I'm not an actuary, but trying to get a better understanding of the "most valuable" requirement, as set out in Treas. Reg. Section 1.401(a)-20, Q&A - 16. If a plan uses an interest rate that is more favorable than those prescribed in IRC 417(e)(3) for determining LS and let's say 6.5% for converting among annuity options, would there be a concern that the LS option is more valuable than the QJSA, which is the normal form for married participants? How is the most valuable determination made? Is it simply a matter of using the more favorable factors to determine the present value of the QJSA?

We want to allow participants currently in a DB to elect whether to stay in the plan at the current multiplier or go to a DC plan. Those who elect the DC will have their DB benefit frozen and get an increase in their non elective contribution rate while the ones who stay in the DB do not receive the nonelective in the DC. Can we do this? Guidance?

Thank you!

note how the '5500-SUP' has been added for 2015 (question 13 - 16)

so looks like this is a done deal when next year

13 Has plan been timely amended... (Q 6 on the 5500-SUP)

14 Have required min distributions been made for 5% owners

15 was there unrelated business tax income (Q10 on the 5500-sup)

16 were in service distributions made (Q-11 on the 5500 SUP)

14 wasn't on the original 5500-sup, so maybe that is getting added

since it is an EZ I guess there was no reason to ask a number of the other questions on the 5500-sup - e.g. coverage, ADP testing, etc)

new EZ.pdf

I have a question. I was recently hired to take over for a woman. She wrote a resignation letter saying that she was going to leave the company on September 2nd. She had told my employer that she was moving to another state and going to take a position in another state because her allergies in Pennsylvania were too severe.

She was to train me until September 2nd. I started on August 3rd. By the 10th, she had called off. She called off from the 10th to the 13th. On the 14th she came in for a few hours and left. On the 15th, she filed for FMLA and her return date is in October. No one understands why she would file for FMLA considering she put in her resignation and we no longer know which one comes first.

The FMLA is unpaid.

Help? They dont want to hire her back. They want to hire me and considering she resigned they think they dont have to hold the position open after September 2nd but arent sure.

Would a plan provision be required to allow the purchase of these in a plan?

Or is it just an investment option selected by the Trustee/Plan Sponsor and made available...

Thank you

A new small plan recently was established with TRANSFERRED funds from a plan whose sponsor sold the company of the participants of the new plan. The financial company of the prior plan, which was a large plan, just transferred funds to the financial company of the new plan sponsor. It appears the 11 participants in the old plan, which was VERY large, did not receive a Benefit Payment Election Form and were not given the opportunity to roll or take a distribution in cash. Their funds were just transferred to the new employers new plan. Total transfer is less than $40K for the 11 participants. Additionally, the new plan was established with no ROTH provisions or loans, yet a couple of participants have small loan and ROTH balances. It would appear that the Large plan sponsor would have the liability. However, the new plan sponsor has tainted funds in it's brand new plan.

Should this call for a VCP filing? The ratio of participants/assets affected is miniscule compared to the overall balance in the large plan, but I don't know if this is SCP material.

Thoughts please?

We have a client that maintains a simple plan and has exceeded the 100 employees for several years while still contributing to the plan They have gone past the grace period so it looks like to me the only correction is through VCP filing. We have told them to cease contributions and deferrals.

I can't seem to find any information on if there are sanctions for this error. The fee for filing is 250.00. Does anyone know and have any experience with a situation like this.

We have a client who terminated their plan effective 10/31/2014. As of 12/31/2014, there were some participants who were still active employees of the employer who had not yet cashed out of the plan. Should they be counted as Active or as Separated participants for purposes of lines 6a(2) and 6b of the 5500?

The instructions say that Active Participants are "any individuals who are currently in employment covered by the plan and who are earning or retaining credited service under the plan."

I can see the argument that these people should be counted as Separated since they are not currently in employment "covered by the plan" and they are not earning credited service under the plan. However, I can also see the argument that they should be counted as Active since they are currently employed by the plan sponsor and the are retaining credited service under the plan.

I'm guessing that I'm missing something basic and obvious, but this one confused me today. Thanks in advance for any input.

Facts:

Small Law Firm (Owner Attorney and spouse and 2 NHCEs) established both a 401(k) plan and DB plan eff. 1/ 1/2009.

