Calculating present value of account for SERP termination. I feel like I'm being screwed. Anyone with experience here???

Please respond

I have a plan that was effective in 2012, made a cash contribution in 2013 for 2012 and immediately purchased shares. The cash contribution and shares were allocated to the participants as of 12/31/2012. Now, for 2013 the company made a cash contribution in April of 2014. But the wrinkle is that as of 1/3/2014 the ESOP became leveraged. The client wants to use the contribution made for the 2013 plan year to pay on the loan that was effective 1/3/2014. Can the shares released with the 2013 contribution be allocated as of 12/31/2013???

Hello,

I recently withdrew 30K from one of my IRAs for a short-term cash need. I plan to redeposit the money in the same IRA within 60 days.

I would like to keep doing a series of 60-day loans until later this year when I will have revenue from my business to pay the IRAs back completely. My wife and I have several IRAs between us.

I know there was a recent Tax Court decision that the one-rollover-per-year rule applies per person, not per IRA. Per the following link, the IRS will not start enforcing this until 1/1/2015 at the earliest. http://www.irs.gov/Retirement-Plans/IRA-One-Rollover-Per-Year-Rule So, the Tax Court decision doesn't preclude me from doing a series of 60-day loans as long as I finish in 2014.

But, I am still wondering if there will be any problem with the following set of proposed transactions. I think the answer is No (i.e., it is fine to do this). As I understand the current rules, a single IRA can't initiate more than one rollover (distribute $), nor accept funds from more than one rollover (receive $), in the same calendar year. In the below transaction, each individual IRA distributes $ once and receives $ once.

30K out of IRA A, spend it

By day 60, roll 30K from IRA B into IRA A

By day 120, roll 30K from IRA C into IRA B

By day 180, deposit 30K into IRA C from outside earnings

Series of 60 day loans complete.

Any thoughts/comments are welcome and greatly appreciated. Thank you!

HCE dies while still employed. She has been receiving RMDs equal to 12 times her AB every year. She has a non-spouse beneficiary. Although the document addresses how long the beneficiary can keep the benefit in the plan if the participant dies before her required beginning date, it is silent on what the time frame is if the death occurs after the RBD. This may be advantageous as it can allow the plan administrator maximum flexibility on determining the time frame, and if this is the case, perhaps it would be reasonable to allow 5 years from the date of death. I wasn't able to find much in the law addressing the maximum time permitted in such a situation and wanted to be sure that we wouldn't be running afoul of any regs - would our assumption be reasonable or does anyone know if the benefit can remain in the plan longer than 5 years?

We have also gotten widely varying opinions from actuaries regarding how the lump sum benefit should be calculated. Perhaps the most unsettling one we've been told is that since the plan's normal form is a life annuity, the benefit is deemed to have been annuitized when the RMDs began and now that the participant has died the beneficiary is not entitled to anything, as the "life annuity" benefit has ended. This would be quite disastrous because the participant has a very large benefit. Aside from defining the normal form, the document is silent on whether RMDs count as payment of a life annuity option. I would think that the participant would have to affirmatively elect to receive their benefit as a life annuity for the benefit to be considered totally paid upon death, in contrast to the RMDs being a payment over which she has no control. I am curious to see what members on this board think about this.

Lastly, assuming the beneficiary is still entitled to a distribution, I imagine that the lump sum would be the PV of the vested AB unreduced for the RMDs - is this correct? This is the first time I've had to do such a calc and am a little nervous about it, especially given the large benefit involved. All help is greatly appreciated.

Got this question today:

[New Employee] is a citizen of People's Republic of China but has residency in Washington (state). She receives a US W-2 for her compensation with [plan sponsor].

The plan excludes non-resident aliens... but that's not what she is. So it looks like she is an eligible employee, comes into the plan based on the plan's eligibility requirements, etc. Is there anything I'm overlooking? Thanks.

The client adds in plan roth convesions... then a participant who is 100% vested in all sources elects to convert her entire account balance under the roth conversion rules... if the TPA is doing the recordkeeping in-house - what sources should be set up? -

Should each established pre-tax source then have a corresponding Roth conversion source? - i.e.:

Pre Tax Elective ---> Roth Conversion Elective

Pre Tax Employer PS ----> Roth Conversion PS

Pre Tax Match ----> Roth Conversion Match

or can all sources move into 1 Roth rollover source - I'd think no since you wouldn't want to mix any elective with any employer source regardless of whether it is pre-tax or Roth Conversion...

