Kevin C

There have been several threads discussing mid-year amendments to safe harbor plans. I'm not going to beat that dead horse. The published guidance is in the 401(k) regs [1.401(k)-3(e)(1)], 401(m) regs [1.401(m)-3(f)(1)] and Announcement 2007-59. There have been several discussions of the topic at ASPPA conferences. The session referenced the most lately is the IRS DC Q&A session at the 2011 ASPPA annual conference. I suggest that anyone interested should try to get a copy of the recording to see for themselves what was said. The 2012 Q&A session added a few examples of amendments that are ok, but not specifically what you are asking about. After all that, you'll have to decide which interpretation you think is appropriate.

With the plan allowing this terminated person to make loan payments with personal checks for 4 years, I wouldn't want to be the one to over-rule that decision. Changes to the loan program would apply to later loans, but they don't change the terms of an existing loan. How long until the loan is scheduled to be paid off? Now, if this person sent a check that bounced, I think the plan would have an obligation to insist on a form of payment that won't bounce.

My notes from Workshop 68 of the 2012 ASPPA annual conference say they are only supposed to go back one law if it all looks good. They can go back further if they find issues. If there is a problem with an agent asking for old documents that are not necessary, you can contact the area manager and take it all the way up to Monika Templeman (who was the speaker). She is the Director, Employee Plans Examinations. I don't think the session recordings are out yet.

I agree with QDRO. If this is the only issue with the client, I don't see a reason to resign. If this is one more issue with a client that has been a royal pain to deal with, it may be time to resign. If they don't follow your advice, document your advice, report it properly and go on. In addition to the 5500 questions, I would send them the 5330(s) for the PT. Hopefully, at some point IRS/DOL will be in touch with the client to get the matter resolved.

Sorry, I was referring to footnote 6 of the preamble to the 1996 final regulations. http://www.dol.gov/ebsa/regs/fedreg/final/96_19791.pdf It's on the 7th page of the pdf file.

You might want to re-read the regulations. The clock stops when the contribution is deposited, not when it is credited to the account. In particular, if they are mailing checks, there is a footnote to the final deposit regs describing a mailbox rule.

I'm curious, what are you using as the deposit date?

Three IRS phone forums scheduled for February 2013 http://www.irs.gov/Retirement-Plans/Phone-Forums-Retirement-Plans Ethical Standards for and Accountability of Practitioners Offering Tax Advice Relating to Employee Benefit Plans - February 13, 2013 Employee Plans Compliance Resolution System Changes - February 21, 2013 - Session #1 - (Morning) Employee Plans Compliance Resolution System Changes - February 21, 2013 - Session #2 (Afternoon) Overview of the 2012 Cumulative List of Plan Qualification Changes - February 28, 2013

When I started in this business, the standard answer to any plan related question was "What does the plan say?". It applies here. The document is supposed to tell you the requirements for participation, the requirements to receive a contribution and how that contribution is allocated. You may need to look up the plan's definition of some of the terms used, but the answer should be in the document. If it isn't, the document should also say who is responsible for interpreting the terms of the document. Usually, that is the ERISA Plan Administrator.

I don't think third-party short term disability payments would normally count as 415©(3) compensation because the regs use the phrase "... for personal services actually rendered in the course of employment with the employer maintaining the plan ..." But, there are special rules in 1.415©-2(g) that apply for someone "permanently and totally disabled", IF the plan provides for it. However, the only way to tell if it is considered Plan Compensation is to look at the Plan's definition.

The plan's definition of Compensation should tell you if it counts or not. But, keep in mind that a plan can use different definitions of Compensation for different purposes. I've also seen documents that based contributions for disabled participants on imputed compensation. So, what does the plan say?

Those tax issues are addressed in Rev. Proc. 2013-12, Section 6.07. You can change the taxation of the corrected loan as part of the VCP (or Audit CAP) filing, but you have to specifically ask for it. There was a similar rule in 2008-50.

You are looking at the pre-EGTRRA regulations. You need to look in 1.415©-2. EGTRRA changed the definition of compensation under Section 415© to include deferrals.

Try Section 6.10(3) of Rev. Proc. 2013-12.

SMMoran, It depends on the document language. The targeted QNEC language in our VS document was designed to be as close as possible to the old bottom-up QNEC's and still have it count in the test. With the allocation method it uses, there is no way to give all NHCEs a 3% QNEC and then give a few of them more.

Starting about 2007, most documents replaced the old correction methods with a reference to correction under EPCRS. There have been some questions here about being able to refund deferrals repeatedly due to the EPCRS requirement to have procedures in place to prevent failures. I think Rev. Proc. 2013-12 helps with that issue. From Rev. Proc. 2013-12 Section 4.04:

Will the prototype allow you to elect both methods for the same year? Our VS document has a modified bottom-up QNEC allocation it calls a targeted QNEC, but you have to pick either targeted or salary proportional. You can't do both. IF the document says you allocate the QNEC that way and IF the disproportionate QNEC rules in the regs let you count it in the testing, I think it works. But, I think the plan document will be the biggest problem. If the document works, you may find that the bottom-up QNEC allocation method will have you allocate amounts to some NHCEs that can't be used in the test. Either way, it's an interesting idea.

Based on the definition of Qualifying Programs on page 13 of Circular 230, one requirement is that the CE program sponsor provide a certificate of attendance or certificate of completion. To me, that means each person has to sign up to get ERPA credit. Is there a typo on your second post? Maybe renewal between 4/1 and 6/30 of 2013? If so, then I think you are correct that you would report your 2012 and 2011 hours, assuming initial enrollment in 2011. My renewal was in 2012 and I reported hours for 2009, 2010 and 2011. Circular 230 sets the ERPA re-enrollment application period as April 1 to June 30.

You'll also want to make sure the document is up-to-date and have him sign the resolution/amendment (depending on what the document calls for) terminating the plan.

Most plans provide for the return of contributions to the employer if they were made due to a mistake of fact. Our VS document has it in the miscellaneous section of the base document. If your document has that provision and they do not want to allocate additional contributions this year, that may be your only option.

It depends on whether you are concerned about the prefunding prohibitions for salary deferrals in 1.401(k)-1(a)(3)(iii)© and match in 1.401(m)-1(a)(2)(iii)(A). If you are concerned that the deposit of the extra amount before next month's services are performed would prevent that extra deposit from being used as next month's deferrals and match, returning the extra deposit under the plan's mistake of fact rules may be the cleanest way to handle it.

You might want to take a look at 1.411(d)-4 Q&A 2 regarding changes that can be made to protected benefits. In particular, under (b)(2)(ix) up to a 6 month change in timing for an in-service benefit is allowed as a de minimis change in timing. Also, under (e) DC plans can eliminate optional forms of benefit if an otherwise identical single-sum distribution is available. The de minimis timing change may not get you to one distribution per year, but I think you have a strong argument that (e) should allow the removal of in-service distributions under $1,000 if the larger in-service distributions remain available.

We used to have a couple of clients like that. We used Corbel VS documents modified by their service bureau for the 401(a) plan. We filed for determination letters as a minor modifier. I don't think you can make a prototype work without turning it into an individually designed plan.

With limited exceptions that do not apply here, plan benefits can not be assigned or alienated. See IRC 401(a)(13)(A). That means the husband's benefits can not be paid to his wife or anyone else. That's why the receiving account has to be in the husband's name. A QDRO would be one of the exceptions, but that wasn't mentioned.

For eligibility, prior service with ABC counts. For vesting, I think you get a different answer since ABC did not maintain a plan.