I have a situation that I've been struggling with and I think some of you may be able to help, since I am not an expert in safe harbor plans.

I have a client who is a member of a controlled group with about 20 members. The members all maintain separate safe harbor plans and define compensation as total compensation. My client wishes to amend the definition of compensation to exclude bonuses, even though none of the other members will be doing so.

First, can a member of the controlled group have a safe harbor plan with different provisions than the others.

Second, if it can what are the potential risks?

Thanks for any help and guidance you can give me.

I have a plan that is undergoing a standard termination. The majority owner will probably forgo part of his benefit rather than fully funding the plan.

This majority owner is in his mid 80s and originally elected his RMD as a 20 year certain and continuous.

He is now well down the road from that and the plan allows him to re-elect as part of the plan termination. I'd assume since it's his own dime, he will want to take a lump sum, but we will provide him with all of the options available to him...well, because it's required and he's married, anyway.

So, the plan says that his lump sum value is "the value of his normal retirement benefit". This is standard language, I'd assume, to avoid early retirement subsidies being rolled into the lump sum value.

As time has gone on, his RMD has increased, so it is not one single value over its history.

I've talked to a few folks to see what they think the "present value of the normal retirement benefit" is for calculating a lump sum. Most people feel like the remaining value of the 20 year certain is the present value of the benefit, and I'm inclined to agree. The Plan obviously does not allow election of any benefit form that goes beyond the statutory certain period limit that would have been calculated as of his original 70 1/2 date.

A calculation accumulating benefits received each year and coming up with a benefits earned less benefits received does not make a lot of sense when you do the numbers because the compensation limit interferes.

Is there any guidance when a situation like this comes along? Nobody else in the plan is receiving anything, other participants who have left have elected to receive a lump sum. Does anyone see any issue with using that present value and allowing another election, that conceivably could include taking another certain and continuous annuity with the benefit of knowing 14 years on that he's still alive?

Aside from the MO's original intention to take a lump sum, if precedence is to make an actuarial adjustment for payments received, I will end up with a drastically different answer, and I want to make sure that no matter what, I don't run into an issue where he is allocated lump sum benefits he's not entitled to.

Question about permissible plan design under the ACA. As I understand it, annual dollar limits for essential health benefits are prohibited under the ACA. However, it has been suggested to me that it would be permissible to lower the coverage level after a certain limit is met.

For instance, prescription drugs would be covered 100% after a $5 copay for the first $20,000 in annual expenses, but only at 30% after $20,000. Any thoughts on this? I'd imagine that a plan couldn't cover at only 1% after $20,000 because that would be a de facto annual limit.

Background:

1) Terminated employee completes all the required forms for a Lump Sum Distribution from the company’s ESOP.

2) A company agrees that the terminated employee is entitled to a Lump Sum Distribution of his entire account balance.

3) Company states that they don’t have the required funds for the Total Lump Sum Distribution.

4) Company states they will pay a portion now and provide an “IOU” for the remaining balance.

Questions:

Is this legal?

Is the company Required to pay the Total Lump Sum Distribution now?

Can the ex-employee force the company to pay....if so how?

How should this ex-employee proceed?

Thanks for your time.

Lisa

Safe Harbor 401k Plan with 3% SHNEC going to the ESOP. May I permissively aggregate the 3% SHNEC going to the ESOP with a 6% profit sharing going to the owners in the PS Plan? Assuming of course I pass rate group testing. Both Plans are sponsored by the same employer and have the same plan year.

Dr. is 12.5% owner of a business that sponsors a CB plan and he owns 100% of a sole proprietorship which may start a DB plan. Does he have a separate 415 limit under each plan?

Plan allows for lumpsum, instalments and annuities as the allowable forms of benefit. Can the document be amended to remove annuities as a form of distribution for all assets or is there any cutback issues? Thanks!

4/30 plan year and 5558 extension was not sent in to extend past 11/30 (due to change in admin & internal confusion on responsibility). So now 5500 is late. They want to file as soon as possible and ask for fee waiver. So the following questions, which are more out of general curiosity as a result of this circumstance:

Who do they contact to request late penalty waiver?

Does checking DFVC checkbox affect eligibility to get a fee waiver? ie would you recommend they do or don't check off the box?

Is there a deadline for paying the DFVC fee?

Need some direction. Picked up a takeover plan where the formula for the Safe Harbor Match is 100% up 1% of pay and 50% of elective deferrals for deferrals which exceed 1% but does no exceed 6%. Does that meet the Safe Harbor requirements? Would seem to me it doesn't even meet the Basic.

Also, has something changed or is the person that wrote this doc totally off base as they but a requirement of two years of service to vest in Safe Harbor Match. Mandatory 100% vesting didn't change did it?

Thank you

Participant's 4% election was stopped in the plan sponsor's payroll system 12/31/2009 - this was done in error.

In 2013, the participant realized that she was not having 401k withheld from her paycheck - so she's missed 4 years of elective...

