• SH Plan with calendar year plan year was acquired in M&A transaction. Parent plan is fiscal year plan year and not SH.
• Need to create short plan year in SH Plan to align plan year with parent's plan year once 410(b) transition period ends.
• New fiscal year plan year will not be eligible for SH testing b/c of plan aggregation.

Question: Does creating short plan year trigger ADP/ACP testing for short plan year? Note that the following plan year cannot be a 'safe harbor plan' because it is now part of controlled group and aggregated for testing.

Many thanks, brilliant minds.

New plan is effective 1/1/2014 with a special elective date of 10/1/2014 for deferral and safe harbor provision (3% non-elective.) Definition of compensation includes compensation which NOT a participant. What compensation is used to determine the 3% safe harbor contribution? Is it the compensation as of the effective date of the safe harbor provisions or full year?

Take that question one step further, an employee is eligible for this plan 1/1/2014 (met service and age requirements prior to the start of the plan), but this employee terminated employment 6/1/2014 (prior to the effective date of the safe harbor provisions.) Is the client required to give this terminated participant a safe harbor contribution?

This doesn't pass any smell test but I can't find the legal prohibition:

Large group health plan has terrible claims history based on 1 particular employee

Insurer telling employer "If we don't have to cover the sick employee your group renewal rate increase is only X% but if the sick employee coverage continues the group rate increases by 3X%"

Employer obviously wants to exclude the sick employee from coverage (and raise his wages by enough to cover his premiums for Marketplace coverage where his pre-existing conditions don't matter).

This has to violate somethng?

so what did the pirate say when he hit his 80th birthday?

Aye, matey!

..................

your correct response of course is

Arrrrrrhhhhhhh.

oh wait, this is supposed to be the humor board

We have a plan that doesn't forfeit until you have been fully paid or have 5 BIS. It has no deemed distribution language.

There are a group of people who have a DOT are 0% vested and have an ending balance.

Are these people in the beg count?

It is the difference between needing an audit and not needing an audit.

When plan was drafted a couple of key people got excluded from the match because they had not yet met eligibility for the match (but they did defer).

Does anyone have a problem with the company providing a "bonus" equal to what the match would have been, which the employee can then contribute the plan as 401k (they are well under the 17,500 cap)? I seem to recall that there is some rule that prohibits anything be provided on account of elective deferrals other than "match."

It seems to me that an employer should be free to provide a bonus for any reason imaginable.

Thoughts?

We am looking at a Relius Adoption Agreement. There was an age waiver if you are employed on 9/30/2014.

I am looking for some clarification. The client has a 17 year old employee who have not yet satisfied the service requirement of 1 year of service but was employed on 9/30/14. He will have 1 year of service as of 12/31/2014. Does he enter the plan on 1/1/2015? In order words, does the age waiver stay with the employee until he has met the service requirement.

Thanks.

Employer maintains both an ESOP and 401(k) plan. Employer wants to merge the ESOP into the 401(k) plan. The 401(k) plan is a prototype. It is my understanding the certain ESOP provisions must be preserved in the merger, such as the right to receive employer stock in kind, the right to diversify, and perhaps put rights. The employer's stock is publicly traded and the 401(k) plan in operation permits distributions in the form of employer stock and the right to diversify frequently.

Does the 401(k) plan has to be amended to preserve such rights and does this fact turn the 401(k) profotype into an indivdually designed plan.

Small business was convinced by an advisor to start a new plan and the best way to do that would be to terminate the old plan rather than transfer assets. So they are both 401(k) and there is a successor rule issue that has been violated. Trying to come up with solution to fix. Can resolution to terminate first plan be revoked and 5500's amended?

An IRA holder over age 70 1/2 has taken her RMD from the IRA as required.

She subsequently becomes a participant in a 401(k) plan. She is not highly-compensated nor an owner of the plan sponsor, but rather a rank-in-file employee.

If she rolls her IRA into the 401(k) plan can she stop taking an RMD on the IRA balance rolled into the 401(k) until she actually retires?

If a small 403(b) terminates and liquidates by 12/31/14, is PPA restatement required?

Thanks

Does anyone have a suggestion for an expert witness regarding a minimum distribution under 401(a)(9) from a DB plan? On party says 401(a)(9) would be violated if the amount argued by the other party is actually paid.

