Company A maintains Defined Benefit Plan X. Company B maintains Defined Benefit Plan Y. Company A acquires Company B. Plan Y includes voluntary employee contributions. Company A also maintains Plan K, a qualified cash or deferred arrangement. Company A is considering the transfer of the voluntary contributions of Plan Y (V) into Plan K and then merging Plan Y into Plan X.

1) Is V subject to a separate cash-out rule than the remainder of Plan Y under 411(a)(11) and 417?

(2) Would the transfer of V into Plan K cause Plan Y to be terminated under ERISA Section 4041(e)?

(3) Are there any regulatory filing requirements in connection with the movement of V into Plan K?

Hello once again. Continuning to learn about these plans - if only I had more access to organizations that can utilize these plans!

My client offers a salary deferral only 403(b) plan to its employees. Progress is being made and the client is interested in adding a matching contribution. I understand that a formalized plan document will be needed and the matching contributions will be tested the same as matching contributions in a 401(k) plan.

Right now, the employee 403(b) accounts are all over the place. The client would like to set up a group account where the participant and employer contributions are grouped together. Is there anything an employer can do to round up the individual 403(b) accounts and bring them under one umbrella?

Hopefully you understand the gist of my question. Any and all thoughts would be appreciated. Thanks.

No matter how hard you try to avoid it, eventually some document allows both loans and hardship distributions!!

Employee has a vested interest of $22,500 consisting of $10,000 of deferral contributions.

He has applied for and received a loan of $11,000. Now he wants a hardship of his $10,000 of 401(k) contributions under the safe harbor hardship provisions.

Okay?? I don't see how it is not acceptable but need feed back.

Thanks

A prospect has a 401k plan with a discretionary 100% match. The employer has never made a match and doesn't really even know why it was in the adoption agreement in the first place (but it was). However, they now want to make a match, but don't want it to be 100% vested. My basic question is - is there any way around this? If they keep the plan where it currently is, then I think the rules under Section 411(a)(10) will prevent them from imposing vesting on any of the current participants. They could amend for new participants going forward.

I'm wondering if this result can be avoided by first eliminating the matching contributions from the existing plan. Since there are no matching dollars, this would seem to be pretty simple. Then, we would establish a a new 401(k) plan with a matching contribution that is subject to vesting. Finally, we would merge the two plans together (the current plan which would no longer have a match being merged into the new plan).

Does anyone think that would work? If not, is anyone familiar with any legitimate technique for solving this problem?

When processing a distribution form, if marital status is marked as Widowed, do we need to get a copy of the death certificate to prove that spousal consent is not needed?

Employer has "standardized" profit sharing plan.

An employee met the eligibility requirements on 04/17/03. His entry date will be 07/01/03. Same employee terminated employment in Oct 19, 2003.

Plan document says that in order for a participant to share in the allocation of employer's discretionary contribution ... he must work over 500 hours during the year or be employed on the last day of the plan year.

He worked 960 hours in 2003 ( 01/01/03 - 06/30/03), prior to his 07/01/03 entry date ... AND worked 480 hours in 2003 (07/01/03 - 10/19/03) after his entry date.

Can he share in the employer's 2003 contribution?

(True that he worked more than 500 hours (namely: 1440 hours) during the plan year 2003 .... but most of those hours were worked prior to his entry date. He worked less than 500 hours after his entry date and he was not employed on the last day of the plan year 12/31/03)

A 401(k) participant names his spouse as beneficiary of his 401(k) plan, then divorces. The MSA contains mutual disclaimers of each party's retirement benefits and is notarized. Its a community property state.

He changes his life insurance beni designation from the ex-wife, to his mom, but forgets to make a corresponding change under the 401(k) plan.

The participant dies. The ex-wife is now a non-spouse, named beneficiary. The mom wants the retirement benefit. Can the ex-wife disclaim interest in the benefit, so the mom can get it? The plan definition of beneficiary says that in the absence of a designation, it goes first to a spouse, then to children, then to the participant's estate. He has no children.

My company (we have 8,000+ employees) currently continues Medical coverage indefinitely for employees on LTD. At no cost to the employee. I would like to hear how other large companies cost sharing medical coverage with there employees on LTD.

We are looking at changing to cost sharing at the active employee level and providing coverage for two years follow by COBRA or continuing coverage til medicare eligible.

Please share your policy.

I am an administrator of numerous governmental defined benefit plan in the state of Florida. Recently, a number of employee groups have started converting from a defined contribution to a defined benefit plans by using DC money to purchase the past service in the new DB plan. It has come to my attention from my actuary that under 415(b), if an employee has less than 10 years of participation in a DB plan, the 415 limit is reduced by a fraction where the numerator is the years of service in the DB plan and the denominator is 10.

Does this 415 limit reduction apply to converted DC to DB plans or is there a way out of this reduction.

