jkharvey

Can a MPPP merge into a 403(b)? I see that assets can be rolled from 401a into 403b but we are specifically looking to merge.

I know nothing about 412(i) plans except that they are in fact a DB plan. The plan terminates and wants to roll the $$ into a 401k plan. Can the assets from the 412(i) plan be retitled or do they have to be cashed out and then cash rolled into the 401k?

Thank you. Is there actually some provision in the code or regs that would allow a plan document to provide otherwise?

I am not very familiar w/ the ins and outs of ESOPs but it looks like (against my recommendation) our firm will begin administering a leveredged ESOP. I have a question regarding other assets in the ESOP. The question sounds very strange to me because I know how it would work in a non ESOP 401(a) plan but I'm wondering if there is something different for an ESOP. The employer established a savings account to be used for making distributions. The account is in the name of the ESOP. The prior TPA has not accounted for this asset on Form 5500 as a plan asset (I don't think that is correct). My question is this. Don't the contributions to this savings account have to be counted as employer contributions and be allocated to participants? Is there some ESOP provision that would allow for this type of account to exist by the ER simply depositing money into the account and not having to allocate that money?

Is this a separation of service/termination for purposes of getting a distribution from the plan?

Here is the scenario. Owner's son terminated before end of the plan year because of "medical disability". That is the client's term not mine. Anyhow, they made payments during the first 2 weeks or so of the next year that they are saying was for disability. Does this count as 415 compensation for the next plan year (the year the amount was paid but is the year after termination). I am still trying to fully understand the new 415 regulations. Thank you.

Thank you all so much. It is a bit comforting to know that IRS has actually issued letters where age was the basis for classification. I realize that doesn't mean they would do it for every plan.

The plan wants to provide for different allocation groups for the two doctors. One would be physicians over age 45 and the other would be physicians 45 and under. Can we do this? I've always been wary of using age for things like exclusions from participation and such. Is it a problem for Xtested allocation groups? Thank you.

Brand new 401k plan is effective 1/1/2007. The plan has 1 year/age 21 entry requirements. To bring in the doctors as of 1/1/2007, they have an eligible if hired by 7/1/2006 date. Now, this leaves out severral NHCEs who were hired after that date but before 1/1/2007. I was wondering if this type of "feature" can be said to be discriminatory based on BRF or something. I understand about a pattern of amendments and such that would favor the HCEs but if this is the only thing the plan does that brings in HCEs and leaves out NHCEs for this year, is there a potential problem?

I personally think that there are facts the client hasn't quite told us yet, but one never knows. I also can not believe the investment company would do this.

401k plan moved the assets from investment company A to investment company B. After the xfer the plan earned a small amount of additional interest or something in Company A. Company A did not xfer the money to investment company B. I'm guessing (don't know for fact) that Company A contacted the plan sponsor about the money and the sponsor either didn't get the notices or ignored them. Anyhow, now we are doing the valuation and are trying to find this money. The client isn't very helpful w/ this but so far can only tell us that company A sent the money to the state. I was wondering if anyone had any experience w/ this. Can Trust money be escheated? Would it go to the state where the Trust is located or where Company A is located? If there were segregated accounts, would they have escheated in the name of participants? I'm mostly concerned about our responsibility as the TPA. I just want to tell the client somehow that they have a responsibility and liability here as the fiduciary and that they need to track down this money.

The participant will not be 70 1/2 until June 2008. If he takes a distribution in January of 2008, that will count toward the RMD for 2008, correct?

Just looking for thoughts on the matter. In particular, with regards to the possible anticutback issues?

Tom, That is what I was thinking. What about timing of the SMM? Do you think it needs to be issued in the same time frame as the old SH notice? Again, I'm thinking not since this is no longer a SH plan.

Plan had SH provisions for 2007. On 11/1/2007 they amend to remove the provisions as of 1/1/2008. Is a SH notice needed that actually tells the participants that no SH contribution is coming? The participants will receive the SMM related to the amendment. Would that need to be delivered to participants by the same time frame as the old SH notice?

