austin3515

If you';re using the $10K de minis rule to get out of the 50%, my understanding is that the Plan needs to obtain security outside the plan to protect it. Really really ugly in my opinion...

Our advice was talk to a lawyer... I'm doing this research as a favor to one of the lawyers. In this situation, it happens to be one of the owners who passed away, and the plan is terminated. The dispute is over a rollover that took place to an IRA (to the spouse's IRA--and the kid is suing).

K2 retire, excellent suggestion. HAd this been in our form, we would have EXACTLY what we need. I'll be adding that to our template...

Yes, the document says that but there is big money at stake so we need something dead on syaing "any prior beneficiary designations are null and void in the event that the participant marries." Yes, the document includes the language required by law regarding QJSA exemptions (that the participant's spouse must be the benficiary), so I have no doubt it is the answer. But still the attorney wants me to provide something that specifically says what I've mentioned. I will forward the case you provided (many thanks) but it doesn't seem to be on target enough

This thing is bubbling up again for me, so I wasn't sure if anyone had anything new to add... I'm looking for a court case or something that says the prior designations are invalidated. Even an ERISA Outline Book site would make me happy!

Sieve, again, I just can't see the relevance for 2/3 of what you're writing. How is fraud and blatant errors in any way related to the question I've set forth? Another example along the same lines might be, we botch the APD test and tell the client to send out refunds for the Plan. Is that a fiduciary act on our part? I think the more relevant question in that situation is what does our E&O policy cover? (thankfully, I've never had to find out!!) Would you kindly clarify that at the heart of the issue is what constitutes discretionary authority over plan assets? In your eyes it's black and white, but I've polled other equally impressive people (you're posts make it clear you're in their arena) and they say "it's not clear." I concede it is definitely a gray area, with compelling arguments on both sides...

Following the terms of the plan is not a fiduciary function. A fiduciary is one HAS DISCRETION over plan assets. There is no discretion involved. For example, if someone is being evicted from their principal residence, the plan administrator has no option but to approve the distribution. If someone terminates employment and the HR rep signs off on the John Hancock form, there's no way that makes them a fiduciary. A hardship is only one level of "gray" above a termination distribution. Same thing with loans. Someone applies for a loan, if the HR rep signs off on the loan again, no way that makes them a fiduciary (in my opinion) because again no discretion is involved to the extent it is allowed. Now, whoever sets the interest rate is a fiduciay, but simply signing off on a loan does not create fiduciary status (my opinion again). In my humble opinion, not every single person involved in plan administration is a fiduciary.

I'm not sure that's relevant. I mean everyone makes mistakes... Sure if we screwed anything up we'd be responsible. That's just part of the deal... I definitely agree that at a minimum it makes sense to forward to the plan administrator a copy of the related support so tha tif nothing else, they can sign off in good faith. But of course, HR managers across the county are signing off on these things, and I have a sneaking suspicion they are not going to be held as fiduciaries if they do the same things that we have described here (i.e., get copies of invoices and approve for this).

Geeze thanks, I was starting to think I was crazy... Guess it's grayer than I once thought, but I still don't see where the discretion comes in.

OK, set's let's say a fiduciary it does make. You would agree that it would not extend to making the TPA responsible for say, poor investment decisions made by the trustee? So the exposure would be very limited, particularly if the hardship was clearly demonstrated.

OK, let's say we're the TPA. Participant sends us a letter of impending foreclosure. Let's say we prepare the paperwork for the client to execute, and the client signs off on it and we don't send them support for the hardship. My opinion is that this would NOT make a fiduciary because the plan includes objective criteria and there is generally no judgment involved (for example, you either have medical expenses or you don't). I can think of a handful of situations where judgment would be involved. Others in the office take the opposite opinion and say "approving it is a fiduciary function." I say approving it would be "performing purely minesterial" activities related to plan administration. Assume the Plans use the safe harbor standards. What do YOU think?

