BG5150

Does the Federal Truth In Lending information have to be in loan documents for participant loans?

Jim, try it with just one of those items entered. Also, do you want to send me the name of the company in a private message and I can see if I can wrangle it up?

Here's something from the 1099-R instructions: You are not required to withhold 20% of an eligible rollover distribution that, when aggregated with other eligible rollover distributions made to one person during the year, is less than $200.

It's ERISA Outline Book Chapter 6 Section IV (missing from the cite) Part D # 2.c.3

I have a question about the participant's selection of the vesting schedule. I thought that applied at the time the amendment is made. In this case, what if the amendment was made 5 years ago, and the person got rehired last year. Do they get to select the vesting schedule?

How many YOS (for vesting) did the rehired employee have when they left?

Is that 'unallocated account' perhaps an ERISA recapture account? Or something that is housing settlement proceeds?

Even if the plan is SH, you can match at any rate you want, provided all the testing is passed: ACP, deductibility, 415.

Make the doc effective 1/1/16 and the provisions you want changed effective whenever you want(ed) them to be.

But, I don't think it's up to the actuary to make sure the notices were delivered to the participants.

Did you ask for the most recent SPD?

Don't forget. As part of any self-correction under the mantle of EPCRS, the plan administrator must put in place procedures to ensure the mistake does not happen again. Keep that with the other documentation of the correction.

We all agree that $5,000 + earnings (or less the losses) must be removed from the participant's account. Either put it in a suspense account or send it back to the employer under the nebulously-defined 'mistake of fact' provision of the plan. That's it. Although, good luck with getting the suspense account thing right if they aren't used right away and there are true forfeitures under the plan. I haven't seen a r/k system that even has a suspense account feature.

(1) The ER could have had that $5,000 invested somewhere and getting earnings outside the plan. (2) Nothing says it must be used "as soon as possible." It says the company can make no other ER contributions (match included) until the suspense account is depleted. I see no problem waiting until next year when they allocate the match, to use these funds.

You cannot use the $5,000 to offset deferrals.

Or, you could just send it to me. I won't tell... ;)

And, yes, they can be used for SH. At least that was the opinion of several ERISA attorneys I've worked with.

No fees. Must be used for contributions. These are excess allocations, not forfeiture of unvested money.

The contribution and its earnings go into a suspense account to fund the ERs next contribution (other than deferrals). In fact, the ER can make no contributions until that suspense account is exhausted. (EPCRS 6.06 (2))

Can someone give me an example of this you've used for a client? I'd like to add this arrow to my quiver when talking about plan design with clients.

Don't confuse eligibility period being the plan year and a YOS. My thought is that it is a constant rolling three-month window, even after a year. Also, with a caveat, that if someone does work 1,000 hours in a 12-month period, they enter the plan on the next entry date. What changes is the window, so to speak, for a YOS. Typically, it is the EEs anniversary year. After that, it reverts to the plan year.

^ Unless it's a Safe Harbor Match. Then it has to be put in by the end of the following quarter.

SH Match formula is 100% up to 6% of pay. Is this okay? Is it just a discretionary match that is capped at 4% of pay?

I think the IRS would find it more problematic if there is a pattern of not withholding. If one slips through, I don't think it's a big deal.

If the participants did not have an option to take a distribution, I would say that this is a spin-off. If they were, then it's a new, successor plan. It's not a merger, as there was no existing plan with which to merge.