I was divorced in June 2000. Part of our divorce had to do with my pension and said the accumulated part of my pension thru marital years would be divided 50/50. It said a Qdro would enter awarding AP the 50% of marital time. Three months later a Qdro was submitted to pension carrier and returned as defective. A year later a new Qdro was entered which now contained language pertaining to the 50% division for marital time but it now added language pertaining to a Early retirement subsidy. This language said AP would get a proportionate share of ERS based on the total subsidy, not just marital time as is stated in divorce decree. I knew nothing of this new order until after it was submitted and approved by the pension carrier. When I confronted my then attorney about this early retirement language I was told that if there was any ERS in my pension that was in my marital years AP was entitled to it based on our agreement of 50% division in our decree. Because the paragraph added a year later contained language that I felt was not part of our divorce decree I went to court yesterday on a motion to delete the paragraph. I was denied on two grounds.. One I was time barred and two that even though the divorce decree said nothing about the ERS I must have approved it in the QDRO because my attorney signed it along with AP attorney which I did not. As a note: I retired early in 2008, I was notified in 2009 about this extra paragraph and money taken from my quoted pension amount. I retained my old divorce attorney to straighten the matter out for which he told me it was just a matter of getting a clarification from the court. 3 years later he has done nothing and as I said I was told I am now time barred. Had he of filed something when I retained him according to the court the part of timed barred would not have been a issue. ANY SUGGESTIONS WOULD BE GREATLY APPRECIATED....

The regulations for corrective amendments (1.401(a)(4)-11(g)) provide for special rules for 401(k) plans; specifically, they instruct that when a plan fails coverage testing under 410(b) and corrects by corrective amendment, the contribution must be a QNEC. Anyone have any idea if it has to be a QNEC or a regular contribution if you are correcting for failure to satisfy benefits testing under 401(a)(4)?

Essentially, a client is contributing an additional profit sharing contribution to NHCEs in the Plan after the client failed benefits testing (not coverage). The TPA is telling us it has to be a QNEC. I read the regulations to only require a QNEC when failing testing for coverage purposes. Thoughts? Sources? Thanks!

Have a plan moving from an insurance annuity to a mutual fund platform. Is there a way to charge the participants for their own related share of the taxes paid on their behalf? Or is the sponsor simply required to pay the taxes, and the participant takes 100% of the assets available when they terminate?

I suppose it all evens out in the end, because they get the deduction for the money that is left in the account when they them out, theoretically anyway (i.e., assuming the account continues to increase in value.

Church personnel policy references making a SEP-IRA contribution for the minister, but no other church employee. I have not seen the actual SEP document, but I don't see that they even a church can do that within a SEP. Am I missing something?

Thanks in advance for any guidance.

I'm looking at a church personnel policy policy just as a favor to a client. I work only sparingly with churhc plans and less with welfare plans.

Sick pay is limited to a certain group of employees. Even if the group consitsed primarily of the "highly compensated" employees and "non-highlys" were predominantly excluded, assuming the church did not elect to be covered by ERISA, I'm not seeing that there would be a problem. Am I correct in that assumption?

Thanks for any guidance.

Seems like it is 403(b) week here...

Just encountered something for the first time, and wondered if others see the same thing? An employer has 403(b) plan and all funds with TIAA. TIAA sends them a report each year giving the number of participants - i.e. the number of people with accounts with TIAA. Naturally, TIAA has no way of knowing how many other eligible people the employer might have, or for that matter, people with investments elsewhere.

Employer simply takes that number and transfers it onto the participant number line on the 5500. This means they are substantially understating the numbers, and in an ERISA plan, not getting an audit when required.

