chris

So what's the problem with moving the amounts to something that's safe that pays interest? And at the same time trying to locate the unpaid individuals....?

As for taking out loans, I'm assuming there are no loans outstanding. If so, you may want to add special language in plan doc right before the loans section to the effect that "... loans are not available as of date x, but that outstanding loans will be maintained in accordance with the following provisions....."??? Of course, the special language will require you to submit the document to the IRS for review.

Tried locationg them per the IRS Letter Forwarding Service or using SSA's similar service??? Not that it necessarily makes it right, but what size balances are we talking in terms of not drawing any interest? There are many old threads on here re what to do if you can't find them, e.g., 100% withholding to IRS, etc...... but I'd suggest trying to find them as soon as you can.... You would also want to go through those hoops to avoid the IRS' treating it as an ongoing plan.

Everett: Do you have the cites for the court cases you mentioned regarding a general durable power of attorney's having to expressly reference the qualified plan(s) the attorney-in-fact can deal with? I had always assumed that such a power of attorney was broad enough to cover dealing with a principal's interests in a qualified plan.

Had a similar situation where the brokerage firm suggested that the Plan buy an annuity for each of the children. They had come up with some reason such that doing so wouldn't require a 5500 each year. Also, since the annuity met certain requirements, the beneficiaries were not taxed on the entire $$$$ amount used to fund their annuities but were taxed on payments as each one was received. Don't know that that helps you in any regard, but.....

Don't do a whole lot in the way of 401(k) testing, but how is it that the HCE will benefit from a failed ADP/ACP test? Won't failing the tests mean that corrective actions will need to be taken in order to maintain plan qualification? Also, nonprofit corporations don't have owners. Typically, they have members or no members and are generally run by a board of directors who elect officers......

Take a look at Sal Tripodi's ERISA Outline Book at page 15.801 for a checklist. Basically, you'll need to make sure the documents get amended to reflect current law. Have participant execute the requisite distribution forms, etc... to distribute the plan assets as per the plan doc's (cash only vs. in-kind, etc....). Consider filing Form 5310 regarding a determination letter on termination, but don't know that I would do so since it's a one participant plan and there are no nonhighly compensated e/ee's involved. As for the MPPP, you would also need to deal with the 204(h)/4980F Notice re cessation of benefit accruals issue.

Given the upswing in the market, I think the trustees would like to distribute the plan assets as soon as possible. Thus the no assets there/undoing of transactions issue will be present in both cases. I typically advise clients to wait until the favorable letter comes back b/f making any distributions, but, of course, they don't all do that.... Regarding the second alternative above, I was just considering the issue of dealing with the IRS as to the amended and restated document when all assets had potentially already been paid out of the trust. However, I guess it's the same issue whether you go the 5310 route or not.... And, even though the 5310 route seems to lend more credence to the process, the fact that the 5310 is discretionary tells me the second alternative is a viable alternative.

Thanks for the input RSNOW.

Have a MPPP which was frozen back in 2001. Given the upswing in the market, the trustees are considering terminating the plan as of June 30, 2003. The plan document (vol. submitter) was recently updated for GUST. Due to language changes the document will need to be submitted to the IRS for review. Anyway to combine the GUST review with the termination, ie, wouldn't it be possible to submit the 5310 and include the new document and receive a det. ltr. on both the termination and the new document? Alternatively, any issues with terminating the plan as of June 30, 2003, paying out participants as soon thereafter as possible and then submit the document for review, ie, forego the 5310, but terminate as soon as possible?

Have a MPPP which was frozen back in 2001. Given the upswing in the market, the trustees are considering terminating the plan as of June 30, 2003. The plan document (vol. submitter) was recently updated for GUST. Due to language changes the document will need to be submitted to the IRS for review. Anyway to combine the GUST review with the termination, ie, wouldn't it be possible to submit the 5310 and include the new document and receive a det. ltr. on both the termination and the new document? Alternatively, any issues with terminating the plan as of June 30, 2003, paying out participants as soon thereafter as possible and then submit the document for review, ie, forego the 5310, but terminate as soon as possible?

Actually, the question came to me from an accountant. I haven't had to deal with the controlled group rules so I figured I would pass it on to the experts. Since A and B do not own 80% or more of Corp Y, then it appears there may no controlled group issue.... Thanks.

