K2retire

No doubt there are more business owners than working stiffs who make it to the legislature so their perspective is different.

If you use Relius documents it's part of your package of forms from them. And yes, we're seeing several of these every week.

Thanks, that helps. I'm told that, although most people believe they are responsible for their children if granted custody in a divorce, at least in Missouri, the children become wards of the state. The state then awards physical custody to one or both parents. From that perspective paying the State rather than the parent makes sense.

That's a brilliant solution. Of course the HR person who called originally has now "found" a zero deferral election in the file dating back to 2004. If one doesn't look too closely, that works even better.

Client called wanting to know if the former company owner who has sold the business and been hired by the new owners must meet eligibility now that he receives W-2 income. Apparently they were under the mistaken belief that because the business is a partnership, and the partners receive only K-1 income, they were not eligible for the plan. The plan has other HCEs and has failed ADP testing for several years, requiring them to take refunds. If we add the partners to the test with zero deferrals it will likely pass. The company anticipates that the folks who got those refunds won't want to repay them to the plan and they've asked what happens in that case. But then there is the issue of QNECs for missed deferral opportunities. Are they included in the test? Are they based on the other HCEs' deferral rates before or after the testing correction? We anticipate that the new owners will not be happy about the company paying money to the old owner because of the old owner's error. The more I think about this, the worse it gets! Any suggestions?

I'm very confused. A couple of years ago at an ASPPA conference I heard Derrin Watson vehemently argue that a QDRO for child support could not be paid to ANYONE other than the former spouse -- even if the former spouse did not have custody of the child. How then does a state agency suddenly become a valid AP?

I haven't heard that before. PPA extended the deadline to 6-30 for some automatic enrollment plans. Otherwise it's still March 15 (not 16).

Absolutely right. Ours are so well hidden that our own staff (including me) doesn't know how much they are. But to answer the original question -- some include loans others don't. You'll have to ask the specific provider.

I believe the example in Appendix B concludes by saying that the plan files for a D letter, but I don't have it in front of me at the moment.

yes

That is correct. But did you actually have anyone with a gain in 2008?

One could wish to not be an HCE without wishing for less compensation -- it is only a wish for a change in rules.

My best guess is that Jim is right, even as the unfairness of that conclusion screams for another solution.

What right does an employer or its retirement plan have to dictate what a participant does or does not do with his or her money outside of the plan?

Why not send the rest of the account balance?

I read others who suggest filing a 5500EZ the first year that there is only one participant. Then if the assets are below the threshold you can quit filing. One is always tempted to remind such a client that you often get what you pay for. I've seen many plans that thought they were getting something for free pay hefty fees to correct what the other provider failed to mention.

In the small plan world it is less of an issue. Even if they could amend out of SHNEC mid year, most would still owe a 3% top heavy minimum.

Sounds like a classic affiliated service group.

I don't assume that -- I know better from experience. Unfortunately the people to whom the plans are sold often assume it.

All good and valid points. My issue is with the folks marketing these "solo K" plans as though they are somehow not subject to all the usual 401(k) rules simply because they may not have to file a 5500.

Thank you for once again pointing out that the concept of a solo K is an urban myth!

The end of the plan year for which it is applicable.

Isn't this the case where the ex-wife received the payment and the daughter sued? I don't see anything about a beneficiary waiving benefits, but the beneficiary designation section under Article VIII says "A divorce decree, or a decree of legal separation, revokes the Participant's designation, if any, of his/her spouse as his/her Beneficiary under the Plan unless: (1) the decree or a QDRO provides otherwise; or (2) the Employer provides otherwise in an Addendum to its Adoption Agreement."

"Where troubles melt like lemon drops "Away above the chimney tops "That's where you'll find me"--and Bill I live in Kansas, why does that sound so familiar?

I currently work in a daily environment where quarterly statements are issued on a cash basis by the mutual fund company. We do not issue a year end statement showing accrued contributions. Based on the conversations I've had with participants (both here and in balance forward settings) they tend to be confused by accrued numbers. The vesting figures on the quarterly statements are based on hours entered by the client. Some clients update that information every time they make a deposit, others wait until they fund their year end employer contribution months later. That is a more troublesome issue, since participants expect to see their vesting updated as soon as they work their 1001st hour for the year.