If the plan sponsor corporation dissolved, but the plan still needs to be restated, and terminated, who typically signs the documents in such a situation? The Plan Administrator/Trustee, under the general authority to administer the plan, etc., etc., or do you have to get into the DOL's "abandoned plans" guidance - which I haven't looked at yet.

Not a real life situation (at least not yet) but there are a couple where this might yet come into play...

This may seem like a simple question, but as you think about it, more questions come up.

Is an Employer required to notify participants in a Safe Harbor Non-Elective plan that they will no longer take EMPLOYEE Deferrals?

The Employer has not said anything about terminating the plan or the situation of the company.

If a person has a DB Plan and a SEP, and they contribute the $52,000 limit to their SEP, are the two plans subject to the 31% limit? In other words, is it true that the combined SEP and DB contributions can't exceed 31% of earned income? Thanks for any responses!

A participant in a small plan elected out of making pre-tax deferrals, however payroll did not pick up on this for several paychecks nor did the participant.

1) Can the deferrals along with income be returned to the participant?

2) If so, how would the company treat it? As ordinary income or would a 1099 be issued? Let's say the deferrals totaled $1000, the participant grosses 2000 per pay period. Would the plan sponsor just bump up the gross to $3000? It would not be subject to FICA, correct?

Has anyone ever seen guidance addressing whether a participant in an IRA who has a fee deducted directly from the IRA could reimburse the account the amount of the fee, without it counted as an annual contribution? Thanks for the help.

Company funds a SIMPLE IRA for 2014. Wants to move to a 401(k) plan. Company fiscal year ends 9/30/14. If they stop SIMPLE @ 12/31/14, can they adopt a 401(k) on 1/1/15 with a short plan year of 1/1/15 - 9/30/15?

I have seen language that says a company cannot sponsor another plan in the same "plan" year as the SIMPLE and language that says a company cannot sponsor another plan in the same "fiscal" year. Which is correct? This is assuming they do not want to "void" the SIMPLE for 2014. Thank you for any clarification.

Their Schedule A indicates that all of the money other than the TIAA Traditional Account is in pooled separate accounts. Yet on their Schedule D report, they include ONLY the TIAA Real Estate Account. Has anyone ever looking into why that is? I assume that we should be doing it more like Hancock does - listing each fund with "000" as the plan number.

I don't really care, I will continue to exclude them based on TIAA's Schedule D report (let TIAA defend it if it ever gets questioned) but was wondering if anyone had ever looked into this.

Besides the typical checking of prior addresses, checking with beneficiaries on file, Google and social media searches, what are people using to find participants now that the letter forwarding is discontinued? Has anyone used an online service such as - Intelius?

Is the buy-back provision (of rehired employees who wish to restore their prior distribution in order to have their nonvested balance restored) a required provision or is it optional?

I have a 457plan with a rolling 5 year vesting provision, so 2013's contributions vest in 2018 and so on. However, the Participant becomes fully vested at NRA.

Is this easily corrected by distributing the excess before 4/15th of the tax year following the year in which the contributions vest? Or is this a bad plan design doomed from the start (assuming the individual will work until NRA).

There would have to be some provision like this, otherwise the Executive will ALWAYS forfeit something.

I'm wondering if we should set up a separate 457(f) Plan for the employer contributions. I suppose there is no reason not to set up the 2nd plan?

We have a participant who terminated from a plan who is under age 59.5. At the time of termination the participant did not take out heir money. The participant is now disabled and would like to make a withdrawal. Would we waive the 10% penalty for this person even though they were disabled after termination?

A covered defined benefit plan was frozen in 2005. The plan is now failing the prior benefit structure test of 401(a)26 with current participants. The plan does not have sufficient assets to pay benefits given 417(e) rates.

An exception applies for an under-funded plan. This exception is all about not forcing a plan with insufficient assets to terminate just to comply with 401(a)26.

Problem is this exception only applies if the schedule SB indicates the plan does not have sufficient assets to pay benefits. The MAP-21 rates indicate this plan is just over 100% funded although in reality it is about 82% funded when applying the 417(e) rates. It seems that with most issues in life you get at least a random 50/50 chance of a positive outcome. With DB plans, you have an 85% chance of the worst possible outcome even with the greatest of care.

Apparently, we can go back before the plan was frozen and add former participants to prove the prior benefit structure meets the 40% threshold. So I guess we can go back to 1988 and add former participants. This should work as all participants accrued at least 2% of pay before the plan was frozen.

