I am adding a loan feature to a plan. Currently, the distribution rules call for spousal consent in lieu of a QJSA.

I have seen plans that did not have consent for distributions have it in place for loans.

Could we have the reverse situation wherein SC is required for distributions but not for loans?

(The owner wants a loan and there is some marital strife, and it seems unlikely the wife will oblige with her Jane Hancock.)

Having read a number of posts on this topic, I find myself still confused. Any help would be greatly appreciated.

Business owner is well over 70.5. Has been taking RMD for a few years. He dies. Spouse is only 60. She is the sole beneficiary.

From what I have read she must continue on with RMDs, but using the factor for her age.

It also seems that she can rollover the monies in the same plan (she is in the same plan with the owner), but she must take RMDs from her rollover account.

Lastly, what is the impact of rollong to an IRA?

governmental money purchase plan is thinking of amending, so that the 2% pick-up contribution now (mandatory for participation) will be changed to allow a range from which to elect (one-time, irrev). Question: Can existing participants change their pick-up amount on account of the amendment, or are they still subject to the prior election? if existing participants cannot change, then are only new participants able to take advantage of the amended pick-up terms? Tx.

Are health insurers required to maintain accurate claim history? I have had instances where the prior history has been deleted which indicates a much shorter claim processing time.

Owner (aka SpouseB) and SpouseA both work for a medical practice. SpouseA wants to name kids as beneficiaries and therefore Owner (SpouseB) must consent. Can Owner witness his own consent on behalf of plan administrator? Or is it foolish not to just get it notarized?

Does anyone have any information, or know of a report, that indicates the participation rates of exempt employees versus hourly employees?

Any information would be appreciated.

Thanks!

As we are now in the DC restatement cycle, I use this as an opportunity to formally review Plan provisions with my clients to see what is working for them and what might want to be changed (I discuss things with them every year but this is more formal).

Taking aside the issue with changing safe-harbor plans mid-year, I know there are certain provisions that cannot be changed if it makes it worse for participants. Retirement benefits is the first that comes to mind.

Typically, I could use a logical rule that says if it is going to "take away" a benefit from existing participants, then it is not allowed to be removed. Is that a rule set in stone?

What if a client is sick of handling loan repayments? Could they remove a loan provision going forward? I could argue that existing participants only deferred in the past because they knew they would have access to the money. But is that stretching it?

Besides the above, is there any list of specific provisions that can NOT be removed or made more strict when doing these restatements?

Thanks in advance.

One of our clients just sent me a copy of an IRS notice they received dated 9/1/2014. We sent in a 5558 for their 2013 plan year (calendar plan year) in late July.

The notice states it is for the year ending 12/31/2003, and the due date of the return is extended to 10/15/2004.

Anyone else seeing this?

Client has nonqualified ERISA plan. Wants to amend the plan to provide that if a participant "cost the employer money" (i.e. losing a large account or other signiciant detrimental financial result), management could, at their discretion, remove the participant from the plan and reallocate the contributions for that participant to other participants. Can they do this? The plan already provides for forfeiture of non-vested account if participant is terminated for cause, and forfeiture of vested and non-vested account if participant is terminated due to conviction of embezzlement, etc. However, now they want forfeiture of vested and non-vested accounts if participant costs them money but is not terminated.

We have a new client who is just adding Roth to their plan. Their payroll folks are asking about the order of deductions for people who might not have enough income to cover all deductions. Currently they are deducting pre-tax deferrals first, voluntary after tax second, then other things such as health insurance.

My gut reaction is that deferrals of any sort should be calculated first, but if there is a shortage the health insurance should be paid first. I'm also inclined to put Roth after pre-tax and before voluntary after tax. But I have no basis for those opinions.

Where would one look for an answer to such a question?