I have been divorced for a little over a year now. we split all asets, including 401K, and retirement.

A month ago I called Fidelity to find out my retirement numbers ( which is going to be in about 7 years. I happened to see that it has my ex wifes name a spouse.

I called Fildelity to find out why her name was on my retirement account. I ended up talking to thier legal dept.

We both had seperate lawyers, My attorney ask me was it ok if the ex spouse attorney did our QDRO. Understand I didn't even know what a QDRO was/is.... It all sounded cut and dry 50%/50% split

She recieved her share of my 401K which was fine. But I come to find out her attorney added the QPSA and The QSAP which I still don't totally understand.

The company I work for is fully funded which I would have be able to take A lump sum when I reture. with the QPSA and the QSAP I have to take a 50% annuity when I retire, not to mention if I die before retiremennt she recieves my pension, Crazy......

She was already issued her share of my pension, why would I owe her anything when I retire. CAN I HAVE THIS AMENDED??? My whole future retirement plans are surrounded by my lump sume. As well as my two children being my beneficary when I die.

I have no idea why my attorey would tell me she looked at the QDRO and said it looks good to her, so I signed it, is it to late. Please help.

I am seeing another Attorney this week

Thanks

A person was injured on a job, and hasn't worked for Company E for almost 2 years. He has been receiving Workmen's Compensation, but does not qualify for the plan's definition of Disability.

I recall hearing that if a person is on workmen's compensation, he is still an "employee" of that company.

In this case, the employer would not hire this person back even if able to work again.

Can we pay this person out as a terminated employee or does the fact that he is receiving Workmen's Compensation either: A): Prevent payment or B): Complicate the answer as there may be a separate legal status this person has.

Thanks for any opinions.

Craig Schiller

http://www.asppa.org/Portals/2/PDFs/GAC/ASAPs/14-13.pdf

Am I reading this right that if I want to go back to 1997 for my 5500EZ's that I need to scrounge up each form for each year? I would have assumed that I could just enter the respective plan years on a more recent version!

If the answer is "yes" where would I get them? Are they still on the IRS's site?

Under 408b2, changes to investment related disclosures must be made at least annually. Does the participant fee disclosure prepared cover those disclosures? I got the impression that legally, it is the other way around - that is, the annual disclosure obligation was required to facilitate the plan sponsor fulfilling it's 404a5 requirements. But as a practical matter, does the covered-service-providers preparation of the 404a5 disclosure cover this?

Under EPCRS, plans may not use permissive disaggregation when correcting a failure to timely correct a failed ADP/ACP test utilizing either the QNEC method or the One-to-One correction method. However, it is not clear if this means the coverage testing for the plan must also be re-run without using permissive disaggregation, or if EPCRS is only focused on the determination of which NHCEs share in the QNEC or the one-to-one allocation.

In other words, if the coverage test was run using permissive disaggregation, is the correction sufficient even if you do not re-run coverage so long as the ADP/ACP test is re-run without using permissive disaggregation and the corrective contributions are made on that basis? Or must coverage also be run without permissive disaggregation?

Hello. I need some help here.

Employer A had a 401(k) Plan (Plan A). A control group existed between Employer A and Employer B. Employer B completes a participating employer agreement to parcipate in Employer A's plan.

Employer A ceases to exist and terminates the Employer A 401(k) plan as of 12/31/13. Plan A distributed the funds to all employees of both employers.

Employer B establishes a new plan (Plan B) as of 1/1/14. Does this constitute a successor plan?

Also, some of employees of Employer B have rolled their distributions from Plan A to Plan B. Is the rollover money considered a related rollover or not?

When adding Safe Harbor to a 401(k) Plan, the first plan year has to be 12 months long. Is there a similar rule when adding Coda to a Profit Sharing Plan? I do mean Coda with a Safe Harbor.

I break a plan into 2 and both satisfy min coverage.

Plan componant 1 to be cross tested, Plan componant 2 to be allocation based tested.

When testing Plan 1 do I include participants of Plan 2 as "zeros" in the cross testing?

