Are there regulations covering the timely deposit of funds for non-electing church 403(b) plans?

Plan has automatic enrollment (3% of pay).

Payroll date: 7/2/1015 (includes wages for service provided through June 27)
Payroll provider's cutoff for paycheck changes: June 28.

Four new employees might enter on July 1.
One of these 4 quits June 30 and gets a paycheck on July 2 and another on July 17. No deferrals withheld from either. No problem.

The other 3 did not return any deferral elections. They get paychecks on July 2. No deferrals withheld. Automatic deferrals withheld on July 17. Problem?

Document says

• "An Eligible Employee shall be deemed to have made an elective deferral election upon satisfaction of the eligibility requirements..."

• " ... provided however that in a reasonable time before the deemed election takes place the Eligible Employee shall receive a notice that explains the ... right to elect to ... alter the amount, ... including the procedure for ... the timing for implementing such election."

• "The Eligible Employee must have reasonable opportunity to file an election to receive cash in lieu ... before such deemed election..."

• "The Company shall contribute to the Plan with respect to each pay period an amount equal to the Elective Deferrals . . . for such pay period"

The Plan Administrator intends to implement this uniformly and consistently. Do they have a valid legal basis for not withholding on July 2 for these other 3 employees?

Does anyone know if there is a way to do this in a 412i?: The participant is age 66 and still full time employed. NRA is 65. The participant (an owner) would like a withdrawal of a portion of his account.

I'm not asking about the document, I'm asking about whether 412i regs permit it.

-investment manager/broker for bank screws up by executing a trade twice

-gets the administrative people at the bank to fix the loss by carrying out transaction on his own personal IRA

-is this a prohibited transaction? has he "dealt with the assets of a plan for his own account"?

Also, where is the best place to find examples of prohibited transactions in self-directed IRAs? ERISA cases, DOL Advisory Opinions, Private Letter rulings? I'm having trouble finding official sources that give examples.

Thanks in advance for any responses.

We have several small 401(k) plans whose investments are with Sterne Agee; each participant gets a monthly statement. Yet we do quarterly summaries and participant statements for them as well. Is this necessary since they do get their own statements with detail information on gains/contributions/fees?

Doesn't the plan sponsor just have to disclose annually (or possibly every 14 months now) what fees could be charged for things like distributions, loans, brokerage acct fees, etc?

I am a little confused on all the fee disclosure requirements now.

A participant in a nonqualified (409A) plan is going through a divorce. Plan doc clearly states that benefits are not transferable, cannot be assigned, etc. Participant is wondering if he can draft a separate agreement with his soon-to-be ex-wife where his Deferred Comp Account would be divided into two, both still in his name, but essentially one for him and one for his wife. (1) I'm pretty sure that doing so would be a violation of the Plan and (2) he will be taxed for all of it upon distribution. So, has anyone seen this done before or do you have any other creative alternatives for the divorce settlement in this scenario?

New one for me.....Someone wants to roll a Roth into her 401(k) Plan. Plan does allow Roth deferrals and in Plan conversions. Do I remember right in thinking that there is a problem with this? or something to watch out for?

We have a participant who took loan 1 out and then went on a leave of absence which has continued beyond 12 months. Before the first loan defaulted, she took a second loan during her same leave. Does the 12 month loan suspension for leave of absence start as of the date of the original leave, or can it start as of the date she took the second loan because she has not returned from the leave? I assume it is one bona fide leave, but just wanted to check!

Thanks!

I have two Employers part of a controlled group; both have 06/30 year end

Plan A- 401k and Profit Sharing Money source

Plan B-401k and discretionary Matching

401k Coverage

Plan A can pass 401k coverage on its own (176%)

Plan B fails 401k coverage on its own (27.44%)

therefore it must be permissively aggregated with Plan A in order to pass- and it does

401m Coverage

Fails when calculated separately by each plan and on a combined basis since Plan A has no Match.

Profit Sharing Coverage

Plan A can pass on its own

Plan B fails on its own since there is no Profit Sharing

Combined testing passes.

So does this mean Plan A has to have a match and fund it?

A QDRO was filed but was written as a shared interest but this needs to be amended to be a separate interest. Can this be done?

An advisor has a prospect with about 300 EEs, and this employer wants a NQDC plan to cover only about 20 non-highly compensated employees who are managers. This is to have a long vesting schedule as an incentive to retain them. No HCEs and no executives would be in this plan.

I don't see how this could be considered a top hat plan. What am I missing?

I have a 403(b) account with a company that I have defaulted loans on and I am basically trying to transfer/exchange/rollover to another qualified 403(b) company. I have enough money in the account to pay off the defaulted loans and transfer the remaining balance to this other company.

I submitted all the paper work to the third party which is the TSA Consulting Group and received a certificate of Approval stating that "TSA Consulting Group, Inc. hereby certifies that this transaction is permitted under the provision of the employer's plan", but yet the company is that they need a letter of acceptance from the new custodian stating the funds will be accepted for deposit into a specific plan (WHICH IS INCLUDED) and also a reason for withdrawal which the options are:

1. Attainment of Age 59 1/2

2. Termination of Employment

3. Disability

4. Payment to an alternate payee....

5. Plan termination by job

6. Qualified Reservist Distribution

I guess I am not looking at this as a withdrawal, but a transfer of funds after the defaulted loans will be paid off.

