RatherBeGolfing

My emphasis in bold. Wife must consent to the mother as beneficiary. I'm not sure I see the controversy

In Florida we have what is called a "document stamp tax". It is an excise tax on certain documents like deeds and promissory notes. ERISA plans are not exempt and applies to all loans executed in Florida. The tax rate is 70.cents per $100, or maximum $350 tax on a $50,000 loan. You can pay it online, by mail or in person. Technically, failure to pay the doc stamp tax could mean that the loan is unenforceable, which of course could have a cascading effect on the the loan and the plan. I have never heard of a loan actually being disqualified due to failure to pay the doc stamp tax. Very few plans and/or service providers actually comply with the doc stamp tax. Most service providers will simply inform the plan and participant that they also owe a doc stamp tax to the state but that they do not fill out the paperwork etc, so it is it falls on the plan/participant to make the payment. We do the doc stamps for some of our clients but the vast majority simply say "ok, I have been informed, I'll roll the dice". The only service provider I knew of in Florida that did doc stamps for ALL their clients, was recently acquired by a major national provider who to my knowledge does NOT do doc stamps.

No panda Larry?

They are up Dave. At least for me.

Ok so I have been thinking on this a little bit more (and reading the EOB, because it is Saturday after all)... Per treasury reg §1.411(a)-11(c)(6), the notice and consent requirements do not apply to an alternate payee unless required by the QDRO. In other words, unless the QDRO states that the AP shall be provided with notices and must consent to the distribution, you can distribute the asserts based on the QDRO alone However, if the distribution is in the form of an eligible rollover distribution (single-sum distribution), the 402(f) notice is required, as is the 30 day election period. Could the attorney perhaps be thinking that notice and consent isn't required per treasury reg §1.411(a)-11(c)(6), not realizing that the 402(f) notice and election period is still required if it is in the form of an eligible rollover distribution? Again, I think the attorney is the issue rather than the DRO itself. You are still correct in requiring your 402(f) notice though, she can't require that you not provide it (even though it seems she is already electing a rollover, so the purpose of the notice is sort of moot) Also, I confirmed with the EOB that the DRO does not have make available to the AP all options available to the participant under the plan, it just cant give the AP an option that is not available to the participant. For your reading pleasure, see EOB Chapter 6 - Section VI - Part B

Just to be clear, does the DRO actually have language in it to prohibit you from sending an election form? Or is this what the attorney is telling you in addition to the DRO. If it is in the DRO, I wouldn't have a problem saying it is not a QDRO. If it is just what the attorney is telling you, you probably have a QDRO but with a PITA attorney who does not know how this works. In which case I would just stand my ground and not pay it out until they go through the elections, notices, etc.

Ok. So you file a 5330 and pay the tax but don't go through VFCP. There are several reasons why you may want to file VFCP in addition to paying your excise tax. Did you use the DOL calculator to figure out your lost earnings? If you did and did not file VFCP, the DOL can come back at you and say you can't use it, either file VFCP or redo your calculations without the calculator. Even if you didn't use the calculator, filing the 5330 does not grant you relief for fiduciary violations, it just means you paid tax on a prohibited transaction. So in short, you can sometimes avoid filing a 5330 when filing VFCP, but you can't avoid filing VFCP by filing a 5330. You are correcting different issues, but under limited circumstances, correcting one can give you relief on the other.

Filing VFCP doesn't excuse your excise tax under 4975, so you still have to file your 5330 and pay the tax. Under limited circumstances, you can file VFCP and deposit what would have been the tax to the participants instead. But outside the PTE it really isn't an either/or situation...

I guess my question is why would you NOT keep records of benefit payments?

That makes more since than how I read it

Why did the participant give a check to the sponsor for a deferral?

