jkharvey

A participant's spouse is currently under care of hospice. The participant wants to go ahead and take a hardship distribution to prepay the funeral expenses. Is prepayment of the expense allowed for hardship?

Can anyone direct me to references for the impact the NRA 62 amendment would have on a governmental plan and what the amendment deadline would be?

Any of you who have received the $15k penalty notice, was DOL DFVCP still available as an option?

Is there some type of correction for this? During the year the employer deposited all of the PS contribution for the owners but none for the NHCEs under the theory that because the plan has a last day rule the owners will definitely be there on the last day but the other employees might not. We have explained to them that they cannot do this, but it is obviously too late to stop what they did during the year. My question is related to correction. Is this a violation that can be corrected? Is it some kind of BRF perhaps that obviously fails coverage? Fortunately with the market conditions in 2008, earnings were not an issue and we are looking at it for 2009.

Thank you for the link. I looked for another discussion on the subject (I figured there was one out there) but just didn't see it. Thanks again.

The plan terminated and the short plan year Final F5500 is due January 13, 2010. I'm trying to figure out if I can file 5500 now w/ a paper 2008 return marked up for 2009 or if I have to wait until EFAST 2. The FAQ at DOL makes reference to a short year w/ a due date before 1/1/2010 getting an automatic extension so they can use EFAST 2 (encouraged to use EFAST). So, I'm thinking that means anything due after 1/1/2010 MUST wait and use EFAST 2. Thoughts?

I haven't been able to research the specifics on this yet, but off the top of your head does anyone know if there is a PT exemption for this? The sponsor is an insurance company. The plan is invested in funds of the insurance company and the sponsor receives commissions based on those investments. It just seems "wrong".

If the employer is paying the insurance premiums for life insurance policies held in the plan, what are the issues or possible issues involved? I've been trying to figure out if this was permissible and I don't find anything that specifically says it can't be done.

The owner wants to use part of his 401k plan account to purchase the whole life policy he currently owns on himself. Is there an exemption for this? I find the exemption for selling policies out of the plan to participants.

The SH 40k plan provides that the sh contribution only goes to participants who have met the statutory minimum age/service requirements (1 year/age 21). The plan is amended 7/1 (12/31 PYE) to remove this provision and now SH 3% nonelective has no such restriction. If a participant terminated 5/1 before the effective date of the amendment does the restriction continue to apply to them or is it all based on the plan provisions at 12/31 when the 3% is allocated?

Plan make a resolution to terminate on 12/1/2008 and distributes all of the assets before 12/31/2008. Can any amendments be made after all the assets have been distributed?

The participant was paid out in 2008 and rolled her distribution to an IRA. We now have determined that the plan failed ADP for 2008 and needs corrective distribution in 2009. This terminated participant is one who needs a corrective distribution. We plan to notify her that the ADP amount can not be in her IRA and needs to be returned but how do we handle the 1099R issue. Since the ADP correction is taxable in 2009 do we just correct the 2008 to reflect the 2008 amount eligible for rollover and then issue a 2009 1099R for the difference?

I want to be sure I understand this correctly. I have a participant who terminated in 2008 at age 74. This was not a 5% owner so the RBD is not until 4/1/2009. Since the RMD due 4/1/2009 was actually for 2008, the amount is still due but the 2009 distribution is not. Is that correct?

Someone responded that plans that don't honor safe harbor provisions will be tested. I'm assuming they mean ADP/ACP test. Isn't the SH contribution required in the document and not simply "optional"? How is that being addressed to the client?

If the plan has segregated accounts and a participant invests his/her money in an annuity what are the requirements regarding the death benefit? If that participant dies does the death benefit just simply go to the beneficiary? Does the beneficiary have to be the Trust? I've never dealt with this and want to make sure I understand the nuances and any possible problems.

Thank you, but I didn't think that this was a 402(g) limit when referring to the 457 plans. I guess bottom line what I'm asking is does the limit for the 457(b) plan apply to calendar year (personal limit) in the same manner as the 402(g) limit does? I wasn't correct when I posted the title of this question. I should have said contribution limit as opposed to just deferral limit.

The employer/plan year are 6/30. Is the limit (i see references to calendar year?) of 15,500 based on the participant's year or the employer's year?

Thank you. I knew there was only one answer..lol How do you handle it with the HCEs as they take the distributions? Do you inform them up front that a part of this might have to be reclassified and they could expect a revised 1099R? I guess I'm looking for a way to "soften" the blow, but I just don't think such a thing exists.

How do you handle this in operation. The plan terminates in December and pays out balances ASAP. The ADP test is run after all this and plan fails so distributions are required. Well, distributions have already been made and 1099R issued. Seems to me the 1099R has to reflect that a portion of that distribuiton is not eligible for rollover because ADP test failed? This makes for very unhappy HCEs. Suggestions? What am I missing?

I need clarification on this. Partners can make elective deferrals on draws during the year (guaranteed payment or not a guaranteed payment)? If the partners decide to terminate the plan on let's say 11/1 would the partner then have no income for plan purposes since his income is determined on 12/31?

Now that you say that, I remember reading that, but then my question becomes, how is it treated if the K1 ends up w/ a loss so there is no "income"?

Can partners make deferrals during the year from the guaranteed payments made each month? Maybe I'm not understanding the concept, but the guaranteed payments themselves are not the earnings from self-employment.

First of all, I have placed a call for the attorney who wrote this document, but he is out for 3 days. I thought I'd see if anyone else has seen this. Anytime I have a plan that excludes vesting service it is specifically stated in the document that years of service are being excluded for vesting purposes (these would be years before the effective date of the plan). Well, this document simply defines a "year of service" as the completion of at least 1,000 Hours of Service in a Plan Year. Would you interpret this to mean that service before the effective date of the Plan would be excluded for vesting purposes? Thank you

The plan made matching contributions on payroll by payroll basis. At the end of the year they had matched on compensation that exceeded $225k. I see an EPCRS correction for 401a17 that allows the plan to move the excess into suspense to be used to reduce next year's match. My question is about the ACP test for 2007. Is this excess that is due to 401a17 included in the match used to determine the ACR for the HCE?

The part. died a few months ago and there are some additional monies owed to him for compensation. The CPA is asking if deferrals can be taken on this amount. My first thought is "no" since the money will be paid to the estate and the estate is not a participant.