Individual lends money to company that invests in distressed properties.

Individual's IRA also lends money to same company.

Company issues a note and gives mortgage to each individuals and individual's IRA.

Company is independent third party - not owned by individual or his family.

Neither investment was conditional on the other (i.e. Company would have accepted only IRA investment without individuals' investment and vice versa)

Did a prohibited transaction occur?

To me it has the look of one, but I am having a hard time fitting it within IRC 4975 and ERISA 406.

Any thoughts?

Is a Form 5310-A (or any other special filing) necessary for the division of a master trust into separate trusts for the constituent plans?

Is it ok to exclude someone whose employment with the employer is "temporary" without including the fail-safe statutory eligibility? (we're not talking about a temp agency here or employee leasing).

so plan has immediate eligibility, but these employees are expected to work for just a 3 year special project and then be done. So they would meet statutory eligibility but by contract their employment is just 3 years.

I know this has been discussed here before as to whether or not this is considered a service based exclusion in violation of 410(a). If anyone has the link handy, I would appreciate it. I couldn't find it...

Can someone tell me how to set up an excel spreadsheet that will calculate the following employer 401k match for each employee.

50% of the first 2%

25% of the next 2%

Couldn't allowing an employee to change his cafeteria plan election mid-year due to a reduction in hours or for the purpose of going to the Marketplace potentially expose the large employer to the "b" penalty?

Imagine an employee whose hours are reduced to the point that the employer coverage is now unaffordable so he'll qualify for subsidies?

Or the employee who enrolled in unaffordable employer coverage and now discovers Marketplace subsidies?

Would it be too "creative" to only allow mid-year opt outs if the employee agrees to not apply for subsidies?

Plan changes service providers (bundled) on July 1, 2011. Plan was originally effective 1/1/2005. The plan documents were all up to date on July 1, 2011. New service provider restates the plan into their document. Effective date of the restatement was July 1, 2011. None of the plan provisions changed in the restatement.

Question: The plan sponsor signs the restated document on July 15, 2011. Is that a a problem? I am being told it is and told to file under VCP as a doc failure.

What if there was a change to the plan provisions (i.e. not a safe harbor plan and they add eligibility requirements)? Would a signature date two weeks later cause a problem?

thank you

Is it possible for a Trustee or Custodian to pay household expenses directly to the billers and code it as a taxable distribution to the IRA owner?

Once an employee who participates in a NDC plan becomes vested in his/her benefit( no longer subject to substantial forfeiture) is the employer required to set aside funds to pay the employee his/her benefit in the form of a lump sum or installments? Are these funds then considered funded & therefore protected from the employer's creditors?

A plan allows only 1 loan outstanding at a time per participant and the minimum loan amount is $1,000. The plan allows refinances. A participant has $400 outstanding on their loan. If the participant wants to refinance their loan, but, the additional proceeds available due to their small account balance is only $700. Is this refinance permissible? I am not sure whether the 1,000 minimum amount should appy to only the additional proceeds amount ($700) or if it applies to what would be the new outstanding amount ($1,100 which is $400 + $700). Any help would be appreciated. Thank you.

We have a large plan for which we received TPA fees in excess of $5,000 in, but all money came from plan sponsor (corporate checking account), not the plan.

Does plan have to file a Schedule C for 2013 to report fees paid to us?

My husband was the alternate payee as a result of a QDRO from his first marriage, from a Defined Benefit plan/ Separate Interest. At the time the divorce was finalized (1985), he assigned his sister as his beneficiary, long before we met and married.

He could commence receiving his pension when the ex reached her minimum retirement age, which would be Dec 2014, he requested the documents to start the process to receive payments, but he died last month (sept), the documents arrived 2 days after his death, he didn't get a chance to sign them and assign me as his beneficiary.

Since he never withdrew his portion of the contributions plus interest, there is a balance. As I read through the documents, it says that if less than three years of benefits have been paid out, his beneficiary will receive the remainder of the contribution and interests in the event of his death.

We married in 2002.A couple of times he contacted the pension plan to add my name as a beneficiary but was told he couldn't do it until he started receiving benefits. it was his wish that I should be his sole beneficiary, not his sister. Will that initial QDRO assignment of beneficiary pose a problem for me to claim this balance? Where do I stand now?