I agree 100%. I only offered an explanation of the issue and the objection as I understand them. The plan and its admins are under no obligation to act on it. I disagree to a degree. I don't think the Sharia issue is all that different. Some Muslims see any vehicle that earns interest or dividends as haram, even if a so called sharia compliant mutual fund is available. Others don't care about the usury aspect as long as the underlying investments are "sharia compliant", and others don't care at all. But just like the Amish example, the plan is under no obligation to make special considerations such as a sharia compliant fund that may appease a subset of believers. They may make the decision to do so if it is otherwise prudent and reasonable, but I don't think it is any different from the Amish exclusion. EDIT: There is an excellent article on Sharia and ERISA in the JPB that was written by Asrar Ahmed at the DOL (at least at the DOL at the time of the article). It goes into many more issues than I noted above. JPB Vol 20 Number 4 if you have access to it. At least I found it very interesting as a non-Muslim pension geek :)

When it comes to religious objections, I think you can always make counter arguments like "how can you object to X but not Y?" The old "would you pull an ox out of a pit on the Sabbath" comes to mind as a perfect example. What it comes down to is that religious interpretation is an individual thing.

I will start by saying that this simply my understanding (right or wrong) of the issue. investment options are not necessarily disconnected from the issue of a retirement plan in general. The objection on religious grounds isn't a one size fits all. Some may object because there are no investments that meets their needs, like a sharia compliant fund. Some may object because no matter what the fund options are, investments are designed earn dividends or interest which some interpret as running afoul of prohibitions of usury. Some (including some Amish apparently) may object because their religion requires them to be self sufficient which means that they may not object to savings but would object to ER contributions.

I haven't seen any Amish examples before but I have heard several examples of Muslim participants who refuse participation and/or refuse to accept contributions based on the theory that the plan itself or the investment options are not halal. In each of those cases the problem was not discovered until the employee was already a participant. I agree with the comments above. Absent a timely executed waiver, you have to follow the terms of the plan. If you can exclude them from the allocation and pass, great. If not, you follow the terms of the plan and contribute to a participant who will most likely refuse to accept it when it is time to distribute the benefits.

You would need to be a bit more creative and draft the exclusion in a way that excludes the people you need to exclude while not being discriminatory. You could probably exclude a class of employees who in writing disclaimed to the employer that their religious beliefs would preclude them from accepting employer contributions. You still have to pass testing though.

Its clear that the annual additions is X. The fact that you can get MORE than the annual additions doesn't change what the annual additions is. What OP quoted is an explanation of annual additions, not an explanation of the the most a participant can possibly be allocated in a plan year. It really isn't ambiguous, just different (yet related) concepts.

That was part of the proposal. My understanding is that the proposal has stalled because it isn't that high on the list of priorities and there is no funding to push forward at this time. It is possible that we will get a new proposal at some time though... Yea if you can't nail down the mailing date it is hard to use it. Is there a difference between when the money left the ERs account and when it was credited at the recordkeeper? Sometimes the RK will deposit one day and credit it in the following days. if so, you can use the earlier date since we are looking at when it was segregated from the ER assets. It might not be much per transaction but over the years the savings can really add up.

You are incorrect. As Lou has pointed out catch-up contributions are NOT subject to IRC §415. See IRC §414(v)(3)(A)(i). Therefore, when you are determining whether an employee's annual addition exceeds the limit in §415(c), you should NOT include catch-up contributions

Not OP obviously, but that was my interpretation. Wouldn't help the past years but would keep employers with lots of employees but little participation from being large plans if the count is by P's with a balance.

When contributions are mailed, use the date it was mailed rather than the date it cleared. The mailing date is when the contributions were separated from the employers assets. That will take a few extra days off your count.

1 - 95% 2 - 5%

A few thoughts: Are they just not going to do have the audit done for the years it was a large plan? That is a compliance issue I couldn't ignore. Either do it or move on. How many years to review? You know of issues going back to 2011. Same theory as above applies. You can't ignore known compliance issues. And these are pretty bad. A 35 day average for a large plan is a BIG deal to the DOL. You need to go back to 2011 and fix it. You can apply the 7 day safe harbor for the small plan years, but not the large. Unless you extraordinarily complex payroll system, 6 days isn't going to fly for a large plan. This is one of those "the rules are the rules" situations. 35 days 15th of the month following are non starters. An auditor will probably apply 2 days but sometimes a few more in rare cases, if reasonable. Here is what it comes down to to me: Don't make the clients problems your problems. They have serious compliance issues. Those issues need to be fixed properly. You are a professional. You know how to fix those issues properly. Don't create problems for yourself by not doing it right just because you want the business. It isn't worth it. Hopefully the client will realize that you are looking out for them and do the right thing.

What is their justification? It is much easier to tell them they are wrong if we know what basis they think they have for their solution.