharing points allocation method in a safe harbor 401(k) plan?

Can the cost for the distribution of SPDs to all employees in a 401(k) plan be paid out of the plan's forfeiture account? Our Plan Document does not specifically address this and we have just updated our SPD.

A participant who was a previous 5% shareholder has retired under early retirement provisions. He is eligible to receive his benefit now based both on early retirement and the fact that he broke service. Account balance is about $1.0 M.

Participant is refusing distribution. Other shareholders want the distribution to take place. Is there any way (other than waiting for participant to turn 70 1/2) to force participant to take distribution?

This is a Profit Sharing Plan that was merged with a previous Money Purchase Pension Plan. Normal form of benefit is J&S.

Thank you

I am getting conflicting information and I was hoping someone could help demystify theexcise tax on funding deficiences. My background is in DC administratioin so I am very green with DB issues. I am wanting some insight or a cite that tells me if the % is 5 or 10 and how it relates to the single and Multi employer. I read 10% in some places and 5% in another. I am not sure if I was reading outdated information because the regs have changed.

Any help would be greatly appreciated.

There are many situations with daily valued plans where a distribution is made and then dividends or other earnings become payable later. This can happen when a plan changes recordkeepers or when a plan terminates. For example assume that the plan transfers assets either to all participants or to a new recordkeeper. When the check for additional earnings comes in, it is for such a small amount that participants would be entitled to either less than $10 or $1. If a participant terminates and receives a lump sum, the receipt of the additional check would require the plan administrator to chase after the former employee and pay it to him/her. These small earnings checks are recurring and the administrative burden of both allocating the earnings and attempting to pay them to participants substantially exceeds the dollar amount of these checks. What are recordkeepers and plan administrators doing in this situation?

I always thought in order for a plan to be considered a 412(i) plan, the plan must be funded solely with whole life insurance products. But now an insurance guy is suggesting that if the plan has only fixed income individual annuities via an insurance company, that can be considered as meeting 412(i). This doesn't sound right, does it??? It has to be life insurance, right?

H & W get divorced. A DRO in good form is issued and processed as a QDRO. It turns out as part of the DRO W gets 1/2 the building where H's business is located. H does not have the money to buy her out. H & W now want to go back to court & get a 2nd DRO. The DRO will give additional retirement plan money to W; H will get building flat out.

1. Assuming subsequent DRO is drafted carefully and has a provision just allocating additional retiement plan money to W & has a separate provision giving entire building to H; does anybody see a problem?

2. Lets says DRO not drafted quite as carefully (We do not draft DRO's, just help the plan sponsor apply plan's QDRO rules); assume it says W gets $xxx amount from retirement plan in return for her 1/2 interest in building. Does anybody see a problem?

I'm a little uneasy about this situation. I don't really see a problem with #1, but I'm not so sure if they come back with #2.

Thanks for any guidance.

I have a situation where a divorce decree was entered granting the former spouse an interest in 1/2 of the participant's account balance. Before the QDRO was completed and entered, the alternate payee died. Does anyone have any idea what to do in this situation. It appears that some courts would hold that the divorce decree created her right in the Plan and some courts would say that the QDRO had to be in place. Assuming the judge will sign a QDRO now, can the Plan pay the 1/2 benefit to the Alternate Payee's estate?

A participant is overpaid in 2003 and this is not corrected until later in 2004. How should this be reported on Schedule I of the 5500 for the 2003 plan year?

I need some ideas on how employers exclude temporary employees (i.e. employed via an agreement with a temporary staffing agency) if the plan has immediate eligibility?

If you exclude them by class (and then define the class in the document) is this still treated as a disguised hours requirement like the exclusion of part-time employees?

Or does it boil down to the fact that temporary employees are not common-law employees of the recipient employer and thus can't be eligible for the plan if the plan only convers common-law EES?

I have been reading and reading but nothing is coming together. Any help is greatly appreciated.

We sent the notice regarding his eligibiity for a distribution under the plan to his last known address but have since learned that he is in prison. A search for the guy on the state's department of corrections web site shows that he is in prison. Do we send the notice to the prison? Has anyone ever encountered this issue? Thanks!