My husband was the alternate payee as a result of a QDRO from his first marriage, from a Defined Benefit plan/ Separate Interest. At the time the divorce was finalized (1985), he assigned his sister as his beneficiary, long before we met and married.

He could commence receiving his pension when the ex reached her minimum retirement age, which would be Dec 2014, he requested the documents to start the process to receive payments, but he died last month (sept), the documents arrived 2 days after his death, he didn't get a chance to sign them and assign me as his beneficiary.

Since he never withdrew his portion of the contributions plus interest, there is a balance. As I read through the documents, it says that if less than three years of benefits have been paid out, his beneficiary will receive the remainder of the contribution and interests in the event of his death.

We married in 2002.A couple of times he contacted the pension plan to add my name as a beneficiary but was told he couldn't do it until he started receiving benefits. it was his wish that I should be his sole beneficiary, not his sister. Will that initial QDRO assignment of beneficiary pose a problem for me to claim this balance? Where do I stand now?

Please help. Thanks

My husband was the alternate payee as a result of a QDRO from his first marriage, the divorce was finalized in 1985, and at that time he assigned his sister as his beneficiary, long before we met and married.

We married in 2002, and although he contacted the retirement center of the QDRO with the intention to modify his beneficiary election, he was told that it couldn't be done until he started receiving benefits.

He was supposed to start receiving benefits in Dec 2014, and requested the documents to start the process to receive payments, but he died last month (sept), the documents arrived 2 days after his death, he didn't get a chance to sign them and assign me as his beneficiary.

Where do I stand now? Do I, as his wife for the last 12 years have any chance of receiving the benefit despite the fact that he didn't get to assign me in writing?

Please help.

I work in the 409A world. I have a potential client that has a 419 that is still around, and has some life insurance as a part of the plan. Is it even possible to start a 409A plan with that existing life insurance?

We typically build the plans from the ground up and have never had a situtation with already existing life insurance.

Thanks in advance!!!

For an ERISA 403b plan that doesn't exclude a particular participant for any other reason, can they "opt out" of receiving the employer match and/or discretionary contribution? The idea would be to negotiate a higher salary......any help appreciated.

We have a master trust covering one non-union and one union plan. The master trust Form 5500 is properly reporting the assets held in the trust as well as identifying the participating plans on the Schedule D.

The real question: On the Schedule H for each of the participating plans line 1c(11) reports the investment in the master trust. Line 4i of the Schedule H also properly reports that the plan has assets held for investment purposes. However, on the supplemental schedule required for line 4i only participant loans is showing. Is there a reason the investment in master trust would not be listed on the supplemental schedule of assets held for investment purposes?

thanks!

I am working on a new 1-person defined benefit plan (effective 1/1/2013). Form 5558 was filed, but, ultimately, the contribution was less than $250k. Is it okay not to file a 5500-SF, or should it be filed since the 5558 was filed?

Thanks!

Having a debate...is 30 day notice required to participants in the event you are only adding a fund to a plan, with no mapping? We believe the requirement is only surrounding a blackout period, but certain recordkeepers are telling are clients it's a requirement when even just adding a fund.

Our firm sponsors a prototye document for use by our clients. Required interim amendments are typically adopted at the document sponsor level.

Is it correct that if we are a VS document sponsor, interim amendments must be adopted by each plan sponsor (versus at the document sponsor level)? Or has that changed?

Thank you.

I have very limited knowledge of DB plans. Assume participant is married and spouse is beneficiary.

I understand that the monthly benefit payment amount is reduced if a participant elects a contingent annuity versus life only annuity. What happens if the participant's spouse pre-deceases the participant? Does the monthly amount remain the same? Or is it adjusted upward for the rest of the participant's life?

Thanks

Can the same process used to ID catch-up contributions for an ADP test also be used for 415 if the plan has a fiscal year and the limitation year is the same? I am being told that the TAG question below only applies to the ADP test and not 415.

Question:

Is it OK to have 2 calendar year catch ups within a 7/31 plan year and not exceed the Section 415 limitation?

This plan has a 7/31/2006 year end. One of the participants in this plan deferred $18,000 from August through December 2005, and $20,000 January through July 2006 (including catch up contributions), for a total of $38,000 during the 2005/2006 plan year.

The participant in my example would have within the plan year:

$29,000 employee deferrals
9,000 catch up deferrals
15,000 discretionary contribution
$53,000 TOTAL

Is this permissible?

Answer:

Yes. This is a bit counter-intuitive, but example 6 from the final 414(v) regulations makes this clear. Well, clear considering it came from IRS. In example 6 (below), Participant E makes $600 in (402(g)) catch-ups from 11/1/05 - 12/31/05, and $1,000 between 1/1/06 - 10/31/06. The full $1,600 in catch up contributed during the 11/1/05 - 10/31/06 plan year are subtracted from Participant E's deferral in determining the ADP for PYE 10/31/06, but only $1,000 counts towards the 2006 catch up limit.

Can an employer contribute lost earnigs on match contributions even if they match contributions were made be the end of the year but not on the payroll date?