Two corp's. -- Corp X and Corp Y. Corp X maintains a PSP. A and B own shares in Corp. X 50/50. A, B and C own shares in Corp. Y 1/3 each. C buys A's and B's shares in Corp. Y. Is the vesting of the employees of Corp. Y determined under the partial termination rules? ....i.e., now treated as 100% vested if partial termination has occurred, otherwise, vesting is as per schedule in effect at time of cessation of controlled group status?

IRS may require those amounts to be restored to the terminated participants. In other words, IRS may say that the participants from whose accounts those forfeitures were generated are "affected participants" and must be 100% vested. Are you submitting a Form 5310 w/r/t the termination?

When did the simple 401(k) go away? Why the effective date of 3/31/03 instead of 4/1/03? If you can't maintain one while you had the other, what's the point? Maybe I'm missing it.....

Thanks Pax, QDROphile for the tips.

Participant's atty. has requested a form QDRO from the plan. The plan has no form QDRO available, however, was considering responding with a checklist of the technical requirements of a QDRO for the participant's atty. to consult when drafting the dro. Any problems with that approach?

Any drawbacks to allowing participants to opt for in-kind distributions where the trustee oversees the investment of the general plan assets, i.e., no directed investment accounts? Employer is considering allowing for distributions to be in cash OR IN-KIND, instead of in cash only. The election is to be made by the participant. Any negatives to allowing for in-kind distributions in this situation?

Typically, the surviving spouse is required to receive the death benefit. The subsequent remarriage voided the beneficiary designation. Thus, the plan sponsor needs to be ready to recoup the money from the children and pay the surviving spouse. Depending on how the recoupment works out, the plan sponsor may end up paying twice. There may be an issue re no notice of the remarriage, but not sure. Did the surviving spouse just happen to show up? Did the plan sponsor have any notice that the participant had remarried, e.g., other e/ee benefits offered such that the plan sponsor should have known about the marriage, i.e., participant added spouse onto e/er provided coverage, etc....? There are others on this board who have probably dealt with this issue before who can add to the above.... You may want to post on other areas of the message board.....

If you represent the plan sponsor, or are the plan sponsor's agent, you probably shouldn't do any more than just direct her to her attorney. From her perspective, the plan paid out to the wrong beneficiary and now may be subject to recouping that money from the children as well as paying her. Given the position the plan sponsor may find itself in, I don't think you need to be advising the spouse on anything. You should refer it to the plan sponsor's legal counsel, or your counsel, if you are the TPA?...

Sounds like a little more than just scrivener's error...

If you've got two employers, i.e., two separate corporations, then you've got two plans, not one. Are all of the provisions in each plan exactly identical? How many 5500's have you been filing in the past? One or two? Also, what about qualification issues in the one affecting the other, i.e., Company B will take on whatever liabilities there are within the plan once it adopts it? I know you said the same person is the 100% shareholder of both companies, but the liabilities of Company A are Company A's and those of Company B are Company B's, unless Company B wants to assume them which it will do with respect to Company A's plan if it adopts it. How can Company A be using Company B's EIN?

Page 2 of Form 8717 states that if a plan was "first effective" on or after December 9, 1989, then it will be exempt from the user fee. Thus, brand new plans put into place on or after that date are exempt. Accordingly, if I've got an employer who set up a PSP and a MPPP on July 1, 1970, there would be no exemption from the user fee, correct? I know it's only 125/each, but I want to be sure... Thanks.

E/er's MPPP contribution formula was amended to 0% of compensation, i.e., plan frozen in 2001. E/er also maintains a PSP. In reviewing plan doc's for GUST restatement the PSP document requires that a top heavy contribution be made to the e/er's MPPP if the e/er maintains one and the MPPP document mirrors that language. Was considering amending that language to the efffect that "... any such top heavy minimum contribution shall be made to e/er's PSP in any year that e/er's MPPP is frozen..." Reg. §1.416-1 T-5 wouldn't appear to help in this situation if the plan doc's actually mandate where the top heavy contribution goes. Any suggestions re proposed amendment? Thanks.

Assuming the plan doc allows for it, I would assume the Reg's outline what type of statement needs to be signed off on by the participant and the third party. At a minimum I would think the statement could parrott the language in the Reg.s re being revocable, etc.... Execution by both parties would acknowledge they both treated it as such...