Anyone see a problem with this?

Thanks.

Pooled profit sharing account valued annually on 12/31. The plan's written policy calls for an interim valuation if the balance of the participant's account to be distributed equals or exceeds 5% of the total of the plan's pooled assets. Can the interim valuation be used for the exclusive benefit of participant X, the individual for whom the valuation was performed? Let's say an interim valuation will be done on 7/31/14. Participant Z terminated on 5/1/13 and his account was valued on 12/31/13. He has a small balance and has not been paid out. If a distribution is made to participant Z between 8/1/14 and 12/30/14, can we still pay out based on the 12/31/13 valuation or are we obligated to pay based on the interim valuation? It seems like you can make a case for using the 12/31/13 amount since the interim valuation was only intended for a specific individual.

Companies A, B & C form a controlled group. A & B sponsor one 401(k) plan and C sponsors a separate 401(k) plan. Participant Doe worked for C and has a large account balance in C's plan ($45,000). He was recently transferred to Company A and is now contributing to A & B's plan (Account balance = $1,500). Doe has requested a loan from Company C's plan. The plan document only allows for loans to be repaid via payroll deduction (checks are only permitted for prepayment). He is no longer receiving a pay check from Company C. He is only being paid by Company A. Can he take a loan from Company C's plan if he cannot repay it using compensation from Company C? Would he be able to transfer his account balance from Company C's plan to A & B's plan? (He has not incurred a distributable event. He only terminated employment w/ Company C but he's still employed within the controlled group.)

Thoughts?

Plan has 6 year graded vesting schedule.

Employee terminates employment with 4 years of service for vesting purposes and is thus 60% vested in his account.

Employee does not request a distribution of his account balance.

Later, the plan is amended to shorten the vesting schedule to 4 years.

The effective date of this amendment is after the employee's date of termination.

The now former-employee claims he is now 100% vested because he has 4 years of vesting service and wants a distribution of his entire account.

Is former employee correct?

Does it matter whether former employee had incurred 5 consecutive one year breaks in service before the effective date of the amended vesting schedule?

Working on a conversion with a plan sponsor who merged their MP plan into their 401k Profit Sharing plan 14 years ago. The receiving vendor doesn't support annuities, so they can only accept the 401k assets. We explored a partial plan transfer of the k-assets only, but the other vendor won't liquidate by source. Can the plan sponsor and/or participants remove the J&S from the MP assets therefore removing the protected benefit?

Rerunning 2011 ADP for a plan due to issues with ownership changes we weren't aware of. Long story, but ERISA attorney has advised we are to split plan into 4 separate ADP tests. 1 of the ADP tests is failing, other 3 are passing. However, I performed the testing by disaggregating the otherwise excludable nonHCEs. Obviously, corrections are being made more than 12 months after plan year-end. EPCRS states that plan may not be disaggregated into component plans for determining the correction for failure. ERISA Outline Book indicates the prohibition against restructuring is because the IRS doesn't want employer to reduce the amount of corrective distributions to HCEs and thus the amount of the one-to-one contribution for nonHCEs. QUESTION: Is the EPCRS saying that it is OK to disaggregate to run the tests, but if the test fails then I have to add back the disaggregated nonHCEs before I determine the refunds for the test that is failing (which is what I have always thought was the case...)? Or am I to understand that I can't disaggregate at all when I run the tests in the first place?

Thanks!!

Hi, All - My plan was terminated by the PBGC in 2013, and all assets were transferred back to the PBGC at the time of termination. I have categorized the assets as a transfer from the plan, but I get an error message when trying to file the Schedule H with the transfer of assets since I do not have a plan EIN for a transferee plan. I have spoken with the IRS, who tells me to check with the PBGC (for a 5500 instruction??). The PBGC basically laughed at me, as expected, since this pertains to the 5500. No answer from either of them. Has anyone had to file a 5500 Schedule H for a plan terminated by the PBGC? If so, how did you categorize the transfer of assets to the PBGC? Thanks!

We have a university client with professors who are eligible to participate in a 457(f) plan. The professors work on a 9 month contract, but may elect to be paid over a 12 month period. The university has historically required the professors who elect to particpate inthe 457(f) plan to be paid over a 9 month period instead of 12 months. They indicate that this is a 457 regulation requirement. Can someone please provide me with guidance as to whether this is an actual requirement, or simply university policy?

Can a QLAC be issued by a public Defined Benefit plan?