rcline46

For heaven's sake man - amend the plan to put everyone in their own group!

The questions are always, always, always the same. 1. What does the agreement of sale say about the qualified plans? If silent, sue for malpractice and then- 2. Was it a stock purchase or asset purchase? Only when 1 and 2 are know can your question be answered. Who is auditing the plan and why? And lastly, when a plan is merged, anything and everything wrong with either plan taints the merged result. And that is always, always, always the same.

Check the 415 amendment - it specifially mentions those types of payouts.

Maybe that reference satisfies the client. However the account could be an FBO account. More likely it is a 'memo' account. That is all of the trust assets are held in the trustee's name, and some record keeper keeps track of the individual participant's portion of that account. The individual does not hold title to any asset (and neither do they in an FBO account!). In fact, unless an individual actually has possession of an asset, nothing is in their name - not in a brokerage account, checking account, savings account, or anything else. Which leads back to - just what is your client asking? There seems to be a disconnect in understanding even the most fundamental concept of an account.

The only way to know is to check the calculations of the QDRO amount.

It is probably way to early to know any answers. However, here are some questions: Will the estate pay off the loan so the entire account balance be rolled over? Will the benefit be paid out as installments, or over 5 years or less? In most situations, the estate must be settled in nine months. You will need to have contact with the executor of the estate to start making decisions because the defaulted loan may become income to the estate, and a surprise to the executor.

A trustee cannot interfere with the ERISA rights of the participants. An in-serive distribution is a right. I think the trustee is in the wrong based on the information given.

Benefits, Rights and Features testing must be done for actual availability. I would bet it fails. Exclude union from testing if their match is negotiated.

In the ASPPA IRS Q & A session some 2 or 3 years ago this issue came up and the IRS response was, in simple terms, tough nuggies.

And Austin understands that an amendment would be VERY discriminatory in effect and is not an option.

Without actually reviewing the link, there should have been a Resolution merging the plans as of a date (and should be at least 30 days prior to the merger). At that date therplans are merged and the trusts are merged. Liquidation and retitling cannot take place BEFORE the merger, so it has to happen after the merger, and it cannot take place instantly. In our practice the final 5500 is as of the merger date.

Scout I think I remember.

YES OPTION 2. Sorry, must be one of my (many) backward days.

If no schedule A, then it would not be an annuity product as I understand the rules. Even if the insurance company is recordkeeping the plan, because of the Schedule D, the accounts are held in omnibus accounts and not true individual accounts (as I understand it). You need to speak with someone (if you get the case) who knows what is going on, AND as said before, you need to see the contract(s).

Option 1. Volunteer service does not count toward eligibility.

No, that is why plan rules are used.

If only a 401(k), then electing -0- deferrals is fine. If there are employer contributions then the waiver is invalid. Really should use a plan amendment to make person ineligible. You are right, the waiver must be irrevocable and extends to all plans of the employer.

If Austin is correct, I wonder what the 5500 shows? Irrevocable commitments to provide benefits are not listed as assets on the 5500. Contributions and payments to insurance company with no assets! If not 100% vested, I wonder how they recapture the forfeitures? This sounds like an 'interesting' (read costly) plan.

In my opinion, if it is a beginning of year valuation, group at beginning of year. If end of year valuation, group at end of year. IE. group at valuation date determines. Since the formula seems to be % of pay, which is determined at end of year, my guess it is using an EOY valuation. The question as posed is whether 1000 hours 'locks' you into a group for part of a year. It seems that it does (no EOY requirement?) if the 'succeeding' group (ineligible) grants a -0- contribution. Of course if you move from A to B after 1000 hours, and then to ineligible, I am guessing the doc is silent on that issue also. Unless the prior actuary/drafter/client has something they want, OR plan has been run splitting A and B as a practice, I would use 'ending' group.

Read the rules on 2 year eligibility. I am assuming the person had 1000 hours in 2009 and 2010, so they actually will enter on 1/1/2011. 2 year eligibility has some peculiar rules you need to be familiar with in order to use it.

The 21 and 2 is ok, and the person is out until 1/1/2011. Only shareholders does not work under 410(b) and 401(a)(4). As of now the person is eligible.

Why are you doing Gateway? This only applies if you are cross testing, and you should pass easily on an allocations basis, even you check top heavy only not benefitting. As Tom said this is 80% so you would not have to test on an accrual (cross-tested) basis. And yes the lady must get Top Heavy.

And if you have a qualified plan, the POP employee premiums are usually added back to income for deferral, match, and profit sharing calculations, in part of pay for db for cb plans!!!

Deferrals are a Cash OR Deferred Arrangement - CODA. So we start with the fundamental principals - you have a choice of either cash or deferral. Now, if they get their tips in cash they cannot defer from the tips. THat is what the thread is telling you. If all tips are pooled and then distributed (rare but it happens) then the employer could take the deferral before the employee's portion of the pool is distributed to them.

My advice would be to NOT merge the plans until 1/1/2012.