CuseFan

No and yes, or use to pay or reimburse final plan expenses.

Yes, according to the Pension Answer Book those shared employee rules still apply, so if someone works 1000+ hours for two or more employers sharing their services they are treated as doing so for all of those employers for purposes of coverage and nondiscrimination. The one physician with a plan would pass assuming there is sufficient employee coverage - and if a DBP be wary of minimum participation.

I generally do not want an HCE to have the highest MVAR and NAR within a permissible rate band, but if one is higher and the other is lower then I'm less concerned. Although with multiple rate bands for multiple HCEs I only try to push that envelope once.

I tend to agree. IRS is concerned with following the document and the timing of contributions for deduction purposes, which you appear to be OK on. DOL is tasked with labor law and ERISA rights, and it's labor law where the client went afoul.

I think documents in general allow for participating employers, whether affiliated or not, so it doesn't look like a document issue/failure to me unless the language was very particular to employers within a control group. If that is truly the case, then VCP might be the answer. The big issue to me is that as a multiple employer plan that each employer is deemed a single separate employer for purposes of coverage, nondiscrimination and tax deduction limits. So if you were running ADP/ACP and/or general testing on a total plan basis, then those tests are wrong. If properly re-run tests subsequently fail then you are definitely looking at VCP. 1983, really? Wow, hopefully the ownership changed over time (recently) so they were a CG or an ASG for much of that time. Good luck and Happy Thanksgiving!

Anyone who says the employer has discretion in providing the plan document in some form upon request is setting the employer up for a DOL audit and the $110/day penalty (or whatever the penalty is now) for refusing to provide ERISA-protected right to requested documents. This is CUT and DRIED.

Jim, a plan document may have a deferral cap as your wife's plan has AND a plan is not legally required to permit catch-up deferrals, but your wife's plan happens to allow. It's not a legal right, it is a "privilege" if you will, granted by the terms of the plan. BUT, the plan's record keeper and/or administrator are not following the Plan Document - that is your argument, not that they are doing something illegal.

Based on the SPD, she should be able to defer 15% of pay PLUS $6,000 in catch-up deferrals, the $18,000 limit is irrelevant to her since 15% of pay is less than $18,000. Not allowing is an operational defect for the plan.

I agree with you that his prior firm comp cannot count in establishing a 3-year average for 415 and that you look only at his "new" SE income.

Even if all plan benefits were distributed as lump sums at once, participant can rollover all but the ESOP lump sum.

This sounds more like it should be a Friday afternoon friendly discussion over a couple of beers or joints (depending on which state you live in and which side of the argument you fall) rather than a middle of the week heated philosophical debate. Take my word for it, it's more fun my way!

Certainly is, although it's still 110% of current liability, which for this purpose was never updated for PPA, so you just need to be reasonable and consistent. For a CBP, it's not account balances.

agreed, although many plans now default to the beneficiary designation automatically being revoked upon divorce.

I thought it was Yankees fans you were allowed to discriminate against! The ACP test must consider everyone who would be eligible to receive a match during the year had they made an elective deferral, so Red Sox fans are excluded. As all agree.

I think an attempt to find and contact the husband must be made and, if unable to locate, follow the plan's provisions for inability to locate participant or beneficiary when benefits are due. If still legally married on the date of death with no spousal waiver/consent, I don't see how the benefit can be paid to the children.

Financial planning implications aside, if a participant rolls from an IRA into a qualified plan they now have a qualified plan rollover account in the plan (not an IRA). Provided the PSP allows for loans from rollover accounts this is permissible.

The Employer may not be treating the person as an employee, and the terms of the plan may then call for exclusion, in which case you cannot cover even if the appropriate determination (or your determination) is that the person is indeed an employee. This is not a statutory exclusion for coverage and nondiscrimination but an exclusion through the definition of eligible employee. Here is Relius volume submitter language. If you have a coverage failure by excluding this person, then you have a demographic failure to fix, but if not, then (s)he should continue to be excluded unless and until the Employer treats as an employee and pays via W-2. (b) An individual shall not be an Eligible Employee if such individual is not reported on the payroll records of the Employer as a common law employee. In particular, it is expressly intended that individuals not treated as common law employees by the Employer on its payroll records and out‑sourced workers, are neither Employees nor Eligible Employees, and are excluded from Plan participation even if a court or administrative agency determines that such individuals are common law employees and not independent contractors. However, this paragraph shall not apply to partners or other Self‑Employed Individuals unless the Employer treats them as independent contractors.

compliance issues are the same

Other concern - even if you can aggregate these individual partner plans for them to satisfy coverage (and nondiscrimination), then you also have to satisfy benefits, rights and features. Why are there individual partner plans? if these partner plans have features not available to NHCEs, such as self directed brokerage accounts, loans, in-service distributions, or whatever, then they are discriminatory regardless of contribution levels, NDT results, etc.

The employer must file Form 5310-A to claim QSLOB status after which you would treat each QSLOB as a single employer for coverage and nondiscrimination. Who the employer deems is most qualified (ERISA counsel or CPA) to help them make that determination is up to the employer. However, if legal counsel is willing and able to render an opinion, I would say that carries more weight than a CPA expressing their opinion. Note geographic differences are only part of the QSLOB criteria.

Partial termination is a facts and circumstances situation but is presumed if there is a 20% + reduction in active participants. If there are enough new participants so the net reduction is not 20% then should be no issue. If the employer can demonstrate that this is normal turnover and that net additions/subtractions over time are relatively stable, I also think you're OK, but IRS/DOL may ask for that demonstration. The spirit of the rule is to protect non-vested participants from losing benefits due to employer initiated actions to reduce workforce - mass layoffs, plant closures, etc. I don't think you have that here, I think it's the nature of the business, but if the dollars are large enough (forfeitures vs. full vesting) then the sponsor may want to seek legal counsel for an opinion.

Also, I suggest talking with your accountant or financial adviser. If the value of the stock has appreciated significantly over the years, you could reap some significant tax benefits by taking your distribution in shares of stock rather than "cashing out" and/or rolling over.

As a 403(b), only ACP testing would be a concern, but I agree that providing a match only to a subset of participants could not be a safe harbor match. They would have to physically have a new/separate plan for new hires (and pass coverage).

In these gray areas we are providing clients with the PBGC criteria and asking them to either make their own determination (who knows their business better?) or to request a determination of coverage from PBGC. However, if there isn't an existing DBP, then PBGC won't rule, and if the question of coverage is one of the decision criteria in whether or not to adopt a plan, potential sponsors and their providers are left making educated guesses. If you're looking for an educated guess here, my opinion is that a licensed speech therapist would be professional services.

If the plans are aggregated for nondiscrimination (and coverage) to enable the CBP to pass, and the contributions required in the DCP to pass the NDT are not made, then it is the CBP that fails 401(a)(4) nondiscrimination and w/o correction would be disqualified. The DCP would not be DQ'd on its own if there is no discretionary PS contribution because that plan does not need to be aggregated. However, if there is a SH and/or other type of contribution required under the terms of the plan and not made then that is a qualification issue. Note that not making the CB contribution does not mean that the plan defined contribution credits do not get allocated - so there's no "out" here by claiming HCEs didn't get any allocation/benefit.