Employer sponsors a generous DB plan. Terminated employee received the lump sum actuarial benefit. It amounted at about 2 years of salary and happily informed her former coworkers about the Employer generosity.

Guess what happened next?

Several other employees promptly submitted their resignation!

Employer would like to amend the plan and remove the optional lump sum form of distribution.

QUESTION: If such amendment is effective - let's say- January 01, 2016, would it apply for all employees that terminate employment after that date? Or only for those hired after the effective date of the amendment? ( like in the case of vesting schedule amendment)

Thank you for your help.

We are the new TPA for a 401(k) safe harbor plan for 2014. During 2014 (prior to our taking the plan over) a participant took an in-service from her account from all sources. Plan allows for in-service at age 59.5 (she is 69 and still employed) but from only the pre-tax and rollover sources.

Can I do a corrective changing the sources of in-service for 2014? I know this is a safe harbor plan.....

Let's ignore that for now, under EPCRS we can do a corrective amendment for loans and hardships. Do you conclude you can do the same for in-service?

A SIMPLE plan has to do a VCP correction for improperly excluding employees for many years. Many of these former employees won't respond to employer letter asking them to set up a SIMPLE-IRA to receive a contribution. (amazing, isn't it?)

Their current SIMPLE-IRA investment provider won't allow the employer to set up a SIMPLE-IRA for a former employee - they say the EMPLOYEE must set it up.

Do you know of any vendors who will allow the employer to set up a SIMPLE-IRA on behalf of a non-responsive former employee?

This really should be the broker's job, but the broker isn't doing it...

A plan covers 3 partners of a company. No other employees. We will be filing Form 5500-SF for 2014. In prior years, the TPA did not check on the Form 5500-SF 'one participant plan'.

Question is: Should this box be checked in this instance? I say yes. Is there a problem with now marking the SF as a one participant plan this year when it was not marked in previous years.

This question has come up because there is no bond for the plan and there does not need to be one but if the one-participant box is not checked, and the plan has no bond reported on the Form 5500-SF, I have concern the client will be contacted by DOL for lack of bond.

I have a plan that will be officially terminated by 7/31/15 (all plan documents updated for current legislation and all plan assets distributed). Of course, this will require a short plan year 2015 Form 5500 that will be due by February 28, 2016 (without extension).

Am I reading the 2015 Form 5500 and 5500-SUP instructions correctly in that I CANNOT file the short plan year 2015 Form 5500 on the 2014 Form 5500 because the Form 5500 is not due until after December 31, 2015 (February 28, 2016)? I must wait for the 2015 Form 5500 and Form 5500-SUP to be released?

My client is in a huge hurry to be "completely done" with this retirement plan and will not want to hear that they must wait until early 2016 to file the final Form 5500. Is there not a way around this?

Have a small 401(k) plan sponsored by an accounting firm. They were bought by another firm and decided to terminate the plan.

We explained that we would obtain benefit elections then prepare an instruction letter for distribution all at one time after all elections were received and verified as properly executed.

One of the two partners of the firm (and also a plan trustee) received her benefit elections, signed them and then immediately called the brokerage firm to transfer her benefits to an IRA.

This plan has self-directed brokerage accounts.

Is it a problem that the key employee and HCE was paid her benefits weeks before any other employees received their distribution?

Thanks.

Under Revenue Procedure 2013-12, in Appendix B, Section 2.01(1)(b)(iv)(B)(1), it states "the contribution ... is allocated to the account balances of ..."

Later in that same paragraph, three more times it states "to the account balance(s)"

Under this One-to-One correction method, could a plan sponsor allocate the QNEC only to eligible NHCEs that have account balances (meaning the Eligible NHCEs with a zero account are excluded)?

If an employer amends a SH Match mid-year to exclude contributions to HCE’s – leaving it in effect for Non-HCE’s however – is it still subject to ADP/ACP testing for the year of the change?

I have a plan that includes overtime, bonuses and commissions in compensation. The document specifies participants may defer up to 100% if their bonuses. It does not mention commissions. A client gave a participant a commission check and withheld 401k deferrals and matched it. Is this okay to do? The document does not address this.

For several years we have used fees to former participants to get them to move their assets - rollover or whatever. We used a nominal $100/yr - hoping that would be enough to get them to move.

We're finding it often is not working - they get a letter each year, they do nothing, and we remove the $100 to cover some employer costs.

