With the newly released Summary Annual Report model notice updates, were any changes actually made to the wording from the prior version?  

A participant was covered under an EACA.  He was int he plan a few years and his auto-deferral went from 3 to 4 to 5%.  Then he left.

When he comes back, I know he is automatically eligible for the plan and enters immediately.

But at what rate?  The initial 3%?  Or his former 5%

I have 2 plans that are part of the same controlled group.

Plan A:  No age/service, daily entry  Plan B:  21/1 YOS/Semi Entry

When determining the groups for coverage, when doing plan A ratio, we count everyone since there is no age/service.  When doing Plan B, do we only count those that have 1 YOS/21/semi for determining the benefiting group? I am trying to figure out who is excludable (for age/service) to those that are non-excludable not benefiting. 

Q: Do the final regs around terminating a 403(b), in which the sponsoring employer must "Generally, stop contributions...to any other 403(b) plan during the period that begins on the termination date and ends 12 months after all benefits have been distributed from the terminated plan" apply to an employer terminating its relationship with a 403(b)(9) church plan?

Client set up a Safe harbor 401 (k) Plan effective 3/1/2019.  They initially wanted a 3 month eligibility with entry dates monthly-following.  Now we are in June, and they are wanting to amend their document to say only 60 days  wait - (to agree with the wait for health benefits with their company).  No one so far has been made to wait 3 months to start deferring.  Thoughts?? Any IRS problems that they could run into?

Has anyone used the penalty relief program ($500 flat fee)?  Experience?  We had someone use it, filed/paid in January, and they've received two letters so far saying "we need more time" implying they are researching it.  Seems weird...or maybe not, I can see how hard it might be to cash a check and check a box.

Plan is a traditional defined benefit plan.  Plan has 4 participants who elected annuity forms of payment, and are receiving their payments from the plan trust.  The plan is going to terminate through a standard termination with the PBGC.

Can the participants already in pay status make new elections on plan termination if they want to, for example, get a lump sum from the plan.  Let's assume that the plan will be fully funded and can pay out 100% of all benefits due.

TAG says that 401(a)(9) allows for a change of election upon plan termination, and I just wanted to double, triple, quadruple check with the community as well.

Thanks!

1) All references are to Ohio jurisdiction besides ERISA;

2) Divorce of 20 years was finalized in 2007 with each waiving rights to each others pension;survivor rights were not stipulated in decree;

3) Ex husband passed in July 2018 with exspouse naming me as beneficiary for all benefits including 401k, pension, etc;

4) Former employer refuses to provide application for survivor benefits stating that since ex was not married at time of death, there are no survivor benefits to be paid and the plan does not allow for payments to dependent children (two children-currently 15 and 21);

5) In December 2018,  I was appointed the administrator of estate in order to resolve estate on behalf of children and subsequently requested copy of employment file.  Employer responded with an incomplete file and has failed to respond to subsequent requests;

6) It is my understanding that if our domestic court judge approved a QDRO designating me or children as  estate designated survivor then former employer would be required to honor QDRO.

However, I do not know how to proceed on unraveling and pursue a claim on behalf of myself or estate.  I know that I need an attorney but I dont know if I need an ERISA, domestic court or probate attorney or all of the above.

Any guidance would be appreciated.

Thank you

Survivor

I continue to struggle with the excess assets issue in a terminating pension plan. The rules under 4980 seem to permit the maximum 415 lump sum to be exceeded. 

I'm wondering what happens if ex spouse dies before QDRO completed? There are 2 accounts, 1 is a defined benefits pension, other is 401k. The divorce was finalized 1 year ago, QDRO started as soon as decree signed by judge. Ex spouse is of retirement age now, but not collecting pension yet. My attorney outsourced the QDRO & that company says they don't deal with clients, only with attorneys. Located in New York

Hi, A DB plan is invested in numerous annuities. A FASB report was prepared and the fair value of the plan assets used was based on the gross contract value, as opposed to the contract value less the withdrawal charge (surrender value).  1.Is this ok or should the value be the surrender value? 2. If the plan is overfunded either way is this an immaterial issue? Thank you.

Participant is taking an in-service distribution from their Match Account "today" (cash out/non-rollover).  As it turns out we are just about to tell the client they failed ACP testing and a refund is required for this very participant.

