Almost all the Plan Documents that I see, whether isured or self funded plans, state that the Employer is the Plan Sponsor and the Plan Administrator. Why is the employer the Plan Administrator and not the claims paying etc TPA?

Any cites and links to explanations would be very helpful in helping me to explain not only that this is the industry standard but also Why?.

One of my clients has a Sec 125 with FSAs on a 1/1-12/31 plan year. In July they changed payroll providers. Because of this switch (and an oversight on the part of the employer), the payroll deductions for the FSAs were stopped. Now that they have adjusted to the new payroll provider, they want to get the FSAs started again. I have not run into this before, but it seems that this must violate some regulation(s). Is it O.K. for the employer to just start them up again and finish out the plan year? Can employees claim reimbursements for services that took place during the hiatus? Should the employer allow make-up deductions for the months (about 3) that were not deducted by doubling up on the rest of the year's deductions? Or, due to this "hiatus", can the employer allow participants to adjust their elections downward to take into account the lost months? Or, should the employer consider the plan year terminated and start a new short plan year with all new elections? Sorry for so many questions, but this one seems sticky. Help! And Thanks!

It seems that nearly all Plan Documents state that the Employer is the Plan Sponsor and is the Plan Administrator, whereas the Claims Administrator, the TPA, is regarded as being a service provider.

Can anyone explain why this is done? Any cites and links to explanations would also be helpful because I need to not only explain and show that this is standard practice but also give the Why?.

In all the plans that I have seen the Employer is the Plan Sponsor and also the Plan Administrator, whereas any TPAs (record keepers, Trustees etc) are service providers.

Can anyone explain why this is done? Why is the TPA not the Plan Administrator?

Any cites and links to explanations would be very helpful because I need to explain this to a client, not only as being standard practice but why.

Can funds in a trusteed IRA account be used to purchase a single premium deferred annuity?

We recordkeep a plan where participants direct their 401(k) but the PSP is managed by the trustee. The 401(k) is daily valued, but the PSP is valued semi-annually.

Participant loans are allowed from the PSP, but they are general assets of the plan, not assets of the individuals segregated account.

The client wants to convert the entire plan to daily, how do the loans get converted? The trustee is going to liquidate the PSP assets, but technically everyone in the plan has a portion of every loan. Can I just assign each loan balance to the affected individual (after the adoption agreement is amended), or do the loans have to be paid-off and subsequently reissued to the participants?

Thanks.

Could someone please point me in the direction of some legal authority on how long the Service has to make a decision on a determination letter application?

A client has not used theoir forfeitures since 1997. The doc requires them to be allocated out annually as if they were profit sharing contributions.

Is it necessary to go back and reconstruct the allocations back 4 years?

Any references on this stuff?

It is my understanding that sub-s distributions paid on unallocated shares in a leveraged ESOP are treated like any other investment gain. That is, they are allocated to participant accounts. So, if only 20% of shares have beeb released to participant accounts, the participants will get 5 times the normal sub-s distribution on their shares because 100% of the sub-s distribution must be allocated as investment gain.

In many leveraged ESOP's, the sub-s distribution on unallocated shares is used to pay down the ESOP loan, but to the extent they are not, the above seems to hold.

Am I missing something? Can the sub-s distribution on unallocated shares be used in other manners?

I have a client who inadvertently recorded loan repayments as just regular 401k deferrals. The only real conseqence I can come up with is that the W-2 needs to be amended.

Is there anything else?

I have a client who calculates and funds the match each payroll period.

The Plan doc, however, provides for the calculation to be based on annual informatio, not on pay period information (as some other docs provide).

What are people doing in situations like this? Do they always have to recalc all participants at year end to ensure that fluctuations in their deferral rates, or having their deferrals capped out early in the year haven't distorted their match?

Thanks!

A plan has a 3% fixed contribution under a Safe Harbor Plan, so no ADP test. The ER will also provide a discretionary match. I've been given conflicting information as to whether the discretionary match can be a Safe Harbor match to avoid the ACP test. Both are reliable sources. One says yes, the other says no. I need a tie-breaker.

We have a client who is proposing the following new 401(k) profit sharing plan scenario:

No Match, but employer Contributions as follows:

Staff & Admin ee's - 3%

Sen. Personnel w/5 years service - 3 1/2%

Managers - 4 1/2%

Non Shareholders - 5%

Class I Shareholders - 6 1/2%

Class II Shareholders - 9%

Note: The Class II equity shareholders would include a vol. contribution of 2 1/2%. The e way they ahve developed this plan is that the firm would pay up to 6 1/2% for the Class I shareholders and if a Class I wanted to move to a Class II, they could voluntarily have 2 1/2% contributed from their annual bonus amount instead of receiving it in cash (these additional monies would be in excess of the employees deferral).

Has anyone ever heard of anything like this and if so how does this pass testing.

Also, will the addtional contribution in lieu of bonus count toward deferrals.

I guess my big

An attorney for one of my plans is saying, and I quote, that "Generally, EGTRRA's increase in the maximum annual addition to $160,000 is an optional change."

I questioned her on the statement that this is an optional change. She misstates that she is referring to the maximum annual addition; she told me she is actually referring Section 415(B)(1)(A) .

Is this increase from 140,000 to 160,000 an option or a requirement? :confused:

A participant has requested a hardship distribution to purchase land on which to place his already existing trailer. The trailer is currently located on his parent's property and he wants to move it. Does this qualify for a principal residence hardship? He already has a home, he just wants to sit it somewhere else. I have seen other discussion regarding purchasing land to build a house in the future, but this situation is a little difference since he already has a home. Any thoughts are appreciated!

The Sarbanes-Oxley Act of 2002 changed the filing deadline “insiders” had to report trades in their publicly traded employer’s stock . What constitutes an "insider"?

I have a plan with three participants who were over the 10% deferral cap stated in the adoption agreement for the 2001 plan year. My instinct would be to return this money to the client as contribution in error. Do you know of any other way to correct this situation. This is for the 2001 plan year and the money has not yet been returned.

I have a participant who has been taking out RMD's, who is not a 5% owner. Can he stop taking the RMD's until he retires?

There was an HR Manager of a large company who decided his firm would benefit from greater diversity, so he hired five cannibals. Recognizing this could pose a hazard to the other employees, he counseled them at length on acceptable and unacceptable behavior toward their co-workers.

Everything seemed to be going fine until a secretary came up missing. Finally, the HR manager had to admit that his cannibals may have had something to do with the disappearance. He called them all into his office and informed them that a secretary was missing and asked if any of them was involved. Finally, one of the cannibals admitted that he was responsible and in frustration, the HR Manager fired them all.

On the way to the parking lot, one of the cannibals approached the guilty party and said "So, why did you have to go and eat a secretary? We've been eating managers for months and nobody's even noticed!"

I am 30 and my wife is 29. We both work, and both contribute the max to our 401k that our employer will match (ie - mine matches 1/2 up to 6% - so I contribute 6%, they match 3%). I plan on continuing matching whatever they will contribute...so will not change that.

I would also like to start a Roth IRA, but am not completely familiar with them, and was hoping to get a few quick questions answered, easy ones for those in-the-know!

1. What is the combined family max income before you cannot open a Roth? Let's assume both my wife and I make $60k each ($120k total) - are we eligible?

2. Where do you open a Roth IRA? Local bank...brokerage...etc? We have Scottrade and Ameritrade accounts...and standard checking/savings account.

Depending on what else I can read in these forums...I may find some other questions. Great boards here!

Thanks in advance.