rcline46

I think that having only one investment provider makes the plan subject to ERISA unless they are otherwise exempt, like a church plan.

Nothing in the rules imposes a continuous service requirement for eligibility. The only rule you can work with is the break in service rules. Assuming the plan uses the 1 year of service rule, once a person has worked 1,000 hours at any time dureing the referenced 12 month period they would enter on the next entry date (read the plan document). If not employed at that entry date, the enter immediately on rehire. The same is true if using shorter eligibility. THen go to the break in service rules in the document.

SInce the forfeitures have not occured, how can there be a cut-back? If an amendment is made which is non-discrminatory, how can it create some other problem? And I thought I was conservative!

1. Fees and pay are never discussed on this board. 2. I have never heard of a 'pension analyst' but then I only have 35+ years in the business 3. In two years you may have learned some of the language. 4. What designations have you acquired in the industry? 5. What job skills have you acquired? I am sorry to burst your bubble - but you are at best a novice in this world.

Maybe the sponsor wants to make all the employees of that store 100% vested and if so the plan can be amended to do so. Since the partial termination is a subjective item and 20% is a rule of thumb, I think this is not your call, it is the sponsor's call.

Interesting - it is obvious the plan does NOT have an hours requirement, nor an end of year requirement to receive an allocation, otherwise you have a failure to follow the document issue. So, an additional allocation is necessary to satisfy gateway because it does not appear that you can satisfy any other tests based on the information given (allocation basis with permitted disparity, broadly available rates, etc.)

I would be careful of successor organization/ successor plan rules here, check them carefully. I know the unworkable successor controlled group rules under 414(o) (?) were withdrawn a long time ago, but is there really a separation from service?

Just have the new org adopt the old plan, then no payouts, life goes on a normal. Just make sure the 5500 is filled out correctly.

Me thinks I have been at this too long - overlooked that part! (no 25% limit). Thanks. Now I can focus on keeping the DB cost for the employees in line (limited) considering they are getting a substantial Davis Bacon contribution. I still think a floor/offset is most effective here due to the size of the contribution in the profit sharing plan.

I was asked to do a proposal for a defined benefit plan for company that has an existing 401(k)/profit sharing/Davis Bacon plan. Now normally this does not present a problem except this is the first Davis Bacon plan I have seen with a contribution rate of about 25% on Davis Bacon wages. When I inspect gross covered pay for the 401(k) plan vs Davis Bacon contribution it comes to 22.5% of pay. Regular profit sharing took the contribution to a full 25%. That leaves very little to use for a defined benefit plan, whether traditional or cash balance. Since the pension plan has to pass 401(a)(26) with meaningful benefit accruals for a sufficient number of participants, a standalone plan seems out of the question as well as a plain DB/DC combo. That leaves me with an offset plan, probably a traditional offset because of the meaningful benefit problems - that is, a formula that gives the desired contribution for the owners and see how the offset affects the rest of the contribution - which is limited due to Davis Bacon contributions. I believe the offset can only be balances accumulated while both plans are in place. Question 1- is is possible to use all prior accumulated balances if past service is granted? Of course this rules out using DB/DC combo testing, but it accomplishes the same goal. Question 2 - is there a better design, and if so are you willing to share it with me? Thanks all.

Read what it says under the admin/sponsor signature - the return is correct subject to PERJURY - which is a felony. Have you attorney explain what that statement means if you don't get it.

Not until they come out with another service pack for RGF.

You can actually type the form into IFILE and have the client 'sign' it. You will need author credentials to do that.

Also, what does the plan say about rollovers and the $5,000 limit - included or excluded. If excluded and the remaining account balance is under $5,000, likely no spousal consent needed.

Ah - to be an inspiration to others - that is something to which we should all aspire! 990-Ts and EBS1s Excess only plans and 81-202 100 times insured benefits and decent fees Do you remember these? (ok the meter is wrong, but Tom can fix that) $30,000 deferral limts and $45,000 DC limits - but that was the early 80s DB funding could use 'asset matching', but that was outlawed - but then brought to life again with PPA. Even poor old Tom doesn't go back that far.

Since there are no requirements for receiving the PS contribution, anyone eligible has already accrued the rights to a pro rata share. The question is a pro rata share of what contribution. If you amend as suggested can you now make two contributions, on allocated pro rata on pay to date of amendment, and the per class on pay after the amendment date? Should you make two contributions (deposits) to show this? If you do it this way, does the first contribution have to be 'meaningful'? If so how much is 'meaningful'? There are learned people on both sides of this question, so you will have to make the call.

No, the amendment defines 415 compensation, and most of the amendments also say the definition applies to 'plan compensation'. Most plans start with the 415 compensation and then make allowable changes under 414(s) to create 'plan compensation'. Prior to the new FInal 415 regs, 415 specifically excluded all pay after severance. Now, (shortened version) anything the employee would have received if they remained in service is now 415 compensation UNLESS pieces are specfically excluded. And guess what, some of the excluded pieces throw you out of the Safe Harbor compensation definitions and into the 414(s) testing.

Well, let's start with what an ESOP is - invests primarily in stock of the employer. With apologies to Derrin - Who's the Employer? You must first make that determination. Controlled Group? Affiliated Service Group? If you may end up with a multiple employer plan, how would that be a true ESOP if the stock is not that of each separate employer? I would think this is an issue. This board would not give you very good answers because you are deep into technical and legal issues here. Regardless of the cost, you/the client needs to get an experienced ESOP attorney involved and maybe an ERISA attorney also. On the cheap all I see here are really big problems.

Reopen the account and pay from the plan. Safest way and provides a proper audit trail.

Cost of insurance - if the PS 58 cost is not reported as taxable income, pray that no one dies. If not reported and there is a death, ALL of the insurance proceeds are now taxable - bummer.

I could eviserate everyone who calls a 3% NESH a match. Get on the right language Newbie-in-training and don't let your clients, contacts or anyone else ever call it a match. Correct them every time. I have been trying to get my clients/brokers/contacts to get it right since 1998 - and some of them STILL want to call it a match. Next, how do you reach the conclusion that the 2% and 10% profit sharing contributions could be tested under ACP? Do you think those are also match contributions? Their testing option is NONE. Get them into to proper test situation and Relius will magically do the calculations correctly.

The loan was distributed, not defaulted. What makes you think it was not a benefit payment?

First look at what was chosen in the Final 415 regulations amendment, your answer could be there.

I would be surprised if, in all prior years, 5% of the 5500s were filed by June 1st. The DOL should not be surprised. I am waiting for their system to crash about July 20th. And then crash again about October 7th. In my opinion, efiling is more cumbersome, and this year a lot more cumbersome than paper, even with the webclient software offered by several vendors.

I have never understood freezing a 401(k) plan. Why would one want to prevent the employees from contributing, especially if you are letting them pay back loans? Ceasing matching contributons or other employer contributions I understand, but deferrals do not cost the employer anything. Vesting cannot be frozen ever. And if the plan were to terminate everyone is fully vested any way.