Hello,

Is the correction for failure to implement a deferral election in a 457b plan the same as the correction in a 401k or 403b? I am familiar with the correction within the 401k and 403b but not sure about the 457. I cannot find anything to answer that question.

Thank you

Since the passing of HATFA did not bring anything new to Annual Funding Notices, we have continued to use the original MAP-21 rates to determine the funding target for purposes of the Funding Target Attainment Percentage for the Annual Funding Notice. Since HATFA is an extension of MAP-21 we have been wondering if these amounts should be based on the HATFA rates instead. Curious to know what other are doing in this regard. Thanks.

Background- Small school district with an ERISA exempt 403(b) plan (Alaska). Since we are ERISA exempt, we don't have to file a 5500. Loans are not allowed, and it's a very simple and easy plan to manage since there isn't a lot of activity. We had a single-sourced 403(b) provider, and added a second vendor (Vanguard) as a low cost provider for the employees. We also kept the original provider (we will be going from one vendor to two). For both providers the employees have 403(b)(7) accounts. As of now no contributions have been made to Vanguard.

I'm trying to see if there is anything I need to do with the plan document. Is it a requirement that the approved vendors be listed in the plan document? If so, do I need to update and amend the document to add the second approved vendor? The plan document was last updated in the middle of 2009 and it lists the original provider as the approved provider. On the IRS website I see stated "7.3 Current and Former Vendors.The Administrator shall maintain a list of all Vendors under the Plan," but I don't see anywhere that it says this must be incorporated into the plan document itself. Could I make a list on my own to satisfy the requirements and not put it in the plan document?

When I set up the Vanguard account, I put myself down as the administrator (I'm responsible for all the finances at the district) which allows me to add participants, send payroll deductions, and authorize distributions. In our written plan document, I see nothing that references the role of "administrator." The original vendor has told me they are actually the administrator for our plan (which I don't agree with since it isn't listed anywhere), and if we want to add the second vendor we will have to list them as the plan administrator (I don't want to do that!).

Any suggestions on how I should proceed? On a side note some of the new teachers have asked if we can add another vendor they used in the past (which I am not opposed to), but it would be this same process all over again.

ER adopts a PS plan with a PY 7/1/13 - 6/30/14. Tax year ends 6/30. ER contributes 20% of comp for 6/30/14. Tax year changes to calendar year for 12/31/14, so plan amended and return will be filed for short plan year 7/1/14 - 12/31/14. ER adopts a DB plan 12/31/14. Effective date is 1/1/14 and PY is calendar year. Val date is 1/1 and the MRC is $157,000 and the max is $190,000.

Does the short taxable year of 7/1/14 - 12/31/14 affect the amount that can be deducted for the DB plan? There will be no contribution to the PS plan for 12/31/14.

Does 401(a)(7) apply since there was a contribution to the PS plan for 6/30/14 and the DB plan is effective 1/1/14? If so, to what time period does it apply?

Any guidance will be appreciated. I've been pouring through the ERISA Outline Book and thoroughly confused.

I have a client who made a 2014 distribution to a participant's ex-wife without a proper QDRO. The divorce decree called for the distribution but it did not contain the required language for a QDRO; they are now in the process of having the a QDRO prepared.

Question 1: To correct the situation, do the funds have to be repaid to the Plan and distributed again after the QDRO, or can it be corrected by not having a repayment but merely having the QDRO prepared after the fact, acknowledging that the distributed amount was correct?

Question 2: Should a form 1099-R be issued by the Plan for 2014, and if so, who should be shown as the recipient on the 1099-R -- the participant or the ex-wife who received the funds?

Thanks in advance for any help.

This feeble mind has forgotten already. If monthly benefits are being provided due to the 430 restrictions prohibiting a lump sum, may the monthly benefits still be rolled into an IRA based on the concept that a lump sum distribution was requested?

We are filing for a determination letter for a plan termination on a pre-approved VS document. The plan has never applied for a determination letter before but has always adopted the document restatements and amendments on a timely basis.

The prior instructions for the Form 5310 clearly stated that if you didn't have a determination letter (DL) then you had to attach all plan documents, amendments since the effective date of the plan.

The new instructions, revised 12/2013, say this under the What to File (#4) "a copy of the opinion or advisory letter for the pre-approved plan, and/or adoption agreement and all required attachments and statements" and (#5): "A copy of all amendments made since the last cumulative list listed on the last DL or plan document, if applicable"

Do we have to send in all documents since inception or only the current document with any amendments adopted after the document restatement.

Has anyone ever heard of this company before? They sent out what appears to be a mass mailing to the clients of a particular large TPA (not us!) making all sorts of accusations and recommending that they fire the offending TPA forthwith. Believe me, the accusations are not scandalous. My 2nd or 3rd thought was "scam?". But there is zero contact information on the letter (it merely lists the county and state as Camden County New Jersey). It does not request any information nor response.

And here is the kicker - they cc'ed (at least according to the letter) 6 or 7 different field offices of both the IRS and the DOL.

I googled the company but found nothing. We're going to forward the letter as a courtesy to the named TPA (a firm that we "know of").

I know there isn't a lot of guidance around excess revenue accounts, but I'm trying to see if there is a rule as to exactly when the money needs to be used...is it 12/31 of the current plan year? Is it similar to some forfeiture accounts where you can use it the following year for previous plan year expenses? Or is there no hard fast rule? I should mention nothing on the usage is listed in the recordkeeper's service agreement either.

