anyone have a procedure they follow. we also manage assets held at fidelity. our service agreement allows us to sell assets for non payment of fees but i am not sure this is allowable under ERISA. anyone have any opinions on that as well?

A client asked me if I could help them write an RFP so they can select a new financial advisor. Has anyone seen anything like this before? We tend to work with smaller plans, so we don't go through that process. Thanks.

A law firm is considering making 2 associates Non-Equity Partners on 7/1/14. The current group of partners (5) do not make any deferrals during a given year until late in the year when they determine whether or not they are going to make a profit sharing contribution. If so, then they make elective deferrals and subsequently make a profit sharing contribution to all staff, which covers the TH contribution that they need to make.

Based on the above, they have 2 questions:

1) Is a "Non-Equity" partner considered to be a Key Employee?

2) If yes, then does an elective deferral that employee made as an associate during the first half of the year trigger a required TH contribution for 2014?

Thanks in advance for your help!

We are considering switching from Relius to ftwilliam for plan administration. Does anyone have any information on how the two products compare?

Thanks!

We have an IRS auditor who's blustering about disqualifying the plan under examination and suggesting audit cap.

We refuse to acknowledge any disqualifying defect and want to call his bluff.

Is my understading correct that a disqualification is extremely rare and involves mountains of additional paperwork and levels of review within the Service?

Can we go into audit cap without admitting that there's a defect in order to get a fresh set of eyes on the situation?

Thanks

Plan is under routine IRS audit for 2012. Plan enjoys a favorable DL issued in May 2012.

Auditor is challenging timely adoption of the PPA interim amendment which was approved in the DL.

Isn't the auditor precluded from challenging plan document qualification? Isn't that the whole purpose of obtaining the DL? Anything we can point to (other than the reliance language in the DL we can point to?

Thanks

A participant wants to take a distribution from his IRA to perform a qualified HSA funding distribution (under IRC Section 408(d)(9)(B)). The transaction is not reportable on the 1099-R, and shows up on the 5498-SA as a regular contribution. Is there any obligation of the IRA trustee to confirm the participant is eligible to perform such a distribution, i.e. has never previously performed on in his lifetime?

Thanks for the help.

Defined Contribution Plan. Plan language states that the benefit options available are a QJSA (if married), a lump sum, or partial benefits. If a Participant doesn't have contributions for 6 months, he can take a lump sum, even if not at retirement age (ignore the tax consequences for the sake of this scenario).

At issue is another provision. The Plan also has language that says that an Alternate Payee may make a voluntary cash-out in a lump sum so long as it has been 1 year since the divorce.

Now, a Participant can get his money in a lump sum after 6 months. The Alternate Payee has to wait a year.

Is that permissible?

Keep in mind that this language has been in the Plan since the early 2000s and the Plan has received 2 favorable determination letters since the language was inserted in the Plan. Now, I understand that the IRS doesn't really look at these Plans with a magnifying glass (well, some agents do), and I understand that, if the Plan language is improper then it needs to be changed.

Now, with all the talk lately about sham divorces, this would be a possibly effective way to combat that (though if people really wanted to skirt the rules, they'd do it anyway).

According to the DOL FAQ on QDROs:

The plan itself may contain provisions permitting alternate payees to receive separate interests awarded under a QDRO at an earlier time or under different circumstances than the participant could receive the benefit. For example, a plan may provide that alternate payees may elect to receive a lump sum payment of a separate interest at any time.

Now, that seems to say that the Plan can have provisions treating Alternate Payees and Participants differently by letting the Alternate Payee get her benefit sooner than a Participant or under different circumstances. Do you read it to say that a Plan can also impose greater limits on an Alternate Payee (under the "different circumstances" language)?

Also applicable here is the DOL publication on QDROs, specifically part 2-15

The plan administrator must act in accordance with the provisions of the QDRO as if it were a part of the plan. In particular, if, under a plan, a participant has the right to elect the form in which benefits will be paid, and the QDRO gives the alternate payee that right, the plan administrator must permit the alternate payee to exercise that right under the circumstances and in accordance with the terms that would apply to the participant, as if the alternate payee were the participant.

From that same publication, part 3-8

A plan may by its own terms provide alternate payees with additional types or forms of benefit, or options, not otherwise provided to participants, such as a lump-sum payment option, but the plan cannot prevent a QDRO from assigning to an alternate payee any type or form of benefit, or option, provided generally under the plan to the participant.

