PJF414

Plan recently discovered 5 or 6 people who had requested deferral percentage reductions that were never implemented. Most are short term, but others go back several years. None of the participants has noticed the error. Client wants to notify the participants and ask them if they want to take the money out of the plan (including match and income) or leave it in. Not sure that this is permissible. Haven't run into this particular failure before, and cannot find anything terribly helpful in EPCRS. My inclination would be to forfeit all if they want to correct, and pay the lost salary outside of the plan.

He's asking on behalf of the client, who actually posed the question. He doesn't have any idea. I just don't want to accidentally trigger some sort of unauthorized distribution. The plan document does not address dividends paying premiums, only contributions.

I saw this line of questions and answers, and I have one that is driving me crazy. We have a life insurance policy in a 401k plan, and the insurance agent wants the dividends on the policy to be used to pay the premium this year (the contributions are not sufficient, and there is not enough seasoned money). It was designed based on the understanding that a big rollover would come in, but that never happened. Would using the dividends to pay the premium cause a premature withdrawal and/or a prohibited withdrawal? I am looking at it as I would the income from another investment, and it would seem that since the other income could not be transferred to pay the premium, then the dividends should not either. Am I off-base, or does this sound reasonable? Thanks!

Would you have a problem if there are different payroll frequencies in the company? For instance, one person could start on January 1st (monthly), while another group could start on January 6th (weekly), and another might start on the 15th (semimonthly). Wouldn't that potentially be discriminatory if the HCEs had the monthly payroll?

I have a client whose business is an exempt service business, and whose wife is a real estate agent. He has a DB plan with himself as the only participant. It appears that neither has any interest in or connection with the other's business, so I am not sure of the ownership attribution in this case. He is the only employee in his plan, and wants to know if he should be paying PBGC premiums. She does not have a plan.

I have a similar situation. Employee works for Company as both a union and a non-union employee. Union employees are excluded from the plan. It's a 401k plan. Would they not have to count all of the Employee's service in figuring his eligibility as a non-union employee? I believe that once the person meets eligibility on the basis of all service, he would be able to participate based on his non-union income? Any thoughts on this?

Unfortunately, we have already exhausted those options. We are the consultants on this one. And that is not the only problem that they have, just the ugliest.

I have a plan that is facing a major coverage problem unless it merges all of the plans in its controlled group by the end of this year. They are skeptical, and want to see a "for instance" on how much it would cost them in the event that they had to go to a closing agreement. My question is, is there a way to access the IRS decisions on closing agreements reached with plans? I know I've seen a couple of very large ones reported somewhere, but I can't recall where. Is there a way to access these decisions on a website?