Kevin C

Any chance they are using transitional relief to treat pre 2009 individual annuity contracts or custodial accounts for terms as not being part of the plan? Or, the 80-120 rule? http://www.dol.gov/ebsa/regs/fab2009-2.html The audit requirement is discussed in the 3rd paragraph of the Background section.

The regs say prorating the catch-up limit by pay period is allowed. The only way they can refuse to allow her to contribute catch-up is if the plan doesn't allow catch-ups. That is assuming the union and 410(b)(6)© transition period exceptions don't apply to her. Otherwise, the plan fails the universal availability requirement for catch-ups.

The balance is subject to mandatory withholding if the beneficiary is the surviving spouse. Distributions to a nonspouse beneficiary are subject to voluntary withholding since mandatory withholding does not apply.

Maybe, but I think 1.401(k)-3(e)(1) and 1.401(m)-3(f)(1) prevent you from making the changes during the year. The compensation definition used for QACA deferrals and the safe harbor contribution must satisfy 414(s). If the plan satisfies 414(s) when bonuses are excluded from the compensation definition, then you can do it. But only if the amendment is in place before the beginning of the year and remains in effect, with no changes, for the entire year. If the change affects the language in the safe harbor notice, you are outside the at least 30 day deemed reasonable period for providing the notice to a calendar year plan. You may still be ok sending it now, but may need to justify that the timing is a reasonable period before the beginning of the plan year.

That is saying the ERPA enrollment fee is being reduced because of the new PTIN fee, not the other way around. It doesn't look like that will help actuaries.

Our pre-approved documents allow the plan's required beginning date for non-owners to be the same as for owners. I've never used that provision. I don't think the plan provision would make the distribution a required minimum under the rollover rules, but if the distribution amount is determined the RMD method, it would be an installment ineligible for rollover.

For the de minimis part, take a look at Rev. Proc. 2008-50, Section 6.02 (5) Special exceptions to full correction.

and key employee deferrals count when you determine the required top heavy minimum contribution.

The September distribution when she wasn't eligible to receive it was an operational failure. The EPCRS correction is in Section 6.06(3) of Rev. Proc. 2008-50. They should consider themselves lucky the overpayment did not reduce allocations for other participants. Don't forget the EPCRS requirement that procedures change to try to prevent this from happening in the future.

You may want to take a look at the transcript of the 8/24/2010 IRS phone forum on EPCRS. The speaker addressed the failure of a 403(b) to timely adopt a plan document. He said to go ahead and fix it, don't wait for the new Rev. Proc. The entire transcript is here: http://www.irs.gov/pub/irs-tege/epcrs_phon..._transcript.pdf The handout from the forum can be accessed from here: http://www.irs.gov/retirement/article/0,,id=218995,00.html

I don't see any issue with it either. We have a few clients in the same situation that grant service credits. Our VS document defines Predecessor Employer as "An employer that previously employed the Employees of the Employer". If the Employer maintains the plan of a Predecessor Employer, service with that Predecessor Employer counts under the plan. Otherwise, the predecessor service only counts if it is designated in the adoption agreement.

If you received your attendance verification form for the 2010 ASPPA annual conference, you may want to look it over carefully. I attended two ethics sessions, but only one showed up in the ERPA Ethics column. Workshop 25 was the one that was not credited properly. I called the number listed and they e-mailed a corrected form.

If you are asking about adding an hours or last day requirement to match provisions that currently satisfy the ACP safe harbor rules, I would recommend you make the change effective the first day of next plan year. Notice that it says you will not satisfy the discrimination requirements of 1.401(m)-1(b). That is not the same as losing the ACP safe harbor. If you are asking about adding an hours or a last day restriction to an existing non-safe harbor match, has anyone already satisfied the current requirements to receive the match?

My vote is no. And I don't think the other suggested option works any better. The timing issue under 1.401(a)(4)-5(a) is based on the effect of the amendment. Both options would have the same result, so I don't see how their effect could be different.

