BG5150

What do you mean by "freeze"? Is it to stop all new contributions, but allow current money to remain? Or is it to require the current money to stay?

Were the bonues paid this year or last year?

I agree with you buckaroo. In a counter-intuitive approach, people who make more than the HCE limit for a particular year will be considered an HCE for the NEXT year. The example is a bit dated, be this is from ERISA Outline Book: Of particular interest here is the last sentence. To determine a HCE for a particular year, you look to the participant's compensation vs the HCE limit for the PRIOR year.

If the plan specifically allows for it, I see no problem with using forfeitures to make a corrective contribution...

Have you tried Relius's "Proposal"?

"Going through EPCRS" does not necessarily making a filing. The missed deferrals, as long as they are not significant, can be corrected through SCP. The method of doing that is outlined in EPCRS. If it was an isolated incident, I think it would be okay to do SCP. But if it happened to a lot of people, or happened multiple times, VCP might be a better approach.

I would say it would be immediate. The hardship agreement (probably) said that deferrals would be "suspended" rather than ceased.

I have a plan that had several ACP excesses for 2007 that were forfeited instead of paid out. The people were not 0% vested (some were not 100%, but all were partially vested, at least). What is the remedy? Are they paid out of the forfeiture account, plus earnings from the date the distribution was done? And is the ER on the hook for the 10% excise tax? The money was taken out of the HCE accounts, just not out of the plan. Your thoughts are appreciated. (The forfeitures were done before 3/15/08)

I seem to remember that under a F&C, the participant must exhaust any and all methods of obtaining the money before taking the h'ship. That included liquidating holdings in brokerage accounts and selling other assets as boats or vacation homes before being able to take the h'ship.

So, I get out of Jean's post: Try to get the money (+/- gains/losses) from participant. If not all of the money comes back, the ER must make up the difference which is to be used similarly to the way forfeitures are used under the plan. Tell the participant the money was not eligible for tax-free rollvoer treatment. And, given the fact-pattern here, I would suggest the TPA checks it's other plans for a similar pattern (if one ER doesn't read the posted reports, maybe a lot of them don't). And both parties should devise a procedure that can and will prevent this from happening again.

Sieve, I thought the intention of EPCRS was to return the plan to the state it was in as if the error had not happened. So, if they can't get the money back from the EE, the ER must put it back in. What happens to that money (the ER replaced) when the participant really does have a distributable event, I won't even hazard a guess.

Does the plan define a class of employee that is not eligible to participate in the plan at all? Eg "managers," "employees in the Des Moines office," or "those scheduled to work less than 1000 hrs." "Once in, always in," is true to an extent. But when an employee becomes a member of an excluded class defined in the document, the person is no longer covered by the plan.

I would think that if this house is the princiapl residence of both him and his spouse, approving the loan would be okay.

If the money stayed in the plan, wouldn't it be considered a transfer within the plan? And in my experience, the spouse would have a second account created in the plan that holds the beneficiary portion of the money, and it would be pulled out of the top heavy test, since beneficiary and QDRO accounts aren't counted.

I understand about the letter forwarding programs. FAB 2004-02 describes other methods (such as contacting beneficiaries and using the internet), and what to do with the money if these people are not found. But it addresses terminating plans, not existing ones. I was wondering if there was a similar document for existing plans. Here is FAB 2004-02: http://www.dol.gov/ebsa/regs/fab_2004-2.html

I have a copy FASB 2004-02 which deals with finding (or, trying to find) lost participants in a terminated plan. Is there anything out there on finding lost participants in an existing plan? I'm thinking much of the methodology would be the same.

Just be careful when you look at the reports from the asset custodian. Depending on the product, some companies track loans and include them in the balances. Some do not. So I would check to see if that $500,000 already includes the loan balances...

Yes. Some financials and the participant count.

(If) When do you need to provide amended SAR's to participants when doing an amended Form 5500?

So distributions go out without the consent of the Trustee or Plan Administrator? If there was a 2 year lag between the 2006 and the 2008 distributions, why wasn't new distribution paperwork requested? Next, do they normally withhold for the penalty tax? That's a new one for me. I think the TPA had a responsibility re: the Action Required reports. If several (and more) contributions were coming in and sent out, and nothing was done by the ER, the TPA should have figured something was amiss. That's just common sense. And, of course, the participant is at fault for not questioning why he or she kept getting these checks. I think the remedy is to get the money from the participant. Failing that, the ER has to make up the money I believe. Please tell me this wasn't an HCE...

But no gap period earnings are calculated, right?

And if the ER does not have a copy of the SPD, is there a bigger problem (since the new participants obviously aren't getting it...)?

Think of a "contribution" as something that goes toward the 415 limit. Rollover doesn't count towards that.

Plan termination.

Was there an '07 form you can reference? Or, did you call Allianz?