I know this is a lot of information, but I am just trying to figure out why this company is asking for this when it received an approval from the 3rd party in which everything for 403(b) has to go through in order for anything to happen. We have to go through this company to get approved for loans, etc. I mean anything dealing with 403(b).

If anyone can shade a little light on this for me, I will greatly appreciate it.

Frustrated

New here. Thank you everyone for all of your posts. This board has been a life saver for me over the past few weeks as I just got asked to potentially be a plan sponsor for my company. Have been trying to get up to speed and familiar.

Question is.. In Part IV, Line 9 of the 5500. For Plan Characteristics. If the plan sponsor believes the plan to be 404© compliant, would there be any reason to not put Code 2F "ERISA section 404© plan – This plan, or any part of it, is intended to meet the conditions of 29 CFR 2550.404c-1."

After looking through some various 5500 filings from other companies to compare, there are some fairly large plans that do not have this 2F code. I would have to imagine plans of significant size have multiple eye balls on them and TPA's and what not that wouldn't allow for this to happen. Thoughts?

An active partner in a professional firm, who is age 66, has a loan outstanding of $30,000 and an account balance of about $100,000 in addition to the loan. NRA is age 65. How much can he withdraw as an in service withdrawal?

Thank you

Hi. This was a paired MP/PS plan that we merged in 2010. A participant who is 53 (with 15 YOP) wants to take an in-service distribution of their money purchase money. The plan document and SPD say that for sources that are not subject to the age 59.5 restriction, isw's are available on the earlier of age 59.5 or 10 YOP. Is "no isw before NRA" something that had to be preserved from the MP plan? Thanks.

Can a participant request a distribution of RMD that's greater than the required minimum if the plan does not otherwise allow for in-service distributions? It is my understanding that the plan has to distribute just the minimum and anything above that is not allowed (as long as in-service distributions are not allowed). Would you tend to agree with that?

Also, do you use 10% as the default withholding (plus state withholding) if there was no indication of what the participant would like to withhold?

Have a 1 participant plan with $6 M of private investments. For the first time the one employee will be eligible for the plan. However, it is a profit sharing plan and no contributions are intended.

We are thinking about changing it to a 401(k) plan. Suppose the 1 eligible employee never makes salary deferrals and never receives a profit sharing contribution. Would the small plan audit be required if the employee never has an account balance?

An audit would probably run $4k to $5k. We are thinking the bond premium would also be about $4k to $5k.

I have been reading the ACA regs on seasonal employee (not worker) trying to make a determination as to whether an uptick in business (summer months or spring etc) which is pretty predictable and the workers hired to deal with the uptick would qualify as seasonal employees. For example, could an accounting firm hire a bunch of accountants for 80 hrs a week for 4 months over tax season. Or do UPS drivers hired for 3 months to deal with the X-mas / Holiday rush qualify for seasonal status. What about a manufacturing company who has a busy season based upon demand (people buy product X usually in spring) who hire workers for 6 months. The nature of the work isn’t seasonal (not based upon a time of year such as fruit pickers or ski instructors) however the busy season is based upon a business seasonal increase in business.

Any thoughts would be appreciated. The regs aren't that helpful ...

Hi gang,

I have done a little rearranging and pruning of the message boards:

* Moved all messages in BLAZE SSI message board and all messages in the the ASPPA C-1 through C-4 Courses message board into a new Continuing Professional Education message board, located in the Retirement Plans category. Deleted the separate category called Continuing Professional Education; deleted the separate Blaze SSI message board and ASPPA C-1 through C-4 Courses message board.

* Moved the Nonqualified Deferred Compensation message board out of the Retirement Plans category and into the Employee Benefits in General category.

* Renamed the Employee Benefits in General category to be Employee Benefits in General; Executive Compensation.

(The Nonqualified Deferred Compensation message board seems happier in this category, where 409A Issues and Securities Law Aspects of Employee Benefit Plans have been and continue to be living.)

* Added some "see also" verbiage to the descriptions of several message boards (Governmental Plans, IRAs and Roth IRAs, Distributions and Loads Other than QDROs), pointing the reader to related and sometimes more specific message boards.

* Shortened some of the descriptions (for Relius Administration, ERPA).

* Moved Retirement Plans in General to appear as the first message board in the Retirement Plans category rather than being down in the list of message boards (alphabetically).

* Renamed the Global Benefits message board to be the International, Expat Benefits message board.

If I've done anything that seems ill-advised or wrong, please let me know. Thanks very much for using the BenefitsLink message boards!

Dave Baker

Administrator

This past month a client acquired a medical practice (Sub S corp) that has an existing safe harbor 401k plan. My client currently maintains a SEP under an LLC. The SEP is a prototype doc which allows acquired employees to be excluded pursuant to Sec 410(b)(6)©. For 2015, my client wants to contribute to both the SEP & 401k plans. The 401k plan receives only elective deferrals & a safe harbor match. Will my client's SEP contribution disqualify the 401k top heavy exemption under Sec 416(g)(4)(H)? Does Sec 410(b)(6)© extend the transition period to top heavy minimum requirements?