When should the document be effective?  My document has a box for PPA restatement, and I recall that this box invokes all of ther egulatory effective dates.  Should I restate effective 1/1/17 and let that box implement all the regulatory effective dates?

I am making some plan design changes, so would prefer a 1/1/17 effective date.

Profit Sharing Plan has 2 participants who are husband and wife, soon to be ex-husband and ex-wife.  Both have agreed not to request a DRO with respect to the other's PS account balance.  This is stated in the Divorce Agreement (not yet signed by both parties).

The husband has terminated service with the plan sponsor and has requested distribution of his AcctBal. 

In order for the plan sponsor to proceed with the husband's distribution, the plan needs assurance a DRO will never be presented to the Plan.

1. Would statements from each of the 2 participants, each irrevocably waiving the right to bring forward a DRO with respect to their soon to be former ex-spouse be sufficient, and if so, should it be a notarized statement or is a witness sufficient?
2. Also, if the Divorce Agreement were signed would it be sufficient on its own (thus no individual waiver statements needed)?

Thank you.

Many employers do not use health insurance for a health plan, and instead pay claims from the employer's general assets.  Some of these employers buy a stop-loss insurance contract to protect the employer (not the participants) against its risk of outsize claims under the health plan.

Can an employer do the same thing with a disability plan?  Is there a ready market for stop-loss insurance contracts regarding disability claims?

ESOP plan document of a c-corp provides for automatic distributions under $1,000 and automatic rollovers between $1,000 and $5,000.  Is anyone aware of any "small amount" exception (whether $5,000, $1,000, or $200) to the rule that ESOP participants are entitled to receive distributions their company stock account in stock?  It appears that the company is making all automatic rollovers of amounts under $5,000 in cash, and all automatic distributions of amounts under $1,000 in cash, and is not offering any of these participants the right to elect stock.  Recordkeeper indicates this is their common practice.  I tend to think that when they send these people the notices they should at least be telling them they have the option of taking the distribution in stock...  Plan document has a determination letter but it is vague on this point and doesn't explicitly say what the form of these automatic distributions/rollovers will be.

Appendix A, Sections .05(9)(a) and .05(10) of Rev. Proc. 2016-51 describe a safe harbor correction method for certain "Employee Elective Deferral Failures" -- which is defined as a failure to implement elective deferrals correctly.  The safe harbor correction method provides that if an error lasted less than 3 months and proper/timely notification is given to the employee, the employer doesn't need to correct the missed elective deferrals.  I'm comfortable that this would extend to a failure to implement a pre-tax or Roth contribution election, but I'm wondering if this treatment extends to catch-up contributions, too.  

We have a client that allowed a participant to take a distribution from the plan.  Participant is still working but is 65 so client thought they were eligible for a distribution.

In-service distributions are not allowed under the current provisions of the plan.  The document can be amended to allow in-service at normal retirement age now but this does not help the fact that a distribution occurred that was not permitted under the terms of the AA.  Can we do a retro-active amendment to correct this operational failure?  If so, does it need to be submitted under EPCRS?

I was reading through "Part-Time Employees Revisited"

https://www.irs.gov/pub/irs-tege/qab_021406.pdf

The include Seasonal Employees along with part-timers, but they make it (I think) pretty clear that what they don't like is when part-time or seasonal employees are defined as employees who work less than X hours in a particular period.

But what if I have a group of employees who are being excluded solely because they work during the summer months exclusively without regard to how many hours a week they work.

I know I can exclude them; the real question is does the document (and operations) need to make them eligible if they hit 1,000 hours in 12 months (i.e. if they meet max eligibility under 410a)?

Employer terminating 401K 6/30/2017, no employee contributions after that date.

Can safe harbor for 2016 be made by 9/15, which is after the termination date w/o jeopardizing the plan term?

I was divorced in 2003. Apparently in the divorce settlement I agreed to pay my ex wife 50% of both my retirement plan and disability plan. I don't remember agreeing to the disability part but I wasn't in a very good frame of mind at the time.

She filed a QDRO in 2012 to have 50% my retirement sent directly to her (which I had begun drawing). Since that time the disability plan has been removed from the retirement plan specifically named in my divorce settlement and the QDRO. Since the disability plan is now different, is that QDRO still legally binding? I'm about to file for disability and found out the disability plan shows the QDRO as binding in the new disability plan.

Here is what the new plan says about older QDRO's established in the retirement plan:

"Qualified domestic relations orders received by the Retirement Plan
prior to January 1, 2015 that provide disability benefits to an alternate
payee under the Retirement Plan will be deemed to apply to disability
benefits paid under this Plan on and after January 1, 2015, to the
extent those benefits are now paid out of this Plan"

Here is what my ex wife's QDRO says about disability payments:

"The Alternate Payee (my ex wife) may only receive disability benefits when and if the Player becomes eligible to receive such disability benefits under the Retirement Plan"

I was never qualified or receiving disability under the old Retirement Plan, and therefore the alternate payee was not provided disability benefits. I'm waiting to hear back from my disability plan whether they mean alternate payees who were actually receiving disability benefits apply to benefits paid under the new plan, or if the alternate payee was in my ex's situation where she never received benefits because I was never qualified to receive benefits.

It will hurt if she gets half of my disability. She has remarried and owns two homes and lives in a great neighborhood and I have struggled for years because of my disabilites and would have been homeless if not for friends and family letting me stay with them. I was finally approved for social security disability just over a year ago and am guaranteed approval from my company plan because of that.

If anybody has any thoughts or suggestions I'd appreciate feedback?

the factor released for April was 244.524

the average needed to increase most of the limits is 244.5 so unless the consumer price index drops over the summer there will be increases in the comp limit and 415 limits

I suppose the crew in Washington could rewrite the regs to prevent this as well.

