austin3515

I think the attorney should have been more clear. Allow me to elaborate: "Termination of the plan needs to occur prior to 12/31/13" It is true that the Plan should be terminated as of 12/31/2013, and that this resolution should be executed prior to 12/31/13. This means a resolution needs to be signed terminating the plan, indicating that after 12/31/13, no further benefits shall accrue. "These contributions need to be made before the existing plans are terminated." In my opinion, what he is referring to, is simply the fact that the Plan will not be fully terminated (as separately defined for 5500 reporting purposes, when all plan assets are distributed) until all of the contributions have been funded and subsequently distributed. I would go back to the attorney and ask if this is what they meant. Perhaps he/she was just rushing and not carefully considering the practical implications of their words (a sin which many "so called" ERISA attorneys are guilty of - not the real ERISA Attorneys, of which many contribute on these boards - only the "so called" ones.

Since the Plan does not include any Safe Harbor, it would not be an amendment to the safe harbor provisions. I think that would be as sound a reason as any. I think one possible pitfall would be if your safe harbor notice was specific regarding who would receive the Safe Harbor Contribution if it ever came to pass. So if your notice says "All eligible participants would receive the SHNEC, if any" as opposed to something more vague like "the Plan might be amended to provide a Safe Harbor Nonelective Contribution." With the latter you wouldn't be going back on a promise you made earlier.

I have never heard of the PT rules coming up for a participant loan transaction. I suppose if it was egregious, perhaps. So if he/she took a $100K loan over 10 years, I suppose I would be more concerned then the owner not making the required payments on an otherwise qualified loan. The former example is more a "loan to a party in interest" than a true participant loan.

Thanks indeed. Very worthwhile for clients who are already have been filing. Is it possible that they were more efficient during the shutdown than before or after?

We're getting notices from the IRS for plans that DID file for 2012, reminding them that they need to file again for 2013. Is anyone else getting these notices and/or does anyone have any insight into why they're sending these? At first I thought perhaps they would send to just those who filed in 2011, but not in 2012. But the ones we have received DID file in 2012.

I'm going on the assumption that the document author made an interpretation that this was allowable. I would not write my document this way, but "they" did, and although "they" are not my favorite provider (putting it politely) they are a big player in the 403b market. So I'm comfortable deferring to their judgment on this one. But you do have me convinced with your cite that I will never write a document that way.

Yes it is, and the Plan Document includes provisions for Er Contriubtions, so the author clearly new it was subject to ERISA.

That is interesting... But alas, I have a document that says to do just that, in black and white.

QDROPhile, you read my mind with your edit. I was just coming out here to ask for it

I have the same question now... I was intrigued by the reference to 4975(10) There do not appear to be any parameters, so perhaps we can apply the beloved "reasonableness standard." See below. I also found an article from Groom Law Group that said it was ok to reimburse the employer (subject to plan terms of course), but if it was outstanding for more than 60 days you needed an interest free loan document. They did not reference any sites. (10) receipt by a disqualified person [i.e., the Plan Sponsor] of any reasonable compensation for services rendered, or for the reimbursement of expenses properly and actually incurred, in the performance of his duties with the plan, but no person so serving who already receives full-time pay from an employer or an association of employers, whose employees are participants in the plan or from an employee organization whose members are participants in such plan shall receive compensation from such fund, except for reimbursement of expenses properly and actually incurred;

I have a 403b document ("widely" used by a lot of 403b's) that states in black and white - "Forfeitures shall revert to the Employer." Thoughts? When I saw this, the first thing that occurred to me is that the following is in 401(a)(2) (OK, I had to look for the exact reference!) which would not apply to a 403b plan--hence, it WOULD be possible. (2) if under the trust instrument it is impossible, at any time prior to the satisfaction of all liabilities with respect to employees and their beneficiaries under the trust, for any part of the corpus or income to be (within the taxable year or thereafter) used for, or diverted to, purposes other than for the exclusive benefit of his employees or their beneficiaries Just curious to know if anyone has seen this.

