John Feldt ERPA CPC QPA

Or the 415 limit.

Also, if you are not going to the IRS, be sure to have the applicable HEART Act language adopted too - it was passed June 17, 2008 and it looks to me like some of that applies now to all qualified plans.

I think efforts must be taken to amend the plan for all required law changes before the date of plan termination. After the plan is submitted to the IRS, the IRS reviewer can require additional amendments as they see fit in order to bring the plan language to meet their requirements. If the plan is not submitted to the IRS, there is no further amending possible after the date of plan termination. I think any amendments taken (other than those dictated by the IRS reviewer of the Form 5310) would negate the plan termination date itself, thus reopening the plan. I could be wrong, but that's my take anyway.

I suppose I implied that by the title and by placing the initial question in the DB plan message board.

From the Fiduciary Answer Book, it looks like the insurance company is the fiduciary to that plan asset. Perhaps that is related to their decision to no longer offer that type of investment anymore. Thanks for the info!

This one is a very old plan. They were investing the plan money in a "deposit account" contract with the insurance company. Last fall the insurance company stated that they were no longer going to offer that type of investment product. The insurance company also provided the plan its GUST plan document, which contains no trust provisions and yes, they cited ERISA Section 403(b)(1) when asked. The company's attorney said that the Employer cannot be the trustee because state law prohibits a corporation from acting as trustee of a trust.

More than the GUST restatement fee.

We are taking over a DB plan and they claim that they have no trustees (it's true their plan document has no trust provisions). This is not a 412(i) plan. They are a normal for-profit C-Corp. All of their plan assets are invested with an insurance company. They state that because of this, they are not required to have trustees. They say then that they don't want to name a trustee because of the fiduciary liability that would then be placed upon that individual. Is it possible for a qualified defined benefit plan to not have a trust and thus not have trustees? Don't they already have fiduciary liability anyway, even if they appear to not have a named trustee?

Not a requirement, but if matching contributions are contributed on a payroll-by-payroll basis, then it's easier to use a match forfeiture to offset a match made in the following year, rather than in the same year the forfeiture occurs. Whereas, if the same plan provides a nonelective contribution (contributed annually after the year end), then a forfeiture used to offset the nonelective for the same year in which the forfeiture occurs does not have the same logistic problem that the match would. Note: if you use PPD, they will fix the problem in their next release (a software glitch does not allow the forfeiture to be split like that).

So a participant who is having amounts withheld for the 125 plan should have those stopped for 6 months too? (question assumes safe harbor hardship)

Church 403(b) plans are not subject to the universal availability requirement.

Thus, a suggestion should appear now to have both a fixed match and a discretionary match. Limit the discretionary match to deferrals not exceeding 6% of pay and limit the discretionary match overall to 4% of pay (but have no allocation conditions). Then back into the fixed match formula based on the compensation of the HCE, limiting the fixed match to be based on deferrals that are not over 6% of pay, but the overall fixed match is not limited like the discretionary match (also no allocation conditions). You can apply a vesting schedule on the fixed an discretionary match (the SH match is already 100% vested). This means those deferring zero will get zero employer dollars with no top heavy contribution required either (as long as you took care of the plan language for the forfeitures properly too).

okay, so then we are back to merely "potential trubble"

Does this mean if the IRS reviews a case where an HCE (age 60 to 65, owner or not) gets 1% of pay allocation, and the other owner (age 50 - 55) gets 13.26% of pay allocation, and the nonhighly group gets 5% each, and it passes 401(a)(4) that IRS could refer the above case to some other gov agency regarding an ADEA violation?

Our cafeteria charges $1.00 for each 20 oz. bottle of pop. -Sorry, I couldn't resist!

okay, I was only considering the a4, not something like ADEA. So, excluding the old owner is a problem, or using him as a zero. How about providing just a small amount to that old owner? Or will this only apply to non-owner HCEs?

but no trubble if they're an HCE

The proposed rule does not shorten the existing requirement. It establishes a safe harbor deadline of seven business days. If you are a small plan, and you make the deposit within the seven business days, then the DOL won't question the timeliness of the deposit. The actual rule of ASAP still applies, but for a small plan, ASAP does not have to be earlier than that 7th business day. The rules still state that "ASAP" can never be later than the 15th business days after the end of the month in which the withholding occurs. http://benefitslink.com/boards/index.php?s...736&hl=ASAP

AndyH is correct. It's okay to transfer the entire excess. Many years back, that was questionable because the rules stated it must be a transfer of 25%, which a literal interpretation meant exactly 25%. Now that's changed and 25% or more can be transferred and only the reverted amount gets taxed to the company/(or shareholders, partners, sole prop) and that reversion is also subject to the excise tax on top. If the transferred amount does not get allocated in the DC replacement plan by the end of the seventh year, then perhaps the excise tax may apply then, but we've not run into that problem yet.

I'm surprised not everyone added that language. Fair enough. If your document allows you to amend on your clients' behalf, then I'm suggesting vol sub for all of your EGTRRA restatements.

I see no advantage to using a prototype plan for EGTRRA restatements, when compared to a volume submitter EGTRRA document. The prototype appears to be more restrictive.

That is a fine line, and certainly should be considered during the decision making process. I am not sure, just from those cites alone, that such an amendment to vest eligible participants only would be discriminatory.

What efficiency exists in a prototype now under EGTRRA (vs. a volume submitter)?

Can you get a D letter, specifically requesting the offset issues to be reviewed for 401(a)(26)? I have heard that some IRS auditors in some regions have no problem with the idea presented above in this thread. Other IRS auditors take you to audit cap. Not a personal experience on my part, but I'm sure another reader can attest to that.

Good question. There were no non-vested terminations prior to this time (the plan's only 2 years old). -Thanks!