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Showing results for tags '414(h)'.
Found 3 results
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A municipality wants to set up a DC plan under which retiring employees can defer their accumulated PTO bank when they retire. The municipality has been told (not by me) that it can set up a 401(a) defined contribution plan for this purpose. The leave bank will be the only source of contributions to the plan (no amounts other than the PTO bank contributed by the municipality or the employees). Employees won't be required to contribute their leave bank, they will also have the option to receive a payout at retirement in a (taxable) lump sum. I can't fit this situation under any of the PLR's, and am concerned this this is really an impermissible "cash or deferred election." Any thoughts? Has anyone seen this type of set-up before? What if I drafted the plan so that employees were required to defer their leave bank at retirement (i.e., try to turn the leave bank into a "mandatory contribution") I am aware that these amounts can be deferred under a 457(b) plan - but some employees have leave banks that are much larger than the annual limit under 457(b).
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Town DB plan with employer pickup contributions (yes - formal action was taken when implemented). Town is amending plan to retroactively include position that was previously excluded. Employee will need to make up contributions for period of credited service she will be granted (and she will start contributing prospectively for future service as well). Do the contributions for the period of past service need to be made on an after-tax basis or is there some way to draft the plan so that these contributions are picked up by the employer as they would have been if she had been included all along. I know she can't be given a choice, but can the plan specify that payment of the past contributions will be paid over a certain period and will be picked up by the employer? I have the same question for making up contributions after returning from a leave of absence. If the plan bridges service and requires the participant to contribute for period of leave, can these be picked up?
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I posted this issue in EPCRS and didn't get a response so I'm trying again here. Governmental employer with a defined benefit plan that includes mandatory employee contributions picked up by the employer. Handful of employees in an excluded class have been erroneously treated as eligible and pick-up contributions have been made for them for many years. How can we correct? (The employer will need to pay social security taxes for these employees, so we don't want to do a retro amendment to include them in the plan. This would also require a VCP since this isn't early inclusion of otherwise eligible employees) Thanks!
