jpod

I'd have to see the plan/agreement governing the 457f arrangement, but presumably the "crediting" should be a meaningless act because there is only informal funding. In other words, it's still the employer's money, and the employee is entitled to what he was supposed to have credited plus/minus earnings/losses on that amount, not the extra amount plus/minus earnings/losses. So, no "correction" is necessary, but the employer will probably want to withdraw the excess from the account in question.

Calendar year plan year; files 5500 on accrual basis. Sponsor adopts an 11(g) corrective amendment in 2011 effective for 2010. Corrective amendment calls for an additional employer contribution for 2010, which was made. But for corrective amendment, no such contribution would be due, but plan would be at risk for disqualification. Should this be reported as a receivable on Schedule H as of 12/31/10 and/or as a matter of GAAP?

Well, I believe you, but that surprises me. What difference would it make anyway? Who would inentionally over-grant with the hope that enough shares will fail to vest?

How could it be other than at the time of grant if the limit on the number of shares was to have any meaning?

It may be possible to remain a co-obligor in some fashion, perhaps as "joint employers," in effect creating joint and several liability for the on-going contributions and any future w/l, while at the same time avoiding a w/l by virtue of the transfer of the employees. I think your client should investigate that.

Why not have your client stay on as an obligor (co-obligor?) under the CBA? How about the 4204 sale of assets exception? If your client is attempting to avoid W/L but at the same time avoid all future obligations to the plan(s), that doesn't strike me as something which could/should fit under the construct of Title IV's W/L rules.

Pre-EFAST the answer was to file incomplete and then amend. Not being privy to the nuances of EFAST, can you even file an incomplete 5500? P.S., if by any chance you have the Hurricane Irene extension you have another 2 weeks.

Are you asking a Section 125 question or are you asking whether the insurance plan will permit the employee to sign up now? If the insurance plan won't let the employee sign up now, isn't the Section 125 question rendered moot? For what it's worth, where is the change in circumstances justifying the employee's sign-up if he personally wasn't covered in the first place?

You didn't say whether Employer A was a corporation or LLC or other type of entity that generally shields owners from its liabilities. Assuming it is, as a general proposition neither the owners of A nor the buyer of A's assets should have any liability or responsibility vis a vis the plan. But this answer is worth about as much as you just paid for it, so Employer A, its owners and the buyer should consult with their respective legal counsel.

XTitan: There's more to the story than I have divulged that would avoid constructive receipt. I know there will be a 409A violation if money is actually paid. What I want to know is if the mere offering of this opportunity is a 409A violation, so as to create a 409A problem for even those employees who reject the offer. Since I posted I think I found the answer, so never mind.

If QDRO didn't intend to draw the distinction, I will. Mere preparation of a policy to be considered for adoption by the appropriate fiduciary(ies) is not a fiduciary function. As a lawyer I have drafted or commented on several for clients and I don't consider that to be a fiduciary act on my part.

I should add that the employer recognizes that 409A will be violated (at least) in the case of anyone who accepts the offer and is cashed-out. As part of the offer the employer will agree to gross the employee up for the extra taxes under 409A for anyone whose cash-out is greater than $16,500.

Employer maintains an account balance deferred compensation plan covering several employees that is subject to 409A. Plan cannot be amended by the employer in a fashion that would have an adverse effect on any participant's accrued benefits. Employer would like to make a limited-time offer to some participating employees (in writing, although I don't think that matters) to cash them out of the plan early and terminate their participation in the plan. Only employees who accept this offer will be cashed out and cease to participate. Questions: 1. Will the mere offer by the employer, prior to acceptance of the offer by any employee, violate the anti-acceleration rule? (Remember, the offer can't be considered a plan amendment because the employer can't amend the plan to cash-out people.) 2. Assuming the answer to #1 is "yes," what if the offer is made only to those employees whose cash-out amount will be $16,500 or less?

I agree with Effen, but only if you file the later returns before Uncle comes looking for you.

If the facts are as simple as you say, and the bank does not receive any indirect compensation (as defined), such as compensation from a 3rd party or a collective trust fund maintained by the bank in which plans invest, then the bank is not a csp. (Hard to believe that the bank is in this business solely to collect a few dollars a year in custodial fees.)

I'm not buying it (if the facts are as good as stated).

Exact same thing happened to a client a couple of weeks ago (and I too have seen it many times). I responded to the IRS warning letter with a copy of the 5500 with final return box checked. Any bets on how many times I have to do this before somebody at IRS actually reads my correspondence?

FGC: Interesting comment about what plaintiff's lawyers may fear about contingency cases, but it's a moot point if you find one to take it on a contingency basis. Was your comment intended to tell us that the fiduciary has searched high and low for someone to take it on a contingency basis and everybody turned her down because of the issue you describe, or is the issue you describe merely an academic one? Same query regarding finance companies.

1. How could they possibly be a B-S controlled group if the relationship is that A is an owner of B? 2. How can they be a controlled group if A owns only 51% of B? Are there pertinent facts not stated here?

Why not a contingency fee arrangement? I don't recall ever hearing anything that would prohibit a contingency arrangement under ERISA, and while the fiduciary should negotiate the best arrangement possible isn't $0.67 on the dollar better than $0.00 (could be a lot better than $0.67 with attorney's fees although the fee agreement would have to include a commitment by the attorney to seek attorney's fees)? Alternatively, aren't there finance companies that would bankroll this case (if the breach is as "obvious" and the pockets as deep as you suggest)?

If documentation is in order, and employees of even 414(b), © and (m) entities are excluded, neither IRS, DOL nor anybody else can force you to cover them. No need to bother with VCP if client wishes to fall on its sword tax-wise, in fact I don't know what IRS would do with such a submission, other than reject it I suppose.

Who is it per the plan document that decides on the match? If, as it is likely, it is the "Employer," who, per the plan document, is to act for the "Employer?" Unless there is a specific provision indicating that the Board of Directors or some other person take some specific action to declare a match, I think at a minimum you have an issue as to whether management's announcement to its employees that there will be a match creates an obligation to fund one, specifically if that announcement influenced behavior (such as by enticing employees to contribute who would not otherwise contribute, or to contribute more than they would otherwise contribute).

First, there shouldn't be any "contributions" (contributions TO what?). I think what you mean is that the employer will provide reimbursements of up to $50 per month for employees who qualify. Second, there is nothing to prevent the type of eligibility criteria you describe. If the reimbursments are made pursuant to what is otherwise a good Section 129 DCAP, they're tax-free.

Good chance that the custodial account agreement or annuity contract says that Mrs. A gets the $$ whether or not the plan is subject to ERISA, unless she gave consent in accordance with the ERISA requirements.

No takers on this? Is this just such an obvious "yes" that I shouldn't expect to find any statement from IRS confirming it?