K2retire

Not relevant to your question, but I've been trying to figure out why anyone would want to remove a fail safe provision. What are you trying to accomplish or prevent?

I believe that your definition is correct as to their tax status. For plan purposes a non-resdient alien is clearly defined as a non US citizen with no US source income. There is no reference to green card status.

I am well aware that the DOL has increased staff and intends to step up enforcement -- but in my 13 years in this business I have NEVER heard of an inquiry because a 5500 had no bond or an insufficient bond.

IRC 414 talks about controlled groups, affiliated service groups and common control. You also have to look to the document. Some specify that all members of a controlled group are automatically included, others require that each individual company become an adopting employer.

Mine has the exact same language. Must be a standardized prototype marriage document. And that is as it should be

I've run into several clients recently who want to name their record keeper as a directed trustee. In most cases the companies have insisted on using a separate trust agreement that was not approved to go with our document, requiring an IRS submission. I am at a loss to think of any advantage that the client might gain by going to the time and expense of making these modifications, although I suspect the clients think they are escaping liability by naming someone else as trustee. Am I missing something?

It sounds like there is some wiggle room on this part of it. I think they want to let them keep as much of the overage as possible.

I like that interpretation. The document does not exclude bonuses -- and I suspect that the employer was supposed to withhold deferrals from the bonus. But for now I'm assuming that the participants requested no withholding from the bonus. One of them change his percentage that same payroll period, so we know they documented something on that date.

Related question: Assume the document specifies that the match is per payroll period, and the employer pays a bonus on the same date as a regular pay check, but in a separate check. There is no deferral from the bonus check, per the participant's request. Is the match for that pay period caculcated separately for each of the two checks on that date? Or is it calculated on the total amount because it is one payroll period, even though it is two checks?

I once spoke to a participant who only wanted to defer from the final paycheck of the month. She said it was because she didn't want the payroll person to have to bother with it every paycheck. She was somewhat incredulous when I explained that changing back and forth every pay period was more work than doing it once and leaving it alone.

Back in the 80s money markets actually paid interest.

That depends on the participant's election. If they said defer $16,500 for the year, it should be evenly spread. If they said defer $3,000 per month, you need to take $3,000 per month until the limit is reached.

The recordkeeper I used to work for had similar issues when they received subpoenas addressed to the mutual fund company. It's pretty common for the people requesting information to have no idea who might have it, or who they should be contacting.

It would probably be considerably cheaper to increase the bond than to pay for an audit.

Or use a cross tested design that allows flexibility from year to year.

Isn't the correction that he has to deduct it in the year he deposited it instead of the year for which it accrued?

All the publicity saying that participants will now be able to make better decisions seem to overlook this important detail!

This is not really much different than a medical bill that was charged to a credit card. That is a frequent enough occurance that I doubt there would be debate about whether the payment to the credit card company qualified as a hardship. Sadly neither medical providers nor funeral homes are typically willing to wait while a hardship request is processed. It's too bad the people who make these rules don't seem to live in the real world.

Partially curiosity, partially trying to accurately support what the DB guys are saying since the client doesn't want to believe them.

The hard freeze takes effect 7-1-2012. Run, do not walk, away from assignments you don't have capacity to handle. Fortunately I will only be handling the ongoing 401(k) piece.

Not a cash balance plan. The discussion came up because the sample statement from the new recordkeeper didn't include the PVAB and the client wants it added!

We're taking over the 401(k) for a non-profit organization that also has a frozen DB plan. I last worked on DB plans prior to PPA, so I know there are a number of changes that I am not familiar with. The plan is currently underfunded, so they have been told that there are restrictions on lump sum payments. The client believes their actuary told them that freezing the plan freezes the PVAB, not just the monthly benefit. We had a lengthy call today between us, the new record keeper for both plans and the client. I was quite surprised to learn that the PVAB has appeared on participant statements along with the monthly accrued benefit. (Is that a new requirement?) Apparently the majority of the participants are expecting that to be the new permanent "balance" in their accounts in the DB plan as soon as the funding increases enough to remove the lump sum restrictions. Anyone have a one or two sentence way to explain why the lump sum amounts will continue to change?

They won't want to spend the money to do that. But if we persuade them to do it, how long would that likely take?

We have a large client who would like to name their recordkeeper as directed trustee of their 401(k) plan. The adoption agreement is an FT William prototype. The recordkeeper is saying that they will only agree to be trustee if the employer uses a separate trust agreement, but they don't want to use the FT William separate trust agreement. They have their own that does not appear to be anything generated on the Relius document software that we know they use for their bundled clients. The question has been raised as to whether the client would be able to rely on the FT William IRS approval letter if they are using an unrelated separate trust agreement. The recordkeeper will only say that they can't give legal advice, but that is the only way they will agree to do it and other clients have had no problems with it. Is this really an issue, or is someone making mountains out of mole hills?

Unless the annuity is a governmental pension plan such as Civil Service Retirement or some state pensions that don't pay in to Social Security. In that case one or the other may have some sort of offset calculation.