I think the DOL would conclude that those deferrals were never deposited to the plan, and should therefore be deposited plus lost interest. I would just allocate it pro rata to anyone who had deferrals in the pay-period in which it was used. The forfeitures that were put in their accounts could probably just be considered additional profit sharing, but is probably way to insignificant to worry about. The most important thing is to get the deferrals into the plan(i.e., the ones that are sitting in the corporate checking account).

We do agree! I wish the OP would write back and tell us what he/she meant!!!

The test is run for the full year. The entire year is a non-safe harbor plan year, even though the match was provided for part of the year.

I guess I am making assumptions, but I read the OP to suggest that he owns 100% of the LLC through his 401k, and 100% of the plan sponsor. Based on these assumptions, PT, or no PT?

So I set up an LLC, and I invest 100% of my account in said LLC. I use the all the money now in the LLC to loan money to the plan sponsor (which by the way, I own 100% of). No PT???? Where is the difference in these examples?

You don't think the plan buying a mahcine to lease it back to the company is a PT? I'm no PT expert, but that doesn't smell right to me...

Does that exception involve the plan sponsor??? I doubt it... I can't see why they carve out an exception to the pt rules for this. This is exactly what they want to avoid

Tom - I figured out a way to get the data out of relius (I created dummy employees, each with one age from 55 to 90), and I got a different APR than your 1983 IAF 8.0% - Relius came up with 119.76 for that one. But thank you VERY VERY much - the suggestions you gave on assumptions are working AWESOME!!! We were using 84 usp, 8.5/8.5. Your's is much better!

Thanks!!! Is there a web-site where I could get those tables? I'd want to get the APR's for 7.5, 8.0 and 8.5 so I can mess around w/ pre and post retirement rates to find the best set of assumptions. I'm pretty sure the APR's for the same table differ depending on the insterest assumption, would that be a fair assumption?

Where can I find annuity purchase rates for New Comp Xtesting for various mortality tables? I'm trying to build a model that will make it easier to find the best testing solution?

I think what you've all said makes perfect sense. I'm now able to reconcile the 30 day grace period with the "12 months after plan year-end rules" for safe harbor. The key to 415 special treatment in EPCRS appears to be the required nature of the allocation. So for example, the 30 day grace period effectively only applies to discretionary contributions. And Poje's point is well taken that there must be an implied excpeiton for ADP correction QNECs (of course I would have preferred an explicit one...) This is issue has finally been put to rest. Thanks for the EPCRS site!!

I don;t know if I would say nothing has come out on the large plans. The preamble to the final regs made it very clear that nothing would be coming for the large plans, despite several comments. Their concern clearly is that the larger companies, to improve cash flow, would simply wait utnil the end of the safe harbor period. I think they gave a few other reasons, as well.

Let's not complain too loudly - now you have just one small problem (tiny 415 for a handful of people), and not a big one (ADP refunds)!!

(6) Other benefits not contingent upon elective contributions —(i) General rule. A cash or deferred arrangement satisfies this paragraph (e) only if no other benefit is conditioned (directly or indirectly) upon the employee's electing to make or not to make elective contributions under the arrangement. The preceding sentence does not apply to— (A) Any matching contribution (as defined in §1.401(m)–1(a)(2)) made by reason of such an election; (B) Any benefit, right or feature (such as a plan loan) that requires, or results in, an amount to be withheld from an employee's pay ( e.g. to pay for the benefit or to repay the loan), to the extent the cash or deferred arrangement restricts elective contributions to amounts available after such withholding from the employee's pay (after deduction of all applicable income and employment taxes); © Any reduction in the employer's top-heavy contributions under section 416©(2) because of matching contributions that resulted from the elective contributions; or (D) Any benefit that is provided at the employee's election under a plan described in section 125(d) in lieu of an elective contribution under a qualified cash or deferred arrangement. I had a client with a similar request a few year's back, and this is what someone on these very boards pointed out to me. I lost track of paragraph this post is from, so here's a link: http://ecfr.gpoaccess.gov/cgi/t/text/text-....77&idno=26