Many business consultants recommend using personality tests when (or even before) interviewing for positions. Even the TPA consultants recommend this.

Does anyone have any experience with online services that do this and can make some recommendations? A Google search is not as effective as someone who may have gone through this already.

Thank you.

Hi all, I have a question regarding possible ERISA restrictions on payments to a participant in a defined benefit plan. The plan at issue is a single employer, defined benefit plan. The participant, 65 years old, commenced payments under the plan in January 2017. The participant retired from employment with the employer in December 2016. Either then or in January 2017, the employer paid the employee severance pay as well as pay for unused personal/sick days. The employer now wants to bring back the former employee and pension plan participant as a consultant for a few months. The former employee would be under a consulting agreement which provides that they are an independent contractor, working up to 40 hours per week. The amount of compensation is a small, monthly payment. Is there anything in ERISA or the internal revenue code which would limit how much the employer can pay this former employee/pension plan participant, taking into account their severance, payout for unused sick days, and consulting retrainer? Are there any provisions of ERISA (and the IRC) which the employer should pay special attention to?

Hi all you knowledgeable people.

I am the executor and while I realize that my deceased brother's nontraditional 401(k) is not going through probate I still need to help. This is a profit sharing plan sponsored and contributed to by his sub S for his retirement and he is the only employee and sole participant filing a 5500-EZ. He died a few weeks ago prior to his RBD. No spouse. The plan was adopted in 1988 and includes a Beneficiary Designation Form naming his 2 children and checking the box "lump sum payment". Publ. 575 suggests that there are only two options, one of which is taking the distribution within 5 years. Yet I have read elsewhere that a lump sum needs to be taken by December 31st of the year following death. I need to know when to distribute via the 1099-R. If it needs to be a total distribution by the following year what is that Code Section citation please? To me lump sum means lump sum so how could Publ 575 say that there are only two options for non-periodic/total distributions. Do they really take a "lump sum" over 5 years which greatly reduces their tax burden?

Thank you to everyone for the useful and informative information you have provided on these boards. I have learned much more than I expected to when I signed up. And thanks to Dave and Lois.

Today is my last day as an employee (and plan administrator).  I'll be looking in from time to time, because there are some interesting subjects to be discussed and questioned in the coming years, and because so many of the posters on this board provide informed, accurate answers.

Thanks again.

GMK ... out.

We';re starting to go paperless and one tool I can see that I need is some sort of an on-screen ruler to scroll down through a pdf report. I have seen apps out there that do this but was wondering if anyone had a suggestion for one they have used.  I'm leary of installing from some random website for security reasons.

I was recently released from my job; I have been there over 11 years so I was fully vested in the retirement plan.  I will probably have to request a disbursement from my 401k to stay afloat until I find a new job.  My employer informed me that I can on get a disbursement on what I allocated to the plan and that all matching/safe harbor could not be disbursed or rolled over to another plan  for a year.  Is this true? 

Question #1:  Is a participant in a 457(b) top hat plan required to cease deferrals in the 457(b) top hat plan for 6 months after taking an unforeseeable emergency distribution?  The document is silent on this fact so I'm assuming the answer is no.

Question #2:  Client also sponsors a 403(b).  It is my understanding that when a participant takes an unforeseeable emergency distribution from the 457(b) TH, the participant must cease elective deferrals in the 403(b) Plan sponsored by the same employer.  Is this correct?

Any input would be greatly appreciated!

this just popped up on MSN

http://www.msn.com/en-us/money/markets/trump-to-halt-obama-fiduciary-rule-order-review-of-dodd-frank/ar-AAmzOmM?li=BBnb7Kz&ocid=iehp

Just curious - how many of your plans permit loan repayments to continue following termination of employment? Almost none of ours do, on the theory that the employer doesn't want to mess with loan issues for ex-employees. However, I've seen some TPA's that have almost all of their plans allow repayments to continue after termination of employment.

So, this is an unimportant question, just to satisfy my curiosity. I think our approach is more mainstream, but maybe not...

2520.103-6(f) appears to exclude individual account plans, e.g. defined contribution plans from the 5% reportable transactions reporting requirement.  Can someone confirm this?   If not, what is required?   

I am working with a non-electing church plan with a number of terminated vested participants.  We are contemplating offering a lump sum window.  Is there anything special about church plans that we need to be careful about related to a window?

For example - Do I need to use 417(e) rates as a minimum lump sum value?  Do I need spousal consents?  Do the QPSA rules apply?  Would I need to offer immediate annuities?

I recognize some of this will already be addressed in the plan document, but since I haven't seen the plan document yet, I am just thinking about possible issues.  

