We have encountered an issue with loans for a sole proprietor who has other employees. Per adoption agreement, loans must be repaid through payroll deduction. However, the owner doesn't get W-2 or regular payroll and so can only make payments directly. But on the surface, this appears to be discriminatory because the other participants don't have the option of paying say quarterly by check.

Would the IRS likely look at this as discriminatory? How have others addressed this issue?

Dr. A and Dr. B are married and jointly own practice, and both are trustees of Dr.A & B 401(k) Plan. Dr. B advises that he no longer works in practice and will not be returning even though he is still a partner in practice. CPA for the practice advised that Dr. B had not received pay in a couple of months. Dr. B requests a partial distribution from his account balance, which I submitted to Insurance Company on his behalf.

Confirmation of distribution is mailed to practice. Dr. A's attorney files an emergency motion of contempt due to pending divorce. Based on this, I know that no other distributions can be made to Dr. B. Insurance Company has also been notified.

Attorney has requested that I provide (under threat of subpoena) evidence that Dr. B was terminated from employment and therefore able to take a distribution. What proof do I need other than the good doctor's word? What else should I be aware of?

I need a list of states that allow their local governments to opt into the state's plan. Is this list available?

CHild will turn 26 in October 2014 and therefore, (I think) will no longer be covered under parent's plan. When does the parent's employer have to notify the child about COBRA, i.e. how much notice is given? Is it possible for a plan to extend parent's coverage past the age of 26?

What is the correction method when an employee elects ROTH contributions and the employer deducts the deferals as pre+tax?

Apparently, this has gone on for several years. The employee now wants his account corrected.

Has this happened to anyone else???

Thanks!

If anyone is interested, someone who is not our client, is looking to hire an actuary to help her and her husband understand their CalPers plan. He was on workmen's compensation and is not working. I think he is over age 60. He wants to be able to purchase some credits.

If you interested in taking this on and helping, call me at 415-725-1100 and I'll give you her name and phone #.

Craig Schiller

We had a Safe Harbor 401(k) plan in 2013. During that year we adopted a Cash Balance plan. It had started with an eligibility window that brought in Employee "A". ("A" is not eligible for the 401(k) Plan in 2013 as of the date of this post.) Turns out, the plans cannot satisfy the Special Gateway requirement because "A" did not get a benefit in the 401(k) plan. The perfect solution would be to adopt a corrective amendment within 9.5 months admitting "A" into the 401(k) plan and giving him the same 7% as all others.

Question: Would a corrective amendment that admits a new participant constitute an impermissible (mid-year) amendment of a Safe Harbor plan? I think it is permissible because it does not conflict with anything in the 2013 Safe Harbor Notice. It is also the kind of amendment that IRS says it would be inclined to permit (but to my knowledge, they have not yet expressly permitted). What do you think?

Thank you very much.

Employer with current PSP (no 401(k) provisions) wants to add safe harbor 401(k) as of Oct 1. Eligibility will be age 21 and 1 YOS. Employer wants all current participants of PSP to be able to participate in 401(k) upon its adoption, i.e., as of Oct 1. So that all such participants can enter the 401(k) portion of the Plan any problems with having quarterly entry dates for 401(k) (which means Oct 1 will be an entry date and all current participants of PSP will enter as of Oct 1) upon its adoption and then amending plan anytime prior to Dec 31 to provide for dual entry dates? Thanks in advance for your replies.

I'm trying to figure out if these types of plans require a Form 5500, assuming more than 100 employees are eligible. I notice the 5500 shows "prepaid legal" plans as an option in the codes? Is that the same thing as group legal services?

The legal services in question are part of an employee assistance plan where the employees get a short amount of time for legal advice with an attorney for free, and then a discount on legal fees if they go beyond the free advice period.

I'm drawing a blank here, sorry. The employer has a PS/401k plan and CB plan. The plans are aggregated for nondiscrimination and 404 deduciton, but totally separate 415 limits. Is that correct?

I keep wanting to say 415 has to be combined, but I think I'm bringing in the old rules...really old rules.

So the sponsor's EIN is listed on the 5500. The Plan's EIN is listed on the premium filings.

On the premium filing, there's a question that says, (not verbatim): If the EIN or PN on last year's 5500 is different from what's listed here, report the EIN and PN that was on the 5500 and explain.

I've always left that blank, because my pea-brain always interpreted it as "if the plan's EIN is different on the 5500...". So now the client and I get an email from the PBGC because the 5500 indicated the plan was covered but they couldn't find the (sponsor's) EIN in their system and they want amended premium filings going back 3 years...

