J Simmons

k2retire, Peter pointed out in another thread a couple of days ago the following: If an employer’s plan is stated using a master, prototype, or volume-submitter document that permits practitioner amendment, a sponsor or practitioner that “reasonably concludes” that an employer’s plan “may [sic] no longer be a qualified plan” must (if the sponsor or practitioner doesn’t submit an EPCRS request) “notify the employer that plan may no longer be qualified, advise the employer that adverse tax consequences may result from loss of the plan’s qualified status, and inform the employer about the availability of EPCRS.” Rev. Proc. 2005-16 at § 8.05 and § 15.07. If your mutual fund record keeping business w/ small TPA division is the sponsor of such a lead document that is being used by the plan sponsor, your company may need to send such a notice to the plan sponsor.

Yes, if the new EE had the time to think it all through before his first payday, while trying to get used to the new job, get settled into the new house and everything.

So if a new EE has some auto deferral under the QACA and then opts to take it out during the 90-day window (needing it to cover some moving expenses, for example), even though the QACA SH is match rather than NEC, that EE might not be able to make a deductible IRA (or Roth IRA) contribution when doing his/her taxes for that year. I don't take exception to the rules as you explain them, Sieve, just observing on the implications for an EE that opts out of the QACA.

I think this post deserves to be nominated for Sagest Post of the Year--do you have an extra 400EX I can ride?

So, if I understand your answer, Sieve, having a QACA plan does not put the EE in a Catch-22: either automatic deferrals (i.e., participating for purposes of the IRA deductible contribution rules) or affirmatively electing out (i.e., no participating merely by reason of making that affirmative election). Any difference in the participating (or not) analysis if the affirmative election out is after automatic deferrals have been held out of that EE's paycheck and he elects to have all returned to his paychecks, in the retroactive election opportunity?

If you do, calmly downplay those bad things when listing them out. Otherwise they might mistake you to be Chicken Little (aka Hank Paulson)

Respectfully, rcline46--Yikes! Unless you know the exact right person at those agencies to give them the phone number for, I would hesitate on that suggestion. I've experienced more than one situation where the person talked to at the government agency either left the participant more confused or more misled re the rules than the adviser did.

They are a controlled group Off the top, I would think the account balances stay put, in the plan. The employees of Company B are yet employees included for testing purposes because of the controlled group. Logically, they have not had a termination of employment from the control-group employer. But logic is a pied piper for much of ERISA.

Are Company A and Company B a control group or an affiliated service group?

Masteff, To be an employer-imposed limit does it have to be specified in the plan documents and thus become a plan-imposed limit?

EE and spouse divorce. QDRO was signed by divorce judge and presented to PA. PA is processing the determination re the order for its status as a QDRO, when the ex-spouse informs the PA that she and the EE are going to get back together in a couple of months. I vaguely recall something several years ago about some airline pilots having gone through phony divorces to get QDRO payouts of benefits. Is there a case citation or DoL ruling/announcement anyone is aware of about that situation?

Don't know enough facts to know if attorney is making this up, but there is no 403p for benefits other than health benefits for spouses of former CIA employees, and that is part of Title 50, not Title 26, of the U.S. Code.

Yes.

I assisted an ER facing a DoL audit. The GUST II plan language provided that the trustee would payout benefits when and as instructed by the PA. The plan also provided that a distribution of vested benefits totaling more than $5,000 could not be made before age 62 or if later NRA, without the consent of the former EE. There was a March 2005 amendment reducting that $5,000 threshold to $1,000. There was no 'shall pay out' language. The trustee waited for PA to instruct when to make payout, and the plan did not specify when the PA must give such instruction or when such a payout from the plan should occur--just not before NRA or 62 without the former EE's consent. Nevertheless, the DoL raised and persisted that such was a problem, despite our pointing out that the language of the plan did not require payout. "Failed to ensure mandatory distributions were made in a timely manner as required the by the plan documents".

EPCRS (Rev Proc 2008-50) does not mention QOSA. Given that, your suggestion for QJSA fix, by analogy, seems appropriate. Look at section 6.04 and Appendix A.07 of Rev Proc 2008-50.

EBIA has a seminar on topic set for a week from today: An EBIA Web Seminar Date: Tuesday, February 24, 2009 Time: 1:00-2:30 p.m. ET (12:00 p.m. CT; 11:00 a.m. MT; 10:00 a.m. PT) Level: Intermediate http://www.ebia.com/Seminars/WebSeminar/19667

Sal's method can help if (a) more than 1 EE wants a part of the same in-kind asset, (b) an in-kind asset is too large to be absorbed and distributed as part of just one EE's benefits, and © to sell the in-kind asset later, only a single trustee or general partner's signature is needed.

