austin3515

Once upon a time I had heard that if a 401k plan has loans, it had to have a trust/trustee to "hold" the loans. Is this true? Or can any plan funded exclusively by insurance contracts claim exemption from the Trust Requirement?

Sometimes it pays to read the regs directly (not usually, just sometimes!) 2520.104b-1 Disclosure. © Disclosure through electronic media. (i) (A) Results in actual receipt of transmitted information (e.g., using return-receipt or notice of undelivered electronic mail features, conducting periodic reviews or surveys to confirm receipt of the transmitted information); and So emailing is fine, as long as you get confirmation of undeliverables. So assuming emailing over Company networks, it is not necessary to get return receipts and cross-reference listings to ensure everyone got it. You only need to track down the undeliverables.

Believe it or not, the insurance company had submitted this arrangement to the IRS and request (and received) a favorable PLR.

Would you mind explaining how these documents either support or refute my conclusions? It seems to me that the first two articles appear to deal with investment vehicles that might be offered to both 403b and 401a plans, but honestly it's very difficult to decipher.

§1.403(b)-8 Funding. (f) Combining assets. To the extent permitted by the Commissioner in revenue rulings, notices, or other guidance published in the Internal Revenue Bulletin (see §601.601(d)(2)(ii)(b) of this chapter), trust assets held under a custodial account and trust assets held under a retirement income account, as described in §1.403(b)-9(a)(6), may be invested in a group trust with trust assets held under a qualified plan or individual retirement plan. For this purpose, a trust includes a custodial account that is treated as a trust under section 401(f). Anyone have any thoughts on this? My situation relates to insurance contracts. Why not mention insurance contracts here?

Where could I get a copy of that letter ruling?

Am I correct that a 401(k) Plan and a 403(b) plan cannot be invested under the same insurance contract? I have one issue in particular which is that the 401(k) Plan has a trustee? Combining all the assets in one investment contract and recordkeeping the source separately would not be sufficient, correct?

Hilarious, I'll grant you that, but I have a legitimate reasonable question from a conscientious client who just wants to know what they need to do to comply with the electronic deliveries...

I guess what it comes down to is, what is the definition of "actual receipt." It certainly would seem that having the email show up in their in box should meet this criteria. I suppose another interprepration is that they actually OPENED the email. How is it that a basic interpretation of what this means on a practical level is not provided anywhere? We're left to guess what it is the DOL actually means here. Does anyone have anything except speculation to offer here??

Well the latter covers the vast majority of people emailing SPD's though, doesn't it? So if everyone in the office has access to a work-based computer, then emailing it to that work based computer over your own internal "known to be reliable for delivering email messages" network, that meets the criteria the DOL has set forth regarding ensuring actual receipt? I mean, it seems logical - I had just never entertained the possibility that anything other than using a firm's internal network would have been used in the first place.

That is an interesting idea. Solves the problem of not being able to see who downloaded. So are you not in agreement that sending an email only within the sponsors domain is enough to support the "actual receipt" standard?

That is interesting - does anyone else draw the same conclusion? My life gets a lot easier if that's the case. Anything published on this? Articles from Reish, McCay Hochman or Relius?

Are you saying that if all the email addresses are in domain (which in my case they are), then you know for sure they were delivered? Does that confirm "actual receipt?"

Client is emailing. I'm actually leaning towards the survey option - email the SPD to everyone, and then call 15 or 20 two days later and say "hey, did you get my email with the new SPD?" This is a larger organization (couple hundred eligibles).

I have read that the DOL requires steps be taken to determine actual receipt of the SPD, such as a read receipt confirmation. Are you supposed to follow up with anyone for whom you did not receive a return receipt? I don't know of any reporting in Outlook that will give you a list of who didn't generate a receipt, which means you've got to have a paper list and check them off as they come in? Is that what people are doing?

Beautiful... Thanks!!

How does 415 handle back wages? Client had a settlement and to pay employees back wages from a couple of years ago. It seems like they should be eligible for the employer contribution (fixed % of pay), but it seems hard to justify based on what I know the final 415 regs.

The well heeled either hire me or pay my bill...

I have never heard of that safe harbor, but it certainly makes me feel like I'm not a crook when my definition of comp basically matches medicare wages!

Not much consolation for someone who has a reasonable request

Because a 401k plan has a lot of perks on top of the SERP (rollover ability being at the top of the list).

I'm getting conflicting information on this design now. OThers are suggesting (off line) that for my matching contributions, this design creates an additional level of match, because as I noted above, I cannot treat this as comp for 414s (i.e., so the extra match creates an extra benefit). Are executives aware that they are potentially "blanking" themselves by participating in these plans? Or is there another interpretation out there would alleviate these suggestions? It would seem to me that there would not be an awful lot of participation (for those under 250K) if there was no way to get them match on this comp.

Corbel had a nice write-up on this. There is some good stuff, including the possiblity of a 30 day eligiblity period that still complies with universal availability. http://www.relius.net/News/TechnicalUpdates.aspx?ID=665

Who knows how many years from today we'll be using pre-approved plans, but at least it now exists... http://www.irs.gov/pub/irs-drop/rp-13-22.pdf

Client has a SERP plan where executives are deferring compensation on a voluntary basis. The Plan's definition of compensation was amended to include these deferrals in the plan's definition of comp because otherwise, they would miss out on the regular match applicable to their 401k contributions. When I run a 414(s) test, the additional comp for the HCE's is clearly de miminis (100.5 vs 100). But... From the 414(s)-1 regs: (d) Alternative definitions of compensation that satisfy section 414(s) —(1) General rule. In addition to the definitions provided in paragraph © of this section, any definition of compensation satisfies section 414(s) with respect to employees (other than self-employed individuals treated as employees under section 401©(1)) if the definition of compensation does not by design favor highly compensated employees, is reasonable within the meaning of paragraph (d)(2) of this section, and satisfies the nondiscrimination requirement in paragraph (d)(3) of this section. In my case, the SERP is available exclusively to HCE's (not by definition, but of course it would be very rare for one of the executives to not be considered an HCE). So I think that under no circumstanc can I call this a 414s definition of comp. Does everyone agree? It's not a problem, because obviously I will pass the general test on the profit sharing (everyone gets the same %age, and the HCE's on average get only a tiny bump), and I have plenty of room on the ADP/ACP test. I just want to know which tests to run and which definition of comp to use.