There is a Nov. 23 IRS phone forum on the new cash balance regs. They are asking for questions you would like the speakers to address. http://www.irs.gov/retirement/article/0,,id=218995,00.html

Unfortunately, you can not merge a 401(k) and a 403(b). That's why one plan is terminated and the balances rolled over to the other. There is still no ADP test for deferrals in a 403(b). 403(b)'s have a universal availability requirement for deferrals instead of testing. The universal availability rules changed 1/1/2009, but they are still there. Testing requirements for employer contributions did not change. The match still needs an ACP test unless they are a church or public school. The biggest 403(b) advantage that went away 1/1/09 was the exemption from the 5500 audit requirement. If the plan has to file as a large plan, they now have the same audit requirement that a 401(k) plan does. Audit fees have increased so much the last few years, they usually charge more for the audit than we do for the TPA work.

2) results in a blackout after 3 business days. Were any blackout notices sent?

If you are worried about an amendment not being treated the same as the adoption of a prototype, you can always restate the document. I agree that logically the two should be treated the same, but we are talking about an IRS program. Out of curiosity, I looked at our VS documents. The exception Sieve mentioned when the CBA calls for plan participation is buried in the definition of Collectively Bargained Employee. I learned something new today, is it time to go home yet?

I'm not sure how much I would rely on the IRS response to this question. Their entire discussion was based on the statement that the mid year amendment prohibition is part of the Notice Requirement rules in the SH regs. It isn't. The mid-year amendment prohibition is part of the Plan Year Requirement in 1.401(k)-3(e). The same rule is part of the Plan Year Requirement in 1.401(m)-3(f). I read that as saying that any plan provisions that satisfy the rules of 1.401(k)-3 and 1.401(m)-3 can't be changed mid year. The two exceptions listed in the reg. are using the conditional 3% SH notice and mid year suspension or reduction of a SH match, which don't apply here. Restrictions on the timing of deferral elections are mentioned in 1.401(k)-3©(6)(ii) as part of the SH match rules, but I don't see anything similar in the 3% SH rules. Since you have a 3% SH, I think you have a strong argument that the plan provision dealing with the timing of deferrals election is not one of the provisions that satisfies the rules of the SH regs, so it can be amended mid-year. I don't think it matters that the document allows a change in procedures instead of a formal plan amendment. Provisions that satisfy the rules in 1.401(k)-3 must remain in effect for the entire year. That prevents a change to those provisions even if no amendment is needed.

That's the way I read 1.403(b)-5(a)(4)(ii)(B). They must be eligible to defer in the 401(k) if you are excluding them from the 403(b). That's an interesting design. Would you be willing to elaborate on the reason for this design?

We do preliminary TH testing for a couple of clients just before their year end. These are ones that don't want to contribute anything at all for their employees. Fortunately, most of our clients contribute enough employer $ that the TH minimum isn't an issue. Most of our small plans are already TH. Economic conditions are not the only thing that can affect TH status. We've had a few become TH after a long term non-key employee retires. At least with that one you have some advanced warning. The fun one is when you find out after year end that they changed their ownership percentages and there are a couple of new >1% owners making over $150K.

It would need to be submitted for a determination letter. 19.03(4) has more information on what kind of amendments can be made without having the plan no longer be considered identical to the pre-approved plan. I think the change they want to make would clearly be a change to the specimen language, so they would not have reliance on the opinion letter.

If the TH minimums are not deposited, they have a qualification issue since the top heavy rules are not satisfied and another qualification issue from the operational failure by not following the plan's TH provisions. If the business owner wants to roll over his/her distribution or have the distribution taxable when distributed, I think he/she has a vested interest in making sure the plan remains qualified.

From the preamble to the final 401(k) Regs:

The IRS website says the proposed regs require annual renewal. (5th paragraph) http://www.irs.gov/newsroom/article/0,,id=226697,00.html