Lori H

If a small 403(b) terminates and liquidates by 12/31/14, is PPA restatement required? Thanks

Thanks for the responses. Forfeitures are allocated to pay for plan expenses first then used to offset future contributions. I used discriminatory since they were considering making whole those accounts that got rolled over instead of those accounts that were paid in cash and took the surrender hit.

A small 403(b) plan is considering paying (using forfeitures) surrender fees for those participants who roll the balances into a new 401(k) plan. However, this would not apply to terminated participants who take their money in cash. I believe this would be discriminatory. Am I correct? Would surrender fees be considered a valid plan expense? I believe they would. Thanks

they currently have just under 200 participants, would an audit still be required if one member had their own plan?

Thanks for the response. It's a 3 member controlled group. Right now its only employee deferrals, but one member, which consists of more HCE's, is thinking of doing something on its own.

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A participant in an ESOP was set to receive distributions over 5 years. Last year the sponsor failed to make the 4th year distriibution. Does the 4th and 5th year distributions have to be taken this year or can they make the 4th distribution this year and the fifth distribution next year? Thank you.

A terminated participant is on disability and TnCare, neither of which she can afford to lose. She wants to know if the Pension Plan allows for the money to be rolled into a Trust (her son who is over 21 would be the Trustee.) If so, is there a tax liability at the end of the year or is there no tax as long as the money stays in the Trust. Of course, in the future when/if money is taken out she knows there would be tax. My thoughts are the funds could be put into the trust, yet they would be taxable in doing so? Would this be the best option for her? I'm thinking she should just leave the money in the plan or roll it over.

Would the benefits, rights and features of the SIC plan have to mirror that of the other members of the controlled group? If it satisfied QSLOB(more than 50 employees, 5310-A, etc) could it have for example a different matching formula?

a 3 member controlled group operates under a 401(k) plan that provides uniform benefits and provisions to all 3. One member brought up the suggestion of having their own plan due to the fact they had a Standard Industrial Classification (SIC) code. I have never heard this.

Thank you kindly for the responses and link.

Current loan balance appx $25K Current account balance appx $25K Current total account balance appx $50K This participant can not have a in service dist since he needs his account balance to secure the loan, correct?

A participant in a small plan elected out of making pre-tax deferrals, however payroll did not pick up on this for several paychecks nor did the participant. 1) Can the deferrals along with income be returned to the participant? 2) If so, how would the company treat it? As ordinary income or would a 1099 be issued? Let's say the deferrals totaled $1000, the participant grosses 2000 per pay period. Would the plan sponsor just bump up the gross to $3000? It would not be subject to FICA, correct?

thank you

The 2 Key employees in this plan never defer over $5500 annually anyway. I trust that they can't defer any amount unless they want to be forced to make the TH minimum.

If a Key employee defers $5500 only, receives no match, would the sponsor still be required to make a T.H. contribution?

A participant in a 401(k) plan has requested to change his beneficiary to his new spouse. Currently his former spouse is the beneficiary. Does the plan administrator need any type of documentation that the divorce decree did not grant the former spouse a portion of his 401(k) that would be payable at his death? If so, what type of documentation would be needed (copy of divorce decree, letter from the participant)? Thank you.

A ps plan that had 2 participants, now 1, has the gist of its assets wrapped up in a farm valued at appx. $400,000. In order for the plan to terminate, he would have to find a buyer, which could be him as the sole participant or someone else. I know an IRA can own real estate, but could he roll over the value of the farm into an IRA?

first rmd is taken March 2014. Calendar year plan. would that be for tax year 2013 or 2014? Would the participant be issued a 2013 or 2014 1099? thanks

A small plan has a loan policy that restricts new loans no sooner than one month after the prior loan was repaid. A participant paid off the loan via payroll deduction as of the end of Feb, but it did not post to the trust until 3/19. Could the new loan be issued around the first of April or would it be a month from the date the last payment actually posted? thanks.

Thanks and no she was not paid her vested balance before the plan terminated, but she did embezzle $37K from her former employer before she was terminated.

Would the 2 new employees even be fully vested in the forfeiture amounts?

Plan year runs 2/1 - 1/31. Participant terminated in August with a year of service. Resolution to terminate was executed in January. Would participant fully vest despite terminating 4 or so months prior to formal termination? If not, a portion of her forfeitures will be reallocated to her.

a large plans SPD states "provided you are an eligible employee, you are eligible to participate in the Plan once you satisfy the Plan's eligiblity conditions" if you are a member of a class of employees identified below, you are not an ELIGIBLE employee for all plan purposes. The employees who are excluded are: -----employees who normally work less than 20 hours per week It then states "Provided you are an ELIGIBLE employee, you will be able to make elective deferrals beginning on your date of hire" First question....Well it states above, if you are not working more than 20 hours a week, you are ineligible. This statement contradicts the Universal Availability rules, yes? The SPD then states, provided you are an eligible employee, you will be eligible to participate in Employer contributions once you satisyf the applicable age and service requirements. They are Matching contributions when you attain age 21 and when you complete 24 months of service. You will have completed the required number of months if you are employed by us at any time after you completed the number of months measured from your initial employment commencement date. Then it goes on to state that the entry date for employer contributions is first day of the month immediately preceding the date you satisy the eligibility requirements. Second question....once an employee meets 24 months of employment and works 20 hours a week, they are eligible for the match. If they start working less than 20 hours a week after meeting eligibility they still get the match, yes? Third question...If they terminate after meeting match eligibility, they are rehired they enter the plan immediately and will still get a match if they defer, correct?

The document does allow for forfeitures to be used to pay the expenses. The amount of the forfeitures is approx. $17k and will exceed the expenses. Thank you for the help.