Decision made to terminate the DB plan 12/31/2013 (non-PBGC plan) and continue the 401(k) plan.

DB plan distributions completed in 2014 along with final 5500.

Attorney changed his mind and would like to continue a DB plan (i.e. establish a new DB) for 2015 (at a smaller contribution level, $50K). There are no changes to the employee group.

Footnote: I would assign PN: 003 to the new DB plan.

Question:

1. Are there any considerations (rules/regs.) which may prevent the owner from establishing a new DB plan given the above facts?

2. I believe the terminated DB plan's accrued benefit must reduce the 415 limit for each participant. Agree?

I appreciate any comments or other concerns I may have overlooked for this issue. Thank you.

Plan A is being merged into Plan B on or before Dec 31, 2015. Plan B will be timely restated for PPA. Does Plan A also need to be restated for PPA prior to the effective date of the merger?

Working on a presentation regarding RMD and I am looking for insight on two basic questions:

- When were RMD's first elected? It has to be before Tefra

- Why did they choose 70 1/2 as the age?

- Whey did they decide to use a mortality table vs just using a set percent?

Any IRC you can site would be helpful as well but not required. Thanks in advance

Employer established a 457(b) plan ( non governmental) in 2013.

The TPA who drafted the document did not prepare the exemption statement to be filed with the DOL.

Question:

Does the employer file under the DFVC for 2013 and 2014?

If so, do they pay $1,500 and then each each file the 5500?

I thought I read, that the employer could file the exemption know and pay $750. Therefore going forward no 5500s are required.

Thanks

We just started a 401(k) plan for a small employer. They did have a DB plan that recently terminated. The 100% owner rolled over her benefits to the 401(k) plan including a Life Insurance policy.

Would the 401(k) plan need to provide Life Insurance policies simply because the business owner rolled over her benefits that included a Life Insurance policy?

Thanks.

employee met eligibility and entered the plan. terminated in 2006. rehired 2015. enters the plan upon rehire date, correct?

I don't typically work on non-qualified plans, so I'm feeling somewhat like a fish out of water.

A client who has had a SERP for many years has decided to terminate it and pay out all of the participants. The record keeper has indicated that they can either pay the funds to the employer to distribute, after appropriate withholding, or they can handle the withholding and make the distributions directly to the participants.

A question has arisen about FICA and Medicare tax withholding. The record keeper is researching whether or not they can handle those. If they decide they can, the employer wants to know how the employer share is handled.

What is the typical solution to this issue?

Looking for guidance about what needs to be provided to meet the ERISA 404© disclosure requirements for white-label funds... can't seem to find anything that addresses white-label funds... does anyone have any suggestions?

I have a sole prop who has a 401k plan for several years. He turned 62 in 2015 and started to take social security. He still owns the business, works and maintains the plan (he is the only eligible participant in the plan). He is being told by others that since he took SS at 62, that he cannot fund his retirement plan anymore. I have not heard of this before and suspect something is being confused, but can anyone confirm whether taking SS prevents him from funding his 401k plan?

Thanks

In some of our DB & DC multi-employer, qualified plans, we have sent applications out to surviving spouses and beneficiaries (for J&S survivor benefits on DB or distribution options on DCs, for example) and not received responses (nor returned mail). By the way, this question is applicable to participants and beneficiaries that are all under 70 1/2.

To what extent must we pursue these situations? Send the app and just wait until the RMD rules kick in? Send a few regular reminders and then send a formal denial (based upon not submitting an app)? If this (under 70 1/2) pursuit is in the regs, can anyone give me the reference?

Thanks!

If a plan document limits deferrals to 50% of compensation, and a participant makes $36,000 but is catch-up eligible - and wants to contribute the max she can - would she be able to defer 18000 plus the 6000 for catch up or would she be

limited to just 18,000 for 2015?

Hi. Our school division uses Lincoln as the vendor for our 403(b) Plan. Lincoln has recently asked us to provide names, addresses, dates of birth, SS#s for all employees of the school division. Obviously, this is information Lincoln will have and need for those employees that have already elected to participate in the 403(b). But Lincoln is also asking for this information to be provided regarding employees that are not participants for purposes of education and marketing to them the benefits of participating in the 403(b) plan.

Are we permitted to share this information with Lincoln?

Thanks.