John Feldt ERPA CPC QPA

Wouldn't the pre-ERISA participation rules apply?

That's what I would conclude, but I'll be interested to hear what Mr. Richter, Mr. Watson, or Mr. Forbes have to say.

Doesn't the limitation on the number of rate groups apply to the discretionary employer nonelective allocation (the profit sharing allocation)? Check that with the document. You have 1 group getting nothing (they are both getting a required allocation of safe harbor and one is getting a required allocation of a gateway minimum) You have 1 group getting enough profit sharing to pass testing (I assume that more than the minimum GW, otherwise you really just have one group) That's just 2 groups. I certainly could be wrong about this. Since my plans are all in Volume Submitter documents, these silly restrictions do not apply to any of our plans. Thus I did not spend much time researching the answer provided above.

Why is the plan in a prototype document?! Rhetorical question. I agree with Jim that you have 2 rate groups.

How about having the loan fee charged directly to the participant for this first 30 days? After the 30 days, then any other future fees related to the loan could just be charged to accounts?

Am I correct that the sponsor does not need to file a 5300 during its normal cycle? I would not restate. Although the restatement requirement applies to plans that request a determination letter, I recall something about it not applying to plan terminations. I have not found the citation, so I could be in error. Before submitting, be sure all interim amendments were timely executed. For example, a DB plan would need to have a Code Section 436 amendment adopted (if not already adopted).

Yes, the same rules apply which only allow the remaining portion to be eligible for rollover. As for the calculation, it is based on the prior 12/31 vested accrued benefit plus any prior unpaid RMD amounts that could not be paid in prior years because they were not yet vested. Just be aware that the RMD amount differs greatly when a full lump sum is paid vs. when only the minimum gets paid. If they're only taking the minimum out, not the entire lump sum, the RMD amount is generally much larger.

Since the participant has elected a lump sum payment, my recollection is that the "account balance method" can be applied for RMD purposes for the year in which the payment is made. The rest can be rolled over. For ongoing participants in a DB plan that are only getting the minimum distributed, the account balance method went away as an option several year ago.

This may be only loosely related, but here goes: It is not necessary for the top heavy minimum to be expressed as a cash balance pay credit in a cash balance plan. Generally, a top heavy cash balance plan provides the top heavy minimum in the DC plan anyway, but if that is not the case, then the cash balance plan defines an accrued benefit equal to the greater of the top heavy minimm (2% x TH years x 5-yr avg pay) or if greater, the accrued benefit provided from the conversion of the cash balance account into an annuity, payable at retirement age. The pay credit in a top heavy cash balance plan would simply be the usual formula that applies for any pay credit, however, a minimum accrued benefit must be earned, but it does not have to be in the form of a cash balance pay credit.

If the plan only allowed deferral changes on the first day of the plan year, then an employee who wishes to defer will only have one deferral type available for that year. This gets closer to the edge. Any employee who elects to defer pre-tax thus does not also have a Roth option for that year. Any employee electing to defer Roth thus has no pre-tax option for the year. Not that this changes anything, just something to mull over.

My understanding is that if you apply for a D letter and are "caught" having missed an interim amendment deadline, such as HEART, then you are no longer eligible to submit that problem under VCP because your submission places you "under exam" (see sections 4.02 and 5.07(3) of Rev Proc 2008-50). The IRS sanction should be higher than the usual VCP filing fee, but should be less than the usual audit cap fee, unless something else is found in addition to this problem.

It would not have to be a 401(k), but some type of defined contribution plan is assumed to be in place to provide benefits to the NHCEs and be combined-plan tested in conjunction with the DB plan, and if needed, the gateway minimum is assumed (or more as needed) - whatever is needed to pass. Alternatively, another DB plan could exist to give benefits to the NHCEs, but now I'm just getting ridiculous.

§ 1.401(a)(26)-3(2) says "A plan does not satisfy this paragraph © if it exists primarily to preserve accrued benefits for a small group of employees and thereby functions more as an individual plan for the small group of employees..." I think frizzyguy is familiar with this. Some IRS agents try to argue that the DB plan you describe is failing the above section of 401a26 - the portion intended for frozen plans. These agents will argue that the plan is considered as primarily preserving accrued benefits for a small group of employees and thus failing, or some similar argument. IMHO, they are wrong. But it might cost the employer more to convince them that they're wrong than the cost to give some small benefit to just one NHCE. Just something to consider.

Have you tried submitting the question to SunGard to see what their document wizards can conjure up for you?

Here's a chart that may have some use, but the 403(b) restatement column is just a fantasy, ... for now ... 6_year_cycle_with_403_b__Guess.pdf

Pre-approved plans are on the 6-year cycle. The current DB 6-year cycle ends/restarts sometime in early 2016, not before 2-1-2016. They can generally rely on the opinion letter assigned by the IRS to that prototype. If they do a "no-no" in some of the document selections, they can lose reliance and be in the 5-year IDP cycle. For example, if they wrote cash balance plan provisions in the "other" boxes somehow, or if they amended the plan to add cash balance provisions. See Rev roc 2007-44, Part III and IV. http://www.irs.gov/irb/2007-28_IRB/ar12.html edit: typo

Thank you - if the full amount is prefunded and the pastor is called away mid-year or dies, what happens to any unused employer funded HSA? Is the annual limit pro-rated?

