My firm has taken over a small plan with 5 participants this year. I am now working on one of it's lump sum benefit calculation.

When I cross-checked the prior actuary’s calculation that was done for another lump sum calculation last year, I found that the final LS paid out was not limited by the 415 LS limit. Am I missing something here since as per my knowledge all lump sum calculations need to be capped by the 415 LS limit or is it that only if the accrued benefit is limited by the $ or compensation limit is the LS 415 limit calculated? Please help me understand this. Are there certain categories that are exempted from the 415 LS limit?

Thanks in advance for all your help.

Can an employer pay disparate premiums for highly compensated and nonhighly compensated under a self-insured plan? That is, contributing a higher percentage of premiums for the highly paid?

I've read Treas. Reg. 1.105-11, but it reads like it applies only to the actual benefits paid under the plan on claims made. I've also read a number of white papers that suggest that paying more premiums for the highly compensated violates Code Section 105, but I can't see where this follows in the Regs.

Can an employer pay disparate premiums for highly compensated and nonhighly compensated under a self-insured plan? That is, contributing a higher percentage of premiums for the highly paid?

I've read Treas. Reg. 1.105-11, but it reads like it applies only to the actual benefits paid under the plan on claims made. I've also read a number of white papers that suggest that paying more premiums for the highly compensated violates Code Section 105, but I can't see where this follows in the Regs.

This is not my field...

Does anyone have data on the percent of schools that allow rollovers?

It is my understanding that 90%+ of for-profits allow rollovers but that schools do not participate at such high levels.

Relatedly - what is the effort/cost/headache to a school to amend their plan and allow rollovers?

thank you

I could have sworn I'd seen something about this on one of these boards recently, but the search function is not finding it.

Governmental VEBA gets a ruling that it is exempt under 501©(9). It then proceeds, for reasons best known to itself, to file Forms 990. (Rev. Proc. 95-48 says a governmental plan does not have to file Forms 990.) At a certain point, plan then fails to file Forms 990 for a couple of years. IRS automatically revokes 501©(9) status. When plan complains, IRS says that because status has been revoked, plan needs to file for reinstatement and to request a retroactive reinstatement for reasonable cause and, at the same time, refile for the exemption status.

Given that the plan was never required to file Forms 990 in the first place, is there some way of getting an automatic revocation revoked?

Just to add to the complications, plan in fact filed a new Form 1024 back in March. Two weeks after the filing, plan got a notice saying IRS would be back to them with any questions within 90 days. IRS has not gotten back to them. All calls to the IRS (before the shutdown) resulted in 60-90 minute waits, after which the plan just gave up. Does anyone have the number of an actual human one can contact (once the shutdown is over) to determine the status of a Form 1024?

Is there a knowledgeable person out there that may assist me with some practical applications of the changes from the doma law as it applies to both medical reimbursement accounts and dependent care accounts. There are many articles out there, but I am yet to see one that actually delves into the details I am looking for. Pls contact me directly.

Is there a discrimination issue with freezing a CB plan where the only HCE/Key has fully accrued benefits, and the other participants have not?

It is a small plan, just a handful of participants, and the owner won't receive any additional benefit accruals, so any contributions will really be going towards the other participants.

No accrued benefits would be cut back, but I feel like freezing the plan would disproportionately affect the NHCE since they would be the ones losing out on the possibility of future accruals. But I seem to think that it doesn't matter, since the plan could terminate, in which case the result would be the same.

I apologize in advance, my knowledge of cash balance plans is obviously very limited.

Thoughts?

According to IRC 402(A)(b)(1), a roth deferral must be maintained in a separate account. Does this literally mean a separate investment account earmarked for Roth deferrals? Can you not have a pooled investment account and just separately account for the roth deferrals, earnings, etc.?

Thanks for any and all input.

I have a plan where the participant executives are not yet vested - i.e., the benefit is subject to a substantial risk of forfeiture. Their benefit payments are triggered on a change in control. The employer is going through a reorganization that would not constitute a CIC under the terms of the plan. Since the structure of the plan doesn't fit the post-reorg employer, the employer would like to terminate the plan and ultimately do a new plan for this executive group. Even though the executives have no right to any current benefit under the terms of the existing plan, we would like to use the 402(g) cashout provisions (1.409A-3(j)(4)(v)) to basically offer the executives a lump sum payment of an amount less than $17,500 to cash them out of this plan such that they relinquish all potential benefits under this plan. Then we would establish a new plan with potentially different times and forms of payment than the original plan. The cashout appears to me to remove any substitution issue such that we would need to worry about complying with the subsequent changes in time and form of payment rule. All of this appears to work to me, but I would appreciate any thoughts on whether anyone sees any problems with this scenario. Thanks.