To be pre-tax or Roth, post-2008 contributions to a 403b contract requires that such contract be part of a plan. mjb has pointed out ERs set up plans, not EEs. See Treas Reg § 1.403(b)-3(b)(3). As part of an ER's 403b plan, it will likely require a 403b vendor to agree to perform certain functions. Treas Reg § 1.403(b)-3(b)(3)(ii). Such an agreement is not an info sharing agreement per se. For an exchange after 9/24/2007 of a 403b contract with one vendor into a 403b contract with another vendor not to trigger taxation of the benefits, the receiving 403b vendor must have an info sharing agreement in place with the employer at the time of the exchange. Treas Reg § 1.403(b)-10(b)(2). For the HCE that has attempted to do his own thing with a different vendor, depending on all the facts and circumstances there might be a remedy available until 6/30/2009. See Rev Proc 2007-71, Section 8.03.

I owe you one!

Thanks, Kevin. Do you understand that Notice 2007-69 would allow for an interim amendment (still timely for the calendar year plan I'm facing) to raise the NRA to 65/5 rather than to just the lower end of the safe harbor, i.e. 62?

Is the ER involved in any litigation with a former EE? In my experience, the DoL usually does not do these type of document requests without responding to a complaint from a former employee--or upset current employee. The DoL is usually so requesting to see if a claim denial is consistent with or contrary to the plan documents.

I've found state agency help usually brings quicker results, such as consumer affairs division of a state's attorney general's office or the state's department of finance.

The 415c limit on benefit accruals is $49,000 for plan years ending in or with 2009. The limit on an employee's elective deferrals (402g) is $16,500 for calendar year 2009, regardless of the fiscal plan year. The catch-up is $5,500 for calendar year 2009. The 401a17 limit on compensation is $245,000 for plan years beginning in or with 2009. It is $230,000 for plan years beginning in or with 2008. For purposes of determining which EEs are HCEs, you use the dollar amount in effect at the beginning of the look-back year. So, if the determination year is the 2008-09 fiscal year that just ended for this plan, the look-back year would be that fiscal 2007-08 year. That look-back year began in or with 2007. So if an EE was paid more than $100,000 from 2/1/07-1/31/08, then that EE is an HCE for the PY 2/1/08-1/31/09.

I provide services, including document drafting, to a pre-ERISA MPPP with a 401k feature that has been grandfathered passed the prohibition of a 401k feature being in a MPPP. The employer is a local governmental entity. So this plan is grandfathered in the additional aspect that a governmental employer has a plan with a 401k feature. In the past, I've prepared documents for this plan by preparing an MPP (NS) adoption agreement to a DC prototype, then adding the 401k feature provisions by way of a contemporaneous amendment--making the plan individually designed. We applied for and received a GUST II d-letter. For EGTRRA, I dropped the MPP prototype and now have just a 401k PS prototype (NS). Rather than draft an individually designed plan document, I am considering adopting the plan preparing an adoption agreement to the EGTRRA 401k PS prototype (NS) that preserves the QJSA/QPSA as the default form of payout and not allowing hardships or any other in-service distributions. In the SPD, I'd also specify the fixed contribution obligation that has been part of the MPPP, despite the new governing plan documents reserving annual discretion to the employer as to what contributions to make. My prototype was approved with language about governmental plans using it not being subject to the minimum coverage requirement provisions or the nondiscriminatory allocation provisions, and being subject to the minimum vesting provisions only to the extent not varied by an addendum to the adoption agreement. My question is whether changing the type of plan from MPP to PS would jeopardize the grandfathering of the governmental employer having a plan with a 401k feature? Any other concerns?

A new client brings in a money purchase pension plan. The old document provider is going out of business. The current adoption agreement specifies NRA to be 65/5. The SPD explains NRA to be 55/5. In preparing new EGTRRA restatement documents, I think I've got to go with 55/5 to avoid a prohibited cutback. That will take the NRA out of the 62 and above safe harbor, but at least the plan would yet have the presumption that it is an appropriate NRA since it is not below 55. Any thoughts or suggestions? One other glitch. An SMM that properly described a change made by an amendment signed by the employer also includes curious language about elective deferral catch-ups, although this is not a pre-ERISA, grandfathered MPP w 401k feature. There have never been any elective deferrals allowed or made to this MPPP. Are there any steps that need to be taken by reason of this misinformation having been included in the SMM?