Doghouse

Don't forget that E&O insurance!

Here's another trick - there is an exception to the 3 month rule if the sponsoring entity is new.

If all the assets are "eligible plan assets" as described in the SF instructions, no reason.

The service agreement between the sponsor and the provider should be examined closely.

I have done the formula approach, but fair warning, the formula is not pretty. It has to take into account changes in 401(a)(17) limit, 415© limit, and 402(g) limit.

I would never use it today either, but it was good back in the day, especially before the automatic rollover rules came into being. And especially if the plan was terminating. It was never sanctioned by the IRS, it was one of those workarounds that used to happen, more or less below the radar. Then I think someone asked about it at an ASPPA conference Q&A with the IRS, and that was pretty much the end of that.

Say that an ERISA attorney has a plan sponsor adopt a volume submitter plan that has just enough modifications to it to support a determination letter request (intentionally), but not enough to render it an individually designed plan. Then, some time after receiving the letter, there is an an amendment, but not to the modified content. Is the plan sponsor eligible to apply for a new determination letter? We are seeing lots of imaginative ways to get around the usual restrictions on getting a determination letter on a pre-approved plan or an amendment to an individually designed plan.

In re-thinking (and looking it up in EOB ) I agree: 3. Crediting rules for forfeitures. Forfeitures are annual additions for a limitation year if they are allocated as of any date in that year. See Treas. Reg. §1.415©-1(b)(6)(i)(D). 3.a. Example. For the limitation year ending September 30, 2010, there are forfeitures totaling $18,000 under a profit sharing plan. To the extent those forfeitures are allocated for the year ending September 30, 2010, they are treated as annual additions for that year, even if the actual determination of that allocation occurs after the close of the plan year. For example, if the plan administrator does not actually perform the allocation until May 10, 2011, the forfeitures allocated as of the September 30, 2010, allocation date are still treated as annual additions for the limitation year ending September 30, 2010, even if May 10, 2011, would be later than the section 415 crediting deadline described above that applies to employer contributions.

Sure - Chapter 15, Section VIII, Part A, #4 (Distributions).

There is some mention of this regional EBSA initiative in this article. http://www.asppa.org/News/Browse-Topics/Details/ArticleID/6889

For what it's worth, the EOB addresses this issue, and suggests that there is a reversion to the employer in this case.

Yup, that's why our plans had automatic rollovers for $0 - $5,000. I really miss 100% tax withholding

In my former position at a TPA, most of our plans had provision for automatic rollover all the way down to $0. And then we used Penchecks for fulfillment. As I recall, they didn't have a problem with it, but the account might quickly be consumed by fees.

There is no excise tax for a corrective refund of a 415 excess, to my knowledge.

Going back to the first question, there is a sort of grandfathering rule under 1.401(a)(4)-4(d)(1), but it may or may not apply to your situation.

Sounds like they are trying to bully people into VFCP. It must be a cash cow.

I, on the other hand, would worry about it.

I think the other significant issue is whether the plan blew its safe harbor status by not being in effect for at least 3 months - if it was relying on that "new plan" exception to the full year requirement for safe harbor. I believe the rules say that the participant must have the opportunity to defer for at least 3 months.

I can't believe this isn't getting more response. It would seem to be a common question.

Code and regs refer to expenses deductible under 213(d): (d)DefinitionsFor purposes of this section— (1)The term “medical care” means amounts paid— (A)for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body, (B)for transportation primarily for and essential to medical care referred to in subparagraph (A), (C )for qualified long-term care services (as defined in section 7702B©), or (D)for insurance (including amounts paid as premiums under part B of title XVIII of the Social Security Act, relating to supplementary medical insurance for the aged) covering medical care referred to in subparagraphs (A) and (B) or for any qualified long-term care insurance contract (as defined in section 7702B(b)). In the case of a qualified long-term care insurance contract (as defined in section 7702B(b)), only eligible long-term care premiums (as defined in paragraph (10)) shall be taken into account under subparagraph (D).

yes, safe harbor rules, and it would be classified as qualifying medical expense.

Health insurance premiums for a partner in a partnership are paid by the partner and deducted on his personal return. Does the fact that this expense is classified as deductible by IRC Section 213(d) make it hardship withdrawal-eligible? Assuming that all the other requirements are met. And if not eligible, what specifically excludes it? Thanks! Dog

There is no sanctioned option. The plan administrator is signing under penalty of perjury that "this return/report... to the best of my knowledge and belief, is true, correct, and complete." They may have to do the best they can with a lenient interpretation of that.

The plan can be structured that way, or the existing participants can be grandfathered in.

"For additional information, VFCP applicants may contact the appropriate EBSA regional office at our toll-free number: 1-866-444-3272 and request the VFCP coordinator."