A husband, wife and two children are the only participants in a 401k plan.

Is it necessary to provide any disclosure notices?

Need some help with timing of notices.

We want to send "one" set of notices to the participants. QDIA, Auto Enrollment and 404(a)(5).

The QDIA and Auto Enrollment Notice would be sent out November 1 to all participants. The 404(a)(5) notice currently produced by the platform shows returns as of 2/2013. I thought I could include this as the annual notice for 2014 along with the QDIA and Auto Enrollment Forms.

the platform tells me that they will post a new 404a5 notice in 2014 and that is the annual notice I must provide to the participants for 2014.

so confused need so thoughts

The Plan Sponsor received a check for a settlement on an investment that has not been in the plan for over 8 years. The payment was less then $700. Going back to the time when the asset was held in the plan is impossible. Is there any guidance that will allow the employer to deposit the funds in the holding account and use to offset fees? Allocating the funds to the current participants would result in pennies to each participant.

Thoughts on what to do?

Thanks

ABC, Inc. sponsors a money purchase plan. A participant terminated years ago at age 61. At age 70½, he began being paid just the minimum required by §401(a)(9). Now at age 82, he dies. His spouse (age 66) is the sole beneficiary of his remaining account balance. How long before the plan (to remain qualified) must require her to take her benefits out?

Plan Sponsor signed a resolution to terminate a 401(k) back in 2003.

Every year since 2003 the Form 5500 has had the yes box checked for "Has a resolution to terminate the plan been adopted during the plan year or any prior year?". No distributions from the plan have ever been made.

I assume that the 2003 resolution to terminate is no longer valid.

Any reason the yes box should not be checked going forward?

We have a client who has inquired about amending the Plan to require a participant with an outstanding loan, who then requests a hardship distribution, to pay back the loan before they can take the hardship. Is this allowed?

So an employer wants to create their health plan so that employees remain on the health insurance like so:

Employee is terminated at the end of the month following 31 days from the date of termination.

So if an employee is terminated on October 3, they are removed from the insurance on November 30.

They do not have a Plan Document. I am going to prepare one for them. However, this request seems odd, and possibly at odds with the insurance company's eligibility rules. Any comments, insights?

QDRO procedures provide for hold to be placed on participant's account following receipt of either signed order, proposed order, or written notice of forthcoming order. During pendency of the hold, participant, who has at least 10 years of participation in the plan, attains normal retirement age and retires. Thus, Code Section 401(a)(14) would generally require that the participant be allowed to commence benefits under the plan. May the participant be prevented from commencing benefits by virtue of the hold?

I recognize that the required minimum distribution rules (Treas. Reg. Section 1.401(a)(9)-8, Q & A-7) carve out an exception for the period, of up to 18 months, during which the qualification of a domestic relations order is being determined. I do not see any way to read the regulation as also applying to proposed orders or notice of a forthcoming order.

I could not locate a similar provision for purposes of Code Section 401(a)(14). Does anyone have any thoughts?

If an employer is no able to deduct the 125 contributions from an employee's paycheck (for example due to a lien), is it possible to make up contributions and deduct the amount in arrears from later paychecks under section 125? Should the contribution be pre tax or post tax..? And what would happen if you cross tax years?

Our client's auditor noted a 'significant deficiency in internal controls' relating to how interest on participant loans was being recorded on their Control Letter in the Auditor Report. Besides identifying and fixing the problem and documenting what they will be doing for internal controls, what else should the client be doing? Is there anything they're required to do because of this being noted in the report?

Here's the situation - Two brothers each own 50% of Company B, their parents own 90% of Company A. Both companies are currently participating in a PEO safe harbor match 401(k) profit sharing plan. Company B wants to exit the PEO plan and transfer the assets directly to their own safe harbor match 401(k) profit sharing plan. This transferee plan would be set up exactly like the PEO plan.

Questions:

1. The ownership by the brothers was shifted to a Trust sometime during this plan year (percentages remained the same). Based on the attribution rules, I don't think this transaction would meet the criteria for change in ownership under 410(b)(6)©, correct?

2. Company B wants to do the transfer/setup before the end of this plan year. How does this affect the ability to set up the transferee plan as safe harbor, and the safe harbor in the PEO plan?

I'm not finding much guidance on the safe harbor issues, so any advise would be greatly appreciated!