We have a client, that we discovered had a second company participating in the 401(k) Plan. They are not a controlled group, but a multiple employer. This was NEVER addressed by the TPA in any correspondence to the client.

When we contacted the TPA doing the work on the plan, they claimed all that they needed to do was a participation agreement so the document matched what they were doing in operation.

Another TPA stated the plan needed to file under VCP since there was an entity participating in the plan that was not allowed to and therefore an document defect.

Anyone have thoughts on this.

Thanks

This seems too agressive to me on its face, but I'm hoping I'm wrong.

We have a take over plan that look like it is top-heavy. HCE's have contributed in 2013, but not in excess of $5,500. How big of an issue is it if we amend now to limit deferrals for HCE's to a low dollar amount plus the catch-up?

I don't see that there is a cutback issue to the non-keys because there is a last day requirement for top-heavy minimum. They haven't accrued anything until the last day.

I also don't really see a cutback issue to the HCE's because he right to defer is not a protected benefit.

I'm uncomfortable because the amendment is really being used to reclassify money that is already in the plan as catch-up when if we let htings play out some of it probably wouldn't be.

Thanks for any guidance.

I recently heard from an administrator, that the eligibility of a 401k/PSP was amended from 1 year to 3 months, effective 1/1/2013, in order for the this plan, together with the DB plan, to pass the coverage test. The administrator said that it was okay to still adopt this amendment, since, as a corrective amendment, the deadline was 10/31/2014. Is this deadline correct? If so, can someone point me to a source?

Thanks a lot!!

Controlled group with two separate 401(k) profit sharing plans. They recently filed as a QSLOB. An internal coding system has created a problem when employees transfer from Plan A to Plan B. Company A is coding them as terminated, and some employees have taken a distribution of their balance.

They are working on a fix for the internal problem. Other than contacting these employees to notify them that they received a distribution in error and need to return the funds (ineligible for rollover, although I think all were lump sum) how is this corrected?

Thanks for your help!

This came up during d-letter review of a DB plan. Plan A requires 1,000 hours of service for a full year of credited service in all years except the participant's first and last years of participation. For those two years, Plan A requires 2,000 hours for a full year of credited service and credits partial years for anything less than that. Anything wrong with having such different rules for the first and last years?

• 2,000 hours (by itself) is fine as a minimum--the regs say so. § 2530.204-2. I can't find any guidance that says you can't use a different threshold for the first and last years.

• I don't think this constitutes an impermissible "last day" requirement for the first and last years because the participant need not be employed on any particular day, provided he/she gets 2,000 hours. § 2530.200b-1(b).

• I don't see a backloading issue--the plan uses a vanilla fixed-percentage-of-comp formula, so unless the "different rules for different years" is itself impermissible, it clearly passes the 133 1/3% test.

Nonetheless, IRS is claiming the first and last year's rules are impermissible, simply because in an other plan year a participant with 1,000 hours would get a full year. Any thoughts appreciated.

Is there an issue with having auto enroll effective 1/1/15 and then the first auto escalation 7/1/15? Something in our document is ambiguous about when the first escalation can occur.

ERISA section 404(a)(1)(D) tells a fiduciary to discharge his, her, or its duties "in accordance with the documents and instruments governing the plan insofar as such documents and instruments are consistent with the provisions of [ERISA]."

The Supreme Court of the United States has made clear that the "insofar" exception at least permits, and might require, a fiduciary to disobey a plan's document if doing so is necessary to meet an ERISA fiduciary duty, including a duty of loyalty or prudence.

Does anyone know of a court decision in which the "insofar" exception applied concerning a situation concerning a health plan?

ERISA section 404(a)(1)(D) tells a fiduciary to discharge his, her, or its duties "in accordance with the documents and instruments governing the plan insofar as such documents and instruments are consistent with the provisions of [ERISA]."

The Supreme Court of the United States has made clear that the "insofar" exception at least permits, and might require, a fiduciary to disobey a plan's document if doing so is necessary to meet an ERISA fiduciary duty, including a duty of loyalty or prudence.

Does anyone know of a court decision in which the "insofar" exception applied concerning a situation beyond employer securities?

Any case concerning a retirement plan?

Any case concerning a health plan?

Any case concerning some other ERISA-governed employee benefit?