PFranckowiak

Plan covers several companies in a controlled group. One of the companies has been hit by the economy. Plan is currently on Cobel prototype. Deferral and Discretionary Match Only. (In process of EGTRRA restatement) All the companies have been putting in the same match amount. Company B wants to reduce or eliminate their match. 1. With the prototype doc can you have different employers having a different match. If no - VS or ID? 2. What testing is required besides the ACP? If they reduce Match to zero, I might have coverage issue, but is their anything else I need to worry about? 3. Could each of the companies have a different match? Appreciate any input on what questions etc I might be missing. Pat

Particiant got a letter from the Social Secuity Administration saying he might have benefits from a plan we have administered since 2002. We have no record of him. The letter states he was reported in 1977. Of course he does not remember being paid anything. Client cannot find records back that far. Bank cannot find records - i.e. they have changed ownership etc. Participant wants proof he was paid. Any ideas how to deal with this? Thanks Pat

Thanks for your help! Pat

Client has two plans - one Union and one nonunion. 1. Can the two plans be covered under one bond? 2. If the one plan needs $500,000, and the other 70,000 do we add the two together or is their one limit per employer? I think they have to have the two added together, but I cannot find something to "prove" it to the client. Thanks - any comments or help appreicated. Pat

Plan uses Safe Harbor for Hardships. Plan does not allow for loans. Participant is building a new home and has a construction loan. Current home is not selling (surprise - we live in MI) He now is defaulting on the construction loan and wants a hardship. Any ideas as to whether this fits under purchase of a principal residence or forclosure ? Thanks Pat

Thanks Tom Okay - so he has compensation in 2008, I tend to agree with that. But the document says he has to have 1 hour of service to get a Money Purchase Contribution. Do we consider the hours from the last payperiod and he gets the contribution? (This is what I want to happen) Now to make matters more complicated - what about only a bonus that was paid - same issue, but the bonus when we get the payroll does not have hours? Participant is a HCE (Dr.) Need I say more......... Pat

Post Severance Compensation Calendar year plan Participant terminated at end of year Dec 2007. Paid in 2008 for hours worked in 2007. Last check and separate check for bonus. What year does the pay go into for contribution purposes????????????????????? 415 amendments counts compensation after DOT. (adopted 2/4/2009, effective 7/1/2007. Has to work 1 hour to get contribution per plan document - MPP. Participant in mpp and psp calendar year plans Since DOT is 2007, our software system excludes from testing. 1. Should participant have been given the contribution on the bonus/ and or last paycheck paid in January 2008? 2. Should the participant be included in all the testing for ADP/ACP 415, 404, 410(b) 402 (g) etc for 2008? 3. Is compensation 2007 or 2008 compensation?. 4. What about hours worked – any for 2008? 5. If MPP has one hour of service requirement for the MPP should they get the MPP contribution for 2008? Thanks Pat

Revenue Sharing has been deposited into the plan and then the plan fees were taken from it. How to show on Schedule C and H? Thanks Pat

Company part of a controlled group was sold. No longer a controlled group. They are on a Prototype 401(k) Plan and want to keep the other company in the plan until the end of the year per the agreement of the sale. Since it is now a Multiple Employer Plan as of last week, what needs to be done with the plan document? Can I keep them on the prototype until the end of the year - and then they are off on their own to set up their own plan or do I have to do an Volume Submitter plan for the rest of this year because of the change? How long do I have to make these changes? As always - we find out after the fact. Ideas - thoughts??? Thanks Pat

It is my understanding that you need to formally amend the plan at least 30 days prior to the end of the plan year and in addition make sure that you give the participants the notice. You must make sure the amendment is for one year only or you are stuck with the SH contributions for the following year. So do both at once if you want to have SH for 2009 and "maybe" again for 2010. Yes it is a lot of paperwork. Pat

Have several related??? companies A Owned by Mr. G B Owned by Mr. G(90%) Mr. T (10%) C Owned by Mr. G 78% Mr. T 22% D Owned by Mr. G 26% Mr X 74% but contains all the employees for C (Leased Employees who were originally employees of C but a separate company was set up due to some tax reason) Controlled Groups for testing? A and B B and C How is D handled? Does this fit under affiliated service group rules? Because not are all in the same controlled group - then this would not fit under a prototype doc, am I correct? Thanks for any input PF

Plan participant has taken the maximum allowed loans for the plan. Wants a hardship to finish building his principal residence - Wants $90,000. Wants taxes at about 43% because below 59.5 and in 33% tax bracket. I was thinking that all he could get if he were buying a house would be the required downpayment and assorted closing costs. With building a home - I think you first take construction loans and then do a closing on the home. Then once you are doing the final loan for the home you could apply the downpayment etc. Am I correct here? I read someplace that you couldn't use hardhip to purchase land since you cannot reside on bare land. Plan uses safe harbor hardship rules. I am thinking he could not get a hardship until he actually gets the mortage on the home, not for paying expenses (construction costs) to build the home. Thanks for you help. Pat