A church's HDHP plan has a $5,000 deductible. They have one employee, the pastor, who is technically self-employed as pastor's generally are, but self-employed for tax withholding purposes. The employer (the church) has adopted an HSA plan and has decided to contribute $5,000 toward that in 2013. Is this allowable? If so, how/when should the $5,000 be deposited into the HSA account? Can the employer deposit the entire $5,000 in January 2013? If they do, what issues could arise?

Many pre-approved volume submitter defined contribution plan documents currently allow multiple employer provisions. In 2014 when the next restatement window opens, prototypes will also be allowed to have multiple employer provisions instead of just the vol/ sub. documents. If you are sure that the reason for the IDP document is not because of some other provision(s) in the plan, then you should be able to find an EGTRRA pre-approved vol. sub, document to accomodate.

Does not 401(a)(4)-11(g) affect already eligible employees? Because she's made of wood?

Nice. Maybe next year we'll find out if they think a safe harbor 401(k) plan with SH match plus an unused integrated profit sharing component with a last day requirement can be amended to change the allocation formula during the year to place each person in their own class. Also, question 42. deals with an amendment to a safe harbor plan where SH contributions were not madedue to bankruptcy (the IRS says the plan should be able to amend).

As for the charge, I think one stick of TNT ought to do it. Derrin Watson has some Q&As right here at Benefitslink regarding MEPs. I am sure there are some that do not agree with all of his opinions. Upon takeover, we've come across several large open MEPs (unrelated employers) where just the one 5500 was filed, not filing a 5500 for each single employer. First, here's a DOL opinion relative to just one MEP, 401(k) Advantage. http://www.dol.gov/ebsa/regs/aos/ao2012-04a.html Here are Derrin's Q&As: http://benefitslink.com/modperl/qa.cgi?db=...loyer&n=315 http://benefitslink.com/modperl/qa.cgi?db=...loyer&n=316 http://benefitslink.com/modperl/qa.cgi?db=...loyer&n=317 http://benefitslink.com/modperl/qa.cgi?db=...loyer&n=318 http://benefitslink.com/modperl/qa.cgi?db=...loyer&n=319 http://benefitslink.com/modperl/qa.cgi?db=...loyer&n=320 http://benefitslink.com/modperl/qa.cgi?db=...loyer&n=321 http://benefitslink.com/modperl/qa.cgi?db=...loyer&n=322 http://benefitslink.com/modperl/qa.cgi?db=...loyer&n=323 http://benefitslink.com/modperl/qa.cgi?db=...loyer&n=324 http://benefitslink.com/modperl/qa.cgi?db=...loyer&n=325 http://benefitslink.com/modperl/qa.cgi?db=...loyer&n=326 http://benefitslink.com/modperl/qa.cgi?db=...loyer&n=327 http://benefitslink.com/modperl/qa.cgi?db=...loyer&n=328 http://benefitslink.com/modperl/qa.cgi?db=...loyer&n=329

Agreed. The provisions need to be in place before the start of the plan year and the SH notice must be provided a reasonable period of time before the start of the plan year.

A lump sum window in a 401(k) plan? ERISA Section 104 governs the SPD and the regulations under 2520.102-3: Here are a couple of excerpts from the regulations: The summary plan description shall be written in a manner calculated to be understood by the average plan participant and shall be sufficiently comprehensive to apprise the plan's participants and beneficiaries of their rights and obligations under the plan. In fulfilling these requirements, the plan administrator shall exercise considered judgment and discretion by taking into account such factors as the level of comprehension and education of typical participants in the plan and the complexity of the terms of the plan. Consideration of these factors will usually require the limitation or elimination of technical jargon and of long, complex sentences, the use of clarifying examples and illustrations, the use of clear cross-references and a table of contents. The format of the summary plan description must not have the effect of misleading, misinforming or failing to inform participants and beneficiaries. Any description of exceptions, limitations, reductions, and other restrictions of plan benefits shall not be minimized, rendered obscure, or otherwise made to appear unimportant. Such exceptions, limitations, reductions, or restrictions of plan benefits shall be described or summarized in a manner not less prominent than the style, captions, printing type, and prominence used to describe or summarize plan benefits. The advantages and disadvantages of the plan shall be presented without either exaggerating the benefits or minimizing the limitations. The description or summary of restrictive plan provisions need not be disclosed in the summary plan description in close conjunction with the description or summary of benefits, provided that adjacent to the benefit description the page on which the restrictions are described is noted. If the participants have been fully informed and an old provision now no longer has meaning or relevance, I see no requirement that the SPD itself must have its language memorialized in its text. For example, do current SPDs still include language that the age requirement to enter the plan was 25 before the TEFRA/DEFRA/REA restatement was done? Probably not.

Was the time period disclosed with the SMM? Perhaps a little more information might help, too. Does the amendment have any possible permanent affects such as a right or feature that could continue to apply to balances that were in effect at the time the amendment occurred?