Just Me

Plan satisfies 401(a)(26) and the reasonable classification test. Other issues? Seems to not pass the "smell test" but that's not part of the Code or ERISA.

Can a DB plan base eligibility to participate on the employee exceeding a specified level of compensation? (The plan is aggregated with a DC plan and will pass coverage and nondiscrimination testing on an aggregated basis.)

DB plan wants to allow retirees to direct a portion if their monthly benefit to be paid to the employer to cover their share of self-funded retiree medical premiums. Doesn't seem like a violation of anti-assignment under the Code. But what about prohibited transactions under ERISA?

Participant over age 70 1/2 retired on December 31, 2013. When is the first RMD payment? The Code/Regs say the distribution year is the year in which the participant retired. Somebody is arguing that since the participant worked on December 31, they didn't really retire until January 1, 2014.

Publicly traded employer sells a subsidiary to a non public entity. Public company owns 60% of the non-public entity (the buyer), so the empoyees of the subsidary do not have a "separation from service" from the seller under Section 409A. When they separate from serivce from the buyer, they will also be considered to be separating from service from the public company as well. Six month delay for specified employees? Or because they NOW work for a non public entity, no six-month delay requires? [This falls in the "grey area" where they don't have a separation from service from the original employer (under the 50% controlled group test applicable to separation from service), but also are no longer "employed" by the original employer either (under the 80% test of who is the service recipient).] Ain't 409A just a hoot?

I keep hearing various practitioners taking the position that you can't accelerate the payment of a short term deferral because it raises 409A issues. I know that it seems extraordinarily logical that if it is a short-term deferral, 409A does not apply, so there is no prohibition on accelerating payment. But this keeps coming up -- can anybody tell me what part of the regulations would lead you to think this is a problem?

By making a late payment, perhaps this short-term deferral has become subject to Section 409A? If it is documented, maybe it qualifies because it specifies how the amount is to be determined, the form and timing of payment, etc.? If so, then perhaps the operational failure to follow the terms of the document can be corrected under IRS Notice 2008-113, or if the payment was due earlier this year, by the end of this year under the rule that says later in the same tax year is deemed timely made? Alot of "perhaps", I know.

A client has a both a SIMPLE and a 401(k) in the controlled group. The SIMPLE only covers "personal employees" of the company's owner. They had been advised in the past that because the "personal employees" were not revenue-generating employees, they could participate in a SIMPLE despite the fact that the controlled group has a 401(k) plan for all of the company's regular employees. Any idea where the advisor may have gotten support for this position?

We spoke with the PBGC directly. They indicated that there is simply no guidance regarding whether the MAP-21 numbers can be used to determine the $50 million threshold. They suggested that perhaps the DOL has an informal opinion.

Underfunded amount is more than $50 million on "regular" basis, but less than $50 million on MAP-21 basis. Is this over the $50 million threshhold for providing a copy of the AFN to the PBGC or not?

Does anyone know if a section 404(k) dividend pass through feature in an ESOP is a protected benefit under Section 411(d)(6)?

Plan A is 100% vested. Plan B has a 5 year graded schedule. Company A buys Company B. Plan B is merged into Plan A. Company B employees will be 100% vested in all new contributions made after the merger. However, Company A wants to continue vesting Company B employees in their pre-merger accounts under the old Company B schedule. Can they do this? If not why not? This does not involve cutbacks.

Ah. A line, but not so hot?

Yup.

Ummmmmm....what 409A hotline?