I have a client that made late deferral deposits and as a benefit to the employees they want to contribute not only lost earnings on the late 401k deferrals but also on the match.

Is there any issue with this?

Did anyone notice the asap (14-23, 9/5) effectively saying that if we prepare more than 10 Forms 945, that we have to e-file them?

I'm on the committee, but couldn't make the call or review it carefully before publication, and I have an issue with it and am curious to get others' takes.

The asap is technically accurate, in that if we file for the clients, we have to e-file. But the next section of the cited reg says that if we prepare the return for the client to file, and get them to sign something saying it's ok, that we do not have to e-file. See below.

This is a big deal to someone like me; it's a several-month process to get approved, with fingerprinting and all sorts of BS involved. We're trying to get confirmation from the IRS about the alternative procedure but that isn't going far. Frankly it's right there in the regs and I see no doubt about the fact that we do not need to e-file. Any thoughts?

Related question - are folks paying as much attention to asaps since delivery is part of ASPPA Net? That's meant to be a neutral question but my asking it probably betrays my own opinion.

Ed Snyder

Our DB plan is less than 80% funded. We want to amend it to increase benefits. But we can't because of 436.

Can we just adopt a new plan to provide the additional benefits we want to provide? Or would the adoption of the new plan be combined with the old plan for purposes of 436?

An employer maintains two 401(k) plans, which each provide for plan loans payable only by automatic payroll deduction. An employee has changed status so he is an inactive participant in the plan that holds his contributions to date ("Inactive Plan") and an active participant in the other plan which has a very low balance ("Active Plan"). The employee wants to take a plan loan from the Inactive Plan, but due to payroll issues, the employer is not able to process automatic loan repayments to the Inactive Plan while processing salary deferrals to the Active Plan. Any ideas for how to handle when the employee seems to have a right to take a loan from a plan, but the employer cannot handle the administration of the loan? The plan allows for elective transfers between plans, but the employee may not want to make the transfer from one plan to the other.

Hi,

I have a single-member LLC, and this year I started a 401(k) profit sharing plan. For federal tax purposes, I'm treated as a sole proprietor and I file a Schedule C with Form 1040.

As a single-member LLC, I don't generate a W-2 for myself. So my question is: if I make 401(k) deferrals, do I need to report them to the IRS, and if so, how? For people receiving a W-2, 401(k) deferrals are reported in box 12.

Thank you very much!

http://www.napa-net.org/News/Browse-Topics/Inside-NAPA/Article/ArticleID/3389

Take a look at thus article. How in the heck would ERISA pre-emption NOT apply?

We have a client that remitted funds to the custodian on the 6th business day following pay date, the custodian received funds on the 7th business day, and the funds were allocated to participant accounts per investment election on the 8th business day.

DOL investigator is claiming the payroll deposit is late because the investment allocation/earnings in the participant account began after the 7th business day. Our argument is that the funds were segregated from the employer's general assets by the 7th business day, and therefore there is no prohibited transaction.

Is there a statutory basis for the DOL investigator's assertion that the deposit is late even though the funds were segregated timely from the employer's general assets? Thank you for any help!

The owner of a S-corp wants to make a $5000 contribution to his 401k plan on a pre-tax without it going through payroll. Is this possible? If so, how?

Safe harbor 401(k) has a YOS requirement, but the plan sponsor has been operating as immediate entry.

Per the plan document and SCP, a retroactive amendment will be drafted to correct the inclusion of the ineligible employees. The SCP procedure says that the amendment can only include the affected employees. The employer wants to keep the immediate entry permanently. Can the retroactive correction and the change to future entry requirements be done in the same amendment? Does the language "anyone hired on or after" a specific date, without specifically naming any employees, satisfy the SCP rules and adequately convey the change to the entry requirements going forward?

A professional with 4 employees wants to terminate the calendar year DB plan as of 12/31/2014. The professional's benefit say for the sake of argument yields a lump sum of $1.5 million after taking 415 into consideration. Plan assets would fall about $150,000 short. The professional wants to distribute benefits in the first 6 months of 2015 and while IRS D-Letter approval will be sought, the professional does not want to wait for approval to make distributions. On the other hand, the professional would want within reason to maximize the distribution.

I'm considering the following. Of course, distribute the employees their full benefits. Distribute the remaining assets (except say for $1 to keep the trust open) to the professional and the professional and spouse would execute a benefits waiver. We do not want to fund the plan 100% at this point to avoid the unanticipated possibility that the IRS may disagree with the lump sum calculation.

Once IRS approval is received, calculate the total lump sum at the new distribution date as the lesser of the lump sum at original distribution and lump sum at new distribution date using the then present age and interest rates. In this way, we ensure that the professional does not derive any unforeseen benefit from the delay. Note: the benefits waiver is still in effect. Have the professional fund the difference between the "lesser" just determined and the amount of original distribution, and then distribute this amount to the professional.

Since the waiver is in effect, the professional can contribute any amount up to 415 so the fact that the Plan does not provide for this mish mash should make no difference.

Any comments?