If what you're saying is true, here is a great plan design - give the HCE's a matching contribution = 200% of the first 5% and a nonelective of 10% of pay! That can't possibly be true, can it?

Believe it or not, I have a check box next to the deferral types, that I could uncheck and have no deferrals. Not sure what that would say on a diagnostic check, but it seems to me if deferrals were mandatory it would say so in the adoption agreement, and it appears not to.

403b plan covers only HCE's, and 401k plan excludes HCE's. Both plans have uniform match. I assume I can aggregate the ACP Test? Both plans provide for same nonelective contribution, which I assume would still be able for the design based safe harbor (or at least aggregation is permitted for testing, which will pass because everyone has same allocation rate)?

403b Plan effective 12/1/2013, with a pye of 12/31/2013. My concern is that the 415 limit would have to be prorated down to $4,250 plus catch-ups of $5,500. OK, I can generally avoid by making the plan effective 1/1/2013, but is that possible in a 403b plan (i.e., a retroactive effective date)?

I've never heard of a PEO where the employees are not the common law employees of the recipient. I assume we are talking about the likes of ADP and PayChex, where the PEO does not for example hire and fire people.

Are you setting up a new 401k plan for the participants? If so, then the distributions from the PEO plan would not be eligible for rollover. I think that is the biggest hurdle. I'm not sure if discontinuing participation is the same as a plan termination in terms of triggering a distributable event. But based on my first question it could be a moot point.

If any of you are doing these submissions, I have to give the IRS credit for this document. Very very well done. Step by Step instructions, written in English (no kidding!). http://www.irs.gov/pub/irs-tege/vcp_submission_kit_403b.pdf

Imagine how I feel. Being an international man of mystery isn't always what it's cracked up to be

Excellent! Thank you very much...

Would you folks consider being a real estate agent a service industry? My first reaction is "no"... But then I say to myself "is capital a material income producing factor?" Is the house consider capital? If the realtor charged an hourly fee I'd say it was service. Why should that make a difference?

That;s funny, because the IRS publicly said it could be ignored last time due to a programming glitch. I tried calling the IRS but the wait time was "longer than 15 minutes" (probably catching up from the shutdown ). I'll be trying again... It's been a week since I got the letter. I have to give you a little bit of a hard time for your emphasis on "immediately." As if I should drop everything and spend 2 hours writing a letter to the IRS about a $68 penalty when they give me 30 days to respond

So I just got one of these today. The letter is dated 10/28/2013 (today is only the 23rd) so that is the first anomaly. They tell us the form is either late or incomplete (but won't tell us which, so thanks for that). We reported one A and one D, both are completed correctly. Line 6a correctly indicates 1 participant reported. I'm wondering if the D has triggered the letter based on the OP, but again we only put one on 6a. And the form was filed on 10/9th. Knowing they have had problems in the past I do wonder if this is also something that can be ignored. Has anyone else received this in the last few days? I wonder if the filing was transmitted timely and they just didn't process it on their end until after the 15th. Nothing would surprise me. Probably the same IT outfit responsible for Obamacare

But it must be in the SMM/SPD, that is a requirement for 404c.

I feel like Corbel has really let me down... I was relying on this. No reference at all to "any future plan of the employer." It seems to me they should have said "participants who elected out of any other plan of the employer are not eligible." 3.6 ELECTION NOT TO PARTICIPATE An Employee is not permitted to elect not to participate in the Plan. Notwithstanding the preceding, in case of a non-standardized Plan, any irrevocable elections not to participate in any component of this Plan shall remain in effect provided such elections were made prior to the date of the adoption of this restatement. An Employee who previously made such an election not to participate under the Plan is treated as a nonbenefiting Employee for purposes of the minimum coverage requirements under Code Section 410(b) and, if such irrevocable election applies to Elective Deferrals, the Employee is not an eligible Participant for purposes of the Actual Deferral Percentage test set forth in Section 12.4 or the Actual Contribution Percentage test set forth in Section 12.6.