For the past 18 years I received a monthly pension from Towers Watson, which used to be Towers Perrin, which used to be TPF&C, which gobbled up my roots at Tillinghast, Nelson & Warren. Now, I get this "thing" called an "Annual Funding Notice." It tells me the company should have contributed $125 million in 2013. They didn't tell me what they contributed, but gee, $125 million is a lot of billable hours.

Oh, I turn to page 2 and it shows assets of $2.2 billion and liabilities of $1.8 billion. So, I feel somewhat comforted. Then, I see some credit balances of about $450 million. I wonder what they are. Obviously, something bad because they're subtracting them from the assets. Is $450 million a debt the Plan owes? Does the Plan not really have enough assets?

Is my robust monthly pension of $115.05 secure or do I need to make other provisions for my retirement. In any event, I'm certainly pleased that Congress forces TW to set the record straight for me so that my former employer does not hide the precarious shape the Plan is in.

Got a 457b "funded" w/ brokerage accounts. Am I correct that the board really ought to be approving a menu of funds? I assume it would be ill advised to let the execs trade in anything they choose? I had one other 457b plan this way and that's what the attorney recommended. I wasn't sure if that was a rule or a good recommendation or what.

Plan A is a multiemployer money purchase plan. Plan B is a multiemployer 401(k)/profit sharing plan. The assets of Plan A are to be transferred to Plan B. Plan A will now longer exist after the transfer.

My question is whether a Form 5310-A should be filed as a result of the transaction? It seems as though this is not required because the transaction would satisfy the 4 requirements of the exception described in the instructions, but I'm wondering if it is good practice to file the form regardless. Also, should Plan A file Form 5310 after the transaction is completed? Again, I'm not sure this is required, but is it good practice?

Any help on this would be appreciated.

A plan sponsor was acquired via stock sale. They were told that terminating their plan before the deal closed was advisable to provide more freedom of choice to their plan participants (a distributable event allowing more distribution choices, rather than face a plan merger under the successor plan rules). The acquiring entity also did not want to take on the liabilities present in an active qualified plan with operational defects.

I don't have any details on the purchase agreement between the 2 parties, unfortunately, but will guess that not much was stated regarding the retirement plan.

So now we have a terminated plan that still has a number of steps to fully shut down, including current and future compliance testing, tax form filings, potential refunds, distributions, etc..

Question 1: Am I correct is thinking the acquiror has every right to insist that those tasks (and costs) be handled by the acquiree?

Question 2: Does the acquiror somehow inherently own the liability for the acquired company's plan anyway, absent anything in the purchase agreement specifying that the plan trustees/officers of the acquired co. are personally responsible until the plan is shut down and beyond?

Thanks for any comments and observations!

I have a new client that is the subsidiary on an Israeli company. All of the employees of the subsidiary are sales people. There are no officers. The company wishes to establish a plan for the U.S. employees. Can the Israeli president of the parent act as the trustee of the U.S. plan? I know the law requires the indicia of ownership of the trust assets to be held in the U.S. but I haven't been able to find any requirement that the trustee be here. Any help or guidance is greatly appreciated.

Plan year 03/01 - 02/28

Plan fails ADP testing at 02/28/13 & $1750 of HCE's deferrals are reclassified as catch-up.

HCE defers $23,000 during 2013 (evenly across all paychecks). It seems to me that we can classify $3,750 of that as catch-up at 12/31/2013. (The $5,500 less the amount used at 02/28/2013)

HCE defers $4,500 in January & February of 2014.

Plan fails testing @ 02/28/2014 and a large refund is required. The system is reclassifying an additional $5,500 as 2014 catch-up on top the $3,750 that we already reclassified for 2013. I think I can use $4,500 as 2014 catch-up, but I don't see that I can use more than the deferrals made during 2013.

Basically I'm think the ADP test should show $19,250. ($23,000 less $3,750 for 2013 catch-up). Up to an additional $4,500 could be called 2014 catch-up and used to reduce any refund

Am I missing something?

