GMK

^ Could we recover some of those subsidies by taxing those persons who do not enroll in the Thrift Plan and do not have other savings that are adequate to provide them with essential retirement benefits? ... just asking. I haven't read the Senator's proposal. I agree it could be an option for those without a workplace plan, but the Plan literature better have bold print warnings to the unsuspecting citizens about what the protections are under the plan and what rules the Plan doesn't have to follow.

ESOP Guy has given you some good notes, and he's right about where to get more information. Running an ESOP is another way to get educated in a hurry, but don't try it without a really good ESOP attorney advising you. When ESOP questions arise, you will regularly hear, "There is little guidance, so ..." which means that you need someone who is immersed in the ESOP world and can give informed advice. And, as with other topics, BenefitsLink can be a good resource. We've seen some very good 401(k) people struggle with the ESOP. For example, simple schedule differences are important. With once a year valuations, there's a push to get account allocations and other paperwork completed pretty fast after the first of the year, so we can process distributions timely. And we've seen people who had to be reminded every year that waiting until the 5500 deadline doesn't cut it. Now, on to celebrating Ricky Nelson's birthday and my wife's birthday. Party time.

Is this correct? The ESOP took out a loan in 2014 and used the loan money to buy shares at a price determined early in the year, and these shares are in the suspense account in the ESOP. Now the ESOP wants to use the $250k that was contributed in 2013 to pay off some of the loan, which would result in the release of some number of shares from the suspense account to the participants' accounts. And the question is whether or not the valuation/price determined earlier in the year can now be used for determining how many shares are released by the $250k in June or July.

Just guessing, but ... I think that about 3%-5% of our people would object to divulging their beneficiaries in print, another 5%-7% would think it's a good idea, and the other 95% wouldn't care either way. "The future ain't what it used to be." enjoy: http://www.brainyquote.com/quotes/authors/y/yogi_berra.html

http://www.law.cornell.edu/cfr/text/26/54.4975-11

I can imagine that some participants would prefer to keep their beneficiary designations secret, or at least not have them printed on documents (that others might see) every quarter or annually or at all. I think that a masteff-like reminder on the account statements would be a good idea, but I am not in favor of printing names. And I would be uneasy if we did not have our own file of beneficiary designation records, rather than relying completely on the recordkeeper's files, but that's just me.

Others probably have different experiences, but our TPA's and whomever don't want the beneficiary information. Distributions to beneficiaries are processed in accordance with the distribution authorizations that we (plan administrator) issue after we do our fiduciary thing to determine who the beneficiaries are. And there's not been anything to expedite. There's been plenty of time to prepare for the distribution while we wait for the death certificate to be issued. But others may see it differently.

^not a fan. Generally, only the plan needs the beneficiary records, and usually the plan is not the generator of the statements. So it's added information for the TPA or whomever to maintain and for the plan to update for no useful-to-the-plan purpose. And some participants prefer to keep their beneficiary choices more private. Once a year is often enough to remind people that they are going to die. Every 5 years is enough for most people (and using wording like masteff suggests, above). The time when participants seem to appreciate a reminder about beneficiaries is when they report a relevant change in their life (marriage, divorce, etc.). And if participants won't file a beneficiary designation, you can't stop them. (I think Yogi Berra said that.)

^ good advice, for sure, even for small companies.

By the lawyer at our benefits consultants and in articles published by legal and benefits firms. It's PHI whether the person is employed anymore or not, so we put it in a separated file.

We have been advised to keep health and welfare records separated after termination and not merge them with other personnel records. HIPAA and like that. We file the pension records separately, too. They are already in a separate file, and it's easier keep them separates, but I don't know why they couldn't be filed with employment records. It probably saves a little time to have separate files when when we have to look up some old documents.

I agree that there is no employer obligation or liability. It's up to participants to designate their beneficiaries. We do, however, encourage the filing of beneficiary designation forms with a reminder every 5 years or so, mainly to make it as simple and direct as possible to identify beneficiaries and complete distributions when the time comes without the folderol of having to figure out who the default beneficiaries are. Some participants appreciate the reminder and file updates.

for some things, maybe. But to say that shacking up with someone whose gender cannot be determined is a marriage, I'm not so sure that one year is sufficient.

