PensionPro

Only if they are in the individual account of a participant or beneficiary over which the participant or beneficiary has the opportunity to exercise control and with respect to which the participant or beneficiary is furnished, at least annually, a statement from a regulated financial institution describing the assets held (or issued by) such institution.

Here is my opinion, and it is okay to disagree: The invoice is stale (since it has been paid and no longer outstanding) so it can not be the basis for the hardship. If a plan administrator is okay with stale invoices, will they accept an invoice that is 5 or 10 years old simply because it is for a qualifying expense? As far as the funeral expense causing the other hardship that is a quote from the OP: "Making the payment has caused hardship." I believe the administrator may have leeway if the employee had to borrow funds to pay the funeral expenses and is requesting a distribution to repay that loan. I don't know that is the case because the only facts we have here are what the OP is giving us.

Plan needs to be safe harbor for entire year to qualify for top heavy exemption. You can amend the plan with 30 days notice to reduce or eliminate the SH match, and apply ADP and ACP tests for the entire year. The match is counted as top heavy contributions. If an employer terminates a SH plan mid-year due to financial hardship or a corporate transaction, the plan retains SH status for the short year.

There are two discrete questions to consider: 1) Is there an immediate and heavy financial hardship? If the plan uses the safe harbor definition for this determination "a distribution is deemed to be on account of an immediate and heavy financial need of the employee if the distribution is for ... payments for burial or funeral expenses for the employee's deceased parent, spouse, children or dependents." Reading the language of the regs my interpretation is that this distribution is NOT for payment for burial expenses as represented by the OP. The key I believe is the employee needs to furnish a current invoice from the funeral home. 2) Is the hardship distribution necessary to satisfy the need? My interpretation is that there is not an immediate and heavy financial need. However, if one believes otherwise and uses the safe harbor definition for this determination then you only have to make sure the distribution does not exceed the hardship amount and the employee has received other loans/distributions from the plan. It does not seem the funeral expenses are the hardship. Incurring the funeral expenses has caused other financial hardship. The question is, is this other hardship an immediate and heavy financial need? Of course we would not be discussing any of this if the participant did not attach a check to the application!

I agree. A distribution is not considered necessary to satisfy an immediate and heavy financial need of an employee if the employee has other resources available to meet the need.

The DOL investigation increases the likelihood of a claim so the safe option is to notify the insurance company. What is the downside? Btw, it is worth exploring what if anything triggered the investigation.

Thanks for all of the helpful responses. Based on K2retire's post I will follow up with the client to find out exact nature of retirement assets.

A couple of questions came up in talking to a client that I thought someone on this forum would know: 1) Does having retirement assets reduce eligibility for social security benefits? 2) Does receiving an income stream (such as annuity payments) from retirement assets reduce eligibility for social security benefits? Appreciate your insight into one or both questions.

I was confused by GBurns saying they are not associated with the religious organization which seemed contrary to the OP so I was checking if I was missing something. You guys are right, ESOP Guy and JPod, we have to celebrate the birth of the acronym POO, it rolls off the tongue better than PPACA!

Does this term have a specific meaning in the regs or are folks just using this acronym to sound cool and mysterious?

And do what? How do these relate to a POO and which has only a "management relationship" and not an ownership relationship nor is it controlled by nor associated with the religious organization ? Can you define the acronym you are using -- POO -- I am not familiar with it? Also I would like to hear your answer to the question posed by the OP or "John.Nasha".

Start at 3121(w)(3)(B), 414(e)(3)©, and 414(e)(3)(D).

OP indicates assets still in plan.

http://benefitslink.com/boards/index.php?showtopic=43403

Generally, includible compensation is comp recd from the employer that is includible in the employee's gross income. Certain items are excludible such as 414(h) pickups and 457(f) salary deferrals. Have you found anything in the regs that allows exclusion of amounts constructively received under 457(f)?

Hope this cite from the EOB moves your analysis forward: Section 415 compensation includes compensation that is includible in income by reason of IRC §409A or IRC §457(f)(1)(A), or because the amounts are constructively received by the employee. See Treas. Reg. §1.415©-2(b)(7).

Any comments on this topic are appreciated ...

The folks we are bringing in are ineligible employees, they have not met the plan's eligibility conditions.

Plan failed 401a4 last year so a number of young NHCEs were made eligible. Plan fails 401a4 again this year and would like to make some young NHCEs eligible. Plan will probably fail next year, and so on. Maybe it is a design issue, but the question is ... How likely is the IRS to consider this "part of a pattern of amendments being used to correct repeated failures with respect to a particular benefit, right, or feature" and disallow the amendment? Appreciate your sharing your comments and experiences!

Few questions: 1. Is this employee entitled to the 3% safe harbor? 2. On what basis is the employer contribution being allocated? 3. What test specifically is failing?

An alumni association generally is subject to the control of the university as to its policies and destination of funds, and is operated as an integral part of the university. I don't have enough information to answer your question but I would recommend digging a little deeper to verify whether in this instance you have 2 sources of income or just one for plan purposes.

Try this link: https://www.tdameritrade.com/withholding.html

Rollovers are not permitted from top hat plans.

Short answer is No.

Whether it is advisable is another question, but there is nothing I am aware of in the regs that prohibits investment in IPOs. Also need to check plan's IPS.