Okay now I need help in calculating it. Accual wording is: Participant who has attained age 59 1/2 , 100% vested, may request a distribution of all or a portion of the Participant's Account, provided that no distribution shall be made of any funds that have not been held in the account for at least two years and no distributions from funds subject to 412. Okay. I have participant that requested at distribution. They have 13,000 account balance 2 years ago, including an outstanding loan of 5000. They have taken an additional loan during that time period. They have contributions of only 200.00 during the two years and the rest was loan payments. Account is worth 15,000 now including outstanding loan balance of 7000. What do I need to do to get the amount available for inservice distribution. I have tried calculating it several different ways and am confused about what is meant by the held in account for two years and how to handle the loan repayments? Thanks Pat

Plan just amended to allow for inservice Distributions as long as the money has been deposited for 2 years. Participant took a loan from the plan for 1/2 the money, now wants to basically take the "rest" of the money in a inservice distribution. Since the loan is secured by 50% of the balance, all that will be left in the plan is the loan. Participant Directed accounts so does not affect other participants. I don't think this is a problem as the loan was secured at the time of the loan, am I correct? Also says no distirbution can come from funds that are or were subject to Code Section 412. This is a PS/401(k) plan so I an wondering what is meant by this also???? Thanks for you comments. Pat

I just talked with the employer. They have no back up - no signed statements that those other participants left voluntarily. So since they have no back up to make that determination is their a downside to 100% vesting them? Plan is 401(k) and has a matching formula and the forfeitures reduce the match. Thanks Pat

I need some thoughts on making a Partial Plan Termination Determination. I have a plan that had two divisions. A and B. B was sold in August. There were 25 total employees for the year. (Including 2 new participants in A -3 month serv req) 3 participants voluntarily left A before B was sold and had nothing to do with B. 2 voluntarily quit B prior to knowledge of sale of B Feb,Mar 6 voluntarily quit B after knowledge of sale even though they were guaranteed a job with the new employer. (Had six months notice and were told that their jobs would continue with the new Employer) 2 participants stayed to the end and then the new company took over their employmentl upon completion of the sale. Partial Plan Termination? Who would vest 100%? Thanks Pat

Have a participant with a loan. Already took a hardship for foreclosure. Now want a hardship for educational expenses. They want to included the room and board, but the student is living at home. My take is that room and board has to be for living on campus etc. Also want to include books as educational fees, but I don't think books are a fee either and she cannot provide a bill for them. Anyone have a source that would explain this more clearly that we can give to the participant? Pat

Thanks The 16 year old is their child, I just wondered if there was anything that would exempt them because it was thier own child that was working for them. I couldn't find any thing that would exclude them from being an ERISA plan or bond requirements because it was still ALL in the Family. Pat

I have a family owned business 401(k) Plan. Was husband and Spouse. Now hired 16 year old child to work and they have no age or service eligibility for the plan. 16 year old is going to defer and get Profit Sharing. It is my understanding that once the 16 year old is hired (summers and Part time during School year), plan is now subject to ERISA, can no longer file 5500EZ. I think a ERISA Bond would now be required, unless their is something I am missing about a minor child in this situation. Am I missing anyting thing??? Thanks Pat

The son is the contingent beneficiary - Also the beneficiary prior to the girlfriend being on scene. She just wants the kids to have it. So what does she have to do to refuse (disclaim) the payment? Thanks for your prompt responses. PF

401(k) Plan Beneficiary on record is deceased participant's friend Friend doesn't want the death benefit from the plan - want's the deceased children to receive the benefit. Is she allowed to reassign the benefit to the kids so the plan pays the kids directly? If yes - what do I need to have her do to accomplish this. Thanks PF

Thanks - more info Compensation definition is w-2 The amount that they are running through payroll is Post Severance as he left May 5. Amount is the Car that they are giving him - It was the car he used at work and previously had the use of the car taxable on the W-2, but they are just giving him the car as Severance. P

I have a 401(k) Plan that has laid off a group of EE's. It is Safe Harbor Plan with 3% SH contribution. Some of the EE's were sales people with Cars. They are going to run the Cars through the payroll system because they are now taxable income. The employee is not receiving any cash payment. Just the Car. With New/Proposed Severence Rules would a Safe Harbor Contribution be due on the Amount of the Car that is being run through Payroll as Part of the Compensation Package? Document is Corbel Prototype. NonStandardized. Thanks P