ljr

We are trying to work out an arrangement where a bank would accept these accounts. Their IRA service provider advises that they can only accept these accounts from "recently" separated participants and not "lost" participants. So, the bank wants to define "recently" which we understand is not defined in the final regulations. Other providers I'm working with do not make any distinction between "recently" separated and "lost" participants. They will accept accounts as requested by Plan Sponsors with whom they have agreements to provide this service. Reality indicates since the forced IRA rules are so new, plan sponsors may have a backlog of participants who may be "lost" at this point. Can anyone shed any light on this?

Assuming these are defined benefit plans, the Company is funding the benefits anyway.

As a bank trustee we receive hundreds of 1099's every year for accounts that are not taxable. We just file them. For example, if a retirement plan account holds CD's as assets, the issuing bank will provide us with a 1099. When we make taxable distributions out of the plan, we report it on Form 1099-R. I'm at a loss to explain why your local bank is having a problem opening an account in the name of a trust. They will need an EIN and some request a copy of the plan and trust documents.

It's my understanding the disclosure documents are the fund fact sheet and prospectus. I'd like tickers on participant statements since all the fund classes are confusing and this is the only way to make sure the participant is looking at the right fund in the newspaper. We abbreviate the fund names and at this point do not include the tickers. Someday!

Since Roth IRA's are part of the plan, I don't see how they can be carved out from the usual treatment of qualified plan money. I've read a lot of articles on this topic and this was never mentioned. You are correct - fails the smell test!

Since the plan never had its own determination letter, we probably wouldn't feel it necessary to file with the IRS. This assumes a small to medium size plan that had no significant problems.

What about pricing the stock? You say it's not traded on an open market. Good luck in convincing your clients to spend the money for some qualified advice!

M Bozek - good point and thanks! I think a concern is that if a forfeited lost participant should reappear, the plan has to pay them out from forfeitures if there is enough or the employer has to make a contribution if there is not.

Now that the new rules are upon us, I'm curious about what financial institutions are accepting these accounts. We amended our prototype at the sponsor level to drop the force out limit to $1,000 to avoid the problem but have received questions from clients who would like to take advantage of the rules to clear out amounts between $1,000 and $5,000 for lost participants.

A company has been dissolved and no one is left to sign on the final 5500 for their 401(k) which has been fully paid out to participants. It is quite possible there may be no way to come up with good census data for testing. What now?

Kirk - you have a good point there!

While I like the 100% withholding idea, the DOL does not. Let's just home someone issues some guidance and soon!

Unfortunately, there is indeed no de minimus rule, even for small balances of lost participants. A DOL speaker at the American Bankers Association EB meeting in June said some guidance should be coming soon on lost participants. The question about what the IRS would consider de minimus was posed at the ASPA conference last summer if I recall correctly. The IRS agent said the same as the prior posters, cut the check.

Yes, the participant would indeed have to go back and amend their return. That's why we recommend to non-calendar year plans that they delay refunds so they are taxable in the year of receipt and just file the excise tax return and pay the tax. In many situations that's better than having to tell the HCE's the file amended tax returns.

Generally, you go back in time and allocate them properly. There are some prior threads on this topic. It's probably the duty of the Plan Administrator who's usually the employer. Check the document and see what it says about who is responsible and also check to see if that duty has been delegated to the trustee, a third party administrator, or ???? You also want to know exactly how much there is in forfeitures for each year.

The deferrals do not need to be tested but any match does.

Technically speaking, you should probably go back year by year and allocate as it should have been done. Depending upon the amount involved, this might not make sense if you end up with participants with tiny account balances. There is no black and white answer so you're back to the usual - get an ERISA counsel idea.

Thanks, WDIK!

Thanks, Lame Duck! Would you have the web address by chance?

Medium depth and I'd be very interested in seeing what you have created. My client is a financial services company so their employee population is pretty sharp. If you could post what you have that would be great. If you prefer to e-mail to me I believe you can do it through this board. Thanks!

We have an ESOP client who is thinking of setting up a 401(k) plan and wants to survey his employees as to their interest. Can anyone point me to a survey? We'd like to include questions about what an employee might defer if matched and if not matched. Thank you for your help!

Try www.aspa.org for information on their designation. Also aba.org (?) regarding their designation. Cannon Institute offers training to enable folks to obtain a designation. I don't know their web site address. If you are in HR, CEBS is probably the way to go. If you work only on retirement plans, the other designations available are probably sufficient and don't involve as big a time commitment.

Before you go further, you may want to check the June issue of PlanSponsor. The Web site is Plansponsor.com. You will see that people are getting out of not into the participant recordkeeping business. You will also see the names of the leading providers of this service and maybe one of them can help. It would probably be a bad idea for your client to get into recordkeeping. Best of luck!!

You probably read about the Corbel prototype documents package. The SPD includes a two page quick questions and answers piece. I think Corbel's Web site is www.Corbel.com and you can contact them.

Not allowing anything other than VRU or Web is typical in the large plan market.