rcline46

It has been proposed that the 'correct' or 'most accurate' method of calculating the current value of a QDRO in a daily val, self-directed plan is to find the actual shares as of the date of division, and apply dividends paid on the 'divided' shares from the date of division to current date to get the current number of shares, and then determine the value based on the current share values. This method is EXTREMELY time consuming, and of course subject to human error. It may be 'perfect', but is it the only 'correct' way? If it were a pooled, balance forward plan, one would apply the earnings rate only from date of division to current date. There would not be another way to determine the current value. If the application of earnings rate is 'correct' in the balance forward environment, would it not also be correct in the daily val environment? That is, from the date of division to current, determine the earnings rate of the individual account, apply that earnings rate to the divided account to determine the current value of the QDRO. What is your opinion on the acceptability, accuracy, and defensibility of the earnings rate method?

If the proposal is from an actuary, they should be willing to disclose their assumptions. If not from an actuary I would have serious problems with the plan as it would be greatly overfunded subjecting the sponsor to some nasty (50%) excise taxes on reversions.

You would think he must be in SOME test. Under the old regs for 2006 this pay was after severance date and would not be included (depending on the document of course)

Using the 'first few weeks' rule in the old and new 415 regs, put the comp and deferrals into 2007 and be happy.

As I understand the restoration rules, he must restore all that he was paid to get back any forfeited money. I interpret that rule as saying to restore the loan amount also. Remember he DID receive distribution of the loan, so as far as the plan is concerned the loan is paid off. If he pays everything back, then depending on the amounts and the loan rules for the plan, he may be able to take a new loan.

Taxes must be withheld on the 'old' schedule (minimum 10%) UNLESS the recipient files a (substitute) W2-P and elects not to have withholding.

They must wait 12 months from the date of the last distribution. Why not 'freeze' the plan? And since contributions are from ee money, why not let ees contribute? What harm is there?

BIrd is right, cuz the IRS letter asks for the DFVC filing date. So file like NOW!

The document must provide for in service withdrawals. The law only says that you cannot take deferrals as an in service distribution prior to 59 1/2. The plan must permit them after 59 1/2.

Change the 'rules' in the match source to not be SH and show in ACP test, then change them back.

This MUST be a defined benefit plan because ALL DC plans must have at least a 2/6 vesting schedule since 1/1/2007. Take the request for benefit as a request for a statement, required to be given if requested. This should show accrued benefit and vesting. An SPD should be given also for good measure. Since she was told what her contribution was, this must be a Cash Balance plan. If plan vesting is based on hours, saying she worked 2 1/2 years is not relevant, need hours per plan year (or whatever the doc/spd says). If I am wrong on any of these issues, get this plan to an ERISA attorney or good TPA because it has some really BIG problems.

To paraphrase Rhett Butler - Frankly, I don't give a hoot what corp Y thinks, do they have a written opinion from an ERISA atty that they are not employees? It will be very expensive to fix if they find out later that they are employees.

You are still the 'common law' employer of your employees. The PEO will not be the employer. If you join the PEO plan, it will be as an adopter of a multiple employer plan. Therefore, unless you terminate the 403(b) plan, there will not be a distributable event and no employee will be allowed to 'transfer' their accounts into the 401(k). Note I said transfer because without a distributable event, there cannot be a rollover.

If this is a self directed plan, then use the ERISA 404© disclosures EVEN IF the plan doc does not say they are complying with 404©. I would not want a client who is trying to do only the minimun in today's environment.

Refer to the final 415 regs which are effective for all limitation years after 6/30/2007. I think the answer is yes, not only can they be made, but probably must be made.

Automatic deferrals MIGHT fall under the Automatic Contribution Arrangement rules. Or they might not. Failure to provide the opportunity to defer when an employee becomes a participant is also a big problem. The company needs to get procedures in place and explain them to the rehire.

Most 401k documents provide for immediate participation upon rehire. So the rehired employee would have the right to start contributions immediately. If your document so provides, I would either insist your HR people get new forms signed, or leave the prior election in place. The employee can always change if they don't want that level any more.

Also make sure you can take a partial distribution from your old plan. As a terminated participant you may be required to take all if you take any.

You cannot merge the plans because the MPPP (I assume) is an ERISA plan qualified under 401(a) of the code. If so, it can only be merged into another plan qualified under 401(a).

Put in a Matching Safe Harbor plan - start with say 100 to 4. If no employees decide to defer (they cannot be permitted to 'opt out', only to not defer), up it to 200% to 6% to get owners to max. When employees start deferring enough, reduce the match.

Report the plan to your local EBSA office as an abandoned plan. Give them what you have on the trustee, etc. They will find the trustee for you. Amazing how fast they respond when a solicitor from the DOL contacts them!

Not yet final, and it is 7 business days, not 7-10 days.

Under USERRA, the company must hold a position for the person. I do not think a distributable event has occured (loans, hardships are different). YOu may want to consult legal counsel on this as the distribution may be improper, POA or not.

It has always been our practice that it back tracks to the Effective date, with the exception of elective deferrals. Remember, elective deferrals have only been around some 25 years, the issue of eligbility and date of entry a lot longer!

No, otherwise you could not set up a profit sharing or DB plan on December 30th effective January 1 of the same year and credit all service, etc for the year. That is why Tom mentioned the profit sharing feature (if any) was effective on January 1. It is true that the elective deferral portion cannot be used prior to the signing of the document because there was no provision for deferrals prior to that date it was signed.