Gudgergirl

NQDC Plan states that a change in control is a distribution event. Employer is 100% owned by X. X dies and all the stock in employer passes to X's Estate, then to his Revocable Trust and then to Marital Trust for X's spouse. 318(a)(2)(A) attributes stock owned by an estate to its beneficiaries and 318(a)(3)(A) attributes stock owned by a beneficiary to an estate. However, I do not see a way to attribute X's stock from X to his estate. So, did a change in control occur upon X's death? Any thoughts?

Individual lends money to company that invests in distressed properties. Individual's IRA also lends money to same company. Company issues a note and gives mortgage to each individuals and individual's IRA. Company is independent third party - not owned by individual or his family. Neither investment was conditional on the other (i.e. Company would have accepted only IRA investment without individuals' investment and vice versa) Did a prohibited transaction occur? To me it has the look of one, but I am having a hard time fitting it within IRC 4975 and ERISA 406. Any thoughts?

Can a small business owner offer both a SIMPLE IRA ad a SEP IRA to his employees? Can the business contribute the maximum amount o each plan?

Thanks

In the case of a plan that has not been amended since GUST, would you use Schedule 1, Schedule 2 or both to report the non-amender failures?

Plan has 6 year graded vesting schedule. Employee terminates employment with 4 years of service for vesting purposes and is thus 60% vested in his account. Employee does not request a distribution of his account balance. Later, the plan is amended to shorten the vesting schedule to 4 years. The effective date of this amendment is after the employee's date of termination. The now former-employee claims he is now 100% vested because he has 4 years of vesting service and wants a distribution of his entire account. Is former employee correct? Does it matter whether former employee had incurred 5 consecutive one year breaks in service before the effective date of the amended vesting schedule?

Thanks for you input. I agree that employer should make the contribution. I am just looking for some definitive black letter law on point. (Anti-alienation rule? Anti-cutback only applies to plan amendments? Follow the plan document or risk plan disqualification rule?) This is a pretty acrimonious situation and Employer (who is a lawyer) is not familiar with ERISA and is focused on the following language in the Severance Agreement FORMER EMPLOYEE hereby relinquishes and waives any rights to other forms of payment or benefits under any other agreement between FORMER EMPLOYEE and Company, whether written, oral, express or implied...

401(k) Plan provides for safe harbor contributions and profit-sharing contributions. There is no last day rule or Year of service requirement. Employee is fired mid-year. He signs a severance agreement with a general yet broad release of all claims. Employer believes this means it doesn't have to make contributions to ex-employee under plan. Thoughts?

Client has SARSEP and allows employees to defer up to 25% of compensation and client makes annual employer contributions = 4% of compensation. Client has been determining all contributions based on gross wages. Client uses model IRS Form 5305A-SEP which to me seems to say the term "compensation" is w-2 wages excluding employer contributions and elective deferrals. Which means that for purposes of calculating employer contributions means that the 4% should be applied to the employee's wages less elective deferrals. Anyone have any thoughts?

Client's Profit-Sharing Plan was last updated for GUST using a proto-type document. I have prepared all amendments required to have been made since then including an EGTRRA restatement. I think I need to use Appendix C, Part II, Schedule 2. My problem is I can't figure out which box to check. Do I check the box for Cumulative List for Cycle E individually designed plan (EIN ends in 5)? This seems wrong because the last time the plan was restated it was done so with a prototype document. Or do I check "Other" and list each individual amendments along with EGTRRA restatement? Any assistance is appreciated.

Thanks. That makes the most sense to me.

Here the sole shareholder terminated his corporation after he "discontinued actively engaging in a trade or business." It makes sense that the former sole shareholder should continue to be treated as the sponsor. The plan has language in it that it will terminate upon the earlier of the employer adopting a resolution to terminate the plan or the employer dissolving. I am wondering whether it makes sense to take the position that the plan dissolved in 2008 (when the corporate dissolution occurred).

I have looked at EPCRS and the DOL procedure and am having trouble figuring out how they would apply to my situation. In this situation, there were originally 9 participants. The sole shareholder had some legal trouble, terminated all the employees, dissolved the corporation and paid out all the participants except for himself. This all happened 10 years ago. I think there was an intent to terminate the plan but int he midst of the legal trouble no one ever followed up to make sure it got done. Form 5500s have been filed annually but no updates to the plan document have been made since the GUST restatement. Both of you said you don't think this is an orphan plan. Why? The plan sponsor was a corporation that has since dissolved. Does the former shareholder somehow become the de facto plan sponsor upon the corporation's dissolution? I agree that the EPCRS orphan plan correction method (which just says to follow the DOL rules and terminate the plan) seems inapplicable here. Do you think the proper procedure is to correct for the failure to update the document under EPCRS and then just file a final Form 5500 (and perhaps Form 5310)?

Thanks for your help. I will concentrate on EPCRS.

I have an orphan plan in which there is one participant account. The participant is the former sole shareholder of the plan sponsor which dissolved several years ago. I have read about the orphan plan procedures under the DOL regs and under EPCRS. The DOL rules seem to focus on insulating the custodian of the plan assets from liability while the EPCRS rules focus on ensuring the qualified nature of the plan assets. My client is the plan participant. Since he is not the custodian, may he just correct under EPCRS or must he also convince the custodian to follow the DOL regs? The EPCRS rules say they don't apply to a plan that has terminated pursuant to the DOL regs. I am confused as to whether one or both procedures must be followed. Any assistance is appreciated.