If the UAAL is negative in any year, does the funding method revert to Aggregate or stay FIL?

If we stay with FIL, do we continue with negative UAAL? or

Set the negative UAAL to $0 for the following valuation.

Assume the plan is not subject to full funding limitation.

Our plan does not permit participants to buy employer stock with their deferrals to the 401k plan. It does give participants the option of buying employer stock with the employer match. We did not file a Form 11-k and are assuming that we are not affected by the requirement to file a Form 5500 within 180 days of the fiscal year end of the plan. Does anybody know if we are making an incorrect assumption?

Under a church plan (as defined in IRC Sec. 414(e)), can anyone please tell me if the entity itself is required to have the following financial forms disclosed?

FAS 35

FAS 87

FAS 132

I understand that a Form 5500 is not required (nor is a financial audit), I'm just not sure if the entity itself is required to disclose information.

Thanks.

Company A maintains Defined Benefit Plan X. Company B maintains Defined Benefit Plan Y. Company A acquires Company B. Plan Y includes voluntary employee contributions. Company A also maintains Plan K, a qualified cash or deferred arrangement. Company A is considering the transfer of the voluntary contributions of Plan Y (V) into Plan K and then merging Plan Y into Plan X.

1) Is V subject to a separate cash-out rule than the remainder of Plan Y under 411(a)(11) and 417?

(2) Would the transfer of V into Plan K cause Plan Y to be terminated under ERISA Section 4041(e)?

(3) Are there any regulatory filing requirements in connection with the movement of V into Plan K?

My 401(k) plan document indicates that the plan does NOT offer annuities and the J & S rules of Code Sections 401(a)(11) and 417 do not apply to the plan.

Therefore, I assume no spousal consent is required to process distributions for above or below $5000 vested dollars.

Does it matter that my employees live in California? I assume not based on my plan document. Does spousal consent matter depending on what state my employees live in if no annuities are even allowed in the plan?

Last week it was announced the IRS would be sending letters to small businesses re- establishing retirement plans and to pay attention to the compliance aspects.

Do you know if they have sent any letters yet, and if so anyone have a link to one they can post?

We have a ps plan with an 8/31 pye. The Trustee decided to term the plan 2/28/03. The plan assets at the time of the last val (8/30/02) were appx $800,000. It was decided to do an interim val as of 2/28/03. (This is a straight forward ps plan, annual val, 6 participants, one HC who has 76% of assets.) The feeling was that the interim val would be in the best interest of the NHCE's due to the market being down. All were vested at 100% etc and distribution election packets were sent in March. The elections were made. The payouts were processed. The HCE was told not to remove his account balance until all the NHCE's received their full balances. The general consensus was the investments would drop. Of course, the opposite happened. Between 3/1/03 and today, the HCE has made almost $180,000. The participants funds were distributed June 4th. The HCE believes these funds are now his. In fairness, he said he would have taken the full loss. The assets are pooled, he guaranteed payment as of 2/28/03. Our firm is partially in error I believe because we held up the distributions until the last participant make his/her election. One particpant with over $100,000 waited over 70 days from the election date to get the funds. So.... any opinions as to what we do now? The employees portion of the gain would be 24% or $43,200. There are 5 participants with balances of $2,000 to $125,000.

The doc is in order. We do not plan to submit for any type of determination.

Help. Any thoughts would be appreciated.

Is testing necessary when forfeitures are allocated to plan participants at plan termination?

A client has a Safe Harbor 401k Plan. The only money sources are the 401k deferrals and the Safe Harbor Match. They are wanting to add Hardship Withdrawal provisions to the plan.

If a hardship withdrawal is taken from the deferral contributions, are the deferrals stopped for 6 months or 12 months? I keep reading conflicting answers.

Must the 10% federal tax be withheld or is that optional?

Thanks.

A potential client wishes to provide an employer contribution based upon the number of miles driven during a plan year. The client is a trucking and freight company. All employees are union members, no HCES or keys. They have proposed a certain fraction of a cent for each mile driven up to a various cap. Has anyone seen this done before? If so, how did you word this in the document? Thanks!

Any thoughts are appreciated. I have a 401(k) client with a 4/1 plan year with a 15% cap on deferrals. In January, one of the plan participants deferred a large portion of her bonus, putting her over her 15% deferral limit for the plan year 4/1/02 -- 3/31/03. As a result, the sponsor returned a portion of her deferrals as a plan limit excess.

The issue now is -- the third party payroll company will not let this participant defer any more for the 2003 calendar year because she has reached her $12,000 limit. It is my position that since she had a portion of the deferrals returned in May as plan limit excesses, she may now continue to defer until she reaches a net limit of $12,000.

I want to be able to point the payroll company to a cite or authority that this participant may net at $12,000, or, perhaps I am incorrect?

Any direction would be great.