GMK

Assuming by "funded" you mean "contributed to," you just keep vesting participants according to the vesting schedule in the Plan Document. Regarding contributions, Q-32 in this list: http://www.sfeglaw.com/page.php/id/176 says that while annual contributions are not required (except as needed to pay off any ESOP loan debt), the IRS requires "recurring" contributions to maintain the qualified status of a tax qualified retirement plan, so that could become an issue. Others say "substantial and recurring contributions" and point to qualification under 401(a).

If the company provided the participant a clear, written warning of the consequences of failure to file the validation form, namely, that the benefits go to the estate, then I don't see why the company would need to do a follow up. If such warning is in amongst the fine print, then there may be an issue. And presumably the company applies this policy uniformly in all cases.

FWIW, I agree with your compliance side. The brokerage account statement should specify both the amount and the reason for the deduction after the actual fee amount was deducted ... unless after the deduction, they sent the participant a separate letter or e-mail listing the amount and reason.

I agree that the employer probably can't know if the daughters are eligible for the subsidy, because the employer doesn't know whether either of their parents has affordable coverage, but I don't understanding why they are eligible for the subsidy in this example. By law the daughters are both eligible for your plan until age 26, regardless of their employment status, etc. Does your plan not provide "affordable" care coverage? Is it grandfathered? Or am I missing something else? Thanks for the clarification.

This site http://www.nfpbenefitspartners.com/nfp_life_and_benefits/hr/benefitscompliance/SAR.aspx says that you can be sued to require distribution of SARs or for damages that are a consequence of not distributing SARs. Willful failure to distribute SARs is a criminal offense. It goes on to say there is no penalty under ERISA, but if an SAR is requested, you have the usual 30 days to provide it before the $110 a day penalty starts.

From 414(p), in reference to "earliest" (B) Earliest retirement age For purposes of this paragraph, the term “earliest retirement age” means the earlier of— (i) the date on which the participant is entitled to a distribution under the plan, or (ii) the later of— (I) the date the participant attains age 50, or (II) the earliest date on which the participant could begin receiving benefits under the plan if the participant separated from service.

Unless the Plan Document says that disability payments are excluded from compensation, you should take deferrals from these payments, unless and until the participant elects 0% deferrals.

Contact the plan administrator for a copy of the plan document (not the summary plan description, which may not provide enough details). Read the plan document to find out if your plan requires a cash out distribution for balances less than $5000 or only for those less than $1000. Some plans set the cash out limit at up to $1000, so they don't have to do the IRA thing. Offer all the forced out participants the option to take the distribution in cash or in a direct rollover (assuming the distribution is rollover eligible). You then only have to force out the participants who do not respond. Under $1000, you can send them cash. Over $1000, you put it in an IRA for them. You will probably have to call around to find out where you can get an IRA with a small initial deposit amount. One option may be a bank that offers 401(k) services. Good luck.

^ But what is itemized are medical expenses, and HSA distributions cannot be included as itemized medical expenses (post #6, above).

A very common misspelling, but I'm really replying only to bump this to the top of the list to see if someone will give you an answer to your questions.

Not always. Sometimes they make you reset your password. They send an e-mail with a link and a temporary password, and you have to go to the link and type the odd-ball collection of characters that you can't remember as the temporary password, and then you have to change that password to one you want, except it generally cannot be the one you used to have (which you can't remember anyway), and it cannot contain more than 2 letters in a row that are the same as three or more letters in a row in your old password, and you are away from your desk and do not have your little book where you list your passwords for reference, as in the case where you forgot your password and need to retrieve or reset it, so you have no record of the new password you just created in the event that you forget it, too. But yes, sometimes you can retrieve it with a request. AtA's solution is way more better.

Sorry I don't have an answer for you, but for future reference (if it's not a typo): separate

I don't think this will fly. A section 125 plan allows an employer to offer employees the choice between receiving their compensation from the employer in cash or a non-taxable benefit, like paying health coverage premiums with pre-tax dollars. Once the employees retire and receive their lump sum, there's no more cash coming from the employer to the employees, so there's no more choice of cash or benefit. A portion of the lump sum could probably be run through the 125 to pay the current premium pre-tax, because the lump sum is part of their compensation. But after that, I think no. It's like not being able to run payments from a pension through the 125 to pay premiums pre-tax. But others may have a different take on it.

