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...

Have a small partnership that is cross tested. We were giving two sets of numbers from client and wanted to verify which we should use to calculate the plan wage for testing purposes. One was the k1 report itself (self employment earnings in box 14a). The second number received before the k1 was a "net number".

To go from K1 earnings to the testing wage you do the following:

Step 1 - Take self employment earnings (box 14a)

Step 2 - Subtract out "?"

Step 3 - Back out partner's share of the non key employer profit sharing

Step 4 - Back out 1/2 SE Tax

Step 5 - Back out partner's own profit sharing

Result - Testing wage

When I was reconciling from the self employment earnings to the "net number" they initially provided. I found they did the following: Took earnings in box 14a and then subtracted out Sec 179 (box 12), Other deductions (box 13), non-deductibles (box 18) and then added investment income (box 19).

Wanted to double check on should be backed out in Step 2. For example I know you would back out Section 179. Should I back out the other items mentioned above (including adding back the inv income)? Or just some of the items, like Sec 179?

Corporation sponsors a 401(k) plan w/ fye 3/31. Eligibiity is age 21 and 1 yos w/ semi-annual entry dates.

They utilize the services of an individual through a temp agency beginning 6/25/13. This individual has worked more than 1500 hours to date. Assuming she is still performing services for the Corporation on 6/25/14, we determine that she is a leased employee.

The plan excludes leased employees from participation. Should she be included in coverage for the plan year ended 3/31/15?

If the plan does not exclude leased ees from participation, would she enter the plan on 10/1/14?

Thanks.

Leaving aside issues about the wisdom, legality, or tax effect of an IRA that is "self-directed" to invest in real property or other unusual investments, which trust companies would you suggest (or avoid mentioning) to someone who has decided on this form and kind of investment?

I divorced in 2011 after 24 years of marriage. The divorce order indicates my ex-spouse is entitled to half my pension when she initiates a QDRO. I began receiving benefits at the end of 2011 but as of yet, she has not entered or initiated the QDRO. Does she have a time frame to enter or initiate the QDRO before she loses the entitlement? I am planning on remarrying soon and need to discuss this with my future spouse.

Thanks for any assistance.

Is the termination of Marketplace coverage (due to nonpayment of premiums because of a loss of subsidy) a qualifying change in status event permitting an election change (i.e., adding medical coverage under an employer plan) under the cafeteria plan rules?

We took over a 457b for not for profit. The normal retirement age is specified as age 59.5 the same NRA as in the 403b plan.

The plan also allows the special 3-year catchup. I am reading the regulations and have found that NRA cannot be earlier than age 65 or the NRA under the DBPP or MPPP. Is there something that allows the NRA to mirror the 403b plan and still be OK for the 3-year catchup?

Any help is greatly appreciated.

lori

If the IRS disqualifies a prviously qualified plan:

1. If a participant was an NHCE then bcame and HCE only in the last year, is his full benefit taxable?

2. Of the taxable distribution, is he required to pay a 10% penalty is he is under age 50?

a few days late, but April 20 was the 19th anniversary for Benefits Link. at least, according to the coffee mug I received a few years ago.

Thanks to all who have shared info. I certainly have learned a lot, not just from the answers, but from the questions themselves. Many force me to use that thing that is rusting away between my ears.

I especially appreciate a numbers of friends, even if distant, who I have made through the site.

by coincidence, my 5500th posting. That seems rather appropriate.

Thanks again Dave!

Looking for the DOL reg that indicates that Value for Guaranteed Interest Accounts = Contract Value where fully benefits responsive.

In this document, http://www.dol.gov/ebsa/publications/2009ACreport3.html

which is an ERISA Advisory Council report regarding valuation of assets, it says:

"For example, for Form 5500 purposes, current value reporting is required. Current value is deemed to be contract value for fully benefit responsive funds."

Where is this rule? I cannot find it anywhere... I know the ERISA section is 3(26), which is found in 29 U.S. Code § 1002, paragraph 26, but I cannot find any related regulations.

"(26) The term “current value” means fair market value where available and otherwise the fair value as determined in good faith by a trustee or a named fiduciary (as defined in section 1102 (a)(2) of this title) pursuant to the terms of the plan and in accordance with regulations of the Secretary, assuming an orderly liquidation at the time of such determination."

And is there a web-site where I can type in the us code (e.g. title 29, Code 1002) and find any related regulations?

The plan has to distribute the excess deferrals made during the 6 month hardship suspension. Under ERISA Outline Book, federal tax withholding under 3405 applies, but not the 20% mandatory withholding. So the 10% withholding would apply. My question is do we need to give the notice and election to the participant to elect our of 10% since this is not really a non-periodic payment, it is a corrective distribution.

Thanks!

Plan A, an audited plan, invests all of it's money in the Fidelity ABC Fund. The Plan is a pooled account so there is no recordkeeper to provide the disclosures.

Fidelity ABC Fund in turn pays a management fee to FMR (Fidelity's investment management arm) of $15,000. Am I required to report FMR as a service provider on Schedule C and report the $15,000 of management expenses? Fidelity is not going to be sending a Schedule C report to the Plan - the investment is taking place through either a brokerage account or a custodial/trust account. As such I cannot imagine this would qualify as eligible indirect compensation.

OR would existing laws that talk about sending prospectuses automatically satisfy the Eligible Indirect Compensation disclosures?