I recently reviewed Notice 2013-74 and it states:

"the following contributions (and earnings thereon) may now be rolled over to a designated Roth account in the same plan, without regard to whether the amounts satisfy the conditions for distribution: elective deferrals in [section] 401(k) plans and [section] 403(b) plans; matching contributions and nonelective contributions, including qualified matching contributions and qualified nonelective contributions described in [section] 1.401(k)-6; and annual deferrals made to governmental [section] 457(b) plans. (The Federal government's Thrift Savings Plan is treated as a [section] 401(k) plan for this purpose.)"

My question is if contributions from the plan's rollover account are also eligible for an in-plan Roth rollover and if the above is intended as an exhaustive list? Or, if any/all vested amounts in a 401(k) are eligible for an in-plan Roth Rollover?

Thanks

Technically these types of IRAs are ERISA plans. But, what provisions of ERISA are they subject to?

They are not subject to most of the reporting and disclosure requirements (summary plan descriptions are required but no annual reports such as 5500s); they are not subject to the funding provisions; and they are not subject to the participation and vesting provisions.

Does anyone have experience applying the alternative method of determining specified employees - specifically, if we determine our specified employees as all employees who are at a certain position level or above, do we have to constantly monitor employees to determine if they are at or above that level, or are we still able to rely on the approach permitted under the regs where we determine our specified employees once per year and update that list each April 1st.?

It's not clear in the regs, but my reading of the regs and the preamble is that we are not permitted to rely on that annual determination process (i.e., we can't look on the separation from service date to our specified employee list prepared as of the prior April 1st and if he is not on the list then he is not a specified employee), and instead we need to know at the time a person separates from service whether or not he or she is at or above that specified level that we determined would reasonably capture all specified employees. That is, there is no list if we use the alternative approach, and specified employee status is determined by whether you meet the objective standard as of your separation from service date.

NON safe harbor 401(k) Plan. Document says match is discretionary; however, match is limited to deferrals up to 6%. Additional limit of 4% of comp applies. Document further states that limits are applied based on the plan year (i.e. "true up" applies).

Employer stopped their match mid year. Would this negate the "true up"?

If I look at match rates for the plan year, they are not "uniform". However this would make sense if someone terminated employment before the match was stopped. (i.e. they received a match of 100% up to deferrals of 3% of pay). Others who continued to defer would not receive the same rate.

Does it matter that the match percentages are not uniform as long as the ACP test passes?

I am sooo confused!

Looking at a proposal for a CB/PS combo with life insurance. Owner gets 70% of pay in CB, employees get 2%. Maximum insured death benefit provided in the CB.

Is there a way to modify this to satisfy both the incidental death benefit rules and the Benefits Rights and Features requirement with the insurance this skewed?

Is there a way for an employer to provide health insurance for non-employee members of the Board of Directors?

My initial off-the-cuff thoughts are the following obstacles:

- it will be a taxable benefit to non-employees

- can the employer's plan be amended to include non-employees? if not, could a separate plan be created for the directors? if it is a separate plan, would the plan pass nondiscrimination testing?

- would a carrier even insure for this?

- if the employer self-insures and its a separate plan, the group would be so small it could be prohibitively expensive

I am wondering if anyone else has come across this.

Thanks.

The subject line is really the question. The employee has signed a letter of confession stating that she stole money from the company. The theft did not involve the plan assets in any way. this is a small 6 life 401k plan. I do not think that the ER can encumber or in any other way get to her 401k assets regardless of the theft.

Not sure how much was stolen, but he is pretty sure she does not have nearly enough money outside of the plan to repay so he is looking at the 401k to get some of his money back.

I wasn't sure where to put this, so I chose the DB forum.

I would like to start on the path to become an Enrolled Actuary.

On of the steps is to pass the exams.

The EA-1 is only given once a year and encompasses financial math and some life contingencies.

Credit for the test can also be obtained by passing grades on the SoA FM/2 and MLC exams.

I was thinking of taking the 2 SoA exams for a couple reasons:

1. They are given half a dozen times a year.

2. It breaks down the material into two exams instead of one big one.

However, it looks like the syllabus for FM (at least) is more expansive than the financial math needed for EA-1 (derivative markets is a big slice of the exam). I haven't looked at the MLC vs EA-1 topics yet.

So if I take the two exams, I will be studying more material than I need.

Any thoughts?

Small 401(k) Plan is sponsored by an LLP and has 7 participants. One of the 7 terminated October 2013 but has not returned his benefit elections until now. The employer informed us today that they are being acquired by another firm who does not have a plan and does not want a plan.

This will be an asset purchase so the LLP will remain. The two partners will remain but the 4 employees will terminate employment with the LLP. So clearly the 4 employees will be 100% vested as this would be considered a partial plan termination. What about the one employee who terminated in October 2013 long before this happened? Would he need to be made 100% vested even if the plan will be on-going and will not terminate until next year?

Thanks

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