cdavis25

It isn't worth getting an ERISA attorney's opinion for the lost taxes, since the amount is not that large. Thanks for the information and help.

Is it a rollover? The CV is already in the Plan. I am just thinking how I will get the vendor to pay out the 1,000 without withholding, when the time comes. Anyone else have this issue?

So, would they need to account for it in a separate after-tax bucket with the vendor? If the Plan does not allow for after-tax contribution or rollovers, then does it have any effect?

Ok, so I now know you lose the ability to recapture the ps-58 cost if the policy is not distributed to the participant. Does the full 10k still get transferred to the other assets in the Plan? i.e. the participant will end up paying tax twice on the 1,000 (ps-58 cost)?

A particpant wants to surrender their insurance in the Plan and transfer the cash value into their account in other assets. The participant is 40 years old and still employeed. The CV is $10,000. The PS-58 costs (basis) are $1,000. The Plan does not allow for after tax contributions. What happens? How do they account for the 9k pre-tax and 1k after-tax? Is this a document issue?

Thanks Masteff. Those are useful. Thank you everyone else too for your input.

They do not want to lose the employee. He wants to enter pay status and work part time. He really is not retiring. He just wants to stop working and enter pay status. Then, he will come right back to work on a part time basis. They want him as an employee and are willing to do this. I told them the IRS has stated that you cannot do this. They want IRS documentation, which is what I am looking for. It is fact and circumstances, but we recommended a longer break to show his intent was to retire. Then, he could be rehired. I said why not just amend the Plan to allow in-service at NRA. For some reason, that is beyond me, they do not want to do that.

A participant wants to retire and enter pay status with an annuity. Then, come right back to work part time for the employer in two weeks. He is 68. The Plan does not allow for in-service withdrawals, except RMDs. I know the IRS has said you cannot simply quit to enter pay status and come right back to work. Does anyone have any IRS guidance on this?

I agree that the answer is no, but thought maybe I was missing something. I never heard of someone using a 2013 forfeiture to reduce a 2012 contribution.

Can a Plan use 2013 forfeitures to reduce a 2012 employer contribution that is depsoited in 2013? I would think not, but the vendor says that is what they would do if the client request X amount from the forfeitures to be used and the forfeiture balance dropped below that x value due to market conditions. The document says forfeitures are used to reduce fees or contributions.

Thanks for responding. Relius said they do not have that ability. I was going to try to avoid the editing of word or crystal, but it appears we have no other option.

Does anyone know of a work around on Relius to test coverage separtely for 401(k) and 401(a)? We want to use statutory exclusions for the 401(a) coverage testing and nondiscrimination testing, but we do not want to do it for 401(k) coverage testing and ADP testing. The client uses prior year testing and statutory exclusions were not used last year.

Is it acceptable to have a definition for eligibility of 6 consecutive months with 500 hours. Notwithstanding the foregoing, an employee who has completed one YoS shall be eligible? I thought this was ok, but a colleague said something was said about not allowing consecutive months at ASPPA.

Tks jpod. I was thinking the same thing and called the PA revenue department too. The rep told me it was, but I was not sure if she was 100% confident in her answer.

Is a one lump sum distribution from a 457(f) Plan to a participant over 59.5 subject to PA state tax? Now, don't everyone jump in at once.

Tks.

Sorry I should have been more specific. It is a 457(f) plan. The normal retirement date is 1/1/13. He reached NRA and stopped working on 1/1/13. I was thinking that he no longer had a substanial risk of forfeiture at this point and the distribution amount is now taxable as of 1/1/2013. So, they could not change the payment schedule for this individual. But, I might be missing something??

A participant reached NRA in 2012 and retired. The Plan offers one lump sum payment after the next valuation and written request by the participant. Is there an issue with amending that today to a five year payment schedule? Would they have to give the participant the option for the one lump sum payment, since they already retired?

I just used ING as an example. I did not want to disclosure any specifics. I am not sure how the vendor would do it. I was just wondering if others felt it would be reasonable.

Nobody wants to touch this one!

A company has a DB Plan that they are going to terminate. They want to move any excess assets to their 401(k) Plan. I know they can use this ratably over 7 years to pay for nonelective contribution and reasonable admin fees. Will the platform recordkeeping fees (i.e. ING recordkeeping charge say 20 basis points) be considered acceptable admin fees?

We have a client using the VS Corbel document. They selected 18 and 6 months of service for eligibility with quarterly entry. The document reads, Months of service. For purposes of this Section, an Eligible Employee will be deemed to have completed the required number of months of service if such Employee is in the employ of the Employer at any time after such months after the Employee's employment commencement date. Employment commencement date shall be the first day that the Employee is entitled to be credited with an Hour of Service for the performance of duty. They have an employee (over 18) that was hired 5/15/12, terminated 8/15/12, rehired 10/15/12, terminated 10/20/12, rehired 12/14/12. Would that person be eligible on 1/1/13?

Client has a short Plan year (6 months). The hour requirement for PS is 500 hours. Do they reduce that to 250 for the short Plan year or does the allocation requirement remain 500?

Company A adopted a 401(k) Plan on a standardized prototype document in 2002. They are part of a control group with company B. So, my understanding is B is in the Plan even if they don't formally adopt the Plan b/c it is a standardized prototype document. Roll forward to 2010. They restate the document on a VS document. Company B does not formally re-adopt the Plan; however, they never discontinued or revoked participation in the Plan either. Are they in the Plan or not? If not, would they need to do VCP or could they use SCP?

Do they have to file the SF or just stop filing period? I thought if you have under 100 participants, then a 5500 filing is not required?