austin3515

100% Owner of the business wants the plan's admin for two quarters (around $1,000) paid from just his own 401(k) plan account. Does anyone see a problem with this? I think it should be treated as a taxcable distriubtion to the owner considering the circumstances. It just smells like an in-service distribution disguised as a fee.

Many agreements say $x.yz will be deducted each paycheck, and make no mention of what happens if there is no check. I agree, I would amend to allow payment by check.

Of course I'm sure my client would be more than happy to collect checks from these people. But that could give them more leverage to double up when they get back (i.e., because you never sent your payments in, now we have to get you caught up).

Have a client where they lay people off over the summer. The people are generally brought back in September (work load follows the school year). Many have loans. Has anyone come up with a good way to address this problem (i.e., they systematically end up behind on their loans). Doubling up payments when they get back is one that comes to mind, but that can be a tough sell for some employees. Reamortizing the loan every time they leave doesn't appear to be a great solution either seeing as how the recordkeepr chargers a new loan set up fee every time we do that. Anything?

I hope those big players are going to give an earful to their congressman on this train wreck!! I heard ING had a very similar outcome, though not on that scale.

"The final rule provides in this regard that participants and beneficiaries must be furnished the required information on or before the date on which they can first direct their investments" This seemed to be in response to an extreme situation. The preamble section I referenced, on the otherhand, would have to be interpreted to be the "winning" interpretation. They said, in no uncertain terms, everyone must get the notice.

Article from BL Newsletter today (headliner, actually): http://www.businessofbenefits.com/2012/08/...+of+Benefits%29 But the preamble to regs, found here, seems to directly contradict Toth's conclusion. Does anyone disagree? Don't get me wrong, I think he is reading the REGS correctly (I made the same case a month or so ago), but it's just not consistent with what the DOL has said in the preamble. http://www.thefederalregister.com/d.p/2010-10-20-2010-25725 Several commenters suggested that the Department clarify, and in some cases modify, the scope of the proposal as to the specific participants and beneficiaries of covered plans to which the rule applies. The proposed rule required disclosures to each participant and beneficiary of the plan that ``pursuant to the terms of the plan, has the right to direct the investment of assets held in, or contributed to his or her individual account.'' The question presented by the commenters was whether disclosures must be furnished to all eligible employees or only those who actually participate in the plan. Consistent with the definition of ``participant'' under section 3(7) of ERISA, disclosures must be made to all employees that are eligible to participate under the terms of the plan, without regard to whether the participant has actually become enrolled in the plan. One commenter recommended that the proposal be modified to require initial disclosures to all eligible employees, but limit annual disclosures only to those that actually enroll, make contributions, and direct their investments. The Department has not adopted this recommendation. The Department believes that, with regard to employees that have not enrolled in their plan, the annual notice will serve as an important reminder of their eligibility to participate in the plan. With regard to notification of beneficiaries, however, the obligation to disclose extends only to those beneficiaries that, in accordance with the terms of the plan, have the right to direct the investment of assets held in, or contributed to, their accounts. Such rights might arise as a result of the death of a participant or pursuant to a qualified domestic relations order. (edited font size and added federal register link)

To me, this logic equates to the same kind of tenuous logic used to conclude that forfeitures cannot be used to reduce Safe Harbor contributions and QNEC's. OK, I can see the basis for the conclusion (401© refers to 404, 404 to 414, 414 to 401a17), but that seems way too indirect to ignore commonly accepted understandings of the rules which have been consistently applied for the same 30 year period you reference, UNTIL the IRS issues formal guidance to the contrary (as they chose to do with QNEC's/forfeitures). In fact, Line 6 of the worksheet reads "Multiply $230,000 by your plan contribution rate (not the reduced rate)" which I believe supports our position that no reduction below the max comp limit is required. Wait a miniute, if you put $650,000 on Line one of the worksheet, won't you get the outcome we are suggesting?? Please let me know how the worksheet comes up with a different result here.

Are these effective yet? I'm not seeing it in any of the disclosures. I have to assume that it is just not effective... I love that the disclosures must include a graphical representation of the glide path. Very very realistic. The following is from the Sungard write-up of these proposed regs. They have not released anything on these yet. This is the tenth in a series of Technical Updates regarding the participant fee disclosure regulations published in October 2010, and generally effective for plan years beginning after October 31, 2011. This Technical Update explains the proposed regulations relating to target date funds (TDFs) and to qualified default investment alternatives (QDIAs) published in November 2010, and how these proposed regulations will impact the participant fee disclosure regulations. Q-1: What is the proposed effective date of the proposed regulations discussed in this Technical Update? The DOL has proposed that the regulations will be effective 90 days after publication in final form.