Thanks in advance for any guidance.

We are taking over an old PSP that includes a mandatory after tax component. Prior to our involvement, recordkeeping has been done in-house. No participant direction. Balance forward annual statements. Plan is audited. Plan has loans that are accounted for in total as a trust asset, as things used to be 15-20 years ago, not as assets of the account of the participant taking the loan.

The trustee bank is accounting for the loans in a separate account under a master promissory note. The balance is increased when a new loan is issued, decreased to reflect principal payments. Not sure how frequently the decreases happen, but as long as everything balances at the end of the year, it shouldn't matter.

Participant statements for those who have a loan will have a note at the bottom indicating their loan balance. The participant's share of the total loan account will not be shown separately, nor wil there be any other indication of loan activity.

Loan interest is allocated to all participants as earnings, whether or not they have a loan.

There is a $100 loan fee taken from loan proceeds, but included as part of the loan amortization.

If a participant defaults (which has supposedly never happened except for terms) and offsets, at that point the outstanding balance is removed the master loan account and deducted from their balance prior to payment.

I need to know if all this sounds reasonable, is there anything to be on the lookout for, have we missed anything, etc? It's been too long since I've had to deal with loan accounting like this. Help is always appreciated.

We are taking over an old PSP that includes a mandatory after tax component. Prior to our involvement, recordkeeping has been done in-house. No participant direction. Balance forward annual statements. Plan is audited. Plan has loans that are accounted for in total as a trust asset, as things used to be 15-20 years ago, not as assets of the account of the participant taking the loan.

The trustee bank is accounting for the loans in a separate account under a master promissory note. The balance is increased when a new loan is issued, decreased to reflect principal payments. Not sure how frequently the decreases happen, but as long as everything balances at the end of the year, it shouldn't matter.

Participant statements for those who have a loan will have a note at the bottom indicating their loan balance. The participant's share of the total loan account will not be shown separately, nor wil there be any other indication of loan activity.

Loan interest is allocated to all participants as earnings, whether or not they have a loan.

There is a $100 loan fee taken from loan proceeds, but included as part of the loan amortization.

If a participant defaults (which has supposedly never happened except for terms) and offsets, at that point the outstanding balance is removed the master loan account and deducted from their balance prior to payment.

I need to know if all this sounds reasonable, is there anything to be on the lookout for, have we missed anything, etc? It's been too long since I've had to deal with loan accounting like this. Help is always appreciated.

Hello,

On line 8f on the 5500 SF, many TPAs are using the actual fees that appear on brokerage statements to complete the information needed for line 8f. What about investment advisory fees that are not appearing on statements? Are other TPA's not reporting these fees on 8f? really, we are looking for clarification on what fees are being listed fro brokerage accounts. Any insight would be appreciated.

Is an Employee Assistance Program, for which an employer pays a PEPM fee to provide its employees, a "fully insured" or "self-insured" benefit? It seems as if it is fully insured but would then the EAP provider be subject to state insurance law?

Assume that the EAP provides more than just referrals and is a group health plan under ERISA.

I am unsure as to what line on the Schedule H, Part I real estate investment trusts and municipal bonds would be included. Any thoughts?

We have a client profit sharing plan (individually designed) that is being submitted for a determination letter. Our client’s plan has an acquired company merged plan that, in turn, had a merged plan (let’s call it plan 3). Plan 3 had an unsigned amendment narrowing the definition of compensation. We have no back-up documentation to substantiate a request to sign the amendment under VCP. Also, we have no data on which to calculated additional contributions to participants based on plan 3’s broader definition of compensation without the amendment. Have you ever had a similar situation in a VCP filing or a determination letter review and if so, how did it get resolved?

I'm dealing with a multiple employer 401(k) plan (Employer A and Employer B) that contains Employer A non-publicly traded securities. Employer A has been purchased, and the new owner would like to limit the future purchase of Employer A stock to Employer A employee-participants. Employer B employee-participants would be permitted to sell any Employer A stock they have, but would not be able to select additional Employer A shares as an investment option in their 401(k) accounts (but Employer A employee-participants would be able to so elect).

