cpc0506

You can only reclassify salary deferral as catchup if the plan is failing the ADP Test.

he receives his vested match amount, remaining funds are forfeited.

My concern is that, although the profit sharing allocation is not explicitly spelled out in the Safe Harbor Notice, the Notice does direct the participant to the Summary Plan Description in effect when the notice is provided. So the participant believes, if there is a discretionary contribuiton for the year, it will be based on pro-rata allocation.

Austin, would you change the profit sharing allocation method - from pro-rata to new comp if the plan had a last day requirement, since no employee is negatively affected by that and there is no cut-back.

I do not believe you can change eligibility provisions unless you are making them MORE favorable.

I understand that changing the sponsor name will not automatically change the plan name. My question is: if the plan sponsor name changes, is an amendment necessary to reflect the new plan sponsor name?

Client tells us that they have changed the name of their legal entity. Is an amendment necessary for the existing plan to change the plan sponsor name? If so, when does the amendment need to be done?

There is no intention to maintain the plan after 12/31/13. The new practice does not want the profit sharing plan of the client. The client intends to terminate the plan effective 12/31/13 but wants to make a 2013 contribuiton, which the client would make by 3/15/14. At which point, all funds will be distributed to the participants.

Here is the language he used: "Termination of the plan needs to occur prior to 12/31/13. In some of the plans maintained by the Practices, there are employer contributions earned by participants during the plan year that have not yet been deposited into participants' accounts. This would include safe harbor contributions, profit shairng contributions, etc. that typically are deposited before the due date of the Practice's tax return. These contributions need to be made before the existing plans are terminated." Not sure why he is saying prior to 12/31/13. The intent of the client is to terminate the plan as of 12/31/13 with an adopting resolution dated prior to 12/31/13.

Client was informed by an attorney representing him that the contribution must be made before the plan is terminated. I cannot understand why. Does anyone have any thoughts on this?

Client has a straight Profit sharing plan. Client is a doctor's office that is joining with 5 other doctors offices in 2014. Client intends to terminate the plan as of 12/31/2013 but would like to make a profit sharing contribution for 2013. Does client have until the normal deadline of 3/15/14 to make the contribution?

Plan has no age or service requirement with monthly entry dates. Employee A has been employed since 2011. He has never worked 1000 hours to earn a year of service. On the 2011 ADP Test, he is listed as an 'otherwise excludable'. For the 2012 ADP Test, he is listed as an 'otherwise excludable'. Is this correct? Can you be otherwise excludable forever?

Announcement 2007-59 provides that a safe harbor plan can be amended mid-year only with regard to the following: 1. Qualified Roth contributions, 2. Hardship withdrawals, 3. Mid-year amendments to become a safe harbor plan using non-elective contributions, and 4. Mid-year amendments to suspend or reduce safe harbor matching contributions. There are no other amendments permitted. So if a Safe Harbor plan wants to change a loan feature, it will have to wait until next year.

Owner does not contribute his his wife's salary deferral contributions until February 15, 2013 for his 2012 payroll withheld deductions. He did contribute all his employee's 2012 salary deferral contributions timely. Is a Form 5330 necessary? Do I have to report late deferrals for owners on the Form 5500? Client does not want to contribute lost earnings for himself or his wife.

Based on the Advisory Opinion that was published on 5/25/12 that open multiple employer plans are separate ERISA plans, we are now doing a Form 5500 for each adopting employer of the multiple employer plan and not just one as we have done in the past. Issue: We filed one extension on behalf of our multiple employer plan for 2012. We completed the Form 5558 using the Plan Sponsor's EIN under the FIler's identifying number. We are now reading the instructions for the Form 5558 that seem to indicate that the Employer's EIN should have been used and we should have filed 15 different Form 5558 and not one. Did anyone else file multiple Form 5500s for their Multiple Employer Plans? Did you file extensions? And if so, did you file one or more extension? Please advise.

You are right in your interpretation of the FAB. FYI, if you already gave the 2013 notice (tying it to last year's notice date), the FAB goes on to say that you can use the transitional period for 2014.

No.

Client is leaving Alliance A to go to Alliance B. Alliance A has sent client a bill for $1250.00 for their 'deconversion fee'. Is this payable with forfeitures if plan allows for forfeitures to pay plan expenses? Thoughts?

No, the plan is not safe harbor.

another question under a different scenario... Suppose the document is currently written - profit sharing allocation is integrated with social security with 1000 hours and last day rule. Client wants to remove service requirements and change allocation method to new comparability. Plan year ends 12/31. Can this be done now?

To K2retire, are you performing the additional test as indicated by ERISAtoolkit?

Can the cost of the plan document be paid from Plan Assets? What if the plan is restated for law changes? We also charge an annual document maintenance fee to our clients. Can this fee be paid from plan assets? Thanks for your replies.

Plan has annuities as its investment vehicle. The statement from the Insurance Company lists: 1. A Contract Value 2. Minimum Guaranteed Surrender Value 3. A Cash Surrender Value 4. Income Account Value Which of these numbers should be used when determining the account balance at the end of the year?

Hello. We have been approached by a client who has an employee who worked in Ireland and participated in and received a retirement benefit while employed there. The employee has returned to the US and wants to rollover his foreign retirement benefit to his current employer's plan. We have contacted Relius, our document provider, and were told that if the law allows for this kind of rollover, the document language covers the rollover. Are there any ERISA attorneys out there who can tell if foreign pension funds are rollover eligible? Thanks

Good point about the death, disability and retirement issue. I did not even think about that. How would you address this then? Suppose under the New Comp allocation, the HCE gets 9% and all others get 3%. What precentage would you have to give to those who left for death, disablity or retirement reasons?