four01kman

You should put the money in the Qualified Default Investment Arrangement selected by the Plan Sponsor. If none, create one and notify all employees on an annual basis.

No, no, no, not whiskey ...... your best friend, your dog!

This really sounds like a Supplemental Employee Retirement Plan, usually only for "senior executives". I am not aware of any rule, regulation, etc. that allows the procedure described. Now I only have been advising clients regarding matching contributions for over 30 years, so I'm sure I have missed one or two things that have occurred.

My take is to bifurcate the distribution. The unpaid loan is an obligation of the participant; the remainder is to be distributed to the beneficiary(ies).

1. No 2. No

Why is something sticking in my head regarding electronic communications? Don't employees have to affirmatively elect to receive electronic communications to a particular email address, which does not have to be the company's email address?

Without looking at the regs, I seem to remember a "safe harbor" definition of compensation is Social Security Wages. Wouldn't this solve your problem?

This was a regular question some time ago, and many threads dealt with it. My sense today is find a qualified ERISA lawyer, get an opinion in writing. The downside for making an incorrect decision is not good.

My immediate reaction is if the contribution is not made by the employer, it is not a contribution.

An independent appraisal of the illiquid asset probably will be required (Oh yes, it already should be required).

I agree with Mike on this. The mere determination of an HCE, by looking at the rules, regs and the Plan document does not, in and of itself, make the TPA a "plan administrator" or a fiduciary. I have performed these functions for more than 30 years and never have considered myself, or been considered a plan administrator or fiduciary in fulfilling those tasks. Of course, I also spelled out my duties and responsibilities in the engagement letter.

Not only funny (certainly to those of us of a certain age), but it proves the maxim that there is a difference between "book learing" and "street smarts".

In my experience, fund changes occur after a period of time tracking the fund to be changed. Typically the decision to change will be after quarterly results have been reviewed, communicated to the appropriate plan fiduciary and communicated to an appropriate plan committee. The date of the change would then be some time in the future. The only time I can remember a particular urgency in change is when a manager or sub-advisor is changed with a totally different investment objective than had been the case. I also wonder at the pass-through of mailing costs to the participants.

The first suggestion I would make is to look at the DOL rules on electronic communication. If you can get employees to buy into receiving plan communications electronically, you are looking at significant cost savings.

I think prudence is this area, like many others, is appropriate. An annual, bi-annual, or tri-annual benchmarking of fees might be appropriate. I think it depends on the Plan Sponsor, the investments offered, and probably should be covered in the IPS, or similar document for non-investments. As for the number of "proposals", the answer well may be none, if appropriate benchmarking data can be obtained other than from proposals.

Austin, look at Code Section 1563(a) which defines controlled groups. In order to be a controlled group, there must be "control". In the situation you describe there is no such control of the second organization in which he is a director.

If the employer makes no contribution, it will pass ACP, but not meet the requirements of safe harbor.

I've done that a number of times, no problem.

Something sticks in my mind that father and son are deemed to own the other's position (IRC 1563 maybe). If so, there would be a controlled group.

Not to add to the confusion or the different views, but a real life scenario for one of my clients: Employee deferrals with company match, and up to 2012 no HCEs participated. In 2012, one HCE rolled over an IRA balance in order to take a loan from a previous employer's plan. The rollover is sufficent enough that there may be a top-heavy plan by the end of the year. Where do the rules stand on this? I don't think there is any help but to make a TH contribution. Certainly this is not what anybody would have characterized as an egregious situation requiring a TH contribution.

In my communications for my clients, the annual limit is described. At no time is monitoring the amount discussed.

Austin, I think this is an issue for the custodian. If the "new" custodian will accept the transferred loan, there would be no problem. Maybe I'm just stating the obvious, but I don't think this is a plan document issue.

Watching this absolutely made my day. I haven't laughed so hard since ...

Wow! This sounds like the dollars are driving human resource and participant recordkeeping issues. Quoting fees based on asset transfers, and then holding up doing any work until the transfers occur is anything but good business practice.

In sending out a number of prospecting letters, focusing on the fee disclosure, I received zero responses.