Gudgergirl

How much leeway (if any) do you have to alter (or restrict) the definitions of change in control as set forth in the regs? I am reviewed a NQDC plan which sets forth the reg definitions but then adds language that says a change in control won't be deemed to occur if the value of the business at the time of the transaction does not exceed a certain amount. Is this permissible?

Company sponsored an individually designed target benefit plan - (set to amended for EGTRRA in 2011). They decided they wanted to switch to a profit-sharing plan. So they signed a volume submitter document profit-sharing document (with a minor variance from the specimen document) and merged the target benefit plan (individually designed) into the profit-sharing plan (VS) The profit-sharing plan was effective beginning 7/1/09. I would like to get a determination letter since there is a variance from the specimen plan, but am unclear whether I need to do so by 4/30/10 (the deadline for EGTRRA Restatements for M&P and VS plans). Can anyone point me in the right direction?

I have a 401(k) plan that has a $1000 cash out rule - i.e. no consent is required to cash out a person with less than $1000 in his account. The wording of this provision is mandatory - the plan is required to cash out such participants. However, the plan has been following its own cash out rule and only cashing out participants with less than $200account balances. Is anyone aware of a correction method for this type of error? I guess it is an operational error since the document was not followed, but it seems like a rather benign one to me. Any ideas?

My boss has 2 IRAs. He is taking RMDs from each. He wants to know if he can combine them and take one RMD from the combined IRA. One of the IRAs has the following history: Boss had a Keogh Plan with a single member. He was told he had to terminate it and put it in an IRA which he did. Is there any reason he can't combine the two IRAs?

I have a profit-sharing plan that, let's say, "slipped through the cracks" about 3 or 4 years ago. It was not timely amended for the final 415 regs nor for PPA. This was discovered in January 2010 (past the PPA amendment deadline). I prepared an amendment, had it signed and prepared a Streamlined VCP submission, filled out the Appendix F. Schedule 1 and checked the box stating the plan was not timely amended for the final 415 regs. The next box states "Other (i.e., any other interim amendment that complies with the requirements in Rev. Proc. 2007-44 or its successors). Please list:" I checked this box as well and wrote "PPA." I took a look at Rev Proc 2007-44 and am wondering whether the PPA amendment is an "interim" amendment which I can correct under streamlined VCP. Does anyone have an opinion as to whether you can correct an untimely amended PPA amendment using streamlined VCP?

I've filed several John Doe submissions and I have never included the 2848 in the initial submission.

401(k) plan provides for profit-sharing contribution and matching contributions - both with 6 year graded vesting schedule. Plan has decided to stop making profit-sharing contributions and make a more generous match. Lots of plan participants have small partially vested profit-sharing accounts and employee turnover is high therefore there are frequent profit-sharing forfeitures. Plan doesn't want to allocate p-s forfeitures in the same manner as their p-s contribution because the cycle of people with small partially vested accounts will continue. Is it permissible to use profit-sharing forfeitures to reduce the matching contribution? Other solutions?

another fact I omitted in my initial post is that the minimum investment is $500k. I keep reading about nondiscrimination implications when there is such a large minimum investment threshhold. Thanks for all of your thoughts. These docs are really keen on the idea so I want to make sure I give them a laundry list of reasons this is risky investment ot make using qualified plan money.

Doctor group 401(k) allows for self-directed accounts. 2 docs want to invest a portion of their account in a venture capital fund. (One of the docs is one of two plan trustees) Investment would be in the form of limited partnership interests. I have read the limited partnership agreement and private placement memorandum and am trying to come up with the reasons this is not a good idea. So far my list includes: -potential prohibited transactions (depending on who the other limited partners are) -severe illiquidity of investment -possible UBTI Can anyone add to my list?

Thanks everyone.

I have been told that minor deviations from a master volume submitter do not prevent an adopting employer from relying on the volume submitter advisory letter. (I disagree) This was told to me by someone who ususally knows what she is talking about so I am curious as to other's views. Also, if there are minor deviations from a master volume submitter, does one use a 5307 or a 5300 in requesting an individual determination letter? I suspect 5307 but would like to know if anyoneknows for sure. Thanks for any assistance.