I have several 401k plans where the assets of the employer's old MPPP have been merged into them. How do the 5/22/2007 regulations regarding lowered permitted NRA impact these plans?

I know how to exclude all HCEs from receiving the SH contribution. I know how to exclude a "class" of employees from participation, but here's the question. Is it permissable to allow an HCE (the owner) to make deferrals but not receive the 3% sh? We don't want to exclude all HCEs because there are other nonowner hces.

This is the only 457 plan we administer so I have limited experience w/ them. I need to make certain we are handling the maximum deferral limitation correctly (outside of any catchup provisions). The plan has a 6 year graded vesting schedule. If an employee is already at 100% vesting, is it correct to say that the total "deferral" amount subject to the limitation is the employee's deferral amount and the ER nonelective contribution. There would be no adjustment for gain/loss. Is this correct? Example: 12/31/2006 PYE EE defers 12,000 ER match contribution of 4,000. Gains during 2006 are 2500 The total for limitation purposes is 16,000 since the limit for 2006 is 15,000, excess is 1,000. Thank you.

Per Code Section 401(m)(4)(A)(i) A matching contribution means any employer contribution made to a defined contribution plan on behalf of an employee on account of an employee contribution made by such employee, and any employer contribution made to a defined contirbution plan on behalf of an employee on accout of an employee's elective deferral" I'm saying that this is a matching contribution based on this definition. If I could avoid the matching contribution concept entirely, it would be easier. I could treat it exactly as you described and use cross testing for my nondiscrimination. I don't see how I can do that, however. I think (maybe I'm wrong) that I'm stuck w/ the 401m regulations and that throws me back to the BRF. The employer has been doing this contribution for a while. I'm not sure (we are waiting to get copies of the prior document) that their document even allows for it. That's going to be an entirely different problem.

Tom, These are exactly the questions I'm wondering about. What do I do about someone who does not defer? Are they factored into the 410b test of BRF in any way? If the rate of match for HCEs is only 2% (just picking a number here), and the lowest rate of match for any NHCE is 3% (again, just picking numbers for illustration), would it apass 410 because all the NHCEs have a higher rate of match?

I agree w/ those of you who wonder why they do this. That was my first comment when it was presented to me. We have tried to convince them NOT to do it this way. We aren't even sure that their current plan document allows for it but that's a separate issue. They are obviously not trying to encourage higher deferrals but they don't want to do a discretionary PS contribution because they would have to give it to more people (ie: those who don't defer) and it becomes more expensive. They want to do the % of compensation contribution but only to those who defer. I don't see a prohibition against it, except that it is now an employer match and because there are different levels of match they now have a BRF subject to 410b. I have several questions about doing the testing on the BRF. That's the reason I'm looking for someone who has actually dealt with the issue. Anyone? Thanks

We have a plan that wants to do the "match" as a flat percentage of employee compensation. For example, if you defer even $1.00 you get the 4% of compensation that is being contributed for any participant who defers. It is my understanding that this becomes a BRF and must be tested (410b) as such. Does anyone have any experience doing this testing?

The term "resource" has been used. Thank you. I really don't want to do Schedule A.

I'm not extremely familiar w/ all the nuances of filing Schedule A. Nationwide Ins. is telling us Schedule A is not needed because the investments are a mutual fund product outisde of an annuity contract. I am NOT looking to File Sched. A if I don't have to but I need to be sure this is correct. The instructions say that Schedule A must be filed if any benefits under the plan are provided by an insurance company (Nationwide is an insurance company, right?) unless the ocntract is an ASO, MTIA or 103-12 IE. Anyone else have not filing Schedule A for these investments w/ Nationwide? TIA.

I know I have seen this but can't find it now. An employee (otherwise eligible EE) does not work hours or get any compensation for 2006. Are they included in the ADP test?