Belgarath

Did anyone check the sale and purchase agreement? Typically, the disposition of any employee benefits plans is part of the normal due diligence process, and the sale and purchase agreement would specify what is happening to the plan(s) and who is responsible to do it. At least in theory. But that may not help. What Kevin said!

'Tis possible. ..

Old rule. Currently, Appendix A, .05(10) states that for purposes of .05(8) and.05(9) - which are the reduced correction items - an "Employee Elective Deferral Failure" includes failure to implement..."an affirmative election..."

I wonder...even if a document failed to have language such as Austin and Kevin mentioned - if you failed 414(s) testing and just operationally used full comp - if most auditors would ever pick this up. I'm obviously not recommending avoiding proper "form" in the document language, or corrective amendments if necessary, etc. - just musing...

And if the employee refuses to return the money, the employee should not count on a long and profitable employment...

FWIW - in our plans we have language to prevent this. To paraphrase, the language says you only get this once, and if you are subsequently rehired and terminate again, the exception doesn't apply.

Thank you! There doesn't ever seem to be a simple answer for DB plans, which of course is why all such questions would be referred to the actuary anyway, but I like to attempt to have SOME idea of how things work. Or don't work, sometimes...

Not a DB person, so I want to see if I've got the gist of this. Assuming a plan has a suspension of benefits (I'll hereafter refer to as SOB) clause, this doesn't prevent a participant from accruing additional benefits, right? But it does mean that benefits can be suspended without actuarial increase for the later payment (but not for retirees who weren't subject to the SOB), and with some quirks, such as actuarial increase still required for active employees over 70-1/2 who are not 5% owners, and taking into account anti-cutback regs for existing retirees, etc... But in the absence of this SOB, if a participant retires on or after NRD, starts receiving benefits, and is later rehired, then the employee will continue to receive payments, with no actuarial increase in those payments, 'cause payments weren't suspended? I'm not sure I can properly phrase an example of what I'm thinking, so I apologize in advance! Suppose $$ retires at age 65, and starts receiving normal plan benefit of $1,000/month. Returns to work another year later. Plan has no SOB. Participant continues to receive $1,000/month with no actuarial increase, plus each year may accrue another piece of benefit, which is added to the $1,000. Now, suppose plan has SOB. In same situation, plan suspends payments of the $1,000. Participant works another 3 years, (prior to 70-1/2) and accrues an additional benefit of $100 monthly for each of those 3 years. Then terminates employment, and starts to receive monthly benefit of $1,300 monthly, 'cause no actuarial increase. Am I on the right track? Thanks!

Save yourself some time - maximum participant loan dollar amount is $50,000. Yes, loan to purchase a primary residence can exceed 5 year period if plan allows it - plan is not required to allow it. Finally, the "process" is governed by the plan document/administrative procedures. Check with the Plan Administrator and/or the TPA.

Start with Mike's advice to check with your divorce lawyer. Just curious - you say it is a teaching pension - is it a pension from a governmental (non-ERISA) employer, or from a private institution where the plan is subject to ERISA? Could make a difference.

I'd have said you can't consider it a 402(g) violation - 402(g) is a dollar amount limit, and as long as you don't exceed that, it isn't a 402(g) violation. I'd vote for 415 violation.

Thanks for the input. Yeah, 45 days seems like an overly tight timeframe, and why it was originally drafted this way I have no idea. Maybe there was a good reason at the time, I don't know.

We've never tracked that percentage - but I can tell you that the true-up is a VERY small percentage - if you forced me to guess, I'd say maybe 2%. That's just a guess, but it most certainly is a very small percentage. At least for us - others may have a different experience.

Thanks.

Thanks Austin.

Plan says that claims must be submitted within 45 days after end of plan year. But the provider doesn't even send bill until the end of February. Would you: A. pay the otherwise allowable claim, as soon as possible but within 45 days of the participant's receipt of the bill B. amend the plan (retroactively?) to provide a longer run out period c. deny the claim, since not received by the deadline d. other? P.S. - I should have put this in the original post, but FWIW, I believe the answer is "c" - as per 1.125-1(c)(5).

Austin - what document are you using, and when you say embed in the "special provisions" - where exactly do you mean? In the "other" section of the compensation definition in the AA, or in an Appendix, etc.?

Just want to make sure I'm not missing something. Had an inquiry from an employer who sponsors a cafeteria plan where the employer (C-corp) has 3 owner/employees only - ALL are Key. No NHC employees. I assume this has no possibility of passing testing, as I'm not aware of any provision similar to qualified plans where coverage/nondiscrimination is automatically passed if there are no NHC employees. So they would automatically fail the 25% key employee concentration test. Agree, or am I missing something?

I would include her.

Deleted.

Give this a try. https://www.law.cornell.edu/cfr/text/26/1.410(a)-7

Without having time to really think about this, my initial quick impression (looking solely at what you have copied, in a vacuum and not looking at associated regs) is that the first sentence means when you are doing 410(b) testing on the 401(k), you disregard the 403(b) employer contributions. The second sentence means that when doing 410(b) testing on the employer contributions under the 403(b), you can take the 401(k) into account. So it appears to say the testing goes in one direction, but not the other. This seems odd, but as I said, don't have time to actually think about it, or do further research. Not sure I want to, either...maybe someone else has wrestled their way through this already!

Yeah, Robert is great. Like many of us, I've dealt with him many times, attended seminars, etc... Glad to know that he has taken over for Sal. I used to worry about what would happen when Sal finally got out of this, and now I have no worries!

Pardon my ignorance, but who is "Robert?" Sounds like he took over for Sal?

Not trying to be a jerk, but I'm not going to describe it over the internet in any form, lest it be viewed/intercepted by people who would then say, "Hey, what a great idea - here's a way to illegally obtain funds."