Nassau

Do government 401(a) Plans have to file Form 5500?

My client is planning a sizeable reduction in work force this week, one that will impact more than 20% of their domestic work force and therefore result in a partial plan termination of our 401k plan. 1) Do they need to notify participants in any way about the PPT and if so, what timelines are attached to this notification? If notification is required, is it only those participants affected or the continuing (non-affected) employees as well? 2) Some of the employees who will be notified next week will be kept on up through 3/31/13 in order to complete some projects. Since they will be notified next week but will remain employed what time period for the PPT determination can stretch beyond one plan year if circumstances require it. Does that mean that the PPT period would be from 1/1/12 to 3/31/13? and if so any employee involuntarily terminated (even for performance) between 1/1/12 and 3/31/13 would need to be fully vested?

If compensation is earned in the last pay period for the year but not paid until the next year, which year would this compensation fall under? Can someone provide me with the actual Section of the law where I can find the answer?

During the period of 04/2011 through 09/2011, the plan was using the self certify method for hardship withdrawals. As the participant is processing the request via the web or participant services, it is communicated that upon request, the plan can request the backup documentation for the hardship taken at any time. There is a participant in question that cannot produce the necessary backup, so the client is requesting that the participant pay back the hardship amount. Our question is: For what amount is the participant responsible for paying back, the gross or net amount of the distribution? Also, if this amount is paid back to Vanguard, into what source should this be accepted into?

To utilize a Hardship for Funeral Expenses of a deceased parent, is that parent required to be a biological parent, or is the option also available for a "step" parent?

What are the rules pertaining to terminated participants over the age of 65 with account balances greater than $5,000? Can they be forced out of the plan and required to take their account balances?

If compensation is earned in the last pay period for the year but not paid until the next year, which year would this compensation fall under?

Are pre-tax assets from a qualified plan permitted to be rolled over to another institution into a Roth IRA? If so, is this a taxable event or non-taxable? Meaning, the financial institution that rolled over the pre-tax assets to the other institution are they required to withhold taxes at the time of the rollover? or does the participant have to notify the IRS that they rolled over pre-tax assets from a qualified plan into a Roth IRA at another institution and pay the taxes?

My client is requesting information about terminated participants under the age of 59.5 who want to take installment payments and believe that this can be done without a 10% penalty if taken as substantially equal payments. Plan document allows installment payments. Please advise what Regulations or Code addresses this information?

Are after-tax contributions required/allowed to be withdrawn at anytime regardless of the plan document type (custom vs. pre-approved document/prototype)?

Do Puerto Rico Plans have to be amended for the HEART Act and WRERA?

Do Puerto Rico Plans have to be amended for the HEART Act and WRERA?

Are there any advantages to changing the plan year for a plan from a calendar year to a fiscal?

If a plan document is amended, am I correct that the plan sponsor has to the end of the plan year to amend the plan document. Can someone tell me where it states the timing in the Code/Regulations?

Thank you very much!!!!!!!!!! Took me several minutes of googling... Found this thread: http://benefitslink.com/boards/index.php?showtopic=35213 Which lead me to find this document, see Q-19: http://www.americanbar.org/content/dam/aba...uthcheckdam.pdf

In informal Q&As at the ABA tax section meeting some years ago, the IRS said that purchasing a co-owner's undivided interest in a residence qualifies. Maybe the question related to exceeding the five year limit on plan loans. I think the Q&As can be still be found on the ABA website at http://www.americanbar.org/groups/committe...efits.htmlEdit: The url posted above looks funny. I did not find the Q&As at the ABA tax section meeting. Can you send it to me. Thanks.

This question is related to Hardship Withdrawals (purchase of a principal residence). The client has a participant who currently owns a home with his ex-wife. The existing mortage is in both of their names. The participant is still living in this residence, and he would like to buy his wife out of the house. An agreement of sale and other necessary legal documentation would be provided. The question is though, since he is technically purchasing the house (I believe a new mortgage will be done in just his name) and he will continue to live in it, would that be considered the purchase of a primary residence, or since he already owns a portion of the house, is it not considered a new purchase?

Third Party is requesting duplicate statements in accordance with the Insider & Trading Securities Fraud Enforcement Act of 1988. The participant this is in reference to is terminated deferred and letter states he is a trader or associated with a broker dealer registered with the CBOE. Please advise if this request is something the Recordkeeper/Trustee should adhere to in terms of distributing statements to other parties or if Plan Sponsor should be notified and involved?

Third Party is requesting duplicate statements in accordance with the Insider & Trading Securities Fraud Enforcement Act of 1988. The participant this is in reference to is terminated deferred and the letter states he is a trader or associated with a broker dealer registered with the CBOE. Please advise if this request is something the Recordkeeper/Trustee should adhere to in terms of distributing statements to other parties or if the Plan Sponsor should be notified and involved.

Yes, I am referring to ACP/ADP Testing. Is non-discrimination testing required for the final plan year when a plan is terminating (i.e., no assets in the plan currently) ?

One of my clients received a letter from the DOL regarding late funding of participant contributions for 2008, 2009 and 2010. The plan is currently inactive, as all balances were distributed in the fall of 2011, including the forfeiture account. At this point, I believe the only outstanding item was for them to file the final 5500, which the recordkeeper and trustee doesn't even prepare. What should we (recordkeeper/trustee) tell the client on how this situtaion should be handled?

Is non-discrimination testing required for the final plan year when a plan is terminating? I'm not sure what value there would be in doing that since there are no assets to distribute excesses even if they failed.

My client recently funded a QNEC for 3 participants covering a total of 46 pay periods. We are now at the point of calculating the earnings. If we were to calculate the earnings by participant and trade date, there are 111 total trade dates that need to be accounted for. I have two questions: If the client uses the highest earnings rate in the plan, is it based on the entire plan's fund lineup, or since this plan has auto-enroll with a default into the Target funds, would it be based on the highest return within one of the default funds Or, can we use the midpoint method to calculate the earnings and base it on the current allocations for the participants?

If compensation is earned in the last pay period for the year but not paid until the next year, which year would this compensation fall under?

The client recently identified that they withheld elective deferrals from participants' 12/24/2010 payroll but never deposited the funds into their accounts as they should have. I've explained to the client that they should seek legal counsel to determine the most appropriate way to address this correction and have also forwarded them the prescribed correction VFCP procedures taken from our Q&A on timely deposits. The client has subsequently forwarded VGI a regular contrib. file with these previously deducted deferral amounts which rejected in our Recordkeeping System because the additional amounts in 2011 put participants' over the 402(g) limits. Questions: Q1. Since 2010 plan year has already passed, should these missing deferral amts. now be returned to the participants along with corrected W-2 tax forms for that tax year? Q2. If the answer to Q1 is "yes," should the client deposit (read as "fund") those unposted EE amounts into their QNEC source along with the associated earnings? Q3. If the answer to Q1 is "no," how should those EE deferral monies be posted to the participants' accounts without impacting prior year testing/tax related issues?