Kevin C

There are many threads on this topic. If you ask three TPA's, you will get four different opinions. As for me, I agree with John. http://benefitslink.com/boards/index.php?/topic/52966-safe-harbor-maybe/?p=229609

What about common law marriage? In Texas, if you agree to be married, live together as husband and wife and tell others you are married, you are married. Not having documentation doesn't necessarily mean they are not married.

I think the current published guidance on timing for discretionary amendments is in Rev. Proc. 2007-44, Section 5.05-5.07.

My understanding, based on a discussion with the attorney who drafted a non-qualifed plan for one of our clients, is that a substantial risk of forfeiture is needed to defer taxation under 409A. He did not explain why. Trying to read some of 409A, the only thing I found was 409A(a)(1)(A)(i) saying that if a plan fails to satisfy the rules in form or in operation, amounts are taxable to the extent not subject to a substantial risk of forfeiture. I'm more than happy to leave 409A details to the attorneys. But that doesn't mean I can't learn a thing or two along the way by asking questions.

You've got me curious. How do you get 100% vested contributions in a non-qualified plan that are income tax deferred? You mentioned SERP, so I assume you are not talking about a 457(b) for a non-profit.

I agree that allowing the plan to jeopardize its qualified status would not be exercising the Employer's duties with respect to the plan solely in the interest of the participants and beneficiaries. I don't recall ever seeing a document that allowed the Plan Administrator to amend the plan instead of the Employer. I think the initial fiduciary breach would be on the part of the Employer. I think the Plan Administrator's liability for the breach would come under ERISA 405(a)(3) unless he makes a reasonable effort to get the problem corrected.. The other issue to consider is the exposure if the IRS comes to visit before the document problems are corrected. Audit CAP isn't cheap.

While not an official record, obituaries often list surviving family members and deceased spouses. Recent ones are generally available for free on newspaper websites. Older ones are available on some of the websites used for genealogy research.

That's part of the catch-up universal availability requirement. A limit on deferrals of 75% of compensation or higher is treated as restricting deferrals to the amount available after other employee withholdings. See (B) below. A limit of 4% for HCEs works as long as you let them defer 4% plus the full catch-up. See (e)(1)(i) below.

It depends on the document language. Our VS document (ASC) has a provision that if selected, says after providing a conditional notice, the sponsor elects to do the 3% safe harbor by providing a supplemental notice. If they do not provide the supplemental notice, no SH contribution is due. The GUST documents we used from another provider required timely amendments to remove the SH and then add it back in to keep using the conditional SH.

What does the Plan say? It should have a provision that says who the beneficiary is if no designation has been made.

The following is from Rev. Proc. 2013-6, Section 8:

A significant failure for CY 2011 can be self corrected by 12/31/2013, provided the plan doesn't become "under examination" before the correction is made. Whether or not a DL request is required depends on the type of document and the amendment being made. See Section 6.05(1). I thought one of the changes for the next restatement cycle for pre-approved plans was that they won't accept a DL request for a pre-approved plan unless you modify the specimen language?

You can self correct insignificant failures at any time. For significant failures, SCP has a correction window that ends on the last day of the second plan year following the plan year the failure occurred. Your first step is to decide if the combined failures are insignificant as that term is defined in EPCRS. See Sections 8 and 9 of Rev. Proc. 2013-12 for details.

The only recent discussion I recall was in the DC Q&A session at the 2011 ASPPA annual conference. It was question 4. If you can get a copy of the recording, the IRS speaker went into a little more detail about the kind of provision they would challenge. It might help, unless their plan uses an unusual design like the one mentioned by the IRS as being a problem.

