Looks like with all the construction, phone lines were not properly labeled and were somehow cut.  We believe the problem has now been resolved.

Again we apologize for any inconvenience.

Sincerely,

Nova 401(k) Associates

Nova’s Houston office is currently experiencing phone service interruption and calls are not coming through, in or out. Technicians are working diligently to resolve the problem.

In the meanwhile, please email your account manager. If you need to speak with a live person, our Austin and Dallas staff members are available to assist you (Dallas (469) 726-3314 and Austin (512) 501-2862).

We apologize for any inconvenience.

Sincerely,

Nova 401(k) Associates

*Please note: the phone lines are now working*

Have a wonderful weekend!

Karen’s topics will include:

• Coverage Testing – Advanced Techniques: Qualified plans must pass coverage tests to demonstrate that they benefit a non-discriminatory cross-section of employees. Gain an understanding of the permissible testing methods and how disaggregation can affect the testing results. Case studies will be examined to provide you with tips and the possible pitfalls in coverage testing.
• Fixing Broken DC Plans Using Advanced Testing Methods: Did you know there are alternative nondiscrimination testing methods that could produce more favorable results? Do you know the best method to correct a failed test? Attend this session to learn advanced testing strategies and correction techniques.

This four-day event (April 29th to May 2nd) provides up-to-date information on all aspects of the retirement plan industry, including day-to-day tasks, impacts of recent or forthcoming legislation, industry trends and practical tools focused on expanding pension administration knowledge.

            The PBGC letter relays that that there are 5 general factors in determination, “(