Am I the only one that made this mistake? Is this even a mistake (yeah, i know it is, but it just seems sooooo stupid) Is the PBGC sending out thousands of these notices?

I'm certain this has an easy answer:

I have a client who changed their name and the plan name in 2013 (effective 01/01/2013).

EIN and all other data is the same (i.e. address, phone #, etc.)

Can I go ahead and use the new names on the 5558 extension, since the 5500 will indicate the name change when eventually filed?

I think it is ok because the filings are EIN driven, but then I got to "overthinking" and wasn't sure

Thank you in advance.

A plan was unfrozen in 2011 and benefits increased as a result. The plan covers only HCES. Per 404(o)(4), the increase in the liability must be ignored for 2 years from the later of the adoption or effective date. Assuming a calendar year, how does this timing affect in the 2013 year?

Back in the day, I had a file cabinet full of items that I had copied from pension periodicals, cases, rulings, etc. and then stuck into manila folders labeled by topic, then in alphabetic order in the file cabinets.

What are you using today as the electronic equivalent, for web pages, emails, PDF documents, etc.?

Evernote? OneNote? Another system?

There are many helpful posts to this forum regarding how to handle "very" late amenders (my situation goes back to 1998 and no documents can be located).

Suggestions have included a single VCP submission with the TRA, GUST and EGTRRA documents.

I'm wondering if anyone can report their success or any problems with such an approach.

I have a client who sponsors three idetical plans. All of the plans have not been amended for EGTRRA and the interim amendments. The plan is to restate all three plans and then merge them into a single plan. My question is whether I can merge them prior to the VCP filing and do a single filing or if i will need to submit on behalf of each plan. There is something in the instructions that says if you have multiple plans, such as a profit sharing plan and money purchase pension plan, you will need to submit separately for each plan, but it doesn't address plans that have been merged.

Thanks for any help.

Has IRS or DOL provided any guidance about VCP or VFCP corrections amid a service provider transition? We have an incoming client that has discovered some Qualification Errors in past years. Their independent auditor is recommended that they not move forward with the service provider transition until the errors are cleaned up through VCP filing.

Has anyone been involved in a transfer whilst an error is being corrected? What types of issues were encountered?

In general, our DB adoption agreements have the valuation date as the last day of the plan year, and our actuary runs the actuarial valuation as of the first day of the plan year. There seem to be some inconsistencies and I am trying to make sense of them. Assuming plan has calendar year:

1. A person is 40% vested on 01/01, and with an additional year of service is 60% vested on 12/31. Actuary shows him as 40% vested on his valuation reports but 60% vested on participant certificate.
2. A person was hired mid-year 2012 and enters plan 07/01/13. The actuary did not pick this participant up on valuation because he was not participant as of 01/01/13. That means he is not shown as accruing any benefit even though he meets requirements for accrual (participant with 1,000 hours).

We used to use the last day of the plan year as the valuation date, but moved it to the first primarily because we don't yet have year-end assets when determining contribution range for sponsor. I though the valuation date of 01/01 would be used simply for valuing the assets, not for determining benefits. How should these inconsistencies be dealt with?

An employee is requesting information on the COBRA implications of her entry into a partial dissolution of marriage (or "bifurcated divorce") under California Family Code s. 2337, pursuant to which I believe a ruling on dissolving the formal marital status is made ahead of resolving other (eg financial) issues:

http://www.leginfo.ca.gov/cgi-bin/displaycode?section=fam&group=02001-03000&file=2330-2348

Anyone have any experience as to whether a bifurcated divorce ruling would constitute a "divorce" or "legal separation" (both COBRA qualifying events under our plan)? Bonus points for Calfornia practitioners but any state would be helpful.

Note this is a separate question from whether the employee will remain financially responsible for providing health coverage pending total dissolution - the CA Family Code suggests that this could be addressed in the ruling, so the only question in my mind is whether the coverage (if any) should be provided as regular spousal coverage or through COBRA.

Thanks for any guidance!

We sponsor a corbel volume submitter plan and in the adoption agreement always name the Plan Sponsor as the Plan Administrator.

We received an RFP from a Plan where we are the current TPA and they are using their document. In the RFP they have named the person who handle their HR as the Plan Administrator.

If I was advising the HR person I would tell him that there is no way I would want any document saying that he is the Plan Administrator.

Am I being overly protective or overly sensitive? Any comments appreciated.