See ESOP Guy's example. The purchased stock goes into the participants' stock accounts, and their cash accounts are reduced by the value of the stock they each got. Same thing if the ESOP purchases the stock from the Company's treasury, if available. And if the ESOP owns 100% of the company, there are no other sources of stock. This can happen at any time during the year. The recordkeeping (stock and cash account balances) has to track the changes as of the date they happen, which is no big thing. If this is an S corp and you're keeping track of tax basis for NUA purposes, there's a change in the allocations of pass-thru earnings each time the allocated stock totals change, so that's some work. As long as the lender gets paid on schedule, they shouldn't have anything to object about. If the ESOP has cash to pay distributions, the company doesn't have to worry about coming up with cash to buy distributed stock (assuming the ESOP is meant to stay the 100% owner of the company). On the other hand, the cash in the ESOP is not available for the company to use as it might wish or need.

As far as I've been able to find, no.

Totally agree. BL is like perpetual education. Thanks to all posters (... well, in truth, maybe excluding one.) HOORAY for Dave and congrats.

Among other things, the prohibition prevents the possibility of using coercion to get people to 'voluntarily' reduce their benefits.

I knew there was something I was supposed to do yesterday. Oh, well... BTW: Happy Birthday, Kareem.

Just to say that I think Peter asks a reasonable question. And the answer is that sometimes things happen mid-cycle. Participants need to be informed about fund changes, because they make investment decisions based on what's available in the plan. Fiduciaries decide when to make changes based on all the factors that apply. Same as it ever was, except now with a prescribed format for informing participants.

As you know, FGC, it's usually not a snap decision, but one taken after a few to several months of reviewing fund options and watching the performance of the plan's fund and possible replacement funds. Sometimes, a change in the fund manager triggers the watching. Market changes may trigger the review as well. For example, when the bond market got jumpy recently, a plan that had all medium term bond funds may decide it's a good time to add a short term bond fund. In any case and for whatever reason, if the fiduciaries decide it's time to add, remove, or replace a fund, waiting until the next cycle of fee disclosures to make the change may (or may not) be as prudent as acting immediately. The fiduciary has to decide, based on what is best for the participants and their beneficiaries, as usual. In general, this happens infrequently for plans that maintain a strong core menu, and IMHO disclosure of why the change is being made is a good idea and not such a burden (other than maybe the sitting around for 30 more days).

And there's this little previous discussion: http://benefitslink.com/boards/index.php?/topic/53845-irs-has-a-new-position-on-plan-loan-interest-rate-anyone-dealt-with-this

Other advice we've received includes to list who does what (by name or job title) for each activity, such as, enrollment, contribution processing, distributions, etc. Kind of a step by step list of what needs to be done and who does it. In particular, this would include who authorizes distributions and who checks that distribution authorizations are correct and proper, and the same sort of thing for processing and checking contribution amounts, and like that. It's a little tedious, but it helps identify where things can go off the tracks, so you can revise or add procedures to do things correctly.

Here's a start: http://www.irs.gov/Retirement-Plans/Internal-Controls-are-Essential-in-Retirement-Plans which includes links to other lists, etc.

I, too, was interested in the answer, although it doesn't apply to us. google search results included: http://www.irs.gov/irm/part7/irm_07-025-025.html https://www.ftb.ca.gov/forms/misc/1028.pdf which indicate that the regulations do not define "substantially all," but in a few sections of the IRC (not applicable sections), it is interpreted to be 85% with the proviso that facts and circumstances may apply. A HUD article defined it as 80% for certain programs, but I wouldn't use that as an authority for ESOP rules. FWIW, I wouldn't use 85% without an ERISA lawyer's concurrence. I'd prefer to be north of 95%.

As Bird alluded to in post #2, the employer is not the plan, and the plan is not the employer. It may make sense to the employer to consider the difference in a person's status as an employee vs. as a plan participant. and maybe to check with another lawyer who is familiar with ERISA. Good luck.