DMcGovern

Corbel recently provided an amendment for terminating DC plans that will conform with PPA provisions for 2006, 2007 and 2008, plus the HEART Act. I don't see that an SMM was provided. Anyone else get one?

The Plan Document &/or Loan Policy should address how these situations are handled. Most usually allow for the loan to be offset (paid off) upon distribution of a participant's vested balance, but worth double checking the documentation on this.

The regs do provide for the "maybe" version of the 3% NE contribution. I guess that was their way of giving Employers an "out" each year. I agree with you that something should be done, particularly during these difficult financial times, to give employers viable options in order to keep their plans in place.

The extra contributions were not employee deferrals (or match, if this is a part of the allocations). The excess was an employer contribution that was allocated improperly. The correction is to put the plan back into the position as if the error had not occurred. One possible method of correction is to calculate what the ER allocation to the participants would be according to the Plan document. Then contribute and allocate that amount. Alternative method would be to forfeit the excess contributions and use the forfeitures as specified in the plan document. Hopefully, no participants took a distribution that would have included this excess contribution?

The correction procedures call for an Employer QNEC contribution. They are subject to annual addition limits. As contributions subject to such limits, I would think they are reported on the 5500 Schedule H or I.

A similar question was posed to TAG (Technical Answer Group) a couple of years ago. They responded that a hardship to purchase materials to build a primary residence is "part and partial" to purchasing your primary residence and would be allowed, as long as the other requirements for taking a hardship distribution are met.

Instructions for Form 5558 do not include any alternate address for overnight or express mail deliveries, so you probably use the same address. The IRS phone number for Retirement Plan questions is 1-877-829-5500

The new correction procedure (see IRB 2008-35) is for the employer to make a QNEC to the plan on behalf of the employee that replaces the "missed deferral opportunity". The QNEC is now 50% of the calculated missed deferral (used to be 100%). To calculate the missed deferral, you multiply the actual deferral percentage for the year (or each year missed) by the employee's compensation for that same year. The bulletin has examples in Appendix B If employer match was also missed, another QNEC would also have to be made on behalf of the participant. This QNEC is equal to the matching contribution the employee would have received on the full amount of deferrals calculated above (not the 50% QNEC deferral). Correction methods are different if the plan is a safe harbor plan

I agree that the employees on a VISA, with income they are paying US taxes on would be included. You probably have already told the client that they would benefit from using EPCRS procedures to correct this?

Just wondering how others are handling all the various annual participant notices. I know that the QDIA and traditional safe harbor notices can be combined. Without final regs on the Participant statement requirements (the annual notice explaining that the information is supplied through more than one source), I am wondering if it is acceptable to combine this with the other notices? I would appreciate other thoughts on this - thanks!