stevena

Thanks! We find this very interesting...could you tell me why you think the DOL says this?? Is it cited anywhere, or is there a case? Thanks a lot!!

Along the same lines....just as an aside.... we get calls all the time from spouses who are beneficiaries, who are in the process of getting a divorce...but no QDRO issued yet. Or we get calls from their attorneys. They are requesting account balance info, etc. Are they entitled by law as beneficiaries (spouses) to receive such information? We didnt think so, but a recent divorce attorney for a spouse has indicated that we were wrong... thanks!

ok, you know what...nevermind...I was reading 206 wrong. Thanks for the help.

Arent there a couple of things, though....that are excluded from protection. I saw violation of fiduciary, settlement for DOL reasons, crime against plan and then it is listed "civil judgements." I am trying to figure out if that means civil judgements against the PLAN or if it would include civil judgements against individual participants. I was looking in 206(d) (4) and (5) thanks for your thoughts

Can anyone cite to me where in writing it states that retirement plan assets are protected from civil lawsuit settlements (personal participant lawsuits, not plan lawsuits) This is not a one person plan, or a spouse lawsuit, or a QDRO. The lawsuit is a personal participant lawsuit. If he loses, and is charged and has to pay a civil settlement, I need to know where it says his retirement plan assets can not be touched. I can find a lot on PLAN lawsuits being protected in certain circumstances, just not personal lawsuits. Really would appreciate CITES! Thanks a lot.

Thanks, We checked the document and it does require spousal consent on loans in the loan provisions. I found out the following this morning: 1) That this is an operational defect that is qualified as "insignificant" 2) That the remedial correction time is the last day of the plan year following the year in which the correction occurred. 3) that the required correction is to obtain consent (not gonna happen), get money back in the plan, or the plan sponsor pays up to purchase an annuity for the spouse. OK....so....here is the question. What if we change the repayment (which is required by the document to be payroll deducted) so that it will be paid off by the time the remedial correction time is over. That way money is back in the plan by the end of the correction period. Now, the promissory note which we drafted for the employee lists a five year repayment. Does the sponsor have the authority to just change that to two years. Mind you the participant never signed the promissory note.

Thanks for the replies!! Salary reduction is the only allowable form of repayment in the document. It also says it on the promissory note, which of course is not signed (spousal consent is part of the prom note which we have not received back. Participant basically will not return the promissory note. So we dont even have his signature.) What I am questioning is if the above post reference to the 15-day, 2 year deal is correct (and I cannot find a reference to that cite anywhere!!) than do we have the authority to change the terms of the loan to a 2 year loan. Even though the (unsigned) promissory note made it a 5 year loan. Trying to avoid having the trustee cough up 20 grand.....

Hmm I did not mention some important facts..... the spouse is now having a fit because they are in the midst of obtaining a divorce (relevant fact that I did not post.....) We are not taking payroll deductions yet because we were trying to figure out what to do....basically whether we should 1099 the guy or what....

We thought of that, but aren't we then making the situation worse by issuing an illegal distribution? Then the funds are not even a plan asset anymore....which we thought might be worse? Then we are issuing a distribution without spousal consent which is sort of getting us back to the same place..... we were thinking as long as it was a plan loan, the employer could at least put the money back into the plan (eventually) by the forced payroll deduction loan repayment. Then again, if we issue it as a distribution at least we are taking some action... Anyone have any opinions either way?

No, just a rank and file guy. No owner or HCE. But it is very very bad because it is my case. Bummer. But is the trustee really required to pay up for the mistake, do you know? Have you ever heard of this?

Thanks..... The loan is 20k and plan document requires spousal consent on loans specifically. Whole situation is bad. Any remedy that is proposed by DOL? Someone told me something like the employee had fifteen days to respond to some kind of notice we are required to give them, asking them their intentions basically, and if they did not return it we were to assume that they had no intention of returning money or getting consent. Then, they said the plan had two years to fix the problem and if not the plan was required to purchase an annuity for the spouse in the amount of the distribution. Did you ever hear of this? I cant find it anywhere...and have spent hours looking.... thanks for your help.

