k man

A participant completes a distribution form and the spouse completes the spousal consent portion. Shortly thereafter and prior to the distribution being processed, the plan administrator (employer) receives a phone call from the spouse requesting a hold be put on the distribution as they are involved in a pending divorce. shouldn't this participant receive the distribution absent a QDRO or a pending QDRO?

Can a Rabbi Trust be assigned to another employer (a subsidiary of the original plan sponsor/grantor)? Would this situation be any diffenrent then the assignment of a qualified plan trust?

John you are correct. I guess I am using proprietary in a different sense. I was using the term from the standpoint of that they are only available from certain vendors and that they use their own "proprietary" process in adding and subtracting sub managers.

i am curious, how do you get the client to answer the question for the 5500 since the new forms are computer scanned? do you make them certify or answer the question in writing separately?

john, i also disagree with the point that a sponsor using "proprietary funds" can't get 404© protection.

I agee that there is no problem with the employer paying fees directly. However, if the employer is paying directly the fees for directed brokerage but the other participants (invested in the core options) are paying asset based fees out of plan assets you might have a problem. it would seem to me that this is discriminatory.

EAKarno, I understand the first part of your post but you threw me with the second point. can you explain that again?

A non-qualified plan defines the employer as the parent, or any of its subsidiaries, and there are participants from several different subsidiaries. Does the parent company (sponsor) get to book the assets on its books even though it is not the one actually paying the specific employees salary? In this case the employees get paid by the subsidiary that employs them.

I am not as concerned what the plan document says as it can be amended. The participants would not arbitrarily be deciding to participate. the plan would be made available to them for the first time in the middle of the year. After further review, I think that Rev. Proc. 92-65 sets forth a specific exception to the "constructive receipt" rule. The procedure provides that an election to participate must be made prior to the beginning of the plan year unless, "in the first year in which a participant becomes eligible to partipate, the newly eligible participant may make an election to defer compensation for services to be performed subsequent to the election within 30 days after the date the employee becomes eligible."

Lets say a fiduciary selects proprietary mutual funds that are essentially made up of numerous managed accounts with each fund having multiple money management firms running the assets. (these funds are managed by a well known consulting firm). the funds are still mutual funds by definition but the managers are hired and fired based on their performance. Does this type of monitoring (even though not being done directly by the fiduciaries, meet the monitoring requirements of 404©? I believe it does not since what goes on behind the scences in invisible to the participants. they are still stuck with the same investment option and it should be replaced if it is underperforming. Any views either agreeing or to the contrary would be appreciated.

An employer sponsors two plans and the participants are identical in both. he is terminating one plan and would like to transfer some real estate he has in that plan to the other plan so that the participants retain the same share of the property (in the profit sharing plan) as they had prior to the termination in the money purchase plan. what issues does this raise if any? what type of documentation should be obtained either from the trustee or the participants (consenting to transfer)?

01 If the plan provides for an election to defer payment of compensation, such election must be made before the beginning of the period of service for which the compensation is payable, regardless of the existence in the plan of forfeiture provisions. with regard to the above, could the participant make the case that he earns compensation on a payroll by payroll basis and as such an election to defer would be valid with respect to the compensation not yet earned (e.g. x earns 100K per year; makes the election on July 1 and thus can only defer 50K)

With regard to "wrap around" plans (ie. non-qualified plan working with a 401(k) arrangment), there are a couple of PLR's out there that state that a participant must make his deferral election by December 31 of the prior plan year in order to "satisfy the 401(k) cash availability rules." what would happen if a person decided to enter the non qualified plan in the middle of the plan year without making the prior year election?

well the purpose of this plan is to allow employees to defer immediately upon employment commencement. the plan will not have a match or a profit sharing plan. thus, i assume the decision would only be relevant to the first year and whether to use full year or actual participation compensation.

If an employer wants to adopt a 401(k) plan mid year (no profit sharing or match), can they make the new plan effective january 1 or do they have to make it effective as of the current date? please include the legal basis. thank you.

jeff v seems to do something different with regard to providing prospectusses. i think his is a bit more lax interpretation than john chambers' or some of the others. am i reading this correct?

The ERISA Regs on 404© say that you must disclose the plans investment manager(s). Who are the referring to in the case of a cross-fund platform 401(k) with several families of mutual funds selected by a registered investment advisor that does not actually manage the funds? can there be several different investment managers as that term is defined in ERISA?

the plan in question is actually a defined contribution plan and there are two participants. the improper contribution was made in both 1999 and 2000.

a client has been making contributions to his company retirement plan but does not have compensation to justify the contributions. He has K1 income and thus is not entitled to make contributions to the Plan. What should he do to remedy the situation? should this be handled in one of the correction programs?

which record keeping system do you use if you dont mind me asking?

well you have to clarrify, do you mean confirmation of instruction or confirmation of trade result?

Does ERISA require that participants receive trade confirmations regarding buy and sell transactions in their participant directed accounts? I see 404© does require that participants have an opportunity to give investment instuctions and obtain written confirmation of such instructions. I read that as requiring confirmation of instructions not confirmation of the trade result. does anyone agree or disagree? If not required by 404© would it be required in another section of ERISA?

Am I reading the instructions correctly? You must file a 5500 for SIMPLE 401(k) but not for SIMPLE IRA Plans

If a plan has a discretionary matching formula, does that mean the employer is not required to true up absent such a provision?

yes it is an S-Corp.