I'm not sure if this belongs in this forum or over in distributions. 401k plan has assets invested at large platform. Participant has been receiving RMDs for a few years and dies during 2013 before the rmd was distributed for that year. The beneficiary is a trust for the participant's children. Rather than make a distribution of only the RMD amount, the platform moved the entire account balance into an account ini the plan and named it "revocable trust for XYZ participant". the RMD was then distributed from that account. Is it permissible for a nonperson like this to be a participant in the plan?

Have a distribution due to death in a 401k. The bene is a trust. Due you withhold 20%? If so who gets credit for the withholding the decedent or the trust? Thanks.

If a full time employee under a payroll deduction loan changes status to part time or temporary, it is likely he will default if his pay is less then the required quarterly repayments. Is the only remedy to default?

And what about an employee who terminates and is then switched to ACH form of repayment - this employee is later rehired. Do the repayments have to continue as ACH or can he go back to payroll deduct?

I am interested in any comments or experience with this.

Thanks!

Had a participant in one of our plans say their previous employer would not allow the $5,500 catch up contribution to be Roth. So they could do Roth for 17,500 but the additional 5,500 had to be pretax. I have never heard of this as a feature of a plan. Anyone know why this would be a feature of a Plan?

Thanks.

The employer deposited its 2012 Safe Harbor contribution in December 2013. However, the money sat in the cash account. The funds are still in the cash account, unallocated.

How soon must deposits made to individual-account plans be allocated to those accounts after the funds hit the trust?

(Similar question for the Profit Sharing contribution)

We have a non-governmental 403(b) plan with just pre-tax and after-tax contributions. Is the plan considered an ERISA plan and required to perform ACP testing?

Lets say I have $250,000 of excess DB assets I am transferring to a QRP. This was a one person plan and the DB participant will be the only participant in the QRP. Lets say his annual compensation is $50,000.

Can I allocate $50,000 per year to his DC account since that would be his 415 limit, or do I need to be concerned with the 25% deduction maximum?

Seems like I am not taking a deduction, so the 25% limit shouldn't matter, but I am having trouble believing it is ok.

Lots of documents have provisions that forfeitures will be used in the plan year following the year in which the forfeiture occurs. This seems particularly common in plans where forfeitures reduce. This seems eminently reasonable, as a forfeiture might not occur until late in the plan year, when matching contributions, for example, have already been funded.

Back in 2010, the IRS published in Volume 7 of their employee plan news, a blurb about forfeitures, and basically stated that they must be used in the year they occur. In spite of this, I think they have no problem with a plan provision that requires use by the end of the FOLLOWING plan year if it reduces. I think their concern was basically forfeiture "suspense" accounts that weren't being used promptly, or were being used in a discretionary fashion.

Anyway, some of the new pre-approved plans state that the forfeitures must be used by the end of the next year, but don't necessarily allow an option that they WILL be used in the next plan year.

Do you really see any problems with a 403(b) document, which of course isn't pre-approved, (or approved at all, for that matter) having a provision stating that forfeitures will be used in the year following the year in which the forfeiture occurs? (And the forfeitures reduce matching contributions)

Divorce issue is that spouse won a wrongful termination lawsuit prior to our marriage, and was awarded $54,000 which she deposited into a CD, and it has been sitting there ever since.

Now, the balance of her 403b is $184,000 dollars attained during the marriage.

Her claim now in the settlement is that her 403b balance is offset by the $54,000, so for settlement purposes, she only needs show $150,000 as a marital asset.

My question is: Is that even possible?

Seems as though deferred compensation is meant to be from your employer and that it must be “deferred” by the employer into the plan, no other way.

Can a lump sum of cash somehow find its way into a 403b any possible way?

I have an self-employed client for a defined benefit plan. The contributions he made so far satisfies the minimum required contribution for 2013. But he wants to put more contributions after 9/15 but before 10/15. His personal income tax is on extension (10/15). Can he make more contributions after 9/15/14 for the plan year 2013? Are those contributions deductible?

In the SB instruction, I can only report any contribution made within 8.5 months after the end of the plan year. If those contributions are deductible, does it mean I don't list them in the SB but I report them in Form 5500EZ?

Any ideas? Thanks!