MoJo

My only response is to shake my head and mutter "only in Texas...." After all, aren't they the ones who are intentionally and militarily refusing to abide by a SCOTUS ruling.... For what it's worth, the House itself gets to decide what it's rules are and can enforce or not enforce the quorum rules affirmatively or negatively. I would suggest that enforcement of the House's quorum rules is reserved to the members of the House. In other words, if a House member doesn't object, then the House has made a defacto determination that a quorum exists, or that it doesn't apply at the time. "After the fact" determinations are inapplicable, inappropriate, and inconsistent with a Federal form of government. Individual states have no power to overturn what the legislative body has done. Constitutional determinations can only be made on the basis of the text of the Constitution, not the internal (or inferno) rules of a specific body....

I'm not sure, and this seems to be what we call a "dandelion" - blow on it and the fluffy seeds spread everywhere. One the one hand, corrections are book "current year" - when contributed, and are otherwise considered "current balances." On the other hand, there may be protected benefits from the past iterations of the plan document that apply to the individuals for whom a corrective contribution is applicable. Generally, we take the position that the correction is "current" and all matters relating to it are subject to the current plan provisions - but we haven't analyzed a protected benefit issue, or here, a default beneficiary issue (although, that isn't a protected benefit). We'd probably use current plan provisions, but if it results in conflict, we might interplead the money and let a court decide....

You get to a certain age and you lose your "filters." I deal with enough ... from the DOL that it's time I turn them loose on something really egregious....

Our positions are not mutually exclusive. Call the DOL, then go after their clients!

Almost makes you want to call the DOL and report them.....

While I would never say never, the answer to the first part of your questions is contained in your second part. It isn't feasible to segregate servicing for one client from the norm of processing for all other clients. In addition, my concern isn't as much for our liability (as we are a nondiscretionary, directed, ministerial service provider) but rather for the plan - where a misstep in institutionalizing inappropriate distributions is a plan issue, and possibly a qualification issue. We take pride in being trusted advisors to our plan sponsor clients, and would seriously caution against them directing us to do something we think can have substantial risks to the plan. That said, guidance, guidance, guidance.....

For now, we are *not* implementing self-certification (much to the chagrin of my ops colleagues). It concerns us that the proviso of "unless knowledge to the contrary" (paraphrasing) exists, and what knowledge the plan sponsor has that may be attributed to us. Also, if someone takes a "medical expense" hardship in March, a "tuition" hardship in April, a "foreclosure" hardship in May and an eviction hardship in June - all self-certified, can we deny or what? Need guidance. In our case, most of our clients "outsource" the obtain of documentation and review to us, so no skin off their noses - except for participant complaints....

I think the answer lies in the terms of each of the plans. I'll bet that the "A" plan covers all employees of "A" and if so, you have a problem. Since they are a controlled group, you can divvy the participants up to participate in either plan as you wish (we see some clients do that to avoid the audit requirement), but the plans have to have the right provisions concerning who is eligible for each.... "We would suggest you consult with ERISA counsel"

One of my pet peeves.... The buyer acquires a lot of employees who have brand new pickup trucks and bass boats (leakage) - but no retirement savings. When then "advance in age" they become more and more expensive in many ways (not the least of which is health insurance costs) and IT'S ALL THERE OWN FAULT! Nothing that is a problem in a retirement plan can't be fixed - the only issue is who pays to fix it and when. That's what the deal documents should spell out, and why doing business with good recodkeepers/advisors can be invaluable (we will assist in due diligence). (off my soapbox for now)....

Just curious, if it's an asset sale, why is the plan being terminated *prior* to the transaction? As you point out, the company is on-going, and presumably can delay the termination until a time of their choosing, avoiding the short plan year and proration issues. That, IMHO gives them maximum flexibility going forward, and they can amend the plan as may be appropriate for those receiving the bonus (either count or not count).

It takes a year before one can declare a plan abandoned, although we tell participants when they call to get their money that we can't without a fiduciary, and to call the DOL (and we give them the number). Once the DOL is involved, the "year" wait is often waived.. Once filed with the DOL, we typically see action within 30-45 days, and then however long it takes to find participants and distribute assets.