First, have you seen this occurring? Second, has anyone ever actually spoken with the DOL on this? I'm wondering if a client could maintain that "eligible but not deferring" in a 403(b) isn't required to be counted due to the following on the 5500 instructions - or at least use this to aid in negotiating if the DOL imposes penalties? Note that while they specifically list 401(k), they do NOT list 403(b):

1. Active participants (i.e., any individuals who are currently

in employment covered by the plan and who are earning or

retaining credited service under the plan). This includes any

individuals who are eligible to elect to have the employer make

payments under a Code section 401(k) qualified cash or

deferred arrangement. Active participants also include any

nonvested individuals who are earning or retaining credited

service under the plan. This does not include (a) nonvested

former employees who have incurred the break in service

period specified in the plan or (b) former employees who have

received a “cash-out” distribution or deemed distribution of

their entire nonforfeitable accrued benefit.

Does anyone have any sample letters to advise clients of impact of DOMA ruling by Supreme Court, and ask for confirmation of owners' and employees' marital status?

We know that plans have protection under QDIA when a participant doesn't choose investment elections for future contributions under a plan.

However does the same apply during a “conversion” from one provider to another? In other words do you have the same protection under QDIA if you invest participants money (due to the transfer of assets) in to a default fund. Is it considered a 404© transaction? I guess what I am saying is in lieu of mapping.

We have a safe harbor 401(k) using the basic safe harbor match to satisfy adp/acp testing.

Client is considering a profit sharing allocation to a select group of employees who are not HCEs (i.e. "middle managers". Since this is not a design based (or non-design based) safe harbor, we will have to pass non-discrim using the general test.

Their document allows them to exclude classes of employees (anyone that does not fall within the middle manager definition) from receiving the profit sharing contribution only. They are still eligible to defer and receive s/h match.

Their document allows them to exclude HCEs from profit sharing only. They are still eligible to defer and receive s/h match.

Plan is NOT top heavy.

Since no HCEs benefit for the profit sharing portion, the plan automatically satisfies coverage and passes general test? Does this sound correct?

I think it's okay....but wanted to bounce it off the experts.

Thanks!

I'm used to the for-profit world where an acquiring corporation is usually not interested in taking on the selling corp's retirement plan. In the cases I've seen where assets are being purchased, the seller agrees to terminate the plan (typically a 401(k)) and distribute the assets. The buyer takes on the employees as new hires. The new hires evenutally meet the buyer's plan eligibility requirements and enter their new employer's plan. Sometimes prior service is counted, sometimes not, depending on if the new employer doesn't mind including these new people sooner rather than later in its retirement plan. But I'm feeling like a fish out of water with this not-for-profit situation. I'm hearing words like "obligations of the Successor Employer" and some people speculating that the acquiring employer cannot refuse the DB obligations of the County facility's severely underfunded pension obligations. They have yet to determine the funding status of the other not-for-profit facility's DB plan, but it's probably not good. Is the not-for-profit world different, meaning that the acquiring not-for-profit might be forced to take on both facilities' DB plan obligations? Or are there situations when it can be avoided, and if so what types of situations?

I work on Company A, and another TPA handles Company B, the other plan in our controlled group. I will be handling the combined testing. Here are some notes:

• Each company has their own plan.
• 2012 is the first year outside the transition period.
• Both plans are non-safe harbor, deferrals only
• I have three HCE's in Company B that are also eligible to participate in Company A's plan, but none have the required eligible compensation to defer in Company A's plan.
• Company A plan ADP is tested on a prior year basis, Company B is tested on current year.
• Each plan passes coverage testing on their own.

What tests am I combining? I did run coverage for both, and they pass when combined.

Also, since I have three HCE's from Company B elig to participate in Company A's plan, I was adding these three HCE's into Company A's ADP test - their compensation and their deferrals made into Company B's plan, and one of these three is due a refund.

I'm just not 100% certain I should be adding in these three HCE's from Company B. Any advice would help, and if you could list an IRS reg. or link on procedures, that would help as well.

Thanks in advance!