For example (from a google search): http://www.withum.com/pdf/ERISA/Article/ERISA_Bonding_Requirements.pdf Note item 2: the bond must protect the PLAN against loss by bad people. So far you've said that SS and the employer sponsor are covered, but is the plan the named insured? ... and what QDROphile said.

Agreed. And check that the bond pays the Plan (not the company or trustee) for plan losses due to evil-doers.

It feels like this business owner needs to find a person who will accept the bulk of the fiduciary responsibilities for the plan, maybe from the trust department of a local bank. If you're not willing to take the time to follow the instructions in a letter or e-mail for your plan, your plan is headed for proubles. And the business owner should get an ERISA attorney to write the service agreement, detailing all the babysitting duties, including operations like those RPG mentioned.

Ah, that kind of 'not in any account.' It makes sense now. Thanks, masteff.

Related questions. What does note 2 on this form mean? http://www.irs.gov/pub/irs-tege/uniform_rmd_wksht.pdf Is it simply a reminder that you count rollovers as well as contributions in your total IRA balance? From Publication 590: Contributions. Contributions increase the account balance in the year they are made. If a contribution for last year is not made until after December 31 of last year, it increases the account balance for this year, but not for last year. Disregard contributions made after December 31 of last year in determining your required minimum distribution for this year. Outstanding rollovers and recharacterizations. The IRA account balance is adjusted by outstanding rollovers and recharacterizations of Roth IRA conversions that are not in any account at the end of the preceding year.For a rollover from a qualified plan or another IRA that was not in any account at the end of the preceding year, increase the account balance of the receiving IRA by the rollover amount valued as of the date of receipt. Basically, does "not in any account" mean not in a traditional IRA or does it mean something else? Thanks.

As BG says, the employer is only responsible to calculate the RMD on the rolled over amount if the employee terminates before the end of 2013. If the employee retires in 2013, the employer issues the 1099's for the rolled over and taxable amounts. The employee has to then get that RMD amount from the IRA custodian. If the employee does not retire in 2013, it's a straight roll over, and there is no RMD for 2013 on the rolled over amount.

Thanks everyone. I think I've got it (at last). So, in the OP, as long as the participant who is over 70-1/2 remains an employee in 2013 and 2014, there are no RMD's from the distributions of the terminated ESOP in those years, and the entire amount of those distributions to that person is eligible for rollover.

Is it not that a current employee over age 70-1/2 is not required to take an RMD (assuming the plan doc says that) if they don't want to, but if they receive a distribution at a time when they are eligible for RMD's, then the first portion of the distribution is RMD? What am I missing?

Good for you, karen1027. It's been a long battle for you. Way to stay with it. I cannot speak for the insurance company, but they may want to check that they haven't paid improper 'claims.'

As I understand it, ... No, termination of the ESOP in which I am a participant does not constitute termination of my employment with the company sponsoring the ESOP, but Yes, when a participant who is over age 70-1/2, whether employed by the plan sponsor company or not, receives a distribution from the plan, the first portion of the distribution is deemed to be RMD until the RMD requirement for the year is satisfied.

If the requirement to receive the match is already based on the deferral rate in each pay period, as stated in the OP, what's to true up? Everybody who defers at least 1% in a given pay period gets the 9% match at that time, and the rest don't get the match. If the plan doc really says that participants who defer at least 1% of eligible comp during the plan year get a match of 9% (which is a sweet deal, by the way), then add a true up feature if that's what you want. Doing the true up once a year, after the end of the plan year, is the easiest to compute and administer ... or maybe not if you actually do have to keep track of pay amounts for pay periods when a participant didn't defer at least 1%. The running true up, determining the trued up match amount each pay day, gets the true up to the participants' accounts faster (compared to waiting until the end of the year) and avoids extra contributions at the end of the year. But as masteff said, it complicates matters for payroll. In addition to keeping track of the YTD deferral and match totals, you may also need to track YTD 401(k) compensation. If a person is not immediately eligible to participate upon hire, then that person will have some pay that isn't part of the compensation that is eligible for deferral, and you need to know the eligible comp to get the YTD deferral and match percentages right.

Yes, one's who understand and have experience doing QDRO's.