The Employer incorrectly reported $5,000 too much deferral for a HCE. We are removing the $5,000 plus the interest that was accumulated to make his account accurate. 

The over contribution we are using to reduce the next contribution that the Employer makes.

What options do we have for the interest.  (It's several hundred dollars)?

I had worked for a CPA firm for 17 years before taking a job in a different city.  The CPA firm recently terminated their pension plan and sent me a letter advising me of what my benefit would be and giving me the option to roll it over into or take a lump sum.  The amount was significantly smaller than I expected.  Upon talking to the actuary of the plan I was informed that my employer had frozen the pension nine years ago.  I have spoken to several employees and not one of them remembers being informed of the plan being frozen.  Does anyone know what actions we can take?

Company A just bought a bankrupt company's assets.  A new company is created out of the bankrupt assets: Company B.  Company B is a single member LLC owned by Company A.

The employer is wanting to keep Company A 401(k) separate from Company B 401(k) plan.  Easy enough to set up the new Company B 401(k) and move forward.

Both plans are going to be setup with same plan year ends and the same plan provisions.  The potential difference is profit sharing contributions per plan.  Plan A might be 5%, Plan B might be 0 or 2%, or whatever based on their own profitability.

If I understand this correctly, as long as each plan satisfies coverage (410b), each plan can do whatever they want for profit sharing.  Here are some numbers....

Company A:  Non excludeables NHCE 468, Benefiting NHC 426, Non excludable HCE 27 Benefiting HCE 25

Company B: Non excludeables NHCE 90, Benefiting NHC 80, Non excludable HCE 2 Benefiting HCE 2

Company A coverage: NHCE 426 of 558 equals 76.34, HCE 25 of 29 equals 86.21,  88.56% Passes

Company B coverage: NHCE 80 of 558 equals 14.34, HCE 2 of 29 equals 6.90.  207.89% Passes

1.  Is my math correct?

2.  If so, test separately, profit share each company separately.

Am I missing anything obvious?

An employer wants to pass along to the employees their monthly admin fee for administering an FSA.  For example, $150 annual fee per plan and $4 monthly fee per employee.  Can employees pay this fee on a pre-tax basis through premium conversion plan?  And if so, does this amount count toward any maximum pre-tax limit?

Can a money purchase pension plan be merged into a 403(b) Plan?

Firm A bought Firm B as a stock purchase.  Both had their own 401(k) Plan before the "corporate merger". It was determined that the Firm B's 401(k) Plan would be merged into the Firm A's 401(k).

The merger of plans was done in 2 stages within 2016.  First, new money (deferrals) were directed to Plan A mid-year.  Old monies (existing balances) were transferred over to Plan A before the close of that plan year Everything went smoothly except for one issue (of course).

Firm B had promised its employees matching on their deferrals for the entire year.  It was expected that deferrals under Plan B would be matched under Plan B prior to the move to Plan A.  I note this is part of the reason for "two stages".  Clean up all aspects of Plan B, including matching and testing on Plan B contributions, and then merge into Plan.  This did not happen as the match on deferrals made under Plan B was not made.

I believe one solution is that the match be done under Plan B as a receivable at plan year end, which is immediately transferred into Plan A accounts in accordance with the merger.  Of course, this raises the potential for another 5500 Filing (large plan), as well as issues that might pertain to "merger documents". Comments on this solution are appreciated.

Another solution I see would be to have Plan A match deferrals of Plan B by including them in the definition of "Matched Employee Contribution".  We would also need to make several other adjustments, such as revising the definition of Compensation and Hours of Service to include values attributable to service to Firm B. Since Firm B was owned by Firm A for the entire year, this is technically acceptable for Compensation and Hours.  My problem is can deferrals under one plan be matched under another? Timing is also a concern for the amendments. Comments on these issues are most greatly appreciated.

As always, I appreciate all comments.  Thank You!

This question is really academic at this point, but could apply to a future situation.

Suppose you have corporation A - a couple of doctors, or dentists, or lawyers, or whatever. They decide to go their separate ways. Corporation A will remain intact, no changes to the plan, etc.

Mr. B will form new corporation B. Some of the employees of corporation A will come over to work for him - or of course they can quit. He'll just establish a new plan. (it could be handled as a spinoff, but for  reasons not pertinent to this discussion, probably won't, and not worth getting into!)

I don't think there's any solid argument that these terminations from corporation A are "voluntary" so it seems to me that if they weren't already 100% vested, they would need to be. Any other opinions? Also, since a new employer is being established, seems like they are entitled to distributions if they choose, (cash, rollover to IRA or new plan, etc.)

Are people processing the PBGC filings on the PBGC website or using software?  We are considering using FT for this - we currently do it on the PBGC website.

Just curious if there are features about it that make it worth the additional investment (aside from the obvious, which is the pre-filling of all of the demographic data based on the 5500, that one I know about).

Will it show filing statuses, etc?

John Doe and his spouse own 100% of corporation A. No employees. They have a qualified plan.

John Doe and his spouse, together, own 40% of Corporation B. No other attributed ownership in corporation B. Corporation B sponsors a qualified plan. There is no CG/ASG. John Doe's brother own the majority of the remaining 60% of corporation B.

John Doe wants his PLAN, Plan A, to purchase some of the stock owned by his BROTHER in corporation B. My initial reaction was that it is a PT, but now I'm not so sure. Any opinions?

just received the following:

Dear ftwilliam.com Customer:

We are pleased to announce the release of the new pre-approved volume submitter 403(b) documents.