When calculating the maximum permitted loan after a loan is defaulted, I can't remember if I should add the current value of the defaulted loan (like I would a active loan) to the investment balance before applying 50%? Example: Ptp defaulted on loan in 2015 and has no other loan. The defaulted loan value after adjusting for interest through today is $2000. His vested investment balance today is $20,000. Is his maximum available loan:

A. $9000 =  [($20,000 + $2000) *50%] = $11,000 - $2000

or

B. $8000 = ($20000 * 50%) = $10,000 - $2000

We have a profit sharing plan (12/31 PYE) that currently has an integrated ps formula with an accrual requirement of 1,000 hours and last day.  

The client wants to amend the profit sharing formula to cross-tested and remove all accrual requirements effective January 1, 2017.   

If we are removing the accrual requirements for receiving profit sharing contributions, can it still be amended for the 2017 PY to change the contribution formula?

Two employers in a controlled group (100% common ownership). Effective 1/1/2017, a large portion of the second employer was sold so that no controlled group and/or affiliated service group relation ship exists.  Plan is now a multiple employer plan.  Questions about 2017 testing (just trying to be ready): 

1) How are the HCEs to be determined?  My assumption is that the HCEs would be determined by looking back at the compensation earned in the prior year when it was a single employer plan.  However, I cannot find anything definitive to back this up.  Does anyone have supporting documentation?  If this is not correct, one alternative I thought of is do we need to look at the compensation earned by each individual employer when they were in a control group. 

2) The plan utilizes the prior year testing method for ADP/ACP testing.  My guess (and it is only a guess) is that the prior year NCHE % would be determined by looking back at prior year testing and using that % for each of the two tests.  However, I cannot find anything definitive to back this up.  Does anyone have supporting documentation?  If this is not correct, one alternative I thought of is do we need to calculate a weighted average of some kind?   

Thanks in advance. 

Employer S (Seller) has an HMO and a PPO.  There are COBRA beneficiaries in each.

Employer S will sell substantially all its assets to Employer B (Buyer).  Employer B is a successor employer.  Employer B only has a PPO.  

The parties have agreed Employer S will continue to run the HMO through the end of the year.  Accordingly, Employer S will continue COBRA coverage for COBRA beneficiaries in the HMO plan.  Employer B will continue COBRA coverage for COBRA beneficiaries in the PPO plan under Employer B's plan.

Questions:

Is it appropriate that responsibility for coverage be split up like this?  If not, what are the issues?

When the HMO plan ends at the end of the year, should those COBRA beneficiaries receiving HMO COBRA coverage from Employer S begin receiving PPO COBRA coverage under Employer B's plan?  If not, what is the best way to continue their COBRA coverage?

Thank you for any help!

Modify QDRO 20 years later before retirement.  Shared interest was used in previous QDRO.  Participant married 18 years ago and current wife has survivors benefits. Ex spouse  now wants separate interest so she can have survivors benefits on her portion of pension. Ex-wife was not awarded survivors benefits in divorce or property settlement.  Is this legal to do under Erisa? Does the case Boggs versus Boggs come into play?  This is a defined benefit pension plan. 

This is a safe harbor 401k plan in which a former employee terminated in 2009 and is re-hired in 2017.  She would like to repay the distribution from the plan in order to have the profit share forfeitures repaid into her account.  The plan document states the following for rehire after 5 One Year Breaks:

After Five One-Year Breaks.  If a Participant resumes employment as an Eligible Employee after forfeiting the nonvested portion of his Account balance after 5 consecutive One-Year Breaks in Service (One-Year Periods of Severance if the Plan uses the elapsed time method) and is not fully (100%) vested upon reemployment, the Participant's Account balance attributable to his pre-break service shall be kept separate from that portion of his Account balance attributable to his post-break service until such time as his post-break Account balance becomes fully (100%) vested. A Participant with a balance in his Elective Deferral Account shall be considered a vested Participant for purposes of Code section 411(a)(6)(D)(iii).

Why would the non-vested forfeitures have to be kept separate?  Does vesting in the returned forfeitures increase with each subsequent YOS? She was 60% vested in 2009.

Have a situation where we were asked the correction for a plan that has 2 year entry (assuming PS only).  Was a solo until they hired someone full time in 2010. The person should have been eligible in 2012 according to our calculations.  So we are assuming that there would be 5 full years they would need to give a PS contribution. 

