ETA Consulting LLC

Here is an excerpt from the Adoption Agreement (ASCi) that my firm uses: You'll notice the opportunity to elect "b". You should be able to find the Rollover Provisions in the document you use. Good Luck! C-2 ROLLOVER CONTRIBUTIONS. Does the Plan accept Rollover Contributions? (See Section 3.07 of the Plan.)  No  Yes  (a) If this subsection (a) is checked, an Employee may not make a Rollover Contribution to the Plan prior to becoming a Participant in the Plan. (See Section 3.07 of the Plan.)  (b) Check this subsection (b) if the Plan will not accept Rollover Contributions from former Employees.  (c) Describe any special rules for accepting Rollover Contributions:____ [Note: The Employer may designate in subsection (c) or in separate written procedures the extent to which it will accept rollovers from designated plan types. For example, the Employer may decide not to accept rollovers from certain designated plans (e.g.,403(b) plans, §457 plans or IRAs). Any special rollover procedures will apply uniformly to all Participants under the Plan.]

Correct. I'm saying that because they have a year of service defined under the terms of the plan, they are not excludable. Had the plan not defined the years of service in that way, but merely let them in; despite not having a year of service, then they would've been otherwise excludable. The determination of whether an employee is otherwise excludable references the age & service requirements in Section 410(a)(1) of the Code. OAN: There has been some debate over the past whether the statutory entry dates in 410(a)(4) of the Code (e.g. semi annual entry) could be used, even when a plan's entry dates are sooner. That's another topic altogether. But, for these purposes, I think how a plan actually defines a year is important. Good Luck!

True, but the plan defines service for eligibility. The plan can define a year of service as merely working 1 hour. When a participant works that one hour, he has a year of service under the plan; and that it what counts. The fact that he met that year 999 hours sooner that he would have had the plan defined a year as 1000 hours does not appear relevant. It would be different if the plan said 'these employees are allowed immediate entry regardless of their service'; but, that's not what happened. Instead, the plan said 'these participants have this much service.' Good Luck!

The key is whether or not each participant has a say on what happens to their balance: If it were a merger, then the Plan Administrator directs everything; which ends in a transfer of all participant balances (without any participant involvement). Since it is not a merger, then each participant receives a distribution and is free to do whatever they want. Some may choose to roll their accounts over into an IRA. Others may choose to roll over to the Profit Sharing. At the same time, the Profit Sharing plan will decide who is allowed to roll funds into it. Good Luck!

A participant's inclusion (or exclusion) from ADP is tied to eligibility service (as opposed to vesting service). So, I think you just answered your own question :-) Good Luck!

I would say the RMD would need to be paid from the plan, but the Alternate Payee will receive it. The rules on when a distribution is paid is still tied to the participant in this case. Now, after that RMD requirement is met, the Alternate Payee (presumably the spouse) will be able to take a full distribution and roll it over. While it's in QDRO status, RMDs will need to continue (and calculated as if the amounts were still owned by the participant). Good Luck!

Once you terminate the MPP, each participant can decide whether to take a distribution in cash or roll over; and that will be an individual choice. Notice that this is different from a plan transfer (e.g. merger of the two plans); under which no participants would be given the choice. With that said, the plan will typically address whether former employees will be allowed to roll money into the plan. Typically, they are not, but the plan should have language to address whether or not they could. Good Luck!

David, I respect you and members of the board. I've posted on this board for years and try to provide insight and participate in discussions where I feel I may have something valuable to add. Sometimes I may get it wrong, and will immediately own up to it by stating 'I stand corrected'. You see, I do not attempt to derive self-esteem from anything that anyone else is doing; I derive my esteem from my own accomplishments. So, I don't 'get off' on criticizing others. But, let's not pretend that we're all blind to Larry's antics. I've never seen anyone (e.g. Other than Larry) lead most of their posts with criticism of others. That is inexcusable. For me, I will not tolerate it. Political Correctness is over-rated.

You're an idiot! If you have a company with 5 employees. All 5 Employees meet initial eligibility and satisfy the accrual requirements for receiving a nonelective contribution that year. The plan has a fix contribution formula of 5% of Compensation for all eligible employees. Please tell me, Jackass, on what authority would any one of those participants be able to elect not to receive their proportionate share of the nonelective contribution for that year?

So, you're now qualified to speak on everyone's behalf? Interesting! When you have a formula written in a plan that defines who is eligible, then allocating a contribution will need to include everyone under that formula. That's basic. The idea of coming in here with that same nonsense you pulled in LinkedIn years ago by antagonizing individuals on their responses is what is not helpful.

When I stated 'elect', I actually took the time to put it in quotes; meaning that you cannot allow a participant to elect to receive or not receive a non-elective in the manner you would an elective deferral. I thought that meaning was clear; and should be to you given your knowledge and background in the industry. If we want to discuss semantics, that's fine. But the idea of jumping on hear and saying I'm wrong is something that should be left in the LinkedIn forums; which I left a long time ago.

It's all or none. You cannot 'elect' out of a 'nonelective' contribution; especially when the plan has a uniform allocation formula. Good Luck!

Sure. No reason why that wouldn't work as long as you meet each rule. Good Luck!

The terminated participant will need to receive the gateway. Typically, plan documents have provisions to address the issue you just outlined. It's important to have the appropriate plan language in place. Good Luck!