DOL Opinion 85-32A, (Sep. 6, 1985) ERISA Sec. 3(33) ERISA Sec. 4(b)(2) ERISA Sec. 3(11) ERISA Sec. 3(10) U.S. Department of Labor, Office of Pension and Welfare Benefit Programs, Washington, D.C. 20210 Mr. Samuel Robbins Enrolled Actuary The Wyatt Company Pan Am Building, Suite 306 255 Ponce De Leon Avenue Hato Rey, Puerto Rico 00917 Dear Mr. Robbins: This is in reply to your letter of February 21, 1985, and previous correspondence with the Department of Labor (the Department) concerning applicability of title I of the Employee Retirement Income Security Act of 1974 (ERISA) to the Pension Plan for Employees (the Plan) of Hospital de la Concepcion (the Hospital), San German, Puerto Rico. Specifically, you request an advisory opinion stating the Plan is a church plan within the meaning of section 3(33) of title I of ERISA and, thus, is excluded from compliance with title I provisions by section 4(b)(2) of title I of ERISA. Your correspondence contains the following facts and representations. The Hospital has been operating in San German for over four centuries and has always been the property of the Roman Catholic Church. The Hospital was issued a certificate of incorporation as a nonprofit corporation February 27, 1956, by the Secretary of State of Puerto Rico. Since 1976, the Hospital has been owned by the Diocese of Mayaguez of the Roman Catholic Church of Puerto Rico. The 1984 Mayaguez Diocesan Directory indicates that the religious order of Sisters of Charity of Saint Vincent de Paul staff the Hospital. It appears that the Hospital has obtained exemption from tax as a nonprofit institution under the Puerto Rican Income Tax Act. You state that the reason the Hospital is not exempt under section 501 of the Internal Revenue Code (the Code) is that jurisdiction of the Internal Revenue Service (IRS) does not extend to the Hospital, but that you represent, for purposes of this advisory opinion, that if the Hospital were made subject to IRS jurisdiction it would be an organization exempt from tax under the appropriate sections of the Code. The Hospital's Board of Trustees (the Board) derives its authority directly from the Bishop of Mayaguez. The Board has 15 members whom you describe as mainly “religious officials.” The Bishop of Mayaguez is president of the Board and the diocesan vicar general is vice-president of the Board. You state that all Board members share common religious bonds and convictions with the Roman Catholic Church. The president of the medical faculty participates in the administration of the Hospital only as an ex officio (nonvoting) member of the Board. The Plan was approved by the Board on August 25, 1967, to provide pension benefits to Hospital employees. The Plan apparently operates in accordance with a trust document dated January 12, 1968, between the Bishop of Ponce (to whose diocese San German and the Hospital then belonged) and the Right Reverend Monsignor Pedro J. Ballester as trustee. The Plan is administered by a Retirement Plan Committee. Its sole function is to administer the Plan for the benefit of the Hospital's employees. Members are appointed by the Hospital's Board, and you state that the Retirement Plan Committee also shares common religious bonds and convictions with the Roman Catholic Church. You state that Code provisions concerning plan qualification are inapplicable to the Plan and you do not consider IRS jurisdiction to extend to the Plan; however, an administrator for the Plan apparently filed Form 5500 for the 1982 plan year with IRS and submitted premium payment forms for plan years 1981 and 1982 to the Pension Benefit Guaranty Corporation (PBGC). You state that you are interested in obtaining a refund of premiums from PBGC and that you believe the Department's opinion concerning church plan status under title I of ERISA will assist you. It is unclear whether you are also seeking a determination from IRS concerning its jurisdiction over the Plan in connection with your request for refund from PBGC. In accordance with section 4(a) of title I of ERISA, title I of ERISA applies to any employee benefit plan established or maintained by an employer engaged in commerce or in any industry or activity affecting commerce, by an employee organization engaged in commerce or in any industry or activity affecting commerce, or by both, to provide benefits to employees and their beneficiaries except those plans specifically excluded therefrom by section 4(b) of title I of ERISA or otherwise excluded therefrom. For purposes of the jurisdiction of the Department under title I of ERISA, we note that the term “industry or activity affecting commerce” has been given a liberal interpretation by the courts, that the term “commerce” in section 3(11) of title I of ERISA includes, among other things, communication between any state and any place outside thereof, and that the term “State” is defined in section 3(10) of title I of ERISA to include Puerto Rico. Moreover, the Department previously concluded that employee benefit plans are not excluded from coverage under title I of ERISA solely by virtue of being established or maintained in Puerto Rico. See, for example, ERISA Opinion 78-06A (issued March 13, 1978) and ERISA Opinion 84-26A (issued June 18, 1984). Copies of these and other relevant advisory opinions are enclosed for your information. However, as you know, section 4(b)(2) of title I of ERISA excludes from coverage under title I of ERISA any plan which is a church plan as defined in section 3(33) of title I of ERISA. The term “church plan” is defined in section 3(33) of ERISA, in pertinent part, as: (33) (A) … a plan established and maintained (to the extent required in clause (ii) of subparagraph (B)) for its employees (or their beneficiaries) by a church or by a convention or association of churches which is exempt from tax under section 501 of the Internal Revenue Code of 1954. * * * © For purposes of this paragraph — (i) A plan established and maintained for its employees (or their beneficiaries) by a church or by a convention or association of churches includes a plan maintained by an organization, whether a civil law corporation or otherwise, the principal purpose or function of which is the administration or funding of a plan or program for the provision of retirement benefits or welfare benefits, or both, for the employees of a church or a convention or association of churches, if such organization is controlled by or associated with a church or a convention or association of churches. (ii) The term employee of a church or a convention or association of churches includes — * * * (II) an employee of an organization, whether a civil law corporation or otherwise, which is exempt from tax under section 501 of the Internal Revenue Code of 1954 and which is controlled by or associated with a church or a convention or association of churches; … . * * * (iii) A church or a convention or association of churches which is exempt from tax under section 501 of the Internal Revenue Code of 1954 shall be deemed the employer of any individual included as an employee under clause (ii). (iv) An organization, whether a civil law corporation or otherwise, is associated with a church or a convention or association of churches if it shares common religious bonds and convictions with that church or convention or association of churches … . Based on the information you submitted and on your representation that if subject to IRS jurisdiction the Hospital would be a tax-exempt organization under Code section 501, it is the position of the Department that the Pension Plan for Employees of the Hospital is a church plan within the meaning of section 3(33) of ERISA. Accordingly, such a pension plan would be exempt from coverage under title I of ERISA pursuant to section 4(b)(2) of ERISA. This letter constitutes an advisory opinion under ERISA Procedure 76-1. Accordingly, this letter is issued subject to the provisions of the procedure, including section 10 thereof relating to the effect of advisory opinions. Sincerely, Elliot I. Daniel Acting Assistant Administrator for Regulations and Interpretations Enclosures

