Target's 401(k) Plan (allows Roth) plan is terminated in connection with corporate merger. Successor plan rules mandate target plan's Roth deferrals must be transferred to the acquirer's 401(k) Plan (does not allow Roth).

402A regs define "designated Roth account" as a separate account... to which designated Roth contributions are permitted to be made in lieu of elective contributions, which obviously applies in the general direct rollover context. That said, if the acquirer does not want to permit Roth, would this prevent a direct plan-to-plan transfer of Roth deferrals otherwise required under the successor plan rules? Hope is to simply set up separately accounted Roth bucket which will be distributable from the acquirer's plan at the same time/manner as pre-tax deferrals. Thoughts? Any guidance I'm missing?

Thanks in advance.

Plan participant (HCE) is transferred from one geographic location to another. A large bonus is paid to the participant as part of the relocation. The payroll company fails to withhold the appropriate health insurance premiums, additional Federal tax withholding and 10% salary deferrals that the participant has requested for the one pay period that includes the large bonus. The client would like to make up all of these missing amounts from the next pay period. Assuming the participant agrees, is that an appropriate fix for the missed deferrals, or must they make a QNEC?

Just wondering - say a C-corp with a fiscal year, and an existing leveraged ESOP, decides to switch to S-corp status and change their fiscal year to calendar year.

Pros and cons of changing ESOP plan year to match the new fiscal year and running a short plan year? Any special problems (or advantages) that you've seen one way or the other?

Maybe this goes on the Form 5500 forum, but I've posted it here nonetheless:

We electronically filed our 2013 Form 5500 on time without an extension being applied for. The due date was 7/31.

Unfortunately, I sat on the manually-filed Form 8955-SSA and here I am almost a week late. Or am I?

What's the proper way to handle?

1. Send it in as is and hope for the best?

2. Check the "Form 5558" box and hope they don't care?

3. Check the "Automatic extension" box and hope it applies to us? (Given that there is a "Special extension" box, what ever is an automatic extension anyhow?)

4. Other?

Help. I have run into a problem that I have never had before.

I have a plan that improperly excluded employees from the plan. We are needing to make corrective contributions. I know that, typically, you use 1/2 of the ADP for th class the employee would have been in. However, we have 2 issues:

1) There are years in which there were no 401k contributions made (it's a very small plan). Given that there is a 0% ADP for those years, what do you do?

2) There are employees whose class has no deferrals (i.e., there are no NHCE deferrals for a given year). We could use the HCE ADP in these cases. Is there any other way to handle this?

Thank you! Hopefully one of you guys/ladies has run into this one before.

Would welcome any thoughts on the following scenario:

Sponsor of small profit Sharing plan adopted resolutions 4 months ago terminating the plan and directing that all plan accounts be distributed.

Key employee of plan sponsor died about 2 months ago while still working with recordkeeper to pull together notice and distribution elections to plan participants so the recordkeeper could process distributions per the plan's termination. Recordkeeper is now sending out the distribution notices / elections and working to distribute all assets and wind up the trust. The deceased participant had a valid beneficiary designation form for the plan on file at the time of his death naming his daughter as the sole beneficiary.

Can the recordkeeper just work directly with the daughter as designated beneficiary on distribution of the deceased participant's account without any need to involve the deceased participant's estate. In other words, we are assuming the adoption of resolutions terminating the plan prior to the participant's death and the plan's pending distribution of assets did not vest any right to a distribution of the account in the deceased participant's estate and that distribution of the decedent's account should simply be governed by the decedent's beneficiary designation (even though distribution of the decedent's account was pending due to plan terminationat the time of death).

We recently viewed a webcast regarding Participant Fee Disclosures and it indicated that plan sponsors could deliver the 404(a)(5) Notice by electronic delivery "under the DOL rules".

We looked at the DOL rules, and it was pretty extensive. We previously understood that the notice had to either be hand delivered or mailed.

To satisfy both IRS and DOL rules, is electronic delivery of this notice allowed?

Hi. I have a participant who terminated in 2013 and received an immediate distribution. Which is great... except that the plan says that the distribution determination date is the end of the plan year, paid as soon as administratively feasible after that.

It looks like EPCRS says that the correction method (presuming the participant won't return the money) is that the employer has to make a deposit for the distributed amount to make the plan whole (which is a whole 'nother topic, since this is a participant-directed account plan and it didn't affect anyone else in the plan) and then use it for their next employer contribution. But this is a deferral-only 401(k) plan - there are no active employer contribution sources.

So my questions are:

(1) Is there some kind of reasonable way around this? The participant was paid out exactly what she was due.

(2) If the sponsor has to deposit $2K to make up for the early payment that they authorized, can they use that to fund deferral deposits?

Thanks.

If a plan adds a self-directed brokerage account feature, can it be offered to only certain classes of employees or does it need to be available to all participants in the plan? The plan wants to add it so their management employees can use it, but is afraid to make it available to lower-level employees who have less investment experience.

Participant requests hardship. Check is issued, participant dies 3 weeks later. Mail was slow or something & the check was received on the date of death and not cashed.

Does that check get returned to the account or can it be reissued to his estate using a constructive receipt argument? The beneys under his estate are likely different than those under the 401(k) so this is a nightmare situation for the plan sponsor.

Thanks in advance for any guidance.

