ETA Consulting LLC

"Like". That speaks to a slightly different issue; "what benefit is protected in a DB plan". It is the stream of payments at NRA (but nothing immediate). Reading it, I would wonder how the courts would've ruled if an immediate lump-sum payout of the Present Value of the Accrued Benefit was written into the amendment to terminate the plan. So, the complexity is (which is why I "like" this cite), is determining what the cutback implications are and how the treat those. I think, since this "IS" a DC plan (and not a DB whose benefit is an amount payable in the future; a different date for each participant), that the availability of a distribution of the entire account balance (less 401(k) deferrals should you establish an alternate plan) is an issue. Good Luck!

We know that the amendment to terminate the plan triggered two things: 1) 100% vesting on all account balances under the plan; and 2) a (potential) distributable event for all balances under the plan. Not sure if un-terminating the plan would fail to constitute some type of cut-back with respect to those events activated with the amendment to terminate. If, however, you were to immediately create another plan, it would be a successor plan (or alternate plan); and the distributable event for the 401(k) source would not be in effect. That would (possibly) do nothing for the distribution available from the other sources. This is just how I would begin to approach addressing the question. I'm not sure exactly where this approach would lead, but it incorporates some rules impacting what you're trying to do. Good Luck!

I think it does; as it requires 1040 hours per year. I don't see where a CBA would provide an overriding exception to this rule; even though it does provide a safe harbor for 410(b). Good Luck!

There wouldn't be an issue. It appears as if the specific groups are identified for the specific set of equivalencies. It's also evidient that they structured the equivalency to coincide with the pay cycle for administrative ease. Good Luck!

There is no "reverse" borrowing. There is only a rule that says "Qualified Employer Contributions (whether QNECs or QMACs) may be tested in "either" the ADP or ACP test, but the same dollar may not be tested in both. When you apply this rule to what you are attempting to do, using a QMAC to pass the ADP test and then incorporate shifting of deferrals to the ACP test, there is a argument that you've effectively shifted "qualified employer contributions" in that process. It's very agressive. Good Luck!

As a rule, you cannot test a QMAC in both the ADP and the ACP tests. So, those dollars that are tested in ADP cannot be turned and used in the ACP test. So, when you shift (borrow), it would be difficult to argue that you're only moving the deferrals. I "think" this is where your approach fails; as it would be easy to argue that a prorated amount (deferrals and QMAC) was included in the shift back to the ACP test (causing the same QMAC dollars to be tested in both ADP and ACP). Good Luck!

The question is worded to imply a numerical limit. I think, instead, the emphasis should be placed on the role of the individual; the main consideration being whether a particular individual "may" need DOL assistance in enforcing his rights under the agreement. There is an argument that suggest that if you have a 10 person Non-profit and implement a 457(b) plan covering all 10 people, then that "may" be representative of a plan where certain individuals may not have the authority to enforce their rights under the arrangement. Obviously, if you include only the 'executive director', you wouldn't have an issue. This merely illustrates the two extremes. Good Luck!

They would have to distribute everyone within 12 months of termination, and allow each individual to direct their distribution. They cannot force anyone to roll over directly into the 401(k). Good Luck!

The only simular provision would appear to be under a Qualified Reservist Distribution. In such event, the reserve member would be able to redeposit amounts withdrawn from a qualified plan into a Traditional IRA without regard to any IRA funding limits. Also, no income tax deduction would be allowed on such redeposit. Not sure if this is what you're referring to. Good Luck!

The Plan that the QDRO is based on appears to be a DB plan. This incorporates a level of actuarial science necessary to determine the value of your benefit today compared to the value of your benefit in the future (mutiplied by the probability that you'd actually receive most of it). Without seeing the actual benefit formula of the plan and accumulated benefit, it will be virtually impossible to calculate. Also, we know the QDRO is likely a portion of the accrued benefit at the time of issue (and your ex-husband has likely accrued additional benefits under the plan). What we don't know is whether: 1) The Plan is allowing you to take a distribution in the amount of the present value of the anticipated QDRO payment in the future. 2) What the calculated QPSA would be should your ex-husband pass away today (and hence what percentage of that amount you would be entitled to). 3) Personally, I'm not sure if there if the value of the QPSA is automatically less that the QDRO amount should your ex-husband survives to retirement age (presumably age 65). This is, likely, more of a reflection of my incompetence in many of the complexities of DB plans. Your approach should be to: At least attempt to ascertain whether a QDRO distribution is currently available from the plan. If so, what the amount is. This "may" be the only basis for your decision given the difficulty in calculating the QPSA amount should your ex-husband passes away today. Good Luck!

My contention is that they cannot. In Welfare Benefit plans, this type of language is acceptable. However, Qualified Retirement Plans seem to have specific rules precluding this type of language; the service class exclusion being the main rule. Not being a part of that Collective Bargaining Unit is an allowable exception and is deemed to pass coverage. When you actually go inside that particular unit and impose a service class exclusion would appear to be an issue. I didn't fully research to see if the union would be exempted from that rule; but we now know what we don't know

Are you attempting to reference the transition relief under 410(b)(6)? Just asking.

