RCK

Right--don't have to obtain denials. Yes, have to make loan payments. See promissory note. We require EOB's for medical. We don't require proof of payment. I believe that some employers do--I was a seminar where the topic came up. QDRO issue--what does the plan say? Ours says that we cannot hold up distributions until we have received an order signed by the court. There have been istuations when we did not act as promptly as we mihgt have, waiting for a restraining order. And to PIP's comment--I think that the fact that the participant is voluntary sending it in removes most of the HIPAA issues. I probably would not leave it lying on the printer in the break room though.

Am I the only one cynical enough to think there is no paper to be written, and there never was?

Back to my original comments: Does your prototype allow the outbound rollovers of loans?

Plan assets should only be used to pay the plan's expenses, including I suppose the termination of the plan. But they should not be used to pay any of those other costs in conneciton with the dissolution of the company. If you have seen or heard anything to the contrary, I would encourage that your wife (not you) and other participants contact the local DOL office. My experience is that their level of interest rises geometrically with the number of calls/letters that they get. http://www.dol.gov/ebsa/AboutEBSA/org_chart.html#section13

Both the sending plan and the receiving plan have to allow the rollover of loans, or be amended to allow that. And in your case the accepting plan has to not only allow inbound rollovers, but it has to allow for longer loans for the purchase of a primary residence. And there is the whole issue of the promissory note. Does the new employer have any grounds for taking payroll deductions when they are not a party to the promissory note? Well, maybe if you have the participant sign something saying that they want the pomissory note transferred to the new employer. The Special Tax Notice did warn the participant what was going to happen. Of course that assumes that they read the Special Tax Notice. Bottom line: it is doable, but I've only seen it done where both parties had an interest in making it work.

It would help if you could clarify what kind of economics paper are you writing and to whom you are turning it in.

Off hand, I agree with the UBIT or UBTI concern. I can't research, but here's the link to the IRS' publication on the topic. http://www.irs.gov/pub/irs-pdf/p598.pdf

I was at a seminar yesterday where this question came up. The consensus there was that this is an oversight that will be addressed in regs or the inevitable technical corrections.

If they are buyer's employees., they are not eligible for the plan. And unless there is a spinoff in place, taking the deferrals from their checks is wrong. If they are seller's employees, they get the same terms as the other employees. So yes, you are correct.

We need more information from the purchase agreement. That should make it clear who the employees belong to--are they still employees of the seller, who is essentially leasing them to the buyer, or are they employees of the buyer, but being paid by the payroll department of the seller as part of a transitional services agreement

I'm sure that this is a trick date, memorable for some other reasons. So I googled October 3, 1992. Sure enough, on this the date the Toronto Blue Jays Won the AL East title.

I agree with the others. Individuals are cash based tax payers, so you should be taking deferrals as soon as possible after they become eligible and make an election. Waiting for pay earned after the eligibility date does not make sense

I agree with each of the last three posts: wsp is correct in that studies have shown communications to be as important as plan design, so in this case communicating the (limited) advantages can overcome the plan design. automatic enrollment can help pretty quickly, but I have to say that auto enrolling with no match will not be as effective as auto enrollment with a match. and Pensions in Paradise is of course right. GBurns' post reads like a Emily Litella (SNL) tirade. Oh, never mind.

I can't decide if the Alumni Association thinks this is what their grads looked like when they graduated, or what they look like now. In either case, I'm glad my daughter is at U Wisconsin Madison.

I believe that it is pretty common to use permissive disaggregation in ADP/ACP testing, where the disaggregation is done using the twelve month rule to determine the excludable group. I also understand that there is a possibility of applying an eighteen month rule to determine the excludable group. The theory behind that of course is that someone can be excluded from participation for 18 months by having a one year wait and and dual entry dates (six months apart). So the question is whether anyone is actually using the 18 month rule as a bais sfor disaggregation. We seem to be flunking by a few basis points with the 12 month disaggregation, and since we have over a thousand HCE's I would rather not have to do refunds or the dreaded bottom up QNEC. Thoughts?

I don't have a cite, but am always willing to provide an off -the-cuff answer. I think that it has to be a plan provision. We've been doing autoenrollment since 1999, and that was definitely a plan amendment. Look at it this way--you're going to put it in the Summary Plan Description aren't you?

Keep in mind that the plan may say something entirely different. That is, the plan may very well limit deferrals to comp up to the 401(a) 17 limit. And I believe that some payroll systems automatically do that.

Thanks for the comments. There was no doubt in my mind that at least some of the union plan documents allow for distributions upon loss of eligibility, and probably have determination letters. But it just strikes me as wrong. I suppose that I should stop jousting with that windmill.

This has happened before, but this one for some reason pushed me over the edge. Our union employee has been participating in a multiemployer 401(k) plan. She is promoted to a supervisory position, and is no longer eligible for the multiemployer plan. But she is now eligible for the corporate single employer plan. So she goes to the plan administrator for the multiemployer plan, asking to roll her account to her new plan. Plan administrator says, "sure, you can do that (after a 90 day wait)'. Assuming that she is not age 59 1/2, where is the distributable event? She is still employed by the same employer--not retired, dead, termed, etc. Second question. If the multiemployer plan makes a distribution to her, we are not responsibile for reviewing that plan for operational compliance, and its a lump sum distribution from a qualified plan. So we accept the rollover?

Since we're essentially voting here: I'm assuming that for everyone else, you included those weeks' earnings and any deferrals from that comp in the 2005 test. So you do that here too.

We recently received payment of the plan's share of a class action settlement on our Company Stock. Although it is a nice payment, it only represents about one tenth of one percent of the Company Stock Fund. The plan's recovery was based on its calculated loss, which was in turn based on net omnibus account level purchases over a period from 1999 to 2003 at a price higher than the specified trigger price. We could allocate the recovery to a participant level based on a calculation similar to that of the claim. But that raises the following issues: - Many of the participants have terminated, and taken a lump sum. We could track them down but it would be expensive. - The recovery was based on days with net trading activity resulting in a purchase over the trigger price. It was not based on participant level transactions. - The cost of an allocation based on the original claim calculation would be very expensive. So the decision on how to do the allocation is undoubtedly a fiduciary decision, but I am looking for ideas on what might be a reasonable, cost-effective approach.

The other question is who wants to give up the billable hours to do the work. This will take time.

I am horrified by this thread (and glad that I won't have internet access after noon today). But I can add that I'm sure that DFerrare is incorrect on #1 Protecting the earth from the scum of the Universe. That was for ERISA-the Movie.

You need to look at how the Small Co plan defines eligibility and make sure that definition is consistent with the new situation. So if everyone is paid under the Big Co EIN, and the Small Co is distinguished by a location code in your payroll system, or a geographical location, then define it that way in your plan. You do need to make sure that you meet the participation requirements of 401(a)(26) and the coverage rerquriements of 410(b).

It is reassuring to this lowly Twins fan to note that the Cubs' streak as hapless losers continues, and that the Red Sox have started a new one.