Okay, so the procedures for changing organization and EA have been renewed via IRS Announcement 2015-03. It's been 10 years since I was engaged in a takeover and I ask this question out of curiosity since my business book is closed.

Suppose, you cannot replicate the prior actuary's work within the prescribed 5% tolerance. Presumably, the remedy is to apply for a change in funding method. Are there other alternatives?

Suppose you have acquired the new client by lower bid. Have you reflected in your bid the cost of applying for a funding method change? It would seem like the last thing a client who has engaged your because of lower fees would want is more expense for work that would not have been required had he stayed put.

How is this handled?

Partnership of professional corps. Two PCs, one partnership, a classic affiliated service group. 3 separate, identical PS plans, one for each entity.

Can partner A's plan make a loan to the individual shareholder of partner B? B does not sponsor A's plan, is not a fiduciary, etc. However A, B and the partnership are a single employer per 414(m). 4975(e)(2)© and (H) define a disqualified person to include a 10% shareholder of an employer whose employees are covered by the plan.

Under a 414 definition of "employer" the proposed loan would be a PT as individual B is a shareholder of Corp B, which is part of the aggregated employer. However 414(m)(4) lists the specific code sections to which it applies and this list does not include 4975.

Still feels a little too close for comfort.

I have a participant who was over 70.5 and still working in 2014 so did not plan on taking an RMD. He passed away in 2014 with children as the beneficiaries. The accounts will be split into inherited IRAs. The bene's did not complete the beneficiary paperwork until 12/31/14,not leaving enough time to make any transactions in 2014. My 1st question is - since an RMD was not taken in 2014, do they need to take one in 2015 for the 2014 amount before moving the account to an inherited IRA? Secondly will they need to take 2015 distributions of their own calculated in their individual accounts?

My client has a sole prop/corp controlled group. The owner has compensation coming from both entities. She only has employee deferrals from the corp. Can she use comp from the sole prop to calculate the discretionary match to her account?

SSAP 102 was effective 1/1/13. In determining the amount of surplus, SSAP 102 generally called for the immediate recognition of unfunded PBO as a liability. However, SSAP 102 contains an option under which it allowed for the recognition of the unfunded PBO to be phased-in over a period of up to 10 years. Under this alternative, SSAP calls for the establishment of a schedule of the maximum unrecognized amount of unfunded PBO that can exist at year-end. Essentially, the Pension Expense for the year is increased by the 10 year phase-in amount. If, at any point in time, a company wants to voluntarily recognize an additional amount of unfunded PBO (above the 10 year phase-in amount that is recognized for that year according to the amortization schedule), does this additional amount reduce the unrecognized gain/loss that exists at that time? Thanks.

We have someone who took a hardship in early October. He stopped his deferrals, but a deduction did come through for his year-end bonus.

What is the correction?

Someone here mentioned to just extend the suspension period one month. She said it was discussed (perhaps?) at the ASPPA EPCRS session.

Any specific guidance out there on this?

Got a TIAA client and we are restating their document onto ours. TIAA's plans say "are loans allowed - yes or no." What I am wondering is, do I need a separate loan program, or do the TIAA contracts incorporate the true loan program? I am also told by TIAA that each individual promissory note includes all of the provisions regarding default, payment terms, etc. Additionally, the loan is actually with TIAA-CREF and merely collaterized by their account balance in the TIAA Traditional account, and I'm quite sure that any loan program would have to describe all of this.

So what are people doing who work with TIAA with respect to a loan program? We're using Corbel's PT Formatted 403b document.

If plan sponsor excludes employees H-2B workers is that exclusion going to be considered to be based on length of service? We wnat them to be permanently exlcuded. Although such workers are temporary deifinition thye aren't being exlcuded because of that.

Thanks in advance for any guidance.

Taking an informal poll. Assume a safe harbor nonelective, utilizing the "maybe" provision. The plan currently uses a non-integrated profit sharing formula, with a last day/1,000 hour provision.

If the client wishes to amend to a new comparability formula, for example, can they:

A. do it at any time prior to the plan formally electing/adopting the SH contribution for 2015, or

B. must they wait until 2016 to have it effective?

Non-profit sponsors 401k. Executive Director's spouse is an employee (and is an NHCE). What's stopping me from giving the spouse a big generous profit sharing contribution, all the way up to the 415 limit? I can't do it for the ED because he is an HCE. Assuming ED is happily married, isn't this a clever way to give this guy an extra contribution? I don't think there is anything in the Internal Revenue Code stopping me (my Doc allows for different allocation rates for each employee, and we're on the PPA Volume Submitter).

Is there some non-profit law that perhaps someone knows of that will trip me up? In other words, it sounds too clever, too cute, and therefore, perhaps, too good to be true? Or do I add this to my non-profit plan design repertoire?

Our plan has a provision which allows a member to use the 3-year catch-up to make additional contributions based on missed contributions under our plan or any other 457 plan in our state. Historically, we have only provided the catch-up based on contributions missed from our own plan, as this requires verification of those missed contribution. Because of turnover at upper management levels, we have been requested to allow a member to catch-up their missed contributions from another plan, but have no mechanism to verify missed contributions under another employer's plan.

Is anyone able to provide a copy of or link to a form that can be sent to another plan for that plan to certify the level of missed contributions?

Thanks in advance.