Does anyone have a suggestion for an expert witness regarding a minimum distribution under 401(a)(9) from a DB plan? On party says 401(a)(9) would be violated if the amount argued by the other party is actually paid.

We have a client, that we discovered had a second company participating in the 401(k) Plan. They are not a controlled group, but a multiple employer. This was NEVER addressed by the TPA in any correspondence to the client.

When we contacted the TPA doing the work on the plan, they claimed all that they needed to do was a participation agreement so the document matched what they were doing in operation.

Another TPA stated the plan needed to file under VCP since there was an entity participating in the plan that was not allowed to and therefore an document defect.

Anyone have thoughts on this.

Thanks

This seems too agressive to me on its face, but I'm hoping I'm wrong.

We have a take over plan that look like it is top-heavy. HCE's have contributed in 2013, but not in excess of $5,500. How big of an issue is it if we amend now to limit deferrals for HCE's to a low dollar amount plus the catch-up?

I don't see that there is a cutback issue to the non-keys because there is a last day requirement for top-heavy minimum. They haven't accrued anything until the last day.

I also don't really see a cutback issue to the HCE's because he right to defer is not a protected benefit.

I'm uncomfortable because the amendment is really being used to reclassify money that is already in the plan as catch-up when if we let htings play out some of it probably wouldn't be.

Thanks for any guidance.

I recently heard from an administrator, that the eligibility of a 401k/PSP was amended from 1 year to 3 months, effective 1/1/2013, in order for the this plan, together with the DB plan, to pass the coverage test. The administrator said that it was okay to still adopt this amendment, since, as a corrective amendment, the deadline was 10/31/2014. Is this deadline correct? If so, can someone point me to a source?

Thanks a lot!!

Controlled group with two separate 401(k) profit sharing plans. They recently filed as a QSLOB. An internal coding system has created a problem when employees transfer from Plan A to Plan B. Company A is coding them as terminated, and some employees have taken a distribution of their balance.

They are working on a fix for the internal problem. Other than contacting these employees to notify them that they received a distribution in error and need to return the funds (ineligible for rollover, although I think all were lump sum) how is this corrected?

Thanks for your help!

This came up during d-letter review of a DB plan. Plan A requires 1,000 hours of service for a full year of credited service in all years except the participant's first and last years of participation. For those two years, Plan A requires 2,000 hours for a full year of credited service and credits partial years for anything less than that. Anything wrong with having such different rules for the first and last years?

• 2,000 hours (by itself) is fine as a minimum--the regs say so. § 2530.204-2. I can't find any guidance that says you can't use a different threshold for the first and last years.

• I don't think this constitutes an impermissible "last day" requirement for the first and last years because the participant need not be employed on any particular day, provided he/she gets 2,000 hours. § 2530.200b-1(b).

• I don't see a backloading issue--the plan uses a vanilla fixed-percentage-of-comp formula, so unless the "different rules for different years" is itself impermissible, it clearly passes the 133 1/3% test.

Nonetheless, IRS is claiming the first and last year's rules are impermissible, simply because in an other plan year a participant with 1,000 hours would get a full year. Any thoughts appreciated.

Is there an issue with having auto enroll effective 1/1/15 and then the first auto escalation 7/1/15? Something in our document is ambiguous about when the first escalation can occur.

ERISA section 404(a)(1)(D) tells a fiduciary to discharge his, her, or its duties "in accordance with the documents and instruments governing the plan insofar as such documents and instruments are consistent with the provisions of [ERISA]."

The Supreme Court of the United States has made clear that the "insofar" exception at least permits, and might require, a fiduciary to disobey a plan's document if doing so is necessary to meet an ERISA fiduciary duty, including a duty of loyalty or prudence.

Does anyone know of a court decision in which the "insofar" exception applied concerning a situation concerning a health plan?

ERISA section 404(a)(1)(D) tells a fiduciary to discharge his, her, or its duties "in accordance with the documents and instruments governing the plan insofar as such documents and instruments are consistent with the provisions of [ERISA]."

The Supreme Court of the United States has made clear that the "insofar" exception at least permits, and might require, a fiduciary to disobey a plan's document if doing so is necessary to meet an ERISA fiduciary duty, including a duty of loyalty or prudence.

Does anyone know of a court decision in which the "insofar" exception applied concerning a situation beyond employer securities?

Any case concerning a retirement plan?

Any case concerning a health plan?

Any case concerning some other ERISA-governed employee benefit?

I apologize if this is not an appropriate forum for this post.

I am trying to make a career change and find an in-house counsel job.

Are there search tools (including particular headhunters) that better than others? How would you go about a search?

Many thanks.

Hello everyone!