We began paying a joint and 50% survivor annuity to a participant from our defined benefit plan several months ago. The distribution election was made by the participant’s court-approved guardian, due to the participant’s apparent mental issues. However, we have now been informed that the guardianship is being terminated by the court. There is some dispute as to whether the guardianship was necessary or appropriate in the first place, but at this point the court has simply terminated it going forward and states that the participant is capable of managing her own affairs.

As a result of the (perhaps inappropriate and unnecessary) guardianship, the participant did not have the opportunity to choose the form of benefit she might have preferred, but is instead stuck with the benefit form chosen by the guardian. I am having difficulty finding any authority for allowing the participant to make a different election now. The situation doesn't fit any of the usual exceptions for modifying an annuity payout. Has anyone encountered a situation like this before and, if so, are you aware of any authority for a new election now? Or has anyone obtained IRS approval of an exception in similar circumstances?

Thanks much!

I've dwelled in big Plan world...now filing a 7 life CB plan 5500...It doesn't appear that a schedule R is required, but am unsure about Schedule SB attachments for actuarial assumptions and summary of Plan Provisions....anyone confirm Yes or No????

A one-man plan is terminating. The 417(e) lump sum (which exceeds the lump sum based upon plan assumptions) is less than the assets, which are less than the 415 limit. The plan document states that excess assets are returned to the employer (who is the participant). When preparing the distribution election form, should the amount of the lump sum be the 417(e) lump sum? The current value of assets? If it should be the 417(e) lump sum, are the remaining assets simply transferred to the employer's business account? His personal account?

Thanks for any responses!

I know a sale of an overfunded DB plan can be problematic but does anybody have an underfunded plan (preferably in Virginia or mid-Atlantic)that would like to talk?

Are there still "brokers" out there trying to do these deals?

Thanks

Hello,

Participant elects to defer 100% of pay (after payroll taxes, etc.) this leads to $0 in pay. Participant will not exceed 402g as this election will apply only to a few pay periods.

Question: I always assumed that you can do this with no issues (plan doc does not have a restriction on deferral %). However, the argument is, can you "pay" someone $0 in a paycheck - I still say yes, as they chose to defer it. Under the Wage Act (of the state in question) section "Deductions from wages" says: "Deductions below the minimum wage applicable under FLSA are not authorized". Based on this, I am being told a participant must be paid the minimum wage in their check. I have never heard this before. Is this accurate? Or is this section of the wage act being taken out of context? Do 401k rules override any state wage act?

Thank you

In a multi-employer, qualified defined benefit plan, is it required that participants be notified that they have incurred a permanent break in service and have forfeited their accrued benefit? I've been told it's necessary by legal counsel because it gives the terminated participant time to dispute the loss of service and that the notice starts the "count" for the statute of limitations during which the dispute can be filed with the Plan. Without the notice being sent, then apparently the participant can dispute the issue decades later, which of course makes it harder for the Plan to defend the record. So, does anyone know if this notice is required based upon regulation or just good Plan practice for protection? If it is reg, I'd like to know where I can find the language outlining it.

A plan has 3 participants who are all family members and HCEs. There have never been and will never be any other employees. The plan is underfunded for 417e purposes and one of the HCEs is due a distribution.

The Treasury Regulations say that in most cases an HCE's distribution must be limited to an amount that would leave behind enough assets in the plan to at least equal 110% of the plan's remaining current liabilities. Treas. Reg. 1.401(a)(4)-5(b) states that the 110% restriction does not apply “if the Commissioner determines that such provisions are not necessary to prevent the prohibited discrimination that may occur in the event of an early termination of the plan” – do you think it would be reasonable to believe that “the Commissioner” would consider an unrestricted distribution to be nondiscriminatory since all of the participants are HCEs?

Could use some advice regarding disposition of excess plan assets. I have encountered remaining funds from 2 plans that are now terminated. We're embarking on a wellness effort and this money could provide several years of start-up funding. But I'm not sure it's an appropriate use of the funds. After some research I discovered the following:

Life Insurance Plan - Fully insured life insurance Plan was terminated in the mid-90s and the employer subsequently received a payout from the demutualization of the former insurance carrier. Funds have just been sitting since 2000. The plan was funded by both employer contributions (basic life benefit) and employee contributions (optional purchchase).

Disabiltiy Plan - Self-funded disability plan was terminated in 2013. All claims are paid. All premiums were 100% paid by employee contributions from a limited, definable subset of the employer (about 20% of the workforce). Excess assets accummulated over a 20+ year period.

While "finding" these funds is a good thing (?), their disposition may pose some issues. Although the plans are not subject to ERISA (governmental), its provides a reasonable guidepost. Researching a similar issue years ago, I recall an ERISA provision (but can't find the cite now) permitting an employer to recoup its own premiums first, and then providing that anything above that (if any) could be used for the benefit of employees generally, or distributed to current or former participants. That might solve the Life Plan excess issue. But the Disabiltiy Plan excess (all from employee contributions) is another matter. What are acceptable uses of this money?

I'd appreciate any leads, cites or suggestions you might offer regarding acceptable use of these funds. Many thanks in advance.

Do you have any online networks to recommend (please nothing obvious like YouTube)? Especially looking for one with lots of comedy. This has a whole chunk of comedy stations, not just commercial standup but sketch comedy and internet comedy: http://pluto.tv/ I feel like this does a good job of making it seem like you're still watching TV even though it's internet content... For some strange reason, I really like the concept of channels and shows, even if it is, in the end, internet content.