BG5150

And, was a trust created? I thought there had to be a trust before a plan could be in effect.

To be honest, who is going to know other than the boss and the guy who wrote the document? Did it get sent in for an approval letter?

I have TWO follow-up questions here: 1. In a case wherein the participant takes a distribution payable to herself, how do we treat the tax withholding amount being returned? It's my understanding that she would have to make up the amount withheld from her own funds. But, would that create basis in the account? Assuming this has occurred after she's filed her taxes for the year of distribution. Would we have to separately account for that money as "after-tax" but still on the vesting schedule? 2. What if the person was 0% vested in the source--Profit Sharing in this case. Does she have the right to have the amount reinstated? Or, because she had no non-forfeitable money, she's not entitled to it? I have someone who has two years of service on a 3-yr cliff schedule. Would it matter if she had any deferrals, since they are 100% vested at all times?

I would say that the "old" money was "stuck" at 80% vested, it would cease to accrue the last 20%. The "New" money, would be immediately 80% vested, and when the participant gets 1000 hrs in a plan year, he/she is 100% vested then. The participant would start again at zero. As for re-satisfying the eligibility, what does the document say?

Ok. So, I'm married in 2009. File our forms as "Married filing [single/jointly] in January. Get divorced on March 2010. Get hired May 2010. Am I married? Sure. here's my 2009 tax return and marriage license.

So is ti jut the targeted QNECs that aren't allowed after the 12 months?

Austin, from what I am reading, Appendix A says you can do the QNEC to all participants int he amount to satisfy the test. Appendix B allows for an alternate correction, which is the 1-to-1 QNEC paired with the distributions.

So, if you are beyond the 12-month window, a QNEC-only approach (as opposed to the 1-to-1 + distribution) is allowed? Then what happened to the rule that QNECs can't be used after 12 months after year of the ADP calculations? And, as a side note: according to section .03 in Appendix A, you must use ALL the NHCEs int he QNEC, and cannot break the test down into excludable/non-excludable groups. This may affect the amount given in a QNEC.

If any of the information changed on the SAR, I would re-distribute it just to be safe.

You DO have elections from all employees stating that they are willfully declining to defer any salary, don't you? I am always wary of a 401(k) plan with ZERO participation.

And in any event, if your choice is between a loan from a bank or a loan from the plan, you are better off "paying" interest in to your plan account and losing a little of it to tax later than paying the interest to the bank and losing it all now. However, your retirement plan is supposed to be a long-term investment. IF you remove money from it, you might be robbing yourself of the compounding gains on the money in the account. (Though some people argue that in a down market, a loan may be beneficial, as you'd be buying back the shares at a lower cost. However, I'm not sure if that would outweigh the benefits of staying in the market, but perhaps in a different investment.)

Gonna be tough to justify a hardship if his deferral account value was more than what his deferrals were.

Was this person an HCE?

Is he in his own group? Or are all the Drs in the same group? In own group--yes In same group--I don't think so

From ERISA Outline Book, Chapter 13A:

In a paperless environment (which, to be honest, might not be cost-effective for some TPA's or asset holders), how do you obtain spousal consent if the participant is choosing someone else as primary beneficiary?

First, does your service contract with your clients involve the collection and recording of beneficiary information? Even if it doesn't, have you been providing the service in the past? That said: how big is your firm and your case load? I once worked at a large provider, and x% of the enrollment forms and beneficiary designations were reviewed. (I'm not sure exactly what x% is, but we had thousands of plans and hundreds of thousands of participants in those plans.) In my current position, we have the ability to review all of them,. In fact, part of our procedure is to double-check the operations department's adding the people to the system. I have heard of providers that allow people to add/change their beneficiaries online. However, I would expect them to notify the client of any changes. I tend to agree that the client is ultimately responsible for collecting and retaining the forms.

A few thoughts: Keeping the companies on, would they need to also sign any required or discretionary amendments that pop up? Or, is the the main plan sponsor responsible for that? There could be an issue, if you can't find someone to sign on behalf of the company. Don't you have to keep them in, if there are participants from those companies with account balances in the plan?

This is my take on the regs. To be honest, though, I've been less than strict on making people take loans before hardships, using the "loan will create a hardship in and of itself" excuse.

Then ask him to request a current bill. I'm sure any medical office would be more than happy to furnish one upon request if it could lead to payment. (Although, I would think that a bill from 2007 would have been turned over to a collection agency by now. Maybe not.)

This is what the regs say avout taking a loan first: 1.401(k)-1(d)(3)(iv)(D)

ERISA says It doesn't mention anything before that time.

I know an SPD must be furnished to an employee no later than 90 days after entering the plan. However, is there a "too early" date? Could the ER give the SPD to an Employee upon hire, even though her entry date might be 14 months later?

So, for my own edification: the "1/3" gateway test can be satisfied with 414, but the SH "5%" gateway must be tested on 415?

Thanks. I read those and the actual settlement document ( the url was in the cover letter), and these 5 were listed as possible, acceptable remedies: Here is a link to the document: http://www.sec.gov/litigation/admin/2007/34-57048-dp.pdf