Assuming there are no HCE discrimination issues, would this be permissible? More simply, can a multiple employer 401(k) plan offer different investment options to different participants based on the employer of the given participant? We believe this is permissible, but I have been unable to find any authority explicitly stating so (right now all I can say is that none of the qualified plan requirements prohibit it). Does anyone know of an authority that explicitly addresses this? I can't even find anything about offering differing investment options within a single employer. Anything that indicates employers have flexibility to offer investment options as they see fit would be useful.

Additionally, Employer A does not plan to offer any additional Employer A shares up for sale for any participants in the plan, and thus the only way to invest in additional shares would be if another participant chose to sell, and the only way to sell shares currently held would be if another participant chose to buy. Participants would be given the opportunity to place buy or sell orders once a year. Within this structure, Employer A would like to prioritize retirees and those close to retirement for satisfaction of sell orders (in the event there are more sell orders than buy orders), as they are ostensibly more in need of the liquidity. If there are more buy orders than sell orders, the sell orders would be distributed pro rata amongst those who placed buy orders. Is this arrangement permissible? And, as above, is there any authority that addresses such an arrangement, or a comparable or related arrangement?

Thanks!

If a 403b Church plan has a service based matching allocation formula, is the matching formula subject to the availability test or is it exempt as a Church plan? Thanks.

A plan converted to a us at the end of 2012. A large forfeiture balance ($200k+) was part of the conversion but we haven't been able to get any detail on what it consists of from the prior recordkeeper. The plan was using forfeiture funds throughout 2013 to offset their match as per the plan document but still has some funds left over. They have a large match coming up this quarter and would like to use the remainder of forfeitures to offset the match and zero out the account. Can that be done as a self correction method? they are hesitant to allocate to participants without good historical records, they'd like to use up the account and be clean going forward.

TIAA-CREF Plans invest in CREF Mutual Funds. Based on the way the Schedule A report from TIAA is prepared, it is clear that these funds are pooled separate accounts, as the total reported on line 5 of Schedule A includes the CREF Mutual Funds. Based on the Schedule D report, it is also clear that they have not elected to file as a DFE. Therefore, they include the CREF investments on the Schedule H report as Mutual Funds.

But why then on Schedule D, do I not need to report each CREF Fund with their EIN and 000 as the Plan Number, as I do with John Hancock plans?

Our client is a corporate medical office with five employees. The president (doctor) and 100% owner of the corporation died suddenly in January. He was the sole trustee of the company's profit sharing plan. Unfortunately, no successor trustee was named in the plan document. His wife is named as personal representative of his estate. She is also a VP of the corporation. The wife is trying to liquidate the assets of the Plan and make distributions to the participants. The custodian refuses to allow her authorization over the account, even though they have a copy of the Letter Testamentary and a copy of an amendment executed this month naming her as Successor Trustee. (The document allows the employer to name additional or successor trustees.) The custodian is now saying that we must have a trustee appointed by the DOL. In the meantime, four of the employees are unemployed and need the funds. Any suggestions as to how to proceed?

Individual A and Company B are unrelated and each maintains its own retirement plan. Individual A and Company B will participate in a joint venture where each joint venturer will own 50% of the joint venture. Can Individual A and Company B continue to maintain their own retirement plans without taking into account the employees of the joint venture? These businesses are totally unrelated. Think of Individual A and Company B making widgets and lawn furniture, respectively, and the joint venture selling pizzas. This would also not constitute an affiliated service group. I think Individual A and Company B would be ok. Thanks for your thoughts. Ed

When determining whether Settlement Accounting is needed, are monthly benefits included in the distributions that are compared to the Service Cost plus Interest Cost or only lump sums and annuity purchases?? Thanks.

Does anyone have a good web-site to sdee if a pension beneficiary has died? used to use Roots web which I guess is gone now...