It seems that the tax free donation of RMDs from IRAs to qualified charities has been extended a couple of times, but I'm not sure that it's safe to say that it's a fixture. It is discussed in the 2013 version of Pub. 590. I don't see reference to there being a deadline in that publication, but before I pass on any information to a client about doing it for 2014, does anybody have a definitive answer as to whether it's available this year, and for the foreseeable future?

The IRS released 2 new qualifying event provisions for Section 125 plans that are optional for employers to add into their existing plans. As a TPA can we take the approach that all plans in our book of business get this update or should we be giving clients the option to include these new provisions?

From our internal discussions it seems like this should have just been an addition to the qualifying event definitions rather than an optional provision to be amended on the plan.

On another note, does anyone know if the deadline to update the Sect. 125 documents will be extended? Our document provider is not expected to release the updated documents until the end of Oct. during our busiest time of year.

If a defined benefit plan does not specifically prohibit an AP from being a QJSA 100% beneficiary, and a QDRO directs a participant to select the QJSA form of benefit with the AP as the 100% survivor beneficiary, for what reason(s) might a plan administrator claim the AP cannot be such a beneficiary (to the extent of the 100% survivor benefit)?

Assume for the above that:

-- the plan's standard QJSA is 50%,

-- it also offers a 100% QJSA survivor option,

-- the unmarried participant has retired and

-- is ready to commence benefit recept, and

-- the survivor benefit is fully subsidized by the plan.

Any/all conjecture welcome, please.

A 1 participant DB will have excess assets of $50,000 (above his 415 limit).

Can:

1. A 1 participant corporation establish a qualified replacement plan (QRP)? The allocation(s) would only be made to the 1 participant of the DB who remains an employee of the corporation.

2. If #1 is possible, is there any time frame in establishing and transferring assets to the QRP? Would like to have him take an in-service distribution now (he is age 62) and leave the excess $50,000 in the DB for a few months until a QRP can be established.

Our understanding is that at least 25% and up to 100% of the excess can be transferred to the QRP. Then it must be either allocated in the same year transferred or over up to 7 years.

If #1 is possible, he may be able to take a $50,000 salary and allocate $50,000 in a profit sharing plan to himself and be done. No deductible problem as it is not deductible anyway and no 415 problem as up to 100% of salary can be allocated.

Thanks.

I'm looking at a potential 401k takeover, but I'm not sure I want it. The employees are all invested in a group annuity contract with insurance company X. But the owner uses a brokerage account to access more investment choices for himself. I know in general the employees must have the same investment choices as the owner. And I know the brokerage company can have a minimum threshhold to be able to use their product. But this owner has put forth a higher threshhold to keep the employees from using this option. I'm pretty sure that's not allowed. Can someone point me to the right code section to research these rules? Or which chapter in the ERISA Outline Book? Thanks.

A participant terminates from a 401(k) plan on 6/30/2014.

The participant is paid their final paycheck on their date of termination, 6/30/2014.

The paycheck includes their final hours of service, plus 6 months severance pay.

Assuming total gross compensation is used for plan purposes, is the 6 months severance pay included for plan purposes since it is technically not paid post-severance?

Thank you.

A plan sponsor was able to make a contribution totaling less than $500 under SCP in order to satisfy a missed deferral opportunity for deferrals not withheld from some OT paid to a few participants. The contribution included the missed match and a very small amount of earnings. NO 415 violations were discovered either. The missed deferral opportunity was discovered after the close of the plan year, but prior to filing the 5500. Should the contribution be included on the 5500 for the plan year it represents or the current plan year and can the whole contribution be deposited into the deferral account? It is a safe harbor matching plan and in some instances the missed deferral opportunity amounted to a few dollars or even less.