Company A & B are brother sister controlled group (each has identical shareholders) with all A & B employees covered by one health plan. Shareholders of Company A sell all assets to Purchaser. Purchaser hires all former A employees and covers them under its plan. Shareholders of Company A & B drop their health plan as a result of the asset sale. Company B employees remain employed by Company B but they have now lost their insurance. Are Company B employees entitled to COBRA? My thought is no, because they have not had a qualifying event. Does anyone agree/disagree?

It depends. You need to look at the definition of M&A Qualified Beneficiaries in Treas. reg. 54.4980B-9, Q/A-4(a) and (b).

Is it possible for an employer (with 13 employees) to set up a self-insured MRP for a single non-HCE? Is it correct that the failure of such a plan to pass 105(h) discrimination testing would be that benefits provided to HCEs under the plan would be taxable? But if no HCEs benefit under the plan, is this a problem? Would the NHCE/participant be able to exclude benefits under the plan from income?

Employee in the "restricted employee" category separated from service 2 years ago. Employee received but never returned paperwork regarding his pension benefit. DB Plan terminated effective 1/1/09 and plans on making benefit distributions in early 2011. Employee now wants a lump sum distribution of his benefit. DB Plan is not 110% funded. My question relates to the restriction on distributions from pension plans. Do these restrictions apply in the normal operation of the plan or during plan termination? I read Treasury Regulation § 1.401(a)(4)-5(b)(2) as restricting the benefits paid to certain “restricted employees” upon the termination of a defined benefit plan. However, I am being told by pension professionals that this rule only applies during normal operation of the plan and not during plan termination. Any help is appreciated.

Never mind. I found my answer (the answer is yes - Rev Proc 2008-50 Section 4.08)

Never mind. I found my answer (the answer is yes - Rev Proc 2008-50 Section 4.08)

I successfully dealt with this exact problem using VCP. (Perhaps you could use SCP since your problem sounds more recent - mine occurred over a period of 5 years). I looked to the portion of EPCRS that deals with omitting an otherwise eligible participant and applied the same principles as to the bonus. (Appendix A, section .05). Remember that if deferrals are matched you will also have to correct for that.

Defined benefit plan terminated effective 1/1/09. Plan recently received favorable EGTRRA determination letter and elected not to file 5310 with IRS. It has now been discovered that plan failed to include about 20 employees in the plan. Plan wants to correct by making a contribution on behalf of said employees. Can this be done under EPCRS?

Defined benefit plan terminated effective 1/1/09. Plan recently received favorable EGTRRA determination letter and elected not to file 5310 with IRS. It has now been discovered that plan failed to include about 20 employees in the plan. Plan wants to correct by making a contribution on behalf of said employees. Can this be done under EPCRS?

Client has $400k in an IRA and wants to invest it in real estate. The real estate in question costs $600k. If the IRA borrows $200k to buy the real, it will have UBTI. Client has the $200k but is prohibited form lending it to IRA under the prohibited transaction rules. Can client and IRA simply purchase the property together (or form an LLC to purchase the property)?

Employer 1 is selling assets to (newly created) Employer 2. Employer 1 and Employer 2 are unrelated. Certain employees will terminate employment with Employer 1 and become employees of Employer 2 performing the same tasks for Employer 2 that they performed for Employer 1. Employer 1's plan provides for a distribution upon "termination of employment." It does not appear to have adopted the "severance from employment" standard. Employer 2 will adopt its own 401(k) plan. My questions are: 1. Does the same desk rule continue to apply to plans that do not adopt "severance from employment" as a distribution option? 2. If the answer to #1 is yes, does the rule set forth in Rev Rul 2000-27 (which states that the same desk rule does not apply when the former employer sells less than 85% of its assets) still apply?

Does anyone know if a Plan must obtain a new (presumably additional) EIN when it adds Roth deferrals?

Plan recently terminated and paid out all participants save one. The lone holdout is actually a participant who died several years ago. There is no beneficiary designation and the participant's estate was not probated. The Plan sponsor has tried to find heirs to the participant with no luck. The participant's account is in the range of $400. What can the Plan Sponsor do?

Is there any reason to amend Cafeteria Plans for the recent changes in COBRA?