Correction is 1/2 the elective as a QNEC + missed match + earnings

Anyone know of any limit of time that we need to go back here - from my viewpoint, it's the full history so we need to calculate 4% on all wages from 2010 to 2013 - determine missed match, half the elective missed is QNEC and fund with earnings

Is there a minimum on the number of months that a plan has to be, funded I guess you can say, to be considered a short plan year? I have a plan that ended 10/31 and are wanting to change to calendar year. Can I do a 11/1/2013 - 12/31/2013 plan year? If so, can I still do it this late into December? I looked into the regs about short plan years and can't see a minimum number of months.

Has anyone encountered this or have any thoughts about how to handle? A participating employer in a multiemployer pension plan in critical status was briefly subject to the default schedule under the rehabilitation plan before withdrawing. Does the default schedule (which required a very high contribution rate) count when considering the "highest contribution rate at which the employer had an obligation to contribute under the plan" when calculating the amount of withdrawal liability under ERISA Section 4219? I can find no real guidance on this point, other than some secondary sources that indicate it is an open issue.

Any thoughts or ideas are greatly appreciated. Thanks!

How do Plan Administrators verify that former participants are still living? We recently discovered a death benefit was not paid timely because we did not know the former employee was deceased.

I am looking for recommendations on a crisis management firm as a replacement for a full blown EAP. We are looking for a company to keep on retainer in the event something occurs. I need a company with networks in most states as our employee population is spread out.

Thank you.

Thanks in advance for any comments/guidance...

I have a small non-profit employer (7 employees) that currently sponsors an unintegrated HRA which will be terminated prior to 12/31. Primarily because all 7 employees are covered under other primary health coverage (5 under spousal coverage, 1 under a union plan and 1 under a retiree plan), the employer has not previously provided and does not intend to provide primary health coverage going forward. The employer also does not desire to simply gross up wages (wants to ensure monies are used for benefits) but, rather, wants to continue providing a vehicle to reimburse mdecial expenses on a pre-tax basis. Based on my understanding, by not providing primary health coverage, the employer payment guidance (TR 2013-03) effectively precludes the employer from doing so inasmuch as a standalone health FSA, standalone HRA or any other standalone medical reimbursement arrangement will violate either the prohibition on annual limits or preventive services requirements...

Am I missing anythin the employer could use on and after 1/1/2014 to reimburse 213(d) expenses on a pre-tax basis without providing primary health coverage?

Again, grateful for any comments...

Form 5310 in completing question 15a(6) do I need to include participants that entered the plan but never deferred so never received a match. No other contribution sources.

Thanks.

What is used to determine the tax year for reporting a distribution - is it the distribution check date or the settlement date for the request? Trying to confirm what is correct for end of year distribution requests. For example, if a distribution is requested (on plan website) on December 30, 2013and the trades settle on December 31, 2013 and the check is issued and dated January 2, 2014, should the 1099-R be a 2013 form, or a 2014 form?

What is the key date - settlement or check? I know that constructive receipt is noted in ERISA Online, but references do not specifcally note for tax reporting purposes(for 1099-R reporting).

I am working on a plan that the sponsor would like to terminate within the next 1-2 years. It has a 7/1 plan year and has a 2 month look-back, so the 417(e) segment rates used for distributions through 6/30/2014 would be the May 2013 rates. The sponsor would like to file the PBGC 500 in February 2014, let the PBGC's 60-day review period pass, wait until June, when the May 2014 rates are published, and to decide then if they should quickly make payouts by 6/30/2014 or, the May 2014 rates are more favorable, try to delay the payout until 7/1/2014 or later. If, in June 2014, they see that the trend is for the rates to increase, they'd like to amend the look-back month to a 1 month look-back and try to delay the payouts until June 2015 (after the one-year grandfathering period) and make payouts based upon the June 2014 rates. Is there a problem with doing this? Specifically, can the plan amend the lock-back month after the PBGC 500 submission (and 5310 submission)?

Any thought would be appreciated!

plan has a safe harbor 401k using 3% NEC. ER fails to make a contribution for one of the HCEs in 2012 and 2011. I assume the plan has failed to make SH contributions for this HCE since the beginning of the plan.

I assume the fix would be to make the missing contributions plus interest. Thanks.

I have divorced and QDROS filed for two retirements, plans joined in divorce proceedings. I received notice of my amount of split retirement and start date of me receiving my portion directly beginning November 30.

I then received notification that a new system was implemented by the retirements and the developer and IT person could not enter my information so that I could receive my portion directly, some apparent glitch in the system. Now another month has gone by, I get another notification that this so-called glitch is not fixed, I will not receiving my portion directly either this month, for December, that the full retirement will once again go to the ex-spouse.

It is beyond my comprehension that a state agency can have a new so-called system in place that is not capable of dividing QDROs, and the "developer "and IT person cannot figure out how to enter my information into the system, and my portion continues to go to the ex-spouse.

Both plans were joined in the divorce and QDROs were filed and approved and signed off by the Court, and the plans acknowledged and wrote me a letter as to what my portion would be.

What can I do to demand the plan administers stop waiting for a so-called glitch fix and have them send my amount to me immediately? In the meantime, my ex is sending me only half of the NET amount and he is saying he is going claim that amount as spousal support on his taxes even though the court order waived spousal support for both of us, so I essentially may be having to pay taxes twice on this amount.

Any suggestions on getting plan administrator to abide by the court order immediately? Any help would be so appreciated.