Brian Gallagher

I would remove any overages from the accounts (including/excluding gains/losses) and put them in a suspense account in the trust (we use the forfeiture account in absence of a suspense account). the plan would just remit fewer dollars next time, making up the balance from the removed moey.

Please help with calculating this person's vesting. We have differing opinions here at the office. Fact pattern: 3 yr cliff vesting schedule DOH = 2/15/02 DOT = 9/1/04 worked >1000 hrs in '02 plan switched to elapsed time vesting effective 1/1/03, was 1000 hrs before that. How many years? 2 or 3?

Maybe the person was getting it confused with the 1% ownership rule of Top Heavy testing? (even then the owner needs to make < $150k)

This sounds more like an eligibilty plan. This person is no longer eligible for the union plan and is now eligible for the non-union plan. This is no different than someone whose job is now excluded under a particular plan. There is no distributable event.

Unfortunately, the discussion is about what exacty "acquisition" is. The person has already bought the house with the loan. If he had taken a regular 3 yr loan, he would be able to refinance it under the new regs to 5 yrs. However, since this is for the "acquisition", can the loan be refi'd for longer than the 5 yrs? I'm quite comfortable that the fact pattern qualifies under 72, but can it be done after the fact, so to speak?

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Catchups in non-calendar year plans are always tricky. Heere is one thing to consider for one of your questions: Catch-ups are NOT included in the 415 calculation so you are okay there.

A person took a loan for 5 years for a primary residence. Can he refinance it for an add'l 15 yrs? (Plan allows for 20 yr mortgage loans)

What does the document say is the maximum percentage allowed for salary deferrals?

No answer on the first question, but the default will be stated in the plan document--it all depends on how it is written. (well, it <u>should,</u> be stated)

Lori, ...With Bosox cap prouldy on display. You'd be surprised at how many Red Sox fans go to those games. PS: Don't those west coast games suk!

Red Sox v. Yankees. I'm going to the game on 9/17! Yay! Let's go Bosox!

The way I always remember it is this way: The limit is 25% of covered compesation. To me, that's the people "covered" under the plan. In this case, Jack and Jill.

I thouhgt there was something like a statue of limitations for something like this. I know it's both the plan's and the participant's responibility to make sure the proper deductions are made. But if you do the correction, this is how it is GENERALLY done: Make up the contributions and any match plus earnings and put into a QNEC type bucket in the account (meaning both contribs + earnings are 100% vested immediately). I would have the company consult an attorney versed in ERISA matters.

I don't see any problem with it, especially if the spousal consent is NOT needed. To me, it's like forging a note from your wife allowing you to see an R-rated movie. Sure, you forged the note, but you never really needed it in the first place. (in my totally, UNLEGAL opinion) What might need to be looked at is the timing related to the divorce. In not sure what responsibility a sponsor has to stop a distribution if he/she knows a divorce is going on (even before it's been finalized).

Yes. Family attribution rules apply for the 5% owner rule.

Going back to the original post: I don't think mk has corrective distributions to do. And, probably not excesses. mk said that the people terminated and have small balances. Sounds like a reallocation of forfeiture to me. It sounds like he wants to use the de minimus rules that apply to the corrective distributions to these accounts.

I don't know where you read that, but we accept checks all the time. Maybe it's just a condition for a particular custodian/record keeper.

A participant requests a loan and indicates she is single on application, and it goes thru. Now we find out that she really is married (but separated). What kind of correction needs to be made? Is the loan void? Do we just get consent after the fact? Any thoughts would be appreciated.

Sorry, I didn't mead our "PRECIOUS" document, but "PREVIOUS". Ooooops!

As a reply to a post above, the 402(g) violations must be corrected by April 15 (it used to be March 1!). As an aside: RMD's are April 1 (for the first one).

I would check the plan document. Our precious document (the adoption agreement to be specific), had a section that addressed when a person can get back in after stopping contributions. If it is silent, then it's a matter of administrative procedure.

it's not mandatory--optional. document issue. can make the $ amount anywhere up to and including $5000. our document allows for the plan administrator to require participant consent for all distributions.

I always thought that a QSLOB had to have more than 50 ee's in order to qualify.

Catchups are year-by-year contributions; there is no accumulation.