K2retire

Does the person who disagrees have anything to show his or her point of view?

We always leave the date on the signature page blank. The other TPA prepares their amendments as a completely restated document. They wants us to backdate the effeective date of the restatement that appears near the beginning of the document.

I think it depends on what data you're refering to. Records as to hours of service for eligibility and vesting must be kept pretty much forever in case of a challenge to a benefit that may be paid years down the road. (especially if the payee is a death beneficiary who won't know things that the participant knew.)

I have pointed out the possible liability and am still hopeful that management will make the right decision. At this point I'm trying to plan what to do if they don't. I appreciate the confirmation that I'm not overreacting! FYI, the capacity of the individual who directed me to back date the documents is still being quietly researched. What he told me is that it isn't the client's fault that his company was late in processing a request that was received in November. (And I can certainly sympathize with not wanting to have that conversation with their clients.) We are hoping that his manager will agree with me. I know the manager to be a QKA who has lamented about his staff not being as knowledgeable as he would like.

My employer has lost a large number of clients in the past year. In an effort to avoid lay offs, document work for another company has been brought in. As I've been training on how the new company does things, I've learned that they routinely back date their amendments. Although I don't agree with that practice, when the amendment is to change trustees or plan name, I'm not terribly concerned about it. However, in the first 10 amendments they sent us, one of the amendments is to remove a safe harbor non-elective contribution effective 1-1-10 and another is to remove a fixed non safe harbor match with no accrual requirement effective 1-1-10. My manager, whose background is mutual fund recordkeeping,, not qualified plans, is struggling to understand why this is a problem. If we are ultimately directed to write the amendments according to the direction of the other company, what sort of problems might I create for myself, personally? (I'm reminded of the Nazis who claimed innocence of war crimes because they were following orders....)

It's not exactly on point, but perhaps helpful. My former employer made contributions to the 125 plan for each employee that were equal to the premium for health insurance coverage. The employees then chose to use the money for health, dental, FSA, disability, etc. Under that plan any unallocated funds were returned 75% to the employer and 25% to the employee.

You trying too hard. If you (temporarily) ignore the safe harbor, you would allocate your Integrated profit sharing contribution, and then check to be sure that the top heavy minimum was satisfied wouldn't you? The only difference here is that there is one more allocation from which the top heavy minimum could be satisfied.

You work for a company in this industry and your boss says you don't have to follow the document? That's scary!

Isn't level amortization one of the requirements to avoid a prohibited transaction?

But to stop accruing those taxes, she needs to get the money out of the IRA, regardless of what she decides about returning it to the employer.

Has anyone explained to the owner/trustee that a qualified plan is not intended to function as a lending institution?

Tom, Ive never understood the above process until now. Thanks for clarifying it!

Your situation 2 appears to be saying that the match was not deposited according to the formula in effect for a particular participant. Wouldn't the correction be to deposit it now, possibly adjusted for lost earnings?

If you're using a third party administrator, start by asking their advice. They are likely to be able to recommend an ERISA attorney for you.

Most folks in the industry will have a simple half page form that allows your spouse to consent to the form of distribution you've requested. I'm not sure if something along those lines (modified to read "consent of former spouse") would work in this case. Someone from Fidelity should be able to answer that question. For a different perspective on Fidelity's reponse to QDROs under California law, you might want to take a look at this discussion. http://benefitslink.com/boards/index.php?showtopic=39835

Relevant question: are they doing that to anyone else?

You're headed in the right direction. The only remaining unknown is if the 5% for NHCEs will pass the 401(a)(4) testing.

If your document calls for a 3% SHNE, that is what you must contribute -- not more, not less. Any profit sharing that you choose to contribute beyond that will need to follow the terms of the document as well. Usually it is a discretionary amount. If yours is, as you say, a 3% minimum then it sounds like the total will end up being 6%. Or are you referring to some other minimum? As for the software, the problem may be that you are trying to put it all in the SHNE money type rather than splitting it between that fixed contribution and the discretionary profit sharing.

Emphasis on ERISA attorney -- not just an attorney!

I always thought the old non-Roth after tax amounts were not allowed to roll over to an IRA, but I had a call from a plan sponsor today challenging that.

Client established a new plan early in 2009 as a EACA with a 2% default deferral rate. They have now decided that for 2010 they would prefer to have a non ACA enhanced safe harbor match formula. Once they amend to remove the automatic contribution provision, do they continue to withhold 2% deferrals for those employees who were previously automatically enrolled?

Well said Belgarath!

A match of 3% is not sufficient to be a safe harbor match. However, 3% is a common safe harbor nonelective contribution amount. What does the document say is the real safe harbor contribution?

And how annoying is that?!?

Since deferrals no longer count toward the 25% deduction limit, Mike's suggested limit of $3,949 on deferrals seems wrong to me. the 100% of pay limit is likely the issue for the maximum deferrals. If the plan has a lower limit, that could also come into play.