My post is not going so well on the distributions board so I thought I would give this board a shot.... Does anyone know how to fix a 401(k) plan loan that inadvertently did not obtain spousal consent? In addition, the plan provides for loans only for certain reasons, this participant said he was buying a home, apparantly is not purchasing a home. Basically the check was sent by mistake before the trustee got the promissory note or the copy of the purchase and sale, which is normal procedure. The participant refuses to return funds to the plan. Any cites would be helpful thanks a lot

401(k) Profit Sharing Plan has loans allowed if for certain reasons...purchase of home is one. Employee took out loan, did not purchase home. EE signed loan request form which indicated his reason for loan was "purchase of home" also spousal consent was not received and we just found out that ee is in midst of divorce can anyone cite the correction for this? ee is refusing to return money to plan, spouse is refusing to sign. thanks

OK, PHEW! THANKS FOR ALL YOUR HELP EVERYONE WOW THIS IS SO MUCH EASIER NOW WITH THE NEW CHART..HOW GREAT.

T BONE... WHAT IF I HAVE A PLAN WITH A PLAN YEAR END 6/30/, WHICH IS NOT VALUED ON 12/31..? I THOUGHT I USED THE PRIOR YEAR BALANCE AS OF THE LAST VALUATION DATE IN THE PRIOR YEAR, NO?

thanks for your help...want to be sure I am doing this right... If I am doing a 2001 RMD, I use participant's age as of 12/31/01, and account balance as of 12/31/2000 (calendar year plan) right?

I have the new chart for figuring RMD. The chart uses age..but what age? What do I do if a client is doing their 2001 RMD now, and is currently 72. But at the end of 2001, he will be 73. DO I use the age he is when he does the distribution or the age he will be at the end of 2001??? Thanks

What do you do if a company which was required to file a 5500 is purchased by a company not required to file a 5500? The plans are still seperate, not merged, but the sponsor of the plans is now the entity which is not subject to ERISA and is not required to file (gov entity).

Thats what I said...there is no deadline, that I can see. Not that I would advise that to a client. But technically speaking, no deadline in the regs.

I imagine that the corporation no longer existing would mean that the plan terminates (no more benefitting employees which would terminate either by partial termination rules (because everyone was laid off, etc. or by distress termination (bankruptcy etc. if partial termination does not apply.) DOL says that in event of termination, benefits must be distributed within a reasonable amount of time which they have defined as one year following the date of termination (subject to a plan by plan review due to complications which may arise from termination)

I will tell you why I have this idea...because this specific question was asked in 1996 at an ASPA conference directly to the DOL official. The answer was that there was NO SPECIFIC STATED RULE on the depositing of the top heavy required contribution, however, he did specifically say that it was "not a 412 issue..." so would not be required to be deposited the same as minimum funding. His thought was that the deposit "probably should be deposited by the 404(a)(6) deadline because it is a qualification issue" ...which (I think??) is the 5500 deadline (incl. extensions), right?.

Thanks...this is exactly what I thought. But do you know where I can find that terminology from the DOL that states that the plan must be named as the insured, not the company? Thanks for your help

I think the question was when does the employer HAVE to deposit funds. I think (although I could be wrong) the answer is that there is no deadline. Whether the deposit would be tax deductible is another issue entirely. And I also think the 8 1/2 month rule is for minimum funding only. But I am interested in others responses as well.

The corporate tax filing deadline is the time limit for deciding what the deduction will be (if discretionary, of course)...but funds do not " need" to be deposited by then. I do not see anywhere where an actual deadline for depositing of funds is stated Although I imagine grossly untimely depositing could cause fiduciary liablity problems, which are another issue entirely.

Thanks for the clarification. I wanted to be sure this was not just me being ignorant of some requirement... The agent says that the bond is part of the client's "Crime Policy" and covers the plan as PART of the policy. So, my question is, do I report on the 5500 the ENTIRE amount of the coverage? I am confused..I guess regarding a bond, does the 10 million make up parts of a whole, and I am looking for a part, or is this like a "blanket" crime policy where all parts are covered for the entire ten million. Know what I mean? :confused: