For purposes of answering the question on Form 5500 - Is the total number of Participants with account balances as of the end of the plan year on accrual or cash base reporting?

Thanks!

Hello all,

Is anyone aware of any precedent that would change a plan's responsibility under VCP procedures based on assigning fault to the participant?

The specific situation I have is an employee who sought to increase his contribution level in 2011, but the HR department never made the change until it recently, when it discovered the oversight on its own. It now wants to know whether it can save any make-up costs by arguing that the employee went two years (and counting) without noticing or commenting on the lack of change in contribution and therefore bears some responsibility for the mistake.

I'm thinking the answer is a resounding no, but I figured I would at least throw the question out and see if anyone has ever come across anything to the contrary. Thanks in advance, everyone!

Church plan would like to raise Normal Retirement Age, for current and future participants. This will have the effect of postponing distribution of benefits to which they would have been entitled to prior to the amendment.

Is this permitted?

Thanks for any insights.

.

Nm. Seeking legal counsel.

I am working on a sole prop's DB plan and the sole participant also has a PSP. In calculating the the 25% of comp limit to the DB contribution (when there is more than a 6% contribution to the PSP), does one look at 25% and 6% of the sole prop's net schedule C comp listed on his schedule C or 25% and 6% of his "comp for pension purposes" once 1/2 of the SE tax, his medicare tax, and his pension contribution have been removed?

Any guidance would be appreciated!

Our ESOP has always paid out a lump sum when an employee leaves the company.

The company’s ESOP plan does contain provisions for a 5 year installment of distributions.

An employee was terminated. A few months after this termination he received his ESOP statement indicating how many shares were in his account.

He was instructed by a member of the ESOP committee (and also the company’s benefit/plan administrator) to come to the company’s office to sign the required documents for the ESOP payout.

Three forms were presented to the terminated employee and signed:

1. “Participant election & Authorization Form”

Completed and signed by ex-employee. (No section for company/ ESOP representative to sign.)

Form indicated a direct rollover to an IRA.

2. “Distribution Consent Form”

Completed and signed by ex-employee and signed by company/ ESOP representative.

Form indicated to receive payment prior to normal retirement age.

3. “Stock Power Form”

Completed and signed by ex-employee. (No section for company/ ESOP representative to sign.)

Form indicates that ALL the ex-employee’s ESOP shares (actual number of shares listed on form) were to be transferred to the company.

(Form read as follows: “FOR VALUE RECEIVED, the undersigned hereby, sell, assign, and transfer unto” the Company. )

The form also indicated the following: “The undersigned hereby irrevocably constitute and appoints the Secretary of the Corporation as attorney to transfer the said stock on the books within named Corporation with full power of substitution in the premises.”

These completed forms were left with the company’s benefit/plan administrator and ESOP committee member.

Copies were given to the ex-employee.

Six weeks after these forms were completed the company has amended the ESOP’s distribution policy.

The ex-employee is no longer being offered the lump sum payout and is only being offered a 5 year distribution payout. (Note: No form of payout has actually occurred.)

The ex-employee is being requested to complete the same 3 forms again, this time indicating a 5 year distribution.

The ex-employee contests that he has already sold ALL of his ESOP stock to the corporation is expecting his lump sum distribution.

Is the company required to pay this ex-employee his lump sum distribution?

Thank you for your time and any help you can provide.

Lisa

(email: lisa_grecco@yahoo.com )

cash balance plan

ppt is age 70

3-year average comp is 250k (2013, 2012, 2011)

415 dollar limit of $205,000, actuarially increased from 65 to 70 exceeds the $250,000 comp limit

cash balance account is $3 million

life annuity under plan's formula without regard to 415 is $257,000/year

plan's actuarial equivalence is 3-segment rates/IRS mortality for 2013

Is the max 415 lump sum equal to the lesser of

1. $3 million

2. $250,000 x lump sum factor using 5.5%

3. $250,000 x lump sum factor using plan's basis?

thanks

Can anyone point me to the most recent guidance on the elecrontic delivery of the 404(a)5 notices?

I thought it was EITHER the "usual" rules under 2520,104b-1(c ) OR the alternative rules TR 2011-03R.

I was informed there is more recent guidance, but can't find it.

Received an email from the DOL saying they hadn't received my large plan filers Health and Welfare 5500 and they may need to file one. I am totally in the dark on that type of filing. Can someone direct me or explain if we need to file? I read the 5500 directions but am somewhat confused on funded and unfunded health and welfare plans. I need serious direction, quickly as this letter was sent to an old email address that is no longer active and I just found it. Apparently the client didn't receive anything either.

