JustnERPA

A plan has a fraud prevention procedure that delays issuing a participant loan request by a couple of days after the request is made. A participant's vested balance is $10,000 on the day they request a $5,000 loan. The market drops during those 2 days so their vested balance is $8,600 when the loan is issued. Can the plan issue a loan for $5,000 or must they redo the amort schedules etc. and only issue a loan for $4,300?

Sorry I wasn't clear, it's: 0% with 0 years of vesting service 20% with 1 year 40% with 2 years 60% with 3 years 80% with 4 years 100% with 5 years of vesting service

Thanks, so it's a grey area: sooner is better, longer becomes questionable.

Yes, the above references are from the PPA document/adoption agreement.

A profit sharing plan uses a 6-year graded schedule for it's employer allocations. The plan has never been top-heavy, but in a couple of years it will very likely become top-heavy. The adoption agreement has a slot for electing a vesting schedule for top-heavy purposes. That section states for any year the plan is top-heavy, the top-heavy vesting schedule applies to the extent that it is more favorable than the plan's regular vesting schedule. For some reason, the top-heavy vesting schedule is a 5-year graded (0,20,40,60,80,100) - one year quicker than the 6-year schedule. The employer would like the 6-year schedule to be applied when the plan becomes top-heavy. The document then goes on to say that the top-heavy vesting schedule applies to all benefits within the meaning of 411(a)(7) except those already subject to a schedule that vests at least as rapidly as the schedule above. And only for participants with an hour of service after the plan becomes top-heavy. The plan document spells out some rules for amending the plan's vesting schedule. Since the plan is not top-heavy yet, do those rules for amending the schedule apply to the top-heavy vesting schedule? If they do apply, the plan states employees with 3 years vesting "may elect to have the nonforfeitable percentage computed under the Plan without regard to such amendment." With the plan currently not top-heavy, that election does nothing - they are still on the 6-year schedule. What choice are they making, for example, between schedule A or B: what would be vesting schedule A vs. what is vesting schedule B that they get to elect from?

The document for a plan sponsored by an S-Corp where the only employee is the 100% shareholder states "If this plan is not subject to ERISA, the Employer shall deposit elective deferrals to the Trust as of such time as is required by the IRS and DOL." The DOL 7-day rule does not apply to a non-ERISA plan, right? So what is the deposit deadline for any withheld deferrals?