"Plan states that if a participant's vested balance is >$1,000 but <$5,000 and the term'd participant has not attained the later of age 55 or the NRA under the plan on the termination date, then the balance is cashed out and rolled to an IRA absent a contrary election. Mandatory cash-out doesn't apply to anyone else regardless of vested balance. The plan utilizes a pre-approved plan document. Nothing in the adoption agreement or BPD (Relius doc) speaks to applying an age criteria other than age 62 or NRA in the plan. Besides being an operational failure (failure to operate the plan according to its terms), are there NDT issues here? Any other flies in the ointment you can see?"

"Client has a straight PS plan, no other provisions. Initial set up was pooled account. A few years later, they wanted to have a participant directed account ... Lo and behold, they switched 2 years ago and now they may want to switch to pooled account because too complicated for them to deal with.... They want to close up the participant directions and transfer all to pooled account. One way to do is leave the participant directed account as is and put in all future contributions into a pooled account but they will prefer dealing with a pooled account only. What issues are they facing, if any? Any BRF issues? Anything else?"

"Perhaps I was derelict in not researching this further or fully understanding it, but I had thought I could self-report ERPA CE credits to the IRS. During renewal, they ask you to enter credits per year (separated by ethics). When I added all the classes I had taken, I received an email from the IRS stating that I was one credit short based on what they had been reported to them directly, and that I needed to contact my CE vendors if there was an error (there wasn't). Furthermore, many of the classes I took did not appear to be eligible for ERPA and, therefore, were not reported. I was one credit short. And, of course, I didn’t learn about this until after the cycle was over, when it was too late to make it up. That’s on me for not fully understanding the rules. In any event, I replied to the IRS explaining that I had over 100 hours of ASPPA credit (albeit not ERPA) and asked if there is any possible flexibility. I’m waiting to hear back. A few questions:

1. Has anyone experienced this before? What did you do, and what was the outcome?
2. Besides John Hancock and ERISApedia, who else offers free ERPA CE credits?
3. Is there a web-based platform where I can take multiple classes (paid is fine) to quickly accumulate credits?
4. I know ASPPA and NIPA offer certificates, credentials, conferences, and other paid options. For example, ASPPA charges about $72 for a 1-credit on-demand webcast. Are there more efficient options?"

"A DB Plan sponsored by a corporation has the following provisions: [1] No in service distributions allowed, even if attained NRA. [2] However, if working less than 40 hours a month, then if attained NRA, allowed to start taking benefits.

"What if the corp has two owners (50/50). One of the owners wants to cut back on his work schedule and salary etc and work less than 40 hours monthly. Can this owner, who has reached, NRA, start to take monthly benefits from the plan, since he works less than 40 hours monthly or does this 40 hour rule not apply to owners?"

"A traditional DB plan is being audited by the IRS.

1. It appears from the questions being asked on the IDR, that the one asking the questions is not well versed in traditional DB plans or in DB plans in general. As they ask that the FT shown in the val report on the maximum contribution page is 1,846,234 is different than the FT shown on the SB of $1,345,367. The answer is that the SB shows the FT for the minimum funding requirements, while the FT on the val report in the maximum contribution section of the val report is based on the 404(0) rates for the maximum allowable contribution. There is indeed, a section in the val report that shows the FT for the minimum funding and it properly matches the FT shown in the SB.
2. They ask to provide a demonstration of how the plan provides meaningful benefits required by 401(a)(26). In a memo for EP determinations on 7/17/2007 (and Paul Shultz?) The IRS confirms that a benefit accrual of 0.5% per year of participation or service is meaningful....thus....a traditional DB plan that has a benefit formula of 0.5% of average compensation times credited service has a 'meaningful benefit'. This plan under audit has a benefit a formula of 3% of avg. comp per year of year of service limited to 10 years. Question: Since the formula is 3% per year of service shouldn't this mean that the plan provides meaningful benefits?
3. They ask how the plan satisfies the nondiscrimination in amount requirements of 401(a)(4). A DB plan that uses a safe harbor formula satisfies 401(a)(4). This pla uses a SH formula.... As it is the same formula for all employees, calculated based on the same number of service, and does not exceed 100% of comp. It uses a uniform accrual formula..benefits accrued at a consistent rate for all....3%per year of service. Question: Therefore based on this, doesn't this plan meet the 401(a)(4) non discrimination in amount by design, and does not need annual testing?"