R. Butler

Isn't a blackout notice required "..to be provided to affected participants and beneficiaries of individual account plans of any "blackout period" during which their right to direct or diversify investments, obtain a loan or obtain a distribution under the plan may be temporarily suspended..." The final rule does state that "... types of permanent restrictions would not in and of themselves be events that give rise to a blackout notice obligation under the regulation.". However, in the very next sentence it states "However, if, in connection with implementing a permanent restriction, some rights would be temporarily suspended, limited or restricted, the blackout notice requirements would apply to such temporary restriction." Since from the facts presented distributions & loans are only being temproarily suspended, how do you get around providing the notice?

1.401(a)-13(e)(1) provides that "... an arrangement whereby a participant or beneficiary directs the plan to pay all, or any portion, of a plan benefit payment to a third party (which includes the participant's employer) will not constitute an ``assignment or alienation'' if-- (i) It is revocable at any time by the participant or beneficiary; and (ii) The third party files a written acknowledgement with the plan administrator pursuant to subparagraph (2) of this paragraph...."

I would be inclined to provide the Blackout Notice because since participants are not going to be able to get a loan or distribution during that time. I don't see an issue with a 2 week blackout on loans & distributions as being unreasonable; particularly if you give participants the 30 day advance notice.

Sure it is possible to have different eligbility requirements for different classes of employees. We had a plan like that at one time; it was absolute nightmare to administer.

We always file in the circumstances which you describe.

I vote for Candily Critical. The subtleties are just tedious.

If my boss let me wait until I understood the concepts we would only be handling non-integrated SEPs.

Calendar year safe harbor plan. They currently exclude division A employee's from participating. They want to allow them to participate beginning Sept. 1. I can't see any reason why would this would jeopardize safe harbor, but I want to make sure I'm not missing anything. Thanks in advance for any guidance.

You need to follow the terms of the plan. If HCE exceeded the annual addition limits & the document says you correct by distributiing employee deferrals then that is what you do. Don't forget to distribute the gains on those deferrals. A 1099-R would be issued. I am assumimg that this is the same HCE mentioned in your initial post to the thread.

I agree with Stephen. See IRC §318; you need look at both the current year & lookback year.

I'll join in you in the class of "idiots". Every plan we handle (prototype, volume submitter, and individually designed) are silent as whether 401(k) election percentages must be renewed annually. Actually, like you, I have NEVER seen a document that addressed that specific issue. I also fall into the "most" category. The enrollment forms we prepare do specifically address the issue & state that deferral elections are in effect until otherwise changed. Enrollment kits prepared by directly by the recordkeeper/investment co. do not always specifically address the issue, but we take the same position. In a written policy statement might not hurt, but I don't see that it has to specifically put into the document. In regards to investment changes, most documents I have a broad provisions that the Adminstrator will adopt procedures in regards to Participant Investment Direction. If your document is silent or if it contains just broad language I recommend that the Administrator does have some sort of written policy statement. Most of the enrolloment forms I have seen are fairly clear about investment elections & when they can be changed, but the written policy statement doesn't hurt.

I'll say upfront that we don't do much with 403(b) plans, but isn't Joe treated as the owner of his 403(b)? For purposes of the 415© limit wouldn't the 403(b) plan be aggregated with any other plan sponsored by an employer that Joe controls?

Somebody may get a yacht out of this deal, but I suspect it won't be me. My reward is the many hours it will take to me to learn how to properly administer this thing. Oh the joy & satisfaction.

We are looking for recommendations on DB software. Software would need be able to handle 412(i) plans. Any thoughts? Thanks in advance for any guidance.

Thats a possibility, but there are self-employeds & pressing the the client for YTD earned income figures might not be feasible.

We took over a MP plan with standardized document in February; we prepared amendments to change it to a PS w/ Safe Harbor 401(k) Plan. Just found out employer neglected to adopt & a few a participants have accrued a benefit under the MP document. I'm trying to find a solution to this problem. The MP plan requires a 25% contribution. Client prefers to amend rather than terminate. If plan retains QJSA provisions, is there any reason the plan couldn't be amended in 2005 to a profit sharing plan with a 22% employer contribution plus a 3% SHNEC? I don't see a problem right off, but I just found out & my head is still spinning.

I tend to agree, whether or not the employer applies forfeitures to gain at this time or uses it reduce a future contribution, the ultimate result will be the same. I just don't see it as that significant of an issue.

That seems like an awful risky scam to me.

Probably not. You'd need to review the document ot see if it limits deferrals.

Actually PAX's was very helpful. He answered the question. You didn't ask that someone provide you with a brief synopsis, you asked "if" someone could provide you... PAX correctly answered no. Now that you know it cannot be provided you can move on to other things. Seriously your best bet is probably to search the web yourself using something like "History of ERISA" as your search term. You'll come up with a lot of hits; some of it you may find useful.

Given that your loan policy doesn't address it I tend to agree with Belgrath, it depends on the facts. Assuming this was the last payment & there are no other outstanding loans; I probably wouldn't have an issue with returning the excess to the trustee as a mistake of fact.

I do very little with DB plans, so I'm hoping to get some verification on this. It is my understanding that a DB/DC combo. is elgibile to cross-test if it "is primarily defined benefit in character". A plan will be primarily defined benefit in caharcter, if for more than 50% of benefiting NHCEs, the normal accrual rate for the NHCEs under the DB exceeds the equivalent accrual rate under the DC plan for the same employees. We are looking at a combo plan where there are 63 NHCEs. 33 benefit under the DB plan; 30 benefit under the DC plan; no NHCE benefits under both plans. If I am understanding correctly this would be considered "primarily defined benefit in character". Does this sound correct? Thanks in advance for any guidance.

Under §1563 a 5% or more partner is treated as owning the partner's proportionate share of the partnership's interests in other organizations. Under §318 a partner with any onwership interest is treated as owning the partner's proportionate share of the partnership's interests in other organizations.

We disagree with the Gray Book. Per §1.416-1, T-24 pension plans not subject to §412 use the cash basis. We see no basis for making the distinction pointed out in the Gray Book At one time Sal Tripodi took the position that nonpension plans use cash basis; I'm away from my ERISA Outline Book today, so I can't guarantee that 2005 Edition says the same thing.

What will the document say? Eligibility varies by plan. I'm going to assume (& hope) that this will be a pretty generic plan. The minimum age & service requirements are covered are covered under a Internal Revenue Code §410(a)(1). You may want to start there.