Thanks

We have a client that established a SEP. The SEP was created in 2008. The contributions for 2008 and 2009 appear to be fine. For 2010, 2011 and 2012 the financial advisor did not deposit the SEP contributions into the SEP account but into an IRA account. Because the deposits were made into the wrong account, the contributions are not coded as SEP contributions and appear as excessive. The financial institution will not correct the forms. What can be done to fix this?

What impact, if any will this decision have on employer sponsored life insurance plans that offer employee spouses life insurance on a voluntary basis?

For anyone who is interested, my article on the above topic can be found at this link.

if the 403b plan excludes employees who are eligible for the 401k plan does the 401k plan have to have immediate entry so that the 403b is no violating the universal eligibility requirement?

Or put another way, if the 403b excludes people eligible for the 401k but the 401k has a 1 year of service (and 1/4ly entry) participation requirement, have I found a problem?

Thanks

My company is using free shareware that attaches to our website, but we have to create login for each client and then transmit the login into the client. It is tedious and requires management of login information for each client. I have used services in the past that allowed an email notification system to the client when we were sending files to them. On the other hand it was only useful for sending files, not for receiving them. Do you have something for the client to use to transfer files to your company? Or do you leave that to the client to figure out?

I just tried Sharefile on their 30 day free trial - like that it would brand the communication with our company name and information. Thanks in advance for your input.

Any ideas of how the DOMA change will affect retirement plans in general?

I read one article that suggest that the determination would be made on a state-by-state basis. However, it would seem that or federal laws, the determination would be made on a federal level. Provisions affected include ( but not limited to):-

• Spousal consent
• Distribution provisions and options
• QDROs
• Transfers due to divorce

So in 403b plan documents, why do we have to enter a "normal retirement age" between 62-65? Employees can take plan assets at 59.5

So it is somewhat of a meaningless requirement, no? Does it have any significance?

Can a Plan use 2013 forfeitures to reduce a 2012 employer contribution that is depsoited in 2013? I would think not, but the vendor says that is what they would do if the client request X amount from the forfeitures to be used and the forfeiture balance dropped below that x value due to market conditions. The document says forfeitures are used to reduce fees or contributions.

I was wondering if anyone has seen an employer who participates in a student co-op program. These are apparently students who receive college credit for the work they perform at the employer. The employer is paying them on a W2, but is telling us that they are not "allowed" to provide them benefits, and therefore have not considered them for participation in the plan. This is a Plan that has only a 6 month eligibility requirement, so there is a chance some of these students would meet eligibility. The Plan does NOT currently have a specific exclusion for these students. Does anyone else have a Plan in this situation and how do you handle the students?

Thank you

I have a question regarding how a regular participant rollover received in-kind (mutual fund or common stock) should be reflected on the Schedule H. Because of how it was coded it appears on the annual statement under the Noncash Contribution category.

Would it be appropriate to include this amount with rollovers received in cash on Line 2a(1)© Others (including rollovers) or on Line 2a(2) Noncash contributions with a footnote indicating this was an in-kind rollover?

Recently the IRS concluded a project where they were reviewing plans that reported Noncash contributions for potential prohibited transactions (background excerpt below and the link):

http://www.irs.gov/Retirement-Plans/Employee-Plans-Compliance-Unit-(EPCU)---Projects-with-Summary-Reports---Non-Cash-Contributions-Project

Background

The transfer of property to reduce a sponsor’s obligation to the plan constitutes a transfer to reduce an obligation of the employer. In the absence of an applicable exemption, such a contribution is prohibited under Sec 406(a)(1)(A) of The Employee Retirement and Income Security Act of 1974 (ERISA) and Internal Revenue Code section 4975©(1)(A). A prohibited transaction exists even if the value of the contribution exceeds the sponsor’s funding obligation for the plan year in which the contribution is made and is not used to reduce the plan’s accumulated funding deficiency for that plan year, because the contribution results in a credit against funding obligations that might arise in the future.

The value of an item other than cash contributed to a plan is reported on Form 5500 Schedule H or I. Non-cash contributions to a plan must be valued annually. Non-cash contributions for which the value is neither readily determinable on an established market nor set by an independent third party appraiser must be reported on Schedule H or I as appropriate.

Thank you