Can anyone give me a reason why I can't take the position that the in-service distribution covers my ACP refund?  The excess match (and then some) is about to be be removed from the Plan.  I just don't have time to get the ACP test finalized to process it as an ACP refund yet.  The participant has an urgent need for the funds, so no delay availalbe.

I will certainly send a letter saying the amount of the ACP refund was not eligible for rollover.

Can someone please tell me if my interpretation is correct?  A SH 401(k) has dual entry, January 1/July 1, with deferral modifications allowed any payroll period.  If an employee becomes eligible to participate on July 1 and chooses not to contribute at that time then changes their mind in September, can they start contributing immediately or do they have to wait until the next entry date of January 1?  I consider the election not to contribute as a deferral of 0% which is then subject to the deferral modification dates and they can contribute the next payroll period.

Plan is funded between 60% and 80% thus limiting their 100% lump sum option to 50%.  A top 25 employee's 50% lump sum is below 1% of the funding target (100% would be above 1% of funding target).  The Plan's ERISA attorney is saying this 50% lump sum can be distributed since the 50% lump sum is below 1% of FT.  

This doesn't seem right since in this case, for example, a plan funded at 78% would allow a 50% lump sum in this situation whereas a plan funded at 82% would allow no lump sum.

Thoughts? 

Need help with legalize of QDRO .. my spouse divorced 19 yrs ago in his divorce degree  he was to give 1/2 pension to his first wife.  At time of divorce no QDRO was filed.  We married 3 months ago and now she is asking for her share of his pension which he began drawing in 2011.  She wants her 1/2 now and what she feels is due from 2011.  If my research is correct the 1/2 pension would only began when the Plan receives a QDRO and no back payments should be granted.  She is stating it is my husband's responsibility to file the QDRO now for her .. and I believe she should incur the legal fees not us. and yes this is probably a revenge thing since the pension amount she will receive monthly is under 250.00 per month.  Thanks for any help.

I did a VCP filing for a client in the first quarter of 2019. Because there are a lot of former employees who may be entitled to corrective contributions, I knew that client could face a major issue in locating all former employees who are entitled to receive a corrective allocation. Therefore, I proposed that the client send them a letter asking them to do three things: (1) provide updated contact information; (2) consent to receive documents and notices electronically; and (3) complete an updated beneficiary designation form.

The mailing resulted in almost 30 people who have not responded, a number who have and 3 that they still cannot locate. I suggested that the search should start with free Internet searches to locate the missing participants and to verify current addresses of those who failed to respond. Then they should move to cites charging a nominal fee. 

In your experience, which are the best free internet search sites and which are the best sites that charge a nominal fee for searching for people? Also, does the search include death information? Thanks.

We have a 403(b) plan that wants to move record keepers.  However, the assets are in some sort of investment that cannot be transferred over without the signed consent of all account holders ("Individual Custodial Trust Account" was the term used, I believe).

So, they are thinking of "freezing" the plan and starting a new one with the new r/k.

Does this pose a no-deferrals-for-a-year successor plan problem?

If not, will they have one if they terminate the first plan at a later date?

Are there any cases which support an auto-revocation upon divorce clause in a 401(k) plan as it pertains to a named spouse beneficiary?

We have an employee who is being required by the court to cover his 2 dependent children on our health plan. The employee reached out to inquire why the update was not done. I told him we have yet to receive the QMCSO from the state. The employee provided the signed Consent Order from the court that details the requirement to add the 2 children. He and his attorney think that the Civil Action Order produced by the court for the child support agency did not include a provision to add the children, just the removal of his child support payment; which could be why a QMCSO was never sent. The coverage effective date was 4/1/19 according to the Consent Order and the employee lives in NJ.

Thoughts on next steps? Ok to use the Consent Order or should I tell the employee he needs to get a QMCSO generated and sent? I read through the H&W SPD and it doesn't appear that the Consent Order would qualify, but just wanted to get guidance elsewhere.

Group:

Clients TPA files 5500 annually for their ESOP.

Assume the 5500 shows plan assets of $200k.

Isn't this the liability owed to participants? 

Is there an Internal Revenue Code/Dept of Labor/ERISA cite/support that says the repurchase obligation is borne on plan sponsor?

in other words, I know the employer/client/plan sponsor ultimately has liability to pay for that repurchase obligation but I'm looking for a regulatory cite/IRC/other to support this statement.

Thoughts and comments appreciated.

Best, Joe Dadich, Esq.