John Feldt ERPA CPC QPA

A prospect appears to have been filing a Form 5500 for their 457(b) plan by somehow combining it with their 403(b) plan's Form 5500. It appears that the initial 120-day DOL filing after the plan was executed had not been done for the 457(b), so the 5500 filing is required. I see no reference on the Form 5500 instructions for items to complete or not complete for a 457(b) plan. Any idea what actually would need to be completed for a 457(b) plan Form 5500? Have you ever heard of filing a 5500 where both the 403(b) and the 457(b) plan names are both listed for the plan?

But a pre-approved plan that restated for EGTRRA in June of 2008 would normally have later adopted the final 415 Regs amendment, and then in 2009 adopted the PPA amendment. Anything before 415 must now be considered as "non-amender" (F, Sch 2) problems, but I don't exactly follow how the 415 and PPA would as well - these appear as "late amendment" (F, Sch 1) problems. Please elaborate.

Governmental defined benefit plans will last until the government is bought out by another government. Then they'll have until the end of the next plan year to fix things due to the 410(b)(6)© transition rules... Never mind.

Prospect wants to update their plan for missing 20+ years of documents and amendments. They want to submit under VCP as a nonamender, get approval, then terminate the plan. The do not want to request a Determination Letter. If a plan submits as a non-amender to go back as far as 1986, even if the 3 newly adopted documents are prototypes for TRA'86, GUST, and EGTRRA, doesn't Rev Proc 2008-50 require the plan to also submit for a determination letter?

Yes, we could not find a way to solve that problem. The safe harbor is a 3% nonelective. We looked at 410(b)(6)© which mentions a person ceasing to be a member of a group in (b), ©, (m), or (o) of Code Section 414. 414(o) says that the Secretary shall prescribe regulations to prevent the avoidance of any employee benefit requirement in (m)(4) or (n)(3) through the use of other arrangements. So, even if regulations had been written there, it would also be of no help. Ironically, the former union employees are actually receiving slightly higher benefits in that plan (UEE plan) than the regular company plan. We plan to aggregate to show coverage passes under 410(b), but for nondiscrimination, is there a way to file with the IRS to say, here's the issue, and we think it works if we just do this: Run ADP/ACP testing anyway (combining the plans (it will pass) and run a combined 401(a)(4) test for the non-SH nonelectives (it will pass) and then provide a 3% of pay QNEC to the NHCEs in the formerly union plan?

An employer has two calendar year 401(k) plans, one for the union employees (UEEs), one for everyone else. The union was going to break up. Before they did, the union plan (UEE plan) was amended with an effective date that begins August 1, 2010 - the same date that the union no longer exists. That amendment allowed the same employees, now non-union, to continue to participate in the plan. The other 401(k) plan is a safe harbor 401(k) plan. 1. Can the plans be aggregated for coverage (for periods after 7/31/2010)? 2. Can they be aggregated for non-discrmination? 3. Would the 410(b)(6)C) exception apply? (I don't think so)

Are you saying that a 403(b) plan (but not a church plan) can exclude employees from making deferrals until they have met a plan entry date, and that would not violate the universal availability rule?

And as long as you pass 401(a)(26) in the DB plan. With just 4 employees, you're okay so far by benefitting 2.

Oh, we all want things to be thought through and planned out in advance, sure.

Probably. If they truly never made a 410(d) election, they never had to file (were they paying someone to do all of those filings?). If they did make an election, then they must continue to file. Such an election would have either been made along with a determination letter filing, or as an attachment to one of the earliest Form 5500's. You may need to explain to the client that the IRS/DOL may send a notice saying "your 5500 is late" sometime after they realize the plan is no longer filing a 5500, but you can tell them you have a letter ready to send back to the IRS/DOL to explain that the sponsor is exempt from filing because they are a church and they have not made an election under IRC 410(d) to be covered by ERISA.

Since church plans are not subject to the universal availability rules, then yes, you could have service requirements, including a requirement to reach an entry date.

The choir agrees.

Can a 457(b) plan sponsored by a tax-exempt employer be amended to adopt the "deemed severance" rules from the HEART Act? If it can adopt this, must the plan also apply the 6-month suspension of if a participant takes such a distribution?

And the plan document probably provides for the Plan Administrator (PA) to make interpretations regarding the terms of the document. So if the word "calendar" is not connected to the word "month", then it seems to follow that the PA has the authority to interpret the plan month to start on the 7th, just like the "plan year" does.

I know of no official reliance for that. Could a plan submit for a D letter which also asks for the IRS to rule on the 401(a)(26) testing methodology?

I think Mr. Deutsch calls it an "Indexed Benefit" plan.

I think we have a plan that was set up with 5%. Otherwise, all of our other plans use one of the variable rates that are automatically considered okay. For 401(a)(26), we project the credit (excluding the interest credit) that is being made to the account for the year to the retirement age by accumulating it at the interest crediting rate. That projected credit is converted to an annuity, then divided by compensation to see if it exceeds 0.50% of pay. If so, then it's meaningful to Paul Schultz and his memo from June 6, 2002.

Usually these government plans have extended deadlines for adopting plan language that complies with any new law changes. So until the plan restates, they need to comply with the adoption of any required language (interim amendments) based on such deadlines as they apply to government employer plan sponsors. Then for the restatement, you have to adopt whatever is required from the cycle E cumulative list in order to submit in cycle E, but that probably can exclude any items that are not yet required to be adopted for a government plan sponsor.

What was this, the Bret Favre version of a TPA? If you resign and you get another request to do work, send another copy of your resignation letter!

Yes, of course, change the age of participant! So, forever only lasts until the participant's age reaches 59 1/2.

They are now forever tainted as far I can tell.

A plan with many Life and CC options (some are Life and below 10 years CC and some are Life and over 10 years CC) would like to simplify things. They want to eliminate as many options as possible, without running afoul of 411(d)(6). The plan also has a lump sum option (which almost all particpants take when there's no restriction otherwise stopping them). Under 1.411(d)(3)©(4), all of the Life and 10 or less is grouped separately from Life and more than 10 forms. Does this mean the plan must keep at least two Life and CC options, such as Life&10 and Life&15?

So, as long as the -11(g) deadline has not passed, you may make changes to a safe harbor plan and use -11(g) as your basis for doing so. Does -11(g) require that a failure exist in order to utilize it?

And making this change would not violate the safe harbor requirement that the provisions must be in place before the beginning of the plan year?

"The 414(s) failure causes the safe harbor 401(k) plan to not satisfy ADP/ACP, which is the sole means of satisfying 401(a)(4). That should make it eligible for correction via an -11(g) amendment." Sorry, I'm not seeing how ADP/ACP testing can be part of this. The ADP/ACP test is not applicable to a safe harbor contribution portion of a 401(k) plan. The plan gave a SH 3% notice or some kind of a SH match notice. The provisions adopted by the plan provide for safe harbor allocations that are not dependent upon ADP or ACP testing. So I am not seeing any ADP/ACP failure to fix because ADP/ACP testing is not applicable for a safe harbor plan. Do I misunderstand?