Thanks

Original QDRO drafter is deceased, I in turn would appreciate board members' thoughts on the following:

DBP, plan admin-qualified QDRO; QDRO uses standard coverture formula, assigns AP 50% of marital portion as retirement benefit with separate interest approach, marital portion being 54% of whole pension. QDRO has 'poison pill' provision -- neither can do anything to derogate the other's rights or things get very expensive. QDRO defines scope of 'Survivor Share' as 100% of the marital portion, includes QPSA for pre-retirement protection, and for post retirement uses the following language:
- - -
...AP shall be treated as surviving spouse for the purpose of receiving her Survivor Share of the QJSA .... Upon retirement Participant shall be required to elect a form of benefit of the type and to the extent necessary to name and provide AP with her Survivor Share of the QJSA or its actuarial equivalent .... Participant may select any alternative form of benefit as long as his choice leaves intact the actuarial equivalent of a QJSA for the AP to the extent of her above-assigned interest.
- - -
Participant retires unmarried in early 2014 and reviewing benefit statement realizes calculation is off and will detrimentally affect AP, so he calls AP and together they learn from admin's counsel that admin calculated AP's survivor share as 50% based on admin's interpretation of QDRO and 1055(d)(2)(B) as applying to limit AP's survivor benefit to 50%. Admin's counsel also says participant can't name AP as 100% beneficiary (though plan doesn't appear to prevent this), and actuarial dept's benefit statement gives him a 100% survivor option. So due to poison pill provision he's stuck not being able to commence benefits until matter is resolved, with AP also on the verge of commencing her standard benefit, and admin won't budge.

Participant and AP are friendly and decide to amend the QDRO to address their intent in another way to achieve their unchanged goals in dividing the pension, and before they do are seeking input.

Assumptions (help me out here, math isn't my strong point):

original whole: $300,000
marital part: $162,000
non-marital part: $138,000

Participant's remaining pension after AP's standard benefit is carved out is 46% of original whole plus half the marital portion of 54%, or 73% of the original whole. Since the admin would calculate the survivor benefit on the 73%, with a survivor benefit limited to 50% of that, AP's survivor benefit as calculated by the admin is 36.5% of whole, when by the parties' intent in the QDRO it is to be 100% of the 54%.

What is the correct approach to the math?
Thoughts on the parties' ability to achieve original intent?

___

* edited to add survivor benefit is fully subsidized

*** edited again to fix math & add info on drafter

Is a 204(h) notice required when a money purchase plan is merged into a profit sharing/401(k) plan involving 2 different plan sponsors? For example, Plan A is the money purchase plan and the plan sponsor is Employer A. Plan B is the 401(k) /profit sharing plan and the plan sponsor is Employer B. Plan A will be merged into Plan B. Does a 204 (h) notice need to be sent to the participants in Plan A? Any help would be appreciated.

DB - NOT covered by PBGC

Assume the following applies to both plans

- all participants covered by both plans

- covered payroll = $1,000,000

- MRC in DB = $250,000

- Max deductible in DB = $400,000

- 6% of pay in DC = $60,000

- 25% of covered payroll $250,000

Can sponsor make max deductible of $400,000 + $60,000 to DC plan and deduct them both?

or

Is sponsor limited to $250,000 MRC in DB + $60,000 to DC plan?

That is if the MRC in DB is 25% or more of covered pay is the sponsor limited to MRC in DB + 6% DC or can the sponsor always take max DB + 6% DC

I feel this should be straight forward but for some reason I'm brain cramping.

Converting 401k plan to QACA effective Jan 1, 2015. Must all current participants complete new election forms? All current participants have previously completed election forms, several have declined to participate - do they need to decline (again)?

In reviewing a Schedule SB for 2012 for a CY plan, I noticed that there was a typo on the Valuation Date. It indicated 12/31/2012 when it should have been 01/01/2012. The numbers are all correct, but, it is just that this date was put in incorrectly.

Question: Should I amend the 2012 filings and re-submit or just let it go and if the gov't calls me on it, explain that it was just a typo and that would be the end of it?