I am wondering if anyone has worked on any lump sum windows for a church plan and if they encountered anything out of the ordinary because it was a church plan?  

well, I figured my 6000th post might as well be as bad as I can think of, so here goes...

Our story concerns a retirement plan, and the union and all that nasty stuff that could go along when you get those folks involved.

It involves one of the Fortune 500 Companies, the union approached management and insisted that they put in a plan everyone could be happy with – sort of like Obamacare, but dealing with retirement and not medical or something like that. This is after all a website dedicated to retirement. Just simply some plan that everyone would voluntarily sign up for, 100% of all employees because then the union would know it was great. Of course if but just one person dissented they would go on strike.

So management sat down, worked out a great proposal and presented it to the union bosses. They looked it over, it looked fantastic.

At retirement there would be annuities or installments or lump sums. There were even a variety of early lump sum window provisions. Along with a bunch of other great stuff.

The document was clear, the SPD easily understood, wouldn’t cost the employees a cent. Initial sign was going great; this was so good looked like it was only going to take days to get everyone to sign up into the plan.

Then, in stepped “Fred”. I won’t use the actual name simply to avoid offending anyone’s nationality.  Perhaps being from ‘the old country’ he had gotten burned on similar ‘good deals’. But he refused to sign. And you’d think if only 1 out of over 100,000 employees didn’t sign that would be ok, but the union figured if they back down on this they would look weak, and who knows what else would happen.

They tried hard – they sat down with Fred, went through the document, the SPD and other handouts, explaining everything to him. It simply was a good deal at no cost to him. Even fellow employees encouraged him to sign. Still he refused to sign. Finally, what must have been the 415^th attempt at this they gave up. Even they had reached their limit.

So despite not wanting to, it looked like there was a chance of a strike.

Everyone was worried, no one wanted this. Finally the boss called Fred up to the office. Fred entered executive headquarters, walked past a fantastic fountain in the lobby. Popped into the elevator, the operator rode him up to the top floor. Fred walked out, past huge plate glass windows offering a fantastic and scenic view of the countryside. Down the hallway, thick lush carpeting.  The secretary- couldn’t have been over 25, young, attractive, admitted Fred to the boss’s office and shut the door behind him, leaving him alone with the boss. On the table was the document, the SPD and everything else, including the last remaining unsigned signature card.

The boss asked “Is there something you don’t understand about this?” and “Is there something wrong with it?, what can we possibly do to make it better?”

And Fred responded, “I think I understand it clearly. Others have explained it to me, but I’m simply not going to sign”

At this, the boss lost his temper. “Fred”, he began, “I didn’t get to be who I am today by letting people push me around. Now either you sign up or I am going to take you and throw you through the window. And then I am not going to be happy because I will have to have the window repaired, in addition to whatever lump of you remains below!”

Fred walked over and looked out the window. He looked at the table with the material. He looked out the window again. Then he signed the card.

As he was leaving, the boss asked him, “Now that wasn’t so bad. But why didn’t you sign before and we could have avoided all this.”

And Fred responded “No one mentioned or described to me how the pension lump-sum window provision worked the way you did.”

This is the 2nd client we have recently discovered that is using PayChex and they are calculating the 401 AFTER reducing wages for 125 contributions.  So John's comp is $10,000 a month and $1,000 is withheld as pre-tax 125.  His 401k is calced as (10,000 - 1,000) * 5% = $450.

When we inquired, they checked with their "experts" who confirmed that what I described above is indeed the way it is supposed to be calculated.

Obviously they are wrong, I am wondering if anyone else out there has had this problem.

Ironically, I just posted in the SIMPLE boards the other day my shock and amazement that what I described above is indeed a requirement for SIMPLE IRA plans, so I presume somehow this is part of the issue with PayChex.

• I have a plan that currently uses PPA rates for  late retirement actuarial increases.  No SOB notices, and the retirement benefit is the greater of the Ab with actuarial increases vs continued accruals.  The actuarial increase factors are based on rates as of BCD, rather than each 12/31 (it's debatable whether this is OK, but that's not where my questions lies).

Assume interest rates at BCD = 4%, 5% and 6% for the 3 segments.  Assume age 65 at NRD, and a.e. updates will occur at integral ages in the future (66, 67, etc.).   Also assume that the AB as of NRD, with actuarial increases,  will ultimately be the final winning benefit.  My question is how to determine the segment periods.  Depending on how you typically set up your late retirement comparison, you would get different results.

The 2 common ways to handle this type of calculation would be:

1. Do the comparison each 12/31 between the prior benefit with actuarial increase from prior date to current 12/31, and the AB determined as of current 12/31.  This comparison is repeated until BCD (format of the examples in the 1988 Proposed Regulation). 

