RCK

I agree with the consensus here that it constitutes a hardship. The challenge is how to apply your normal documentation rules--there is probably not going to a signed purchase agreement.

I apologize if I'm missing something and making a serious response in the humor column. But isn't the EFAST2 User ID and PIN belonging to the Plan Administrator/Sponsor the confidential information referred to here?

Andy, I hereby offer you a spot on the Minnesota Twins bandwagon.

Yes, its late, but we're still bogged down a bit. My interpretation of the alterntive reporting option for Eligible Indirect Compensation is that it is only available to providers who receive only EIC--not to a provider who received direct compensation, and eligible indirect compensation, and certainly not to a provider who received any other indirect compensation. And my problem is with a provider whose right hand does not know what the left is doing. So the right hand is getting only direct compensation, and the left hand is getting only eligible indirect. As long as both hands are reporting under the same EIN, can we use the alternative reporting option for the eligible indirect?

I agree with the concept, but I guess that I have to nit pick the words a bit. We would leave them in the plan until the next amendment--not the next restatement. The alternative is to just leave the employers there on the off chance that they come back to life, and once again have employees. If you amended them out, then you have to amend them back in again.

Under the category of how spoiled professional baseball players are, can you even imagine how great it would be to walk into work every day, and hear Bob Sheppard announce "Starting at actuary today, Andy the Actuary."

Apologies to Andy-I have to agree that the niches that she has identified will continue on for some time. But I have to say that if I had not already accumulated an AARP to go with my FSA, EA I'd be looking at a CERA (Chartered Enterprise Risk Analyst) certification.

Nope, no exceptions. RCK, FSA, EA

Ironically, just this morning I told our Enrolled Actuary that he'd be able to shut off the (actuarial) lights when he retires because there would not be any DB plans left.

What about contributions? Are those being made in a timely manner? If contributions are going in, but loan payments are not, I would be sympathetic to it being just a systems glitch. But the other responders' comments are right on--15th of the month following the month of withholding at the absolute latest.

In case you need more support. I work for plan sponsor with a large (multibillion dollar) plan. It is a Safe Harbor with weekly matches and an annual true-up. It operates as you would anticipate--the true-up match is calculated as if the whole year was a single paycheck, adn the person contributing $100 out of $100,000 would receive $100. You do have to be sure that the amended plan language accurately describes what you would like to do. I just saw one of those emails that occassionally makes the rounds. This one had a bunch of sayings, includign this one: "No" simply means begin again at one level higher. That may apply here.

In a former life, I worked for an insurance company that wrote GIC's, and I worked on pricing for the 'surrender charges' for that contract. So: a GIC is first of all a Guaranteed Investment Contract--therefore a contract and that contract will have language about how the surrender charge is calculated. In theory, it is designed to do two things--first to help the issuer recapture unamortized expenses (they planned to do it over say 5 years, and that is what you agreed to, but now you've changed your mind), and second to let them recover possible market value losses. That is, they bought a 5 year bond that they were matching up to their committment to you, and if they have to sell that (say) 5% bond into a 7% market, they are going to suffer a slight loss. But if interest rates have moved down over the term of the contract, the bond that that they bought is now worth more than they owe you, and that portion of the calculation should be positive. Disclaimer: this is all a simplistic overview of a complicated deal, and somewhat dated. But the bottom line remains the same--its a contract, and you need to check the terms of the contract. And you will probably need to contact the issuer for a calculation of the charge.

Good point. But our deductible is an awful lot bigger than that. Will keep it in mind for the next one though.

Clarification for masteff: The distribution from the plan went to a DOMESTIC BANK in the name of our participant. From there it went to a foreign bank. The second transaction had nothing to do with the plan.

In response to some of the earlier posts, I have raised some of these high level issues with the recordkeeper. I do know that we put significant value on the fact that we have the participant on a recorded line with the call center, admitting that he received the Change of Banking Information notice, and did not pay any attention to it. I'm not sure how much impact that has in court, but it does make us feel better.

Thanks to everyone for their thoughts. Here's the update: we have managed to recover about $6,000 from one of the banks somewhere along the line, and are still working on remaining $3,500. We still have not decided on a final strategy in regard to what ever fund ends up lost, but we do not feel there is a fiduciary issue. There is an interesting sidenote on this case. The domestic account that the BG set up to receive the funds from the plan had a $10,000 limit. After the first loan was deposited to the account, BG requested a second loan, also for $9,500. And it hit the account before the transfer overseas happened. So the domestic bank rejected that deposit and returned it to the plan.

I do not see any grounds for decreasing the rate to less than 6%. As I understand it, within 180 days after return from service, the servicemember can request a reduction in the loan rate FOR THE PERIOD OF SERVICE, and any interest in excess of 6% is 'forgiven'. The concept seems pretty straightforward. You would have to go back and recalculate the existing loan balance based on the actual cashflow and 6%, but that is just arithmetic. And the only way that the rate is less than 6% is if the original rate was less than 6%.

This is a complicated situation, so I'll see if I can hit enough of the highlights to get the questions across. Facts are not in duspute: We (I'm with the sponsor) have a large plan with lots of participants (more than 125,000). All transactions are paperless except for hardship withdrawals, and those few people whose accounts still have money requiring spousal consent. Participant gets a virus on his home computer that "scrapes" his social security number and password and sends it to the bad guys (BG). BG uses that information to log in to the account, and changes the banking information. Participant receives notice of change in banking information, but disregards it. BG waits through the required 7 day wait on banking changes, requests a $9,500 loan with direct payment to the newly defined bank. Another week later, Participant receives paystub that shows a hefty loan payment being deducted from his check. He calls the call center, which triggers research. Needless to say, the money is no longer in the receiving bank. It went to a bank in Russia, and may or may not still be there. We see two sets of issues: 1. The money has left the account, and we're seeing the participant as the responsible party. But at a high level, do we treat this as a loan and continue loan payments, treat this as a loan but allow him to stop payments, or treat this as some kind of investment loss. 2. What is the tax treatment of the event? 1099 R Early distribution no known exception; 1099 R Early distribution exception applies; No reporting required. Fortunately, it was a 2010 event so we do have time to figure this part out. Anyone with actual experience in a similar situation?

As long as you have access to the Plan and the SPD, why don't you check for language that allows the administrative commitee to either implicitly or explicitly delegate its authority. That would give the attorney the authority to act on its behalf. That does not of course excuse the attorney from compliance with the plan's rules. Our plan also includes limits on the amount by which a monthly benefit can be reduced to adjust for past overpayments, so you may want to look for that.

My response to bobolink: I have two credit cards. One to use on a regular basis, and another in case the first one blows up for some reason. The way that I use them, a failure is most likely going to be a physical failure from overuse. And second one is also used to buy presents for the wife, who pays all the other bills.

And remember that the Schedule SSA is NOT public.

Henny Youngman, Gracie Allen and the DOL. Sounds like a Karnack joke to me.

PPA gave the DOL one year after the enactment of PPA ( by August 18, 2007) to develop one of more model pension benefit statements. I've seen Field Assistance Bulletins 2006-03, and 2007-03 that basically talk about timing of statements and good faith compliance on a number of topics. But were the model statements ever released?

Is there a post of the year contest? I think that GMK's post is brilliant. And to the best of my knowledge, I am not related to GMK

What kind of time frame are we talking about here--a pay period or two