K2retire

Large non-profit selected a corporate trustee for their 401(k) plan at a time when the plan was bundled with the trustee's record keeping and compliance services. In 2008, they unbundled it, moving to a different TPA, but retaining the record keeping services of this provider. In early 2010 the restated document, drafted by the new TPA, was signed by the plan sponsor and sent to the trustee for signature. Fast forward to this year. Plan sponsor decides to amend the plan, signs the amendment and forwards that to the trustee to sign. At that point it is discovered that the trustee never signed the restated document due to objections to some of the language. Both the TPA and the record keeper have had changes in personnel, making it difficult to determine exactly what happened (or didn't) in 2010. I work for the TPA and have been able to locate the message sending the document to the trustee, but nothing after that. Can a restated document that was signed by the employer but never signed by the trustee be considered a timely restatement? Are there any possibilities for a self-correction at this point?

NOT!

Although I didn't see it on your list, it is my understanding that a plan participant is also a party-in-interest.

Are the other two owners working for the business or are they investors? If they are investors with no W-2 income nor K-1 earned income they can't participate in the plan.

Likely there will be 2 1099s -- one for the amount legitimately rolled over and another for the portion that wasn't eligible for rollover and is taxable.

I'm anxious to hear what others have to say. I've run into pretty much the same thing -- including being specifically told that management fees don't have to be disclosed.

And the rules are abundantly clear that the "book value" shown on a K-1 has no relationship to the "fair market value" required to be determined for a plan valuation.

I was always under the impression that the enhanced match formula had to match up to at least 4%, but not more than 6%.

Many clients make bonus payments to their employees that they call "profit sharing". Typically they have nothing to do with a 401(a) profit sharing plan. Could that be what they meant by "non-ERISA profit sharing plan"?

An attorney should have already known that!

What we're really concerned about is a couple of terminees who have moved out of state.

I recall pre-EGTRRA when we had more money purchase pension plans, that terminating plans making distributions of balances over $5,000 were required to buy an annuity if the spouse did not consent to the distribution. I'm working on a 401(k) plan termination that includes some old MPPP balances and calls for QJSAs. I am being told that the plan sponsor can pay those balances to an IRA without regard to the QJSA provisions because the plan is terminating. Has that rule changed?

That is essentially my question. I can see on the statements that the annuities assess fees each quarter. I'm trying to figure out what, if anything, the employer must include on the participant fee disclosure about those fees.

The problem is that the IRS says employees should get a W-2. Vendors get a 1099.

The statement says it is a deferred variable annuity. A quarterly "rider charge" is being deducted. The amount appears to be related to the contract value.

Client has a profit sharing plan that allows self directed brokerage accounts. Within a couple of those the participants have purchased annuities. The particular product that is currently in the account is no longer being offered by the insurance company. For purposes of the disclosure should the fees reflect what the existing participants are paying, or what a participant wishing to buy a new annuity would be charged?

There's trick I'd like to learn.

Thanks for the cite. I agree that they are supposed to do what they are told, but when completing the forms asking them to automate the process one sometimes has to adjust one's expectations. It was when I challenged the choices on their form that they started objecting. P.S. The recordkeeper has quit challenging the validity of the document provision and simply stated that their system is not able to automate the process if the balance is over $5,000.

Our FT William document includes language along the lines of what you said above. But we have a recordkeeper pushing back saying that you must get participant consent over $5,000 at any age. Can you direct me to the apprpriate IRC section to show them?

Are you really doing them a favor by setting them up to owe a large about next April?

I'd be more concerned about an affiliated service group.

I've seen only one instance where a beneficiary wanted to inherit the loan. It was a married couple who owned the business that sponsored the plan. Since the widow was filing a joint return, she would have been taxed on the deemed loan and chose to continue making the payments.

When a controlled group wants to give different (discretionary) matching contributions to different companies, what testing is required? One resource is telling me that so long as each company passes coverage and ACP, and the combined group passes, that's all you have to do. Another resource is telling me that you also have to do 401(a)(4) testing. Does the answer change if they are separate plans for each company rather than all participating in a single plan?

Definitely check on the affiliated company issue. That may be a big part of the equation. You are correct that a match cannot be made unless the employee deferred. But timing may be the issue and there are multiple ways that can happen. If, for example, the employee did not defer for the entire period that they were eligible, or they changed their deferral percentage during the year, the amount that you calculated based on each individual pay period may not be correct when considered on the basis of the portion of the year they were eligible. What is your match formula? If it is limited to a percentage of pay that is lower than the percent the participant deferred, that will impact the calculation. Or if the person was really eligible immediately because the affiliated company rules, but you only allowed him to defer for 3 months, the match would be compared to his deferrals and his compensation from his correct plan entry date and you might even need to make an additional contribution to make up for the 3 month delay. Does your document require a true up, or is it optional?

And yet the Relius prototype document that the IRS approved allows the choice of using them in the year of the forfeiture or the year following the forfeiture.