"Like". Keep in mind that the "service class" exclusion (i.e. part-time where the term is defined based on a customary work schedule) is disallowed. I'm not sure this is a coverage issue; at least I never thought of it as being one. Then again, there is an argument that it should matter since the benefits are subject to good-faith bargaining (which effectively deems it to pass coverage). Just something to think about. Good Luck!

Just shooting from the hip, I believe 410(b) applies separately to each Collectively Bargained Unit. You may have more than one union, but each union would constitute their own population with respect to non-discrimination tests. With that said, the rules still apply when comparing the benefits of the HCEs to the NHCEs within that particular union. Also, to my knowledge, there is no exemption of unions from the rules precluding 'service class exclusions'. You cannot have a class defined by a customary work schedule (i.e. part-time) excluded from participation based on that class; you should use hours instead. Other than that, I believe the tests are, mathematically, the same. Good Luck!

We do have legal counsel, so I'm sure it's something with my wording ascue, but could you clarify why my wording is a code violation? When you purchase a company, (among various alternatives) you may merge "purchased" company's plan into the "buyer's" plan; which is seldom done. The alternative you alluded to was to terminate and distribute the "purchased" company's plan without taking it over. When you do that, each employee in the terminated plan will have an option of rolling the money over to whereever they want. They "may" roll over into the "buyer's" plan, but you may not require them to (unless you are actually merging the two plans). These are just two structural basics, but it tends to get very detailed. Fact patterns are important. Good Luck!

He is 80%. You lose vesting service under the rules of parity "ONLY" if you were zero vested. Since he already had 60%, then vesting would never reset under that plan. Good Luck!

I would recommend revisiting the language in the document. You "may" be correct, but the death distribution rules under IRC 401(a)(9) would not require the spouse to begin receiving a distribution until the year the decedent would have turned age 70 1/2. A play "may" require immediate payment, but plans are "typically" consistent with delaying until a distribuiton is required by law (in cases when the spouse is beneficiary). I would verify this with your plan. Again, you may be correct, but I am merely suggesting to reverify this. Good Luck!

Okay, I recant everything I said. If it's not reported on the W-2, how could the CPA conclude it is W-2 compensation? Good Luck!

I do. I see your position, but believe you have just identified one of the major differences between withholding wages and W-2. Operationally, I look at Withholding wages as the amounts reflected on the final "pay stub" of the year. These would represent amounts that were paid (or imputed) and had income tax withheld at that time. By the time the employee receives the W-2 at the end of January, the value of the housing would've been calculated and included as taxable income (even though nothing was withheld from those amounts). Keep in mind that this isn't intended to be technically accurate, but merely to attempt to illustrate a major difference between withholding pay and W-2. If you apply this method to your participant, you can clearly see where your position differs from the CPA's position. Good Luck!

Up to the plan. Per law, 100% vesting applies to "EMPLOYEES" who reach Normal Retirement Age under the plan; not "participants". That appears to be a huge difference. The plan, however, "may" be written to say participants, but the law (as written) requires 100% vesting to "employees" at NRA. Good Luck!

Not sure about this. They are merely being excluded from receiving additional contributions to the plan. They are, however, still employed and having their vesting service tracked under the normal provisions. I would agree with you if they were actually terminated and precluded an opportunity to work the additional years of service to increase vesting. Good Luck!

You just answered your own question As long as the plan continues to pass 410(b), it wouldn't be a problem; since this amendment would not violate IRC 411(d)(6). Good Luck!

"Like" It does have the potential of becoming a house of cards when it moves into another year; one unanticipated mis-step can easily lead to additional issues.

Don't assume anything, but you're right to expect there 'may' be issues in other years. Affirm what you can based 'solely' on all information you can obtain from the client. After ascertaining those specific years the errors have occured, you correct through a VCP filing (where you specifically identify the problems, recommended solutions, and explain the changes the client is making to ensure those issues do not recur. Good Luck!

Yes, under VCP. This is provided that you did not exceed the 5 year repayment period. You know, I've seen this in several instances where the participant wanted to pay the loan current and resume payments when the loan actually had a significant amount of time left. I allowed the payment even though it was, technically, beyond the cure period. It goes to comfort. If challenged on audit, the IRS agent "may" deem it taxable or actually decide the violation isn't eggregious enough to challenge it (given their potential fixes under Rev. Proc. 2008-50). This will, ultimately, be a judgement call on your part. In instances that I faced, I noticed that a "right to cure" was not communicated to the participant. Had it been communicated and the loans defaulted timely, it wouldn't be an issue. Also, keep in mind the Regs "Require" it to be solved by the end of the quarter following the quarter in which the first payment was missed (as you clearly stated). The plan's provisions may have been sooner (i.e. 60 days). The regs merely preclude the plan from going beyond that period. Good Luck!