1. Would this be corrected under VCP?  And if yes I don't think there is a cookie cutter type application process correct?

2. Would the correction be to give a contribution needed to pass testing based on the allocation method defined in the document plus earnings?

TIA

Apparently a business is dropping their SIMPLE IRA due to new legislation?  I have not heard of any adverse tax consequences.  Can anyone confirm?

Are 403(b) plans sponsored by a public school required to perform a financial audit? 

I think the answer is no (not subject to ERISA) but wanted to confirm that I wasn't missing something.

Plan Sponsor has asked for 2 employer contribution types, with similar eligibility, as follows:

• Individual rate groups - this would be immediately vested
• prorata allocation - this would be subject to a vesting schedule

There are no HCE or key employees receiving contributions. Contemplating plan design options, but not sure I'm seeing it in the volume submitter document we're setting it up with.  Is it as simple as setting the first contribution as a QNEC?

When are match forfeitures allocated as an "increase to discretionary match" and for what reason?

Is there a specific regulation relating to it?  Couldn't find in ERISA outline book.

Employer has 2 plans.  Can one plan lend the other money for an investment?

I don't think a plan fits into the Disqualified Persons list but doesn't seem like it should be ok.

(DB Plan to lend to PS Plan for a non-publicly traded investment in land.  Trying to keep DB out of the investment due to annual valuation issues.)

Thank you

Auto enrollment plan where participant takes a permissible withdrawal to close their account within 90 days.

Match eligibility is immediate.  Do they still get the match?  Please please please tell me the answer is yes cuz I don't want to have to look for these withdrawals every time I run some numbers (let alone differentiate between permissible withdrawals and any other kind of withdrawal).

An employer has a 401(k) plan for the staff and a 403(b) for their union employees.

A former staff 401(k) participant is not a union employee.  There are no distribution options available to the employee in the 401(k) plan.

Is it possible for the participant to request an elective transfer from the 401(k) to the 403(b)?  Did EGTRRA create an exception that allowed an elective transfer between dissimilar plans, and if so, would that apply in this situation?

Thanks.

I have a safe harbor design question - 

401(k) regulations provide that "the safe harbor nonelective contribution requirement of this paragraph is satisfied if, under the terms of the plan, the employer is required to make a qualified nonelective contribution on behalf of each eligible NHCE equal to at least 3% of the employee's safe harbor compensation."

I know a plan can limit the safe harbor contribution to only NHCEs or it can provide it to everyone.  Is there anything stopping a plan from providing the safe harbor contribution to NHCEs and also to HCE's in a certain identifiable job category (but exclude all other HCE from the contribution)?  

Thanks,

I have been asked to look into a situation where a Plan Sponsor did absolutely nothing regarding compliance since adopting the Plan in 1994.  While I anticipate operational defects, my first concern is toward plan documentation.

My understanding is that the filing under the "Non-Amender Program" requires document updates for every required restatement that was not done.  My question is what document restatements would be needed for a Standardized Prototype which has an Opinion Letter dated 7/9/1991.  I do not have access to the Basic Document or any updates to the Basic Document.  Just a 2 page Adoption Agreement and the Opinion Letter.

Any suggestions on what needs to be done are greatly appreciated.

I have a client with a Group Health Plan that has experienced excessive utilization with their Drug Card program. A solution being considered is to offer a Base Plan with Generic only, and let those who desire it Buy Up to the plan with Broader Drug Card Coverage.

The company funds a $1000.00/year Health Reimbursement Plan that allows the assets to accumulate in each participants account.

I am seeking a solution that would allow the $1000.00 being contributed currently, to a plan that will allow the employees to allocate that towards their portion of their employee premium if they choose.

It that possible?

In making disclosures for and reporting on Form 5500's Schedule C, did anything change between the 2015 form and instructions and the 2016 form and instructions?

Since the regulation requires to perform aggregate test if an employer has a DB/DC plan.

Is this permissible to use forfeitures from the DC plan as a contribution to the DB plan?

Plan document says that, among other options, a participant can elect nearly equal installments over a specified period of years (with remaining payments to a beneficiary if participant dies before full distribution), or non periodic installments.

My base question is, when do payments rise from the level of being nonperiodic to becoming periodic?

A participant wants to receive $1,000/month.  But, he wants it to be subject to change (like if he needs more or less for a specific time period).

Can the participant go the Plan each month for a distribution?  Or would that rise to the level of periodic?  Or am I just reading way too far into this?

Thanks.