Please help. Thanks

My husband was the alternate payee as a result of a QDRO from his first marriage, the divorce was finalized in 1985, and at that time he assigned his sister as his beneficiary, long before we met and married.

We married in 2002, and although he contacted the retirement center of the QDRO with the intention to modify his beneficiary election, he was told that it couldn't be done until he started receiving benefits.

He was supposed to start receiving benefits in Dec 2014, and requested the documents to start the process to receive payments, but he died last month (sept), the documents arrived 2 days after his death, he didn't get a chance to sign them and assign me as his beneficiary.

Where do I stand now? Do I, as his wife for the last 12 years have any chance of receiving the benefit despite the fact that he didn't get to assign me in writing?

Please help.

I work in the 409A world. I have a potential client that has a 419 that is still around, and has some life insurance as a part of the plan. Is it even possible to start a 409A plan with that existing life insurance?

We typically build the plans from the ground up and have never had a situtation with already existing life insurance.

Thanks in advance!!!

For an ERISA 403b plan that doesn't exclude a particular participant for any other reason, can they "opt out" of receiving the employer match and/or discretionary contribution? The idea would be to negotiate a higher salary......any help appreciated.

We have a master trust covering one non-union and one union plan. The master trust Form 5500 is properly reporting the assets held in the trust as well as identifying the participating plans on the Schedule D.

The real question: On the Schedule H for each of the participating plans line 1c(11) reports the investment in the master trust. Line 4i of the Schedule H also properly reports that the plan has assets held for investment purposes. However, on the supplemental schedule required for line 4i only participant loans is showing. Is there a reason the investment in master trust would not be listed on the supplemental schedule of assets held for investment purposes?

thanks!

I am working on a new 1-person defined benefit plan (effective 1/1/2013). Form 5558 was filed, but, ultimately, the contribution was less than $250k. Is it okay not to file a 5500-SF, or should it be filed since the 5558 was filed?

Thanks!

Having a debate...is 30 day notice required to participants in the event you are only adding a fund to a plan, with no mapping? We believe the requirement is only surrounding a blackout period, but certain recordkeepers are telling are clients it's a requirement when even just adding a fund.

Our firm sponsors a prototye document for use by our clients. Required interim amendments are typically adopted at the document sponsor level.

Is it correct that if we are a VS document sponsor, interim amendments must be adopted by each plan sponsor (versus at the document sponsor level)? Or has that changed?

Thank you.

I have very limited knowledge of DB plans. Assume participant is married and spouse is beneficiary.

I understand that the monthly benefit payment amount is reduced if a participant elects a contingent annuity versus life only annuity. What happens if the participant's spouse pre-deceases the participant? Does the monthly amount remain the same? Or is it adjusted upward for the rest of the participant's life?

Thanks

Can the same process used to ID catch-up contributions for an ADP test also be used for 415 if the plan has a fiscal year and the limitation year is the same? I am being told that the TAG question below only applies to the ADP test and not 415.

Question:

Is it OK to have 2 calendar year catch ups within a 7/31 plan year and not exceed the Section 415 limitation?

This plan has a 7/31/2006 year end. One of the participants in this plan deferred $18,000 from August through December 2005, and $20,000 January through July 2006 (including catch up contributions), for a total of $38,000 during the 2005/2006 plan year.

The participant in my example would have within the plan year:

$29,000 employee deferrals
9,000 catch up deferrals
15,000 discretionary contribution
$53,000 TOTAL

Is this permissible?

Answer:

Yes. This is a bit counter-intuitive, but example 6 from the final 414(v) regulations makes this clear. Well, clear considering it came from IRS. In example 6 (below), Participant E makes $600 in (402(g)) catch-ups from 11/1/05 - 12/31/05, and $1,000 between 1/1/06 - 10/31/06. The full $1,600 in catch up contributed during the 11/1/05 - 10/31/06 plan year are subtracted from Participant E's deferral in determining the ADP for PYE 10/31/06, but only $1,000 counts towards the 2006 catch up limit.