AndyH

Anybody here read the survey? Worthwhile?

ASPA has a wage survey available for $75. I haven't seen it and I'm not sure if it costs more for a non-member. They call it a "Financial Survey". It was originally supposed to be $350 for non-members and $200 for members, but the price has been obviously chopped.

Depends upon the form of payment elected-which should have been one of the options in the document, and that option should have allowed a "change of mind" if you're going to allow it now. But, the "change of mind" is probably not permissable due to the QJSA waiver rules. I don't see how somebody can elect a lump sum and magically start receiving a life annuity. This is a tough issue with some exposure. There's been a good deal of discussion about this on this Board. I'd suggest a search for "restricted payment" or something similar. No good answers, however, other than some kind of hybrid optional form of payment. You can either look the other way or follow the terms of the document. Problems either way.

Good points. Thanks.

What about reallocation of forfeitures from a profit sharing/k plan where profit sharing contributions have been discontinued in the hope of satisfying the safe harbor. Do forfeitures cause a problem?

Tom, the last day employment requirement is an interesting take. I prefer just the opposite-no last day. I just find it causes undesirable and unpredictable test results, because those people become 0%'s. I'd like to hear you elaborate on why you prefer to have a last day requirement, i.e. your experience with the tradeoff. Also, your comment about testing using SSRA. How can you do that if NRA is uniform? Even if NRA isn't uniform, I didn't think SSRA was generally accepted as ok for testing age. I thought it was a gray area that most shied away from.

I wasn't aware of anything that would allow you to merge retroactively. Don't the assets have to be moved or at least re-registered by the merger date for the merger to have taken place, among other requirements? As far as I know, 12/31/2001 isn't now an option. I'm pretty certain that a 5500 filing is needed either way until the assets move or are re-registered.

Jon, what law or regulation requires a notice in advance of the SMM due date to amend the plan and impose a last day employment requirement for receipt of a matching contribution?

The termination date is relevant for other things, such as the determination of average compensation in a DB context, the "last day employment requirement" in a DC plan, and application of changes in plan provisions as well in any type of plan. I've struggled with this issue as well.

Back to the original question and the legality, is notice even required if the plan were amended in 2001 to require employment on 12/31/2002 in order to receive a share of the match or profit sharing contribution? What would be required besides a Summary of Material Modifications due within 210 days of the amendment date, which could be as late as 12/31/2001? I wouldn't think this would be a 204(h) matter requiring 15days/ reasonable advance notice. I agree participants should be notified in advance, but is there any requirement to do so?

QDROphile, would you please elaborate on what you mean by "unless the plan expressly provides otherwise"? Is there some type of plan provision that might cause an ex-spouse to lose beneficiary status, absent a QDRO, once payments have started? Can a QDRO even cause that?

He has until 4/15/02 to establish a SEP for 2001. Anything else is less than legit, and I think it's fair to say few people if any would touch it. Nobody I've worked with or for would.

Thanks, but would a one lifer be exempt from fiduciary standards governing such conduct because there are no non owner-employee participants?

A related question: I once handled a (always) one life DB plan (ignore the funding and 415 issues for purposes of this question) who told me year after year that he had been told (by my boss at the time) that he could make margin transactions ("naked options" were his words) on his 401(a) plan but could not do so if his plan was terminated and the assets rolled over into an IRA. That was his justification in his mind for keeping the plan even though it was fully funded. My response always "Oh. Is that right?", or just silence. Was/is this true?

Steve, the premise to your comments is incorrect. There is no prohibition on multiple plans. There are organization-wide deduction limits. There are individual limits. There are aggregation rules regarding each limit. There are, as Tom pointed out, also some "exclusive plan" rules, mostly with regard to simple-type plans. For example, your realtor could set up a profit sharing plan. She could instead set up 20 profit sharing plans. What matters is that the deduction and individual limits are satisfied. The exclusive plan limits pertain only to simples and seps. Those types of plans have by design very strict limts. This board focuses more on "qualified plan" rules, which have more expansive limits. And, the plan limits you reference do not generally apply. Hopes this provides some perspective.