I'm not sure why this old thread was revived, but I'll provide a brief update. The trustee did not face criminal prosecution. I don't know what happened to the prior TPA, but he was named in some of the DOJ paperwork as participating in some of the activities. The DOL settled the civil matter informally and did not impose a 20% penalty on the trustee. The trustee paid some rather large PT penalties.

Effective opportunity is defined in 1.403(b)-5(b)(2). If you put that with the universal availability general rule in -5(b)(1), I don't see justification there for a waiting period for deferrals. But, the IRS wrote the rules, so they should know what they mean. If they say monthly entry is ok, I'm not going to argue with them. There was a comment made by an IRS representative at the ASPPA annual conference DC Q&A session a couple of years ago dealing with entry dates. There was a thread here that mentioned it.

For situation 1, the scheduled balloon payment means the loan violated the level amortization requirement and was a deemed distribution 10 years ago when it was taken. See 1.72(p)-1 Q&A 4. I don't think whether or not the plan allowed loans at the time changes that. Unless the loan was for the purchase of the participant's principal residence, you are way beyond the maximum amortization period, so I don't think VCP is an option. See Rev. Proc. 2013-12, section 6.07 (2)(a). For situation 2, VCP should be an option, provided you are not beyond the original maximum amortization period. The easiest correction would probably be to amend the loan program to allow 3 loans.

Did company B have a plan? Our document provider takes the position that a transfer of assets from another plan means the employer is maintaining the plan of a successor employer and service with that precessor employer counts. That goes with

It was published in Notice 82-2, if your reference sources go back that far.

Here is a fairly long previous discussion of the topic. http://benefitslink.com/boards/index.php?/topic/46028-401k-snhec-and-integrated-ps-allocation/

I read the OP as asking if the plan's vesting provisions are not allowed because they conflict with the 410(a) regulations. As a non-electing church plan, the regulations under 410(a) do not apply. The terms of the plan control.

Maybe I'm missing something, but why would a non-electing church 403(b) be subject to regulations under 410(a)? Sections 410 and 411 do not apply to non-electing church plans as long as they meet the applicable pre-ERISA requirements. See 410©(2) and 411(e)(2).

Anyone can download the 5500 data sets directly from the DOL. There is a link to their electronic FOIA webpage on the 5500 search page. With the 5500 software we use, the DOL database apparently shows the name of the person in our office who submitted the filing as the signer. Our clients regularly get letters from TPAs addressed to one of us using their address.

You report your CPE hours and Ethics hours for the last three years on the renewal form, 8554-EP. You are supposed to keep documentation in case they ask to see it.