An advisor would like her client (a participant in a 401k plan) to take his 2014 RMD as an in-kind distribution of shares of a certain stock. Is this allowable? I know the RMD is a taxable event. Regardless of whether tax is withheld from the distribution or not the 1099-R will show the entire amount as taxable. But is it ok to transfer stocks in-kind from a 401k plan to another account (trust)?

When determining the non-statutory otherwise excludable employee group, can you use the elapsed time method for computing the 1 year of service requirement? For example, a 401k plan has a 6 month eligiblity period using elapsed time. It is difficult for the employer to track hours. When determining the non-statutory group, instead of using 1000 hours, can you use elapsed time and age 21?

Thanks!

An employer was paying for the first month of a former employee"s COBRA. The former employee sent his COBRA election letter to the former employer instead of the administrator. The employer paid the first month premium. The administrator cancelled the former employee"s COBRA because they did not receive the former employees election. Does the election notice by the former employee to the former employer count as notice of the election? The election notice was sent to the employer 8 days after receipt of the COBRA notice.

Any solutions anyone knows about?

Annual check to the state as an escheat process?

Failure to make the RMD is a problem for the plan as well as the Participant I believe.

Thanks

On page 4 of this article:

http://www.davis-harman.com/pub.aspx?ID=VFdwWmVnPT0=

is the statement that:

"If the 5-year rule applies, no amount is treated as an RMD that is ineligible for direct rollover for the first four years after the employee’s death, and no amount is eligible for rollover on or after January 1 of the fifth calendar year following the year of the employee’s death."

Do you know of any cite or reference that confirms that this is true? Thanks.

A participant in a 401(k) that has automatic enrollment was enrolled in the plan and subsequently opted out. The participant is now upset that the service provider has access to his personal info (address, SSN, etc). Opting out does not erase/delete the employee's personal information from the roll. Do you know where I can find information on this topic of protecting personally identifiable information? Is this a privacy issue? Has anyone had experience with this?

The service provider will need this info to process distributions, 1099's, 8955's, etc when a distributable event occurs. Do participants have any recourse with privacy issues?

Thanks

Multi-employer defined contribution plan.

I represent the Plan. I received a QDRO in June, 2014. I reviewed it and everything looked good. The QDRO assigned the AP a lump sum (let's just say $100,000 for sake of ease) as of November 1, 2010 (not the true date, but just for ease of use) plus interest/earnings accrued since November 1, 2010. I contacted the custodian and plan and told them to segregate the account per the QDRO terms, etc. Very easy and standard. The account was segregated and the AP withdrew the money. All proper.

Two months later, I get a note from the attorney for the AP that, in fact, the segregation should have been $100,000 as of February 1, 2014 plus interest/earnings accrued since February 1, 2014. Considering the amount of interest/earnings that accrued since November, 2010, the AP received an extra about $60,000 in her distribution.

The new QDRO that has the correct segregation date looks fine. My question is, what can the Plan do?

Can the AP just write a check for the excess amount back to the Plan?

Does the Plan have an issue because of a wrongful payment (even though it was following a Court Order)?

What do you recommend as the best practice to make this right?

To me, a problem is that the original QDRO assigned essentially $160,000 to the AP and now the new QDRO assigns approximately $110,000 to the AP. That's not an additional $110,000, but a "negative" $50,000. It's almost as if there's no use creating a new account since that would be pointless.

Instead, the AP should just pay back the excess amount and everything should be ok. But that seems way too easy and logical, and we all know that dealing with these things, easy and logical usually means wrong.

Your thoughts? Thanks.

A 401(k) plan had a participant with a participant loan. It turned out she made one extra payment on her loan and an additional $410.00 is in the plan. She was not making repayments through payroll deduction but by personal check.

This seems like it should be correctable through self-correction. If so, I would think the additional $410.00 plus earnings would be refundable to her. Does anyone disagree? Also I would think earnings should be based on actual plan earnings between the time of the additional payment and the refund. Anyone disagree?

Thanks.