I haven't found a solution to this that is "palatable". It's a real problem with rates being so low.

Yes, those are important clarifications, that: 1. Only a portion of the death benefit must go to the spouse. It is possible that such a form may constitute a proper designation of death benefits above the required REA death benefits. But that mechanism would be defined in the plan document. 2. Yes, the 1 year marriage requirement (if the plan document so provides) is an important clarification.

Joan Gucciardi has stated that any 3% (or 1% or 2% for that matter) must be increased to 5% if any HCE receives 15%. Her ASPA conference outline on page 14 in part states "Accordingly, the regulation tells us that each NHCE who receives any allocation at all must receive an allocation equal to at least the minimum allocation gateway. " The 8th Q&A from her post-Webcast notes relates to the 3% SHNEC as follows: Q: "If you have a safe harbor 401(k) that has a last day requirement to receive the employer profit sharing contribution are you required to increase the 3% nonelective contribution to 5% for NHCEs who have terminated employment? A: Because they are entitled to a 3% nonelective contribution, such NHCEs must be increased to 5%." Here's a link to the post webcast Q&A's. http://aspa.org/archivepages/conferences/2...p/questions.htm

Wouldn't the terms of the plan document govern who receives death benefits, not some form? I'd check out what the document says in this regard. If it's a DB plan subject to REA, then, yes, the spouse would likely be the proper beneficiary under the situation you've described. But, again, the plan would state that.

Mike, your comment about deductability in particular caught my attention. Are you saying that additional contributions resulting from a corrective amendment under 11(g) are not deductible for the prior year generally? In my case this might arise more frequently within the context of a cross tested profit sharing plan. If a sponsor of such a plan amends and contributes within the normal deduction timeframe (8 1/2 months if an extension is filed), then I think what you're saying is that such amounts are not deductible until the following year. Is that correct? I do see language that might support that interpretation. And, your comments about repeated amendments make sense, but the regulation seems to be referencing brfs only. Do you interpret it more broadly than brfs? Thanks for the info.

I've been told, and I agree, that you cannot properly permit a lump sum without also permitting an immediate annuity. In such case, the election to take a lump sum (and waive the annuity) would not be within 90 days of the annuity start date, and therefore would not be a valid waiver. So, in the case of a plan termination, you must either purchase deferred annuity contracts, or offer lump sums, immediate annuities, and deferred deferred annuities. In my experience, nobody takes anything but the lump sum in a small plan setting. And, in the case of a subsidized early retirement provision, I think the deferred annuity would need to have all the features of the plan's subsidized annuity, which is why insurance companies aren't looking for this type of business except at high cost.

You can use any criteria you wish for the allocations, including individual names if you wish. You should be careful about running afoul of side issues such as age discrimination or the like, however. Many people would not use age or date of birth due to potential age discrimination risks under ADEA. For similar reasons, I would not have one group be all men and the other be all women. But, if you want to group by hair color, you probably could do that.

Yes, I agree completely.

Gary, I think you've got the testing part backwards. You (the Plan) can exclude bonus and/or overtime under one of two conditions: 1. the ratio test of 414(s) passes (common for bonus' exclusion but not overtime); or 2. the plan is general tested and passes But, the general test must use comp that satisfies 414(s), which means either gross pay or some definition less than gross that passes the 414(s) ratio test. And, for top heavy purposes you must include bonus' and overtime.

I've seen discussion of this here but don't recall any definitive answers. Can an active participant's accrued benefit go down legitimately? For example, if: 1. Average comp decreases (e.g. comp history is less than the averaging period and comp goes down in year 4 or 5) and an additional year of benefit service isn't credited for some reason. 2. Average comp decreases on account of a high 5 in last 10 definition where the highest years would be prior to the most recent 10 and additional service credit isn't enough to offset decrease in average comp. 3. An increase in covered compensation on account of indexing in a year of termination prior to accruing an additional year of service. Thanks for any clarification of this.