austin3515

The Plan document should indicate whether apsousal consent is required for the loan. Foir example, I have a client with a money purchase plan, and prior to approval of a loan the plan document requires that spousal consent be required.

IS there a place where I can pull a sample participant loan program. For example, a separate written loan program is required in addition to the Plan Document in a Plan I am working with. Can someone recommend a site where such a document can be located? I found this one on reish.com. Any comments? http://www.reish.com/publications/pdf/loan...rogpolicies.pdf If the SPD describes the loan program, do we still need a separate written statement? Looking at the 2002 ERISA Outline Book (page 14.10), it seems as though all of the information I would need is already included.

Katherine - Just the why... I agree with the rest of the statement! Brian - thank's for the tip!

IT depends if they're an NHCE or an HCE. IF they're an HCE, the results can only get better, so why retest. If they're an NHCE, then the results will get worse, so you may have to rerun depending on the situation. Of course the Plan would have to be pretty generous to get a 415 failure for an NHCE in the post-EGTRRA rules.

Katherine, I respectfully disagree. I think they just like to make things more complicated than they need to be!

But if the money was in a conduit IRA, which is generally the case I imagine, that woud not be an issue. Of course if it was just a distribution in cash, I would agree 100%...

1) Politics. Same as any other nonsensical rule... 2) Nobody is debating that the SPD is sufficient. We're talking about the "extra mile," to ensure that participant's take advantage of what's available to them... I'm sick of this topic! No offense jpod, it was an interesting discsussion...

1) Says me! Maybe I'm being idealistic but it would bother me to know that a rehire with $3,000 in forfeited benefit was leaving that on the table. The rule makes sense. If someone comes back they should be able to vest in older employer contributions. In any event I suppose the truth lies somewhere in between what we both believe... Any other opinions out there? 2) I disagree. The point of doing away with the 5 year break is this: Why have the money tied up for 5 years when the person most likely is never coming back?? Paying administration fees, probavly getting kicked into an audit requirement because of it, etc., etc.

1) If Company policies can't be enforced. that's a problem. Can 100% compliance be obtained? Of course not, but if the local director of HR is told that he/she has to do something when a person is rehired, then its reasonable to expect that they will do that. Also, what percent of plans are sponsored by small companies? Its gotta be well over 50%, probably in the range of 75 to 80%, but that is admittedly a blind guess. 2) Many employers want their employees to have every penny their entitled to. If I was an employer, I know I would. The money is rightfully their's.

Hi its, devils advocate here... Maybe its because you don't distribute notices to rehires? What;s the best way to increase participation in a 401(k) Plan? Many experts say effective communication. Should this be any dfferent? I just have a feeling that 98% f the people who get the notice would say, "I can get back the money I forfeited???" And then they would then do whatever they could because to them its like getting free money... It;s like finding 100's of $10 bills in an old pair of pants!

As far as GUST goes, request a copy of the IRS determination letter and go no further. The IRS has already made sure that the adoption agreement and the prototype document are in compliance. As far as EGTRRA goes, there should be a separate amendment and (typically) a separate adoption agreement. If its a well known provider I'd be hard pressed to think it was somehow not compliant. I would just make sure that the amendments were in fact made. Also, if you're using a standardized prototype it should be designed such that its impossible to not be qualified as designed. I think you're time could be better spent then to review the product of a team of ERISA attorneys. I don't think there's many prototypes out there with qualification issues. And even if there are, the IRS has already blessed them.

HAve a client who had a bunch of problems with their payroll provider. As a result, a bunch of deferrals were not deposited until a few months after the end of the Plan Year, when they had a chance to do a reconciliation. Can we still say that the "amount involved" is just the interest that we gave participants as a result, the same way you could if it was 15 or 20 days late? Thanks,

All the TPA's I've talked to would do it if it meant the difference between pass/fail. But it is a "riskier position" and there's no telling what a particular IRS agent wouldgive you a hard time on. If employed I would communicate to the employer that there is some risk to it. That way if they get burned you can say I told you there was risk.

The point of an SPD is to communicate important provisions to participants. So absent any other requirements, I wouldn't think it would be required. However, employees don't read those things as a matter of fact. I could definitely see a law suit for a part. who got screwed on this, so it seems to me to be an excellent policy to communicate this to rehires...

I would also check the "computation period" for the match. I'd say starting matching int he middle of a plan year probably causes problems. Discretionary matches are usually worded to be based on compensation and deferrals for the Plan Year, and likely doesn't acomodate willie nilli on/off matches during the year. The only way I can see this being okay is if match is calculated based on payroll period deferrals (or month or quarter assuming the match is started on the first day of one of those). But again, I don't think this is typical of a discretionary match formula. Also, many docs require the amount of the match to be communicated at the beginning of the Plan year. Any other opinions?

My God Tom, how many years have you been doing this stuff? My goal in pensions is to catch up to you. I wonder sometimes if I'll ever get there... What do you do? Do you work for a TPA firm?

I think Katherine is right because I too made this very mistake!

Nuff said... I was half kidding about asking Sal!

I'm just curious to hear Sal's thoughts on the matter. Heck he probably golfs with those guys!

Let's call Sal Tripodi! Anyone have his number?

It does say that! That was actually why I had the question in the first place. Actually, I think its worded such that the top heavy is made to the Plan covered by 412 to the extent that each participant is covered... We sent an email to the client to make sure it was addressed... Thanks!

I'm almost positive I read in both the ERISA Outline Book and the 401(k) Answer Book that receivables are excluded for non-pensions except in the first year. Can both of the "Bibles" be wrong? My world will shatter if they are!

Two Plans, one Profit Sharing, one Target Benefit. The Plans are top heavy as aggregated. They cover the same employees. PS recently changed eligibility to 6 months, but left Target Benefit at one year. Is there any funky exception to the 3% contribution if one of the Plans is subject to the minimum funding requirements? Thanks,

Off the subject, but is a 5.7% load a good option for what is most likely a short-term duration of investment? How long do most employees stay in a 401(k) Plan? It's tough to justify 5.7% up front investment expense when you pull all your money out in 3 years, isn't it?

IT seems to me that in 401(A) its pretty clear that it has to be "impossible" to get the money back out for the employer's use. In all the previous discussions, and likely the ones your referencing, the only option is to offset other employer contributions, or perhaps offset administrative expenses paid by the Plan. I don't think what your asking is possible.