Hi,

We've been allowing employees to simply request that a certain monthly amount up to $245 for parking be treated as pre-tax income with the caveat that they should retain their receipts in case of audit. The employee notifies payroll to treat x amount of their regular monthly pay as pre-tax income. Employees can adjust or stop their pre-tax amounts at will. Presumably, this amount matches what they are actually paying for parking but we have no way to verify this. It's not a payroll deduction, just a tax treatment that is worked through payroll. We simply shield the income. (This practice predates me.)

I would like to work this benefit through an FSA as I believe we are running afoul of IRS rules by allowing employees to claim tax-exempt income for parking benefits outside of a Section 125 Plan.

I know that we can offer this benefit through our Cafeteria plan. But, can we also offer it outside of the plan. If we run it through the plan, is it subject to the same qualifying life event rules as other Section 125 benefits or can participants change election amounts freely - i.e., I'm taking the metro now and I'd like to stop withholding for parking or I've just found a cheaper garage and I'd like to lower my election amount.

Thanks!

November 12, to be exact.

I just signed up.

Yay me!

How far back should a sponsor go to correct a nonamender in EPCRS?

Example, if the sponsor finds out in 2013 that a plan didnt execute a GUST amendment, or amendment for 401(a)(9) regulations, etc. do they have to correct in EPCRS?

The plans in question were prototypes and volume submitters and did restate the plans before the April 30, 2010 deadline.

We are setting up a new plan for a dentist. He says the employer's name in the plan document should be Dr. X, DDS, APDLLC. I asked if there should be punctuation or a space between APD and LLC, but he said no. Does anyone know what APD stands for? I can't find anything about it as a type of entity. He is in the state of Louisiana.

Is there a specific definition of "employer contribution" for purposes of the Affordable Care Act?

501©(3) private school has two 403(b) plans, using TIAA documents. One is an ERISA plan, and gives a 5% match if you defer at least 5%. The other is a "non-ERISA" plan that is deferral only. It is worth noting that these were set up (by whom I don't know) prior to DOL Advisory Opinion 2012-02A. I think TIAA did this two-plan thing routinely.

Although the AO refers to a situation where a separate Money Purchase plan receives the "match" if the employee defers into the deferral plan, it seems to me that the AO would apply to the situation above as well. At the very least, it seems an aggressive interpretation to maintain that the "deferral only" plan is non-ERISA based upon the penultimate paragraph in the AO. I certainly would say the client should get advice from an ERISA attorney if they want to take the aggressive approach.

None of it makes much sense to me, because the ERISA plan has no exclusions. Doesn't exclude participants who are in another 403(b) plan of the employer, so it has to file as a large plan. That being the case, I'm not sure what possible benefit there is to maintaining a separate plan, which now being (perhaps arguably) subject to ERISA will also require filing as a large plan, since it also doesn't exclude anyone. Seems as though everyone is eligible to defer into either plan.

Now you get to prior 5500's. Can you take the approach that audit wasn't required for years prior to the AO (2012)? I don't see how...

I'd love to hear any thoughts on this!

We work with small DB plans so It's been a while since someone has chosen an annuity as part of a plan termination. I now have a few such elections on a plan termination where none of the participants are at ERA or NRA yet but want a deferred annuity. Can you remind me under a PBGC covered plan what the annuity structure must be to relieve the plan of it's liabitlies to the participant. I know it has to be an individual contract in the participant's name, and I believe since the annuity payments will start way after 90 days that their election as to the form of deferred annuity benefit will be null and void after 90 days, so does the deferred annuity essentially have to contain ALL optional forms of benefits under the plan ? Thanks for the help and reminder.

The plan's auditor has found that bonus is included in total comp and our client has failed to withhold on bonus for the past 10 years. I'm assuming they will have to file VCP. The issue is they don't have records of participant's actual deferrals going back that far. What would be an acceptable correction? And would they have to hire an Erisa attorney to help calculate and file?

Our client's auditor found the plan has been using the wrong definition of compensation going back 10 years, so they said they doubt they will be able to finish their report by Oct 15th because they need to know the financial implications. What does this mean... can they not file their 5500 on time now? Will they be penalized for this?