Does anybody know if there is any guidance on how much is allowable. One employer wants to up the charge to $250 - still just to get them to move.

Participant has outstanding loan which he has been repaying through payroll deduction religiously, through his date of termination via payroll deductions. Terminated 6/1, loan paid through 5/29 installment. He is not over age 59 ½.

Is a terminated participant eligible for the "cure period" of 60 days after the calendar quarter of missed payment to repay the missed payments and bring the loan up to date through the end of the cure period before he has incurred a "deemed distribution"??

Of course, the plan doc does not address.

1) Let's say a participant takes a distribution from a plan. His account balance is $1,000 and the TPA firm charges $50 for processing the distribution. I would assume that $950 should be listed as "Benefits Paid" (since that will be the 1099-R amount) and the $50 should be listed under "Administrative service providers" section. Do you agree?

2) Also, let's say the plan does its Form 5500 on accrual basis. At the end of the year, one of the participant's account balance is $1,000. However, for the fourth and final quarter of that year, he is due to pay a management fee of $5. That fee is not pulled from his account until the first week of the following year. Should the ending balance on Form 5500 that's attributable to this participant reflect that $5 fee (with the $5 fee listed under "Administrative service providers")?

Participant terminated in May. She completed distribution paperwork, the employer signed the form and we processed her distribution in July. Now the employer notified us that they changed her status from terminated to on-call in June. The distribution was done as a rollover. Do I need to request the funds back? The participant is too young for an in-service withdrawal.

Thanks for any advice

A client medical office sponsors a small and very underfunded DB plan. For various reasons termination is on the table. Does anyone have any helpful resources for how this would work when the plan has no PBGC insurance?

Co. A is acquired by Co. B in a stock transaction on 11/01/14. Co. A's 401(k) plan was merged into Co. B's plan

A prior 5% owner of Co. A (Person Z) turned 70.5 on 12/01/14. It is my understanding that since perspn was a 5% owner at some point during 2014 that he should have received a required minimum distribution by 04/01/15, but thta further minimum distributions would not be required as long as he remians employed. Am I correct on that?

Thanks in advance for any guidance.

I was just wondering what common practice was when a participant hands their enrollment form in a week or so after the plan entry and misses the first payroll run. For example a plan has a 7/1 enrollment first payroll is 7/7. The participant didn't hand in the enrollment form until 7/10 so the contribution deferral was not established until the 2nd payroll run. Does the participant just start from the 2nd payroll run, are the employees told "too bad wait until the next enrollment", or double up on the deferral for the 2nd payroll?

Wondering how other admins handle this. Thanks.

Assumptions: This is a 401(k) plan in which no owner or HCE participates.

The sponsor will make a discretionary match which they will contribute on a payroll basis. They want to be able to vary the amount of the match throughout the year without "truing up" at year end. For example, January's match might be dollar for dollar while February's match might only be 50 cents on the dollar.

Our document would seem to allow this, but compliance opinions are in disagreement on whether this is allowed without the true up to a consistent formula at year end.

Any thoughts? Citations would be appreciated.

Plan has 3 employees – one of which is an HCE, two NHCE. All are participants in the plan.

One of the two NHCEs (NHCE A) only worked 499 hours in 2014 but was employed as of 12/31/14. Plan has 1000 hours and last day requirement for Profit Sharing allocation. Plan fails coverage when I exclude this employee, coverage % is now only 50%. Adoption Agreement includes fail safe language. So I need to bring the employee in to pass coverage.

Here is the dilemma. With only 2 NHCEs I can only have 1 rate group (Relius EGTRRA document. The one NHCE (NHCE B) received a 28% Profit Sharing contribution and a 3% SHNEC.

TPA has given NHCE A a 2% PS allocation and a 3% SHNEC allocation to satisfy gateway. I don’t feel that this is ok. Since you are forced to bring in NHCE A to pass coverage, I think he has to get the same allocation so he is in the same rate group. Giving a 2% allocation puts this employee into another rate group which is not allowed.

Am I overthinking this? Can a corrective amendment be made to remove the fail safe language after the plan year has ended? (I don't believe so.) Any guidance would be greatly appreciated.

A plan decides to replace a fund, and due to administrative errors the recordkeeper liquidates the wrong fund. Are they ok correcting the error asap, or do they need to provide another 30 day notice in order to be afforded 404c protection?

member elected catch up deferrals. Plan sponsor stopped making them after 2009 for member. No documents to support this, and member indicates they intended to make them each year. What are their options?