The DOL has an abandoned plan program through which the custodian of assets (often a recordkeeper) can become a limited fiduciary for purpose of terminating the plan and distributing the assets. We have a sizeable book of small employer plans and have a dozen or so become "abandoned" (a determination made under the criteria established by the DOL) and yours truly becomes the QTA (fiduciary) for purposes of winding up the plan. Often, the threat of filing under the program or the actual filing will prompt the plan fiduciary (often under urging by the DOL) to do their job....

Another "Full Attorney Employment Act." And as an attorney - I'M ALL FOR IT! Bring it on!

As an employee of a recordkeeper, I can say the trend is toward facilitating, if not outright encouraging participants to stay in-plan. Our latest is a decumulation tool (PensionPlus, by Schlomo Bernartzi and company) that provides an analysis of periodic distributions to fund a desired (and likely to succeed over one's lifetime) income level in retirement. Lots of plan sponsor excitement. Slow uptake by participants, but growing...

Well, at the risk of rehashing the issue of spendthrift protections, I still maintain that a qualified retirement plan has more protection against creditors. Also, institutional procing of investments (at the cost of limited investment choices.)

The problem is, the investment options create many of hte issues I raise. It's a "fiduciary decision" on investing those assets.

I think you need to provide more details. If you are talking about an employer prefunding an employer contribution before any allocation conditions are met, the DON'T DO IT. Period. If the funds experience a loss, who suffers? If the funds have an investment gain (even interest), is that an additional contribution when allocated? If there is money left over because too many people don't meet the allocation conditions, how do you account for the funds (and it clearly can't go back to the employer). As far as how the funds are invested, they are plan assets. I would say "prudently" but would reiterate - DON'T DO IT.

That *may* work in some situations, but I would caution that the proposed regs indicate that the exclusion *cannot have the effect* of being an age or service based exclusion. If all of your non-degreed employees are part-time/seasonal, the I think you have a problem. In addition, there are other areas where it clearly won't work. Law firm "summer interns/associates," medical techs (x-ray, ultrasound) taking an internship with a hospital for experience (but having a degree), and others.

We're not telling clients you "can't" but rather are telling them that whatever exclusions you want, you had better be able to define the group in clear terms that don't include a service component - lest there be a risk of missed deferral opportunities for those excluded. As I said before, I haven't been able to come up with a definition of "intern" that doesn't fall into the trap of including a service component - and I have a group of very bright people who delight in springing that trap on me when I test out a definition.

One 6 month period with no repeats? They simply would never become an LTPT - which requires two years of 500 hours or more - hence, no need even to exclude them from the plan. If, however, you do bring one back, you have an issue.

Are you saying that a service based exclusion - can in some cases be a legitimate exclusion from the LTPT rules? I don't see that at all... Please explain.

"Student" implies part-time, a service condition. "Trainee" implies a definitive "end" to the course of study (same as "seasonal"), and is a service condition. Playing devil's advocate here....

Define "intern." I defy you to do so without having a service based condition. I've tried, and my team has constantly caught me in the trap that makes interns a proxy for a service based exclusion.

I've never heard of a 6 month delay in processing a distribution (unless, perhaps, there is an illiquid investment involved). I can tell you that (from experience) the major causes of delays in processing distributions are (somewhat in order) 1) a NIGO request, incomplete or improperly completed forms/documentation; 2) additional layers of review for suspected "unusual activity (possible fraud based on certain triggers tripped); 3) misdirected funds (i.e. wrong rollover account or even rollover custodian requiring retrieval of funds before reprocessing) and 4) human error. Never 6 months though. May be a week or two (depending on the responsiveness of the participant and if necessary the plan sponsor)....

I don't think so (directly). A deferral has to be an election - a Cash or Deferred Election. Making the contribution directly obviates the election. Given them a pay raise, and if they don't defer, evaluate whether they have the smarts to stay employed (but don't threaten!)