2.  Determine the ABs (based on service, earnings, etc.) as of NRD and each 12/31, and then actuarially increase each of these values from the AB determination date all the way to BCD.  Then the greatest of all the Abs with applicable actuarial increases is determined as the final benefit at BCD.  This format is what is illustrated in Gray book examples 200-34 and 2007-17.

Either way, you typically (should) get the same answer.  Even when rates vary, you get the same answer as long as you vary the rates for the appropriate periods in Method 2.

However, with the PPA segment rates, there can be a difference (due to interpretation)

1.  In Method 1:  For the actuarial increase from 65 to 66, benefit payments for the NRD benefit are discounted from age 65 to 70 at 4%, 70 to 85 at 5%, and greater than age 85 at 6%.  However, when the next actuarial increase is applied from 66 to 67, the segment periods are being reset to 5, next 15, 20+.  So now the benefit payments based on the NRD AB from age 70 to 71 are discounted at 5% instead of the original 4%.  This anomaly repeats itself each time there is an update/comparison made, so that effectively the 1^st segment rate ends up applying to the AB determined at NRD for more than just the 1^st 5 years after NRD. 

2. In Method 2:  Since the actuarial increase is applied from AB Determination Date to BCD, the segment periods never change over time.  So the discount rate for benefits payable from age 70 to age 71, no matter what

Does anybody have an opinion or reference with regards to this issue?  Personally I feel that the result in #2 is correct (Method #1 can still be used as long as the segment periods are determined as of NRD).  Logically it doesn’t make sense to vary the segment periods.  This could result in a termination prior to age 65 (who defers benefit beyond NRD) getting a different benefit than someone who works past NRD, but doesn’t accrue a significant benefit after NRD, just because a comparison needs to be done to ensure that continued accruals don’t exceed the NR benefit.

If you feel the segment rates shouldn’t get reset for the Abs based on prior date (NRD in example above), should they still get reset for Abs determined at later dates? That is, for the AB determined at age 66, should the segment periods start at age 66, or should they start at age NRD?

I've got a plan that calculates the employer match on a quarterly basis, and in the back of my head I seem to remember a specific timing issue that relates to when that deposit has to be made.  Or maybe I'm mixing it up with something calculated per payroll having to be deposited by the end of the quarter...?  And because I don't know what I'm exactly looking for, I can't find anything that makes sense.  can anyone figure out what I'm talking about and half-remembering?  Thanks.

A church that sponsors a 403(b)(1) plan and wants to add language to the plan document that all distributions to ministers are designated as housing allowance unless the church says otherwise.

Treasury regulation 1.107-1(b) requires that the employing church or other qualifying organization must designate the amount of parsonage allowance in advance of payment.

The 403(b) LRMs doesn’t have housing/parsonage allowance language. Is it appropriate to designate plan distributions as housing/parsonage allowance in the plan document?

A church that sponsors a 403(b)(1) plan and wants to add language to the plan document that all distributions to ministers are designated as housing allowance unless the church says otherwise.

Treasury regulation 1.107-1(b) requires that the employing church or other qualifying organization must designate the amount of parsonage allowance in advance of payment.

The 403(b) LRMs don’t have housing/parsonage allowance language. Is it appropriate to designate plan distributions as housing/parsonage allowance in the plan document?

Thank you.

I have a large 401k plan that excludes HCEs. I just learned that two years ago (as of 1-1-15) they did some reorganizing and moved about half their employees to a newly-created entity; this new entity was never added to the plan. Yet those employees continued to participate in the 401k plan.

It seems the logical fix would be to amend the plan to add that new entity as a co-sponsor. But obviously the amendment is not timely. Which government fix-it program should this be submitted to?

I am an attorney in Green Bay, WI with a small practice drafting QDROs for divorce attorneys. I have run across an interesting situation. Company A's DB plan was frozen effective 10/01/01 when the company was purchased by even larger Company B. The participant/husband  didn't disclose the frozen DB plan during the divorce proceedings (maybe he forgot). I discovered it when requesting documents from Company B for other Company B plans that he participated in.

Many practitioners suggest that at least one of the starting points for solving a question about plan administration is to RTFD - read the Fabulous document.  And for some of those questions, a next step is to read the plan-administration procedures.

My question today is about how much, if anything, preapproved documents say about whether the plan allows some acts to be done by a participant's agent; and, if allowed, what form of power of attorney is sufficient for the administrator to recognize the agent and the agent's powers.

I'll start our unofficial survey.  I searched prototype and volume-submitter documents of several big investment houses and recordkeepers, and found a complete absence of any expression about circumstances in which the plan recognizes or refuses a power of attorney or other agency.

Would you please confirm whether the plan document you most often work with is the same or different?

And if the plan document yields a nothing, does the set of documents include a model or sample procedure that says anything about how to handle a power of attorney?