If a 401(k) plan document requires that funds received as a result of a demutualization are distributed to the participants as of the record date, but proceeds are paid out much later, how hard must the fiduciary look to determine who was a participant as of the record date?

We have a small DB plan with a calendar plan year. What is the latest date the Annual Funding Notice can be distributed?

Don't deal too much with union plans recently, but looking at a plan right now and just wanted to brush up on one point under PPA funding.

Plan is collectively bargained with a single employer (not a multiemployer plan). Benefits are dollar based; in this situation looks like scheduled rate improvements only impact future service (so any scheduled increases aren't affecting prior accruals, only future accruals). Under pre-PPA funding, when a contract was settled and we were funding on projected benefits, for 412 and 404 we recognized the full increase under the life of the contract in the year of signing (so if a contract had the benefit multiple increasing say a dollar a year for 5 years, we would establish an amendment amortization base with the highest multiple covered under the contract, rather than a year by year increase). For Current Liability purposes would just value the benefit in effect at the valuation date.

Under PPA, not really seeing anything that covers this situation (and now that I think about it, since PPA is pure unit credit, maybe why it doesn't). Given that in this situation where bargained benefit increases here only affect future, not accrued to date, benefits, Funding Target isn't affected in any event here. The improvements in benefits paid would only affect current and future Target Normal Costs under the Plan so maybe nothing to deal with under PPA?

For 404 and cushions, again the Funding Target isn't going anywhere in the future either since no history of increasing past service benefits; any improvements are in the Target Normal Cost, so no cushion for future benefit increases either (although given this is a Union plan, maximum deductible contribution is probably an academic exercise anyways).

Anything I'm missing?

Can you have an Irrevocable Life Insurance Trust in a 401(k) Profit Sharing Plan?

During CBA negotiations certain union-member employees become elgibile for 401k plan and make contributions.

When CBA is finalized a few months later it's made retroactively effective to a date prior to when the union employees made contributions so they're now "retroactively" excluded.

Can we (and must we) distribute the interim 401k deferrals? Is this a VCP type of event? Could we just amend the plan to override the union exclusion for the interim period?

Thanks

Employer operates as an unincorprated LLC for 10 months of 2012, incorporates as S corp for final 2 months and adopts plan in December retroactively effective as of 1/1/2012.

We assume it's correct to prorate the 2012 employer contribution between the 2 entities based on employee compensation from each.

Our main question is how we reflect the 2 entities in the plan document, is it as simple as just defining "employer" as both the LLC and S corp?

Participant works in State A where he accumulates $1,000,000 in a deferred comp plan. Participant retires and moves to a state with no income tax, and then closes his account 6 weeks later. Is this good tax advice, or will State A claim that it is due some income taxes because the money accrued in their state?

Edit: The Participant moved BEFORE constructive receipt.

Since I am brought in only tangentially on cafeteria plans, I'd love to hear any opinions on the following question that came up:

We recently offered an early retirement program to a select group of employees. As part of that program, if the employee accepts they can receive (XXX) in a lump sum and health care plan continuation for up to 24 months. One of the questions that has come up is if they can have deducted from that lump sum future health care premiums. As premium deductions are made through the Section 125 plan, can this be done?

It seems to me that perhaps it is possible for 2013, but not for 2014? In other words, the proposed 125-1 regulations require that all participants must be employees. It further defines an "employee" as including former employees, and (g)(3) limits participation by former employees in that the plan may not be established primarily to benefit former employees.

So it would perhaps seem possible to do it in the first year (2013) but it doesn't seem allowable for any future year (2014) under 1.125-1(p)(ii)(A)?

I'd appreciate any thoughts on this. As you can see, I don't know much about this subject! Thanks.

Need a little assistance in understanding this. Apparently client has no document but a Custodial Agreement for a 403(b)(7) account. They still need a document don't they? Thought all 403(b)s need docs now? No employer contribs just salary deferral. What makes a 403(b) different than a 403(b)(7)?

Can I get some recommendations for a large group in DC who will need to file 5500s for past years as well since they went over a hundred a couple years back. We handle their 401(k) but don't do anything with Health and Welfare.

I have a one-man DB plan whose plan sponsor, during 2011, inadvertently contributed $24,970 over the maximum deductible for 2011. Can this be considered an advance contribution for 2012? If so, would the 2011 date be put on the 2012 SB?

Any help would be appreciated!

In general, is there ever a requirement that an IRA holder's spouse approve the designation of a beneficiary that is not to the IRA holder's spouse?

A TPA provides what they call a "Form 18" with each of their reports to the client. The Form 18 details the profit sharing contribution by participant, and contains a signature line at the bottom for the Trustee.

I have never seen this before. Is anyone familiar with this form? Is it required? Could it jsut be something the TPA developed for the client to "memorialize" their profit sharing decision? Any insight would be appreciated.

Was wanting someone else's thoughts on creative ways to administer a DCAP mid year election change. Say a participant for 1/2 the year was contributing up to $2500 (married filing sep.) to the DCAP. Mid year, the person has a status change (divorce) and wants to change the election. Should the person be allowed to then contribute up to the $5000 limit...but prorated for the rest of the year? Other things to think about? Thanks!

This happened for 2008. I wrote to DOL, they were interested and helpful but ultimately referred the matter to IRS. And to my knowledge that was the end of it, almost 2 years ago.

Does anyone know of an airtight case history where a top-heavy PSP sponsor just refused to make the required contribution for NHCEs and got called out for it? Thanks!

It occurs to me that one way around this, in a climate where interest rates have gone down, is for, a couple of years into the amortization schedule on an initial five-year loan, the participant to take out a second five-year loan (with lower monthly payments) to pay off the first loan. In effect, this turns that original five-year loan into a seven-year loan -- and I can't find anything to say this is improper.

Anyone aware of anything that would thwart this type of arrangement? Thanks in advance.

Question - is it REQUIRED that a separate account be established for EACH external rollover from another plan? Ignoring possible practical reasons for the moment, I don't find that this is a requirement - a separate account/accounting is required, but I don't see why multiple rollovers can't be deposited to that 1 account. The 5-year clock will be based upon the first deferral date among the various accounts rolled in.

Assuming it isn't a REQUIREMENT, there may be good, practical reasons to establish separate accounts. Thoughts on that, based either upon theory or practical experience?

Thanks.

A particpant wants to surrender their insurance in the Plan and transfer the cash value into their account in other assets. The participant is 40 years old and still employeed. The CV is $10,000. The PS-58 costs (basis) are $1,000. The Plan does not allow for after tax contributions. What happens? How do they account for the 9k pre-tax and 1k after-tax? Is this a document issue?

457(b) plans may allow participants an opportunity to elect a trustee-to-trustee transfer to a governmental defined benefit plan to purchase service credits under the DB plan in accordance with the rules under 415(n).

In addition to pre-tax elective deferrals, a participant contributes roth contributions to a 457 plan. The participants wishes to transfer part of his account balance to a DB plan for the purpose of permissive servcie credits. Can the participant include roth contributions as part of the transfer to the DB plan?

http://www.dol.gov/ebsa/regs/fab2013-2.html

Fee disclosures due date extended to "18 months" for this year to allow plan sponsors to "reset" the filing deadline to coordinate with SH Notices, for example.