It seems to me that there are some hurdles to enforcing the Plan's language. Now, if I can get the parties to agree to insert in the QDRO that the Alternate Payee won't have access to her account for one year, then I think that's ok.

My bigger issue/question is the operation and language of the Plan.

Your thoughts? Thanks.

At the time that we prepared the 5500 for a client, their record keeper did not provide the necessary information as to their own compensation to report on Schedule C. We indicated the information about the record keeper and that the information had not be provided. Of course, this prompted a DOL inquiry. This has made the record keeper much more interested in cooperating.

The client's attorney is suggesting that once the record keeper provides the information, we should file an amended 5500. I have two questions about that.

1. Is it really necessary? What was filed was accurate at the time of the filing.
2. Would the client need a new audit?

Hi all,

We are a TPA getting into COBRA administration. Does anyone have any information on software programs to help with administration? Any tips or feedback, pro and con on software would be greatly appreciated.

Thanks for any help!

Plan doc has 3 mo eligibility + 1st of mo entry. Not consecutive service and no minimum hours required. Plan has a lot of summer workers who come and go each year so am trying to determine eligibility accurately. How do you determine if a person met eligibility requirement prior to DOT assuming they term'd prior to 3 mo from DOH? If they're rehired within 12 mo from DOH do you add the time together? If anyone has an example with dates that would helpful. Ty

Employer owns 3 companies. Controlled group situation exists.

Each company has its own plan. Plan A, Plan B and Plan C.

Client does not want to aggregate all the plans and wishes to test each plan separately. I understand that if each plan passes coverage on its own, we can do separate ADP/ACP testing.

My question is:

Is this an all or nothing situation? EIther each plan passes coverage separately or they are combined as 1, coverage is run and then other compliance tests follow OR can you combine Plan A and B, and if this combined plan passes coverage and Plan C passes coverage, you can then run your compliance testing separately for Combined Plan A&B and Plan C?

I hope I am making some sense here.

I understand that a 401(k) Plan can restrict cash or deferred elections to once per plan year pursuant to 1.401(k)-1(e)(2)(ii).

If a Plan has an annual enrollment period, does this mean a participant who elects a 10% deferral cannot elect a 0% deferral until the next annual enrollment period?

A participant in a 401(k) plan has requested to change his beneficiary to his new spouse. Currently his former spouse is the beneficiary. Does the plan administrator need any type of documentation that the divorce decree did not grant the former spouse a portion of his 401(k) that would be payable at his death? If so, what type of documentation would be needed (copy of divorce decree, letter from the participant)?

Thank you.

Can anyone tell me how many tax laws have been passed in the last 6 years?

Hello,

I have a client who added life insurance to the Plan and purchased a couple of whole life policies in late December of 2013.

While the premiums are substantial, the only portion of them which had cash value at year end are the Paid Up Additions.

The cost of insurance was almost as high as the value of the PUAs, and I'm not sure where and how to account for this on my balance sheet and 5500.

My prior experience has been with older policies where the premium simply adds to the overall cash value.

I was thinking of accounting for the COI as an expense, like other expenses, but an alternative is to call the COI a withdrawal from the plan, since it's not the same as a normal plan expense.

Call it withdrawal? Expense? Something else? Thanks for your help!!

If a plan hasn't been amended for GUST and EGTRRA--using App. C, Part II Sch. 2--must a filer send (1) a GUST amendment and an EGTRRA amendment (i.e., two amendments), each retroactive to the applicable effective date, or (2) may the filer simply send a restatement with everything? Thanks!

Hello, I am new to this board and am not a benefits professional, but this seems like a good source of information on a topic that is as clear as mud to an outsider. I hope I'm not breaking any rules with this post.

I left my employment in Sept 2013; this employer had a pooled 401k. The year end statement for 12/31/2013 was provided to me in May 2014, and they distributed my balance (~$130k) to a rollover IRA on June 1. The amount distributed was the amount on the year end statement.

In other words, any gains that my $130k portion of the pooled fund may have made between January 1 and May 31 of this year accrued to them, not me. Is that legal? Or should they have performed another valuation of my account prior to distribution?

A TPA client has multiple clients with SIMPLE IRAs. They would like us (the custodian) to set up their IRAs in an omnibus account. Is this allowed?

past age 25. Adult child is disabled. Can coverage continue past age 25? Can coverage continue under any other situation (another child is in graduate school)?