I would like to point out that no one does it any other way, at least that I have ever met (I can say that having never met mbozek).

mbozek - Are you suggesting that the allocation rate is not ~13% (32.5/245)? The starting point is 650K, so all the match you mentioned brings it down to $600K (I didn;t do the math), but it's then that you would apply the max comp limit. I seem to recall some discussion of some obscure literal interpretation of the rules that might suggest your approach, but I have never heard of anyone actually applying the limit as you suggest.

I think perhaps AJM missed the comment above.

09 IRA distributions made for purchase of a first home, up to $10,000 I just had this conversation with an employee in the office

I'm not a personal financial planner, and as such it is none of my business, but if for example the extra money would make the difference between losing your home today or maybe losing your home in 6 or 8 months, I would think a rational person might conclude that getting around the withholding would serve their interests quite well. Or perhaps it means you can get the medical treatment you need versus not getting the medical treatment you need. Long-term financial planning is a luxury only available to those with positive cash flow.

Should I feel guilty about telling participants that they can get out of the 20% withholding requirenment by rolling to an IRA first and then closing their account. I don't advertise the option, but, as an example, I'm currently dealign with a Totally and Permanently disabled participant who is in what you might call dire straights. And that IS what the rules say.

I'm proposing creating an allcoation period from 1/1/2012 - 8/31/2012, and then another period from 9/1/2012-12/31/2012. You're answer is of course correct - it's just not what the client wants to do. Am I being too cavalier with this?

PS VCP is not an option, as this organization is a non-profit that would prefer to spend its money helping people.

Touche... In my zeal to avoid this stupid requirement I did overlook the active participant issue. Anyone have any ideas?? How aggressive would it be to allocate the one-to-one as a match, or perhaps to everyone who has a balance? It just defeats any measure of rationale to do anything but. No one is getting more than $5 if I allocate to all eligibles. Plus the employer is being "punished" by having to fund the QNEC, and the employees noit getting their QNEC would in all likelihood never have received any money anyway.

Discretionary.

Yes, that's right, but since there is no "fee" it gets transferred to the forfeiture account. It doesn't seem to make sense that we put the $1.37 into somoene's account only pay $1.37 to FundCo as a "bonus". Rather, the money gets transferred to the forfeiture account where it will benefit the remaining participants.

I believe at the end of the day it will be easier.

The thought crossed my mind, but I just have a hard time believing that based on the relevant facts and circumstances it could be construed by a rationale individual as a cut-back. Just an opinion I know, and will stipulate that a literal interpreation probably supports your conclusion. The employer is going out of their way to provide this generous benefit, every pay-period, it just doesn't seem right to "stick-it-to-em" for being so kind to their employees. Anyone else have any thoughts?

Would it be acceptable to deposit the de minimis amounts for people who have no money in the plan to the forfeiture account, under the following logic: Were we to open an account for the participant to deposit $1.37 (no joke), it would immediately be forfeited anyway because the plan requires that the participant pay the distribution fee, and our disclosure of fees includes the fact that your account balance "taken" as a distribution fee. So full correction will be made to the PLAN, and we just skipped the step of opening the account before subsequently forfeiting it?

Anyone had a situatiuon where a client (a non-profit in this case) funds their "profit sharing" each pay-period in a 401(k) plan, but would like to change the rate mid-year? There are no allocation conditions. My concern is that everything in the document about allocating profit sharing uses annual language. I'm on the EGTRRA Corbel Prototype (I know, I know, we're getting the VS for PPA--so we can make amendments and then argue that they were indeed minor). If anyone has thoughts or can suggest a workaround I would appreciate it. For example, would a board resolution do it?

Do you get an excel download, or is it toitally interfaced with relius? I'm so frustrated with these recorkeepers and how they went about this, I'm thinking about just doing it myself in access. We're a producing TPA but have outsourced the daily val to bigger recordkeepers. This process was a struggle, so I'm not sure how I'll be able to get this info for enrollment kits, etc.