Maybe only in the AB%T?

Thank you

We have a client that received a bill from the IRS for $18,000+ stating

"we made changes to your December 31, 2004 Form 5500. As a result, your amount due is $18,000. This wasn't an audit. Your return may be examined in the future. Please keep this notice and your other important documents in a secure place"

SInce when do 5500 changes generate a bill? What is this? Anyone seen this previously?

So it looks like we are NOT supposed to put the D's into the count for question 6.

Didn't we used to? Was it ambiguous?

The instructions say:

Do not include any participants on line 6a or 6b
who were previously reported on a Form
8955-SSA or a Schedule SSA (Form 5500).
Accordingly, only those participants who are listed with an
Entry Code A on page 2 should be included on line 6a or
6b.

Seem clear, right?

I hate Late Fridays. My mind goes to mush.

From the DOL's Schedule C Q&A Q25: If a service provider discloses a formula used to determine its indirect compensation, is the plan administrator required to calculate or estimate dollar amounts from the formula for purposes of Schedule C reporting (to the extent that compensation described by a formula is not eligible indirect compensation)?

No. Element (g) on Line 2 of Part I of Schedule C requires the plan administrator to enter the “total of all indirect compensation that is not eligible indirect compensation” and Element © on Line 3 of Part I of Schedule C states that the plan administrator should “Enter amount of indirect compensation.” Where a plan administrator receives a formula from a service provider for amounts reportable on Line 2, the plan administrator may enter “0” if that is the only indirect compensation reportable in element (g) on Line 2. The plan administrator must check “yes” in element (h) of Line 2, and attach a statement describing the formula(s) that is labeled “Schedule C, Line 2(h) formula description.” Where a plan administrator receives a formula from a service provider for amounts reportable on Line 3, the plan administrator may enter “0” if that is the only indirect compensation reportable in element © on Line 3. The plan administrator must include in element (e) on Line 3, a description of the formula(s).

My Question

With respect to the bolded paragraph, has anyone seen such an attachment? Great West is indicating that their comp is NOT eligible indirect on their schedule C report AND that they provided a formula. Has anyone included the attachment described above?

Also, why is GW saying that it is not eligible indirect? I had heard that the 408b2 should have made everything eligible indirect? Perhaps it is, and they just did not reprogram their systems?

Can someone provide an explanation as to what this is for? I believe it had to do wth a statute of limitations thing. Also, if there is no separate EIN for the trust, can we just use the employer's EIN?

An individual just sold the assets of his corporation to an unrelated corporation on April 30th.

His five employees terminated employment with his corporation on April 30th and are now employed by the purchasing corporation.

The purchasing corporation has agreed to pay the individual's corporation consulting fees for continuing to provide services for the purchasing corporation.

The individual's corporation wants to establish a new defined benefit plan effective July 1.

Questions:

1. Will the new defined benefit plan pass 410(b) coverage testing for the plan year beginning July 1? In performing the 410(b) coverage test, will the 5 former employees need to be considered in any way for the plan year beginning July 1?

2. Will the 5 former employees have to be considered in any way for testing under 401(a)(4) for the plan year beginning July 1?

3. Will the timing of adoption of the defined benefit plan be considered discriminatory since it is adopted after the termination of the 5 employees?

Any insight or comments will be greatly appreciated!

Employer maintains an auto enrollment plan. Using a bundled platform and it was discovered the participants eligible to join the plan effective 1/1/2014 were not provided the auto enrollment information. Platform's position is this can be self-corrected by using the missed deferral opportunity, making the respective match and lost income.

Now for the tricky part, the participants in question all received the auto enrollment information as soon as the error was discovered and the majority of them opted out of the plan. The platform has asked the employer, since the employees have opted out, do they still want to make up the missed contributions for the period January 1 through the date the opt out was execute? Or will the participants who opt out be removed from the missed deferral calculations?

My gut feeling is the employer is on the hook for the missed deferrals even though the employees are now opting out. Since they never completed the form or online form stating they wanted to opt out, I do not see how the employer can take the position, "they more than likely would have opted out all along."

Change to deferrals/investments etc. are to rescind prior elections, my position would be that going forward the election is to not participate in the plan, however, the election can not be retroactive.

Thoughts????