I have a client that is contributing only the 3% Safe Harbor Nonelective contribution to their plan. There are no other employer contributions to be allocated, and forfeitures were used to reduce plan expenses. Based on all information I could find, and from my past experience, this scenario allows the plan to be exempt from all top-heavy minimum requirements.

However, there is one wrinkle that is affecting my judgement. The plan document is written so HCEs are not required to receive Safe Harbor contributions (keep in mind they are eligible to receive the Safe Harbor in the sense they met the eligibility requirements and entered the plan for Safe Harbor contributions, and are not strictly excluded from this portion of the plan). This selection was made a few years ago, so the plan has not contributed the Safe Harbor 3% Nonelective for any HCEs (both Non-Key and Key) for quite some time. This is the first year in a while where the client decided to not allocate discretionary profit sharing in addition to the Safe Harbor, so the Top Heavy exemption can possibly come into play for the plan year.

That being said, since the HCEs that are Non-Key are not receiving any Safe Harbor contribution, does the plan lose their Top Heavy exemption, and would this group have to receive a 3% Top Heavy Minimum? I can't confirm anywhere whether the exemption still holds up since the client is strictly allocating the Safe Harbor nonelective to the plan.

Any help is greatly appreciated (a regulation cite or excerpt from the ERISA Outline Book would really help as well).

Thanks!

Wickedp1

Is an employer permitted to double-up cafeteria plan pre-tax health insurance withholding amounts from a final payroll for an employee who terminated mid month? This would be done to cover the "2nd half" the employee would have ordinarily paid in the latter part of the month had employment continued. [This is with respect to a MD employer.]

Thank you.

If a participant in a qualified plan dies, and the participant's named beneficiary is a See-Through trust, then the persons who are beneficiaries of the trust are treated as designated beneficiaries of the participant.

Does this include that the beneficiaries can split the trust account into their own separate personal accounts (if they do it by the end of the year after the year of the participant's death)?

Until the trust account is separated, does the plan pay the benefit, including RMD, to the trust or to the persons?

Before the trust account is separated, do you use the shortest life expectancy of the beneficiary persons to determine the RMD, or do you treat it as separate benefits and calculate an RMD for each as if they were the participant's named beneficiaries?

Thanks for answers. I'm just trying to understand how this works before I need to know how it works.

A sole prop has a 401k PSP for 201 and has already contributed his maximum deferral of 17,500 and PS of $33,500. Now he would like to implement a DB Plan in 2014. If he does this, his PS contribution would be limited to 6% based on the combined deduction limit, but he's already contributed more than this.

How to fix this, if possible?

We have a client that would like to rollover a substantial amount of money from his IRA to his 401(k) plan. However he would like to be able to access this money by either taking a lump sum distribution each year if needed or rolling it back to the IRA.

The plan document states that a participant may distribute all or a portion of the amount credited to the participants rollover account at any time.

He is under age 59 1/2, i understand that he could take lump sum distributions from his rollover source from the plan based on what the document says. However can he roll it back to his IRA? Is it considered an eligible rollover? I believe it is but i just want to make sure.

the account is split pursuant to a QDRO and the alternate payee takes less than a lump sum. they then request a follow up distribution. is she exempt from the 10% penalty for all distributions because she is an alternate payee or does she only get the exemption for the initial distribution from the account?

the account is split pursuant to a QDRO and the alternate payee takes less than a lump sum. they then request a follow up distribution. is she exempt from the 10% penalty for all distributions because she is an alternate payee or does she only get the exemption for the initial distribution from the account?

I am looking at a single-employer plan that provides health insurance, life insurance, dental, etc. It is self-insured for health and pays in monthly amounts to the plan third-party administrator based on an estimate of total claims for the year. It has about 150 participants. If the employer pays in a set amount of contributions per employee each month for health insurance and employees also make contributions, whatever balance is held by the TPA at year end is plan assets, and schedule H is required, and a plan audit is required, correct? Are there any exceptions I should be aware of?

What if the employee portion is only to cover dependents? Does that change anything?

Notice 2014-53

Does anyone have experience requesting an expedited review of a determination letter request due to an "urgent business need"?

I have a client that needs to establish a new 401(k)/ profit sharing plan for collectively bargained employees. Employers are currently contributing to another plan on behalf of these employees, but the other plan is essentially kicking these employees out. We need to set up the new plan to receive new contributions for the employees, and also to transfer the accounts from the other plan.

The problem is that the other plan will not transfer the accounts until the new plan obtains a favorable determination letter. Also, employers are reluctant to make contributions to the new plan until we get the letter. Without the letter, employers will have nowhere to remit contribtuions required under the collective bargaining agreements. Also, fees would by very hugh for participants if we need to maintain 2 plans before obtaining the letter.

Any help would be appreciated.