chris

Not plan related but anybody have a link on the web to a formula for computing the risk premium for a self-cancelling installment note, i.e., premium based on probability of seller not surviving the note term and thus collecting all payments, etc....? Thanks in advance.

E/er contemplating adding loan provision to current PSP. Seems that plan amendment, written admin. procedure re loan program, summary of material modifications to SPD would be the only doc. issues to be addressed. Anything I missed?

Main issue is how to deal with discrimination issue as to setting a $$$ threshhold as to when a participant can and cannot direct the investment of his/her account..... Is it a matter of picking a $$$ threshhold low enough that some NHCE's can elect to direct the investment of their accounts? For example, e/er doesn't want participant with $1200 in his account to elect to direct the investment b/c of add'l admin charges by plan bookkeeper/accountant. Really becomes an issue when 50 participants with small balances want to elect to direct the investment of their accounts. Looking for any guidance as to setting a $$$ threshhold, if applicable, or for alternative manner of delineating who can/cannot elect to direct the investment of their accounts..... Thanks in advance...

Purported QDRO identifies plan as "XYZ, Inc. Profit Sharing Plan" when in fact the name of the plan is "XYZ, Inc. Amended and Restated Profit Sharing Plan". Technically, the DRO should be rejected, but practically speaking is that what most plan administrators would do? or would they accept it? Thanks.

Re the document, it would still need to be amended to bring it into compliance with the applicable laws at time of termination.

The "in-kind distribution" comment deals with whether or not the RE will have to be liquidated if the MPPP is terminated. If in-kind distributions are allowed for in the MPPP document and the MPPP is terminated and all participants elect to rollover to the PSP, then the objective of preserving the RE investment within the plan is achieved without having to deal with the protected benefits/restrictions issues. The two objectives are: 1) maintain the RE investment; and 2) get rid of the MPPP.

Actually terminating the plan and allowing for the participants to chose how they want the distribution, ie, rollover, in-pocket.... is the only way to purge the protected benefits/distribution options, correct? If the MPPP was terminated and all participants chose to rollover their balances to the PSP, then assuming the MPPP allows for in-kind distributions, the RE could be transferred to the PSP. Thus, the RE investment is preserved AND there are no protected benefits/options that have to be tracked in the future. So I guess merger vs. termination will mainly depend on how many participants would not elect to rollover to the PSP.

WDIK: twelve questions in a single post is no longer the record (see above post)... I haven't necessarily noticed a 180 re safe harbor plans; however, I have not submitted any for review either. Is the IRS actually requiring the removal of the testing language in safe harbor 401(k)'s?

Given that the surviving plan will be the PSP and the merged plan is an MPPP, there is obviously no language regarding preserving/restricting distribution options within the current PSP plan document. Therefore, I would assume that a new PSP plan doc would be in order referencing the fact that there are assets in the PSP from a merger with a MPPP and providing for the requisite distribution options/restrictions. I guess the effective date would be the first day of the current plan year...... Also considering a short merger agreement signed off on by both plans setting forth the effective date of the merger and referencing the transfer of assets, etc.. from MPPP to the PSP and authorizing the trustees of each plan to take the necessary actions to complete the merger. No 204(h) notice should be necessary b/c the MPPP is frozen and a 204(h) notice was issued at that time. Any suggestions...? Thanks.

Is there still an exception to the 5310-A filing requirement where two def. cont. plans are involved as long as acct. balance is same before and after, etc......? Also, I guess all issues re plan mergers in general would need to be addressed....e.g., new plan doc to reflect merger and to preserve/restrict the ben. options, all assets moved by plan year end so as to be able to file a final 5500.........??

E/er has a frozen MPPP. E/er also maintains a PSP. Assuming all participants are the same in both plans, wouldn't it be possible to amend the MPPP in order to provide for the transfer of all assets and liab's to the PSP upon termination of the MPPP. MPPP has three parcels of RE inside. Plan and e/er would like to keep from having to cash out the RE in order to pay out participants if they chose an in-pocket distribution instead of rollover to e/er's PSP. Thought I had run across this scenario on here, but it's been some time. Thanks for any suggestions....

Would it be possible to amend the plan effective with the first day of the 2003 plan year to utilize one of the safe harbor rates? I would think that doing so would only affect the calculation of contributions needed for the 2003 plan year and would not affect prior years which were calculated using the 6% rate? Thanks for the prior responses.

Just ran across a takeover target benefit plan. Prototype doc. is dated some time in 1989. Other than amendment issues I noticed the interest rate set forth in the adoption agreement is 6%. What is the current interest rate (or range) that is ok to be used?

What does the plan doc say regarding eligibility for the safe harbor 401(k) arrangement, e.g., all employees employed as of 4/1/03 are eligible, 1 yr/age 21 requirement? I typically have it such that all employees employed as of date X are eligible. That way it's clear who's in and who's not. The above was in response to your "for example,...". However, if your question concerns what compensation to base the safe harbor on, then see http://www.benefitslink.com/boards/index.p...t=0entry80576 Basically, unless the doc. says one way or the other, you can go with full year comp. or comp. from 4/1/03 to 12/31/03.

You stated that "their SSN's are very similar". Wouldn't the employer have the SSN of the person they've been withholding on? And couldn't you match that up with the ones presented by Individual A and Individual B to determine who's entitled? Otherwise, couldn't the SSA tell you the dates as to when a Soc Sec card was applied for....??

A Form 5310 can be submitted after the assets have been distributed. For practical reasons, an employer should delay distributions until a favorable determination letter is received. In fact, almost all corporate consents/minutes I do re terminating plans provides that the plan will be submitted to the IRS......and that assets will not be distributed until receipt of a FDL. However, there's always the client that wants to distribute 2 minutes after the consent to terminate has been signed. That can be done. I always explain to the client that the IRS could find a problem of some sort and it's a whole lot easier to correct if you still have the assets than if you, for example, have to pursue a participant who was paid too much. There's no statutory bar to distributing the assets if you file a 5310.

Sounds like the e/er may not want to honor it based on the tenor of the question.... Is that the case?

I filed a 5310 for a client approx. 1 year after termination. Other than remarking that the plan had been terminated a year earlier, there was no flack from the IRS reviewer. I am assuming that if assets were distributed in 2001, then a final 5500 was filed for 2001. If so the statute of limitations should have started running on 7/31/02 (assuming no extensions). I would think that filing the 5310 would give the IRS additional time as to the issues covered in the 5310. Two thoughts here..... one, advise client of the risks of filing the 5310 at this time, get client to sign off as to acknowledgement of risks, then drive on..... two, reiterate all of the reasons for not filing (assuming there are no correction issues, amendment issues, etc.........) as well as potentially extending the statute of lim's and advise not to file. if client insists, then see one above or refuse to do it.......

Reg §1.414(v)-1©(1) appears to state that the catch-up limit is an individual limit. The last part of that paragraph directs you to a different section of the Regs. as to multiple plans maintained by the same employer......

I tend to agree with both of you as to the catch-up, but I happened to run across Sal Tripodi's example referenced above where a participant in two unrelated 401(k)'s received catch-up contirbutions in both plans b/c of failed ADP tests. In Sal's example, the combined catch-up's from both plans exceeded the limit, but Sal mentions that it is a plan limit and not a participant limit.....?? On Sal's rationale, a participant could exceed the deferral limit in each 401(k) (assuming unrelated e/ers) by 2,000 and have each of them qualify as a catch-up contribution....... Thanks for the replies.

Person is employed by two unrelated employers and potentially will be a participant in each employer's retirement plans (possibly PSP and 401(k)). It appears that the 415 limit and the catch-up contributions limit( see example in Sal Tripodi's ERISA Outline Book at 11.257 regarding situation where catch-up limit is exceeded where individual is participant in two separate 401(k) plans maintained by two unrelated employers where failed ADP results in refund of deferrals) are plan limits and the 402(g) limit on elective deferrals is the only individual limit. Thus, assuming sufficient compensation from each employer, it would be possible for a participant in two unrelated employers' PSP/401(k) plans to receive 40,000 in the PSP(Employer 1) and 42,000 (28,000 PSP contribution, 12,000 deferral, and 2,000 catch-up) in the 401(k)(Employer 2)???

Reg. §1.105-2 (last two sentences) appears to allow for a direct payment by employer to provider.

Employer has a medical expense reimbursement plan. The written document appears to be outdated in that it references the 1954 Code. One provision of the plan allows for the Corporation to directly pay the medical provider. Since it is a medical expense "reimbursement" plan, is direct payment permissible? Thanks for any help.

Employer previously maintained two plans -- one MPPP and one PSP. Employer terminated MPPP as of June 30, 2003. 5310 was filed for the MPPP and still waiting on IRS to review. MPPP assets were paid out shortly after June 30, 2003. Employer wants to know if it can pay remaining termination expenses from the PSP. Employer's reasoning appears to be that since same participants are/were in both plans there should be no problem. Technically, I would think that the MPPP and the PSP are two separate animals and that payment of the remaining termination expenses should come from the employer directly and not by way of the PSP. Any comments or suggestions?

Generally, yes. 4980F requires the notice to be given a reasonable time prior to the adoption of the amendment reducing/eliminating benefit accruals. For plans with fewer than 100 participants I believe 15 days is still adequate notice. Otherwise, it may be 30 or 45 days I can't remember which. The notice will need to explain in simple terms that no contribution is to be made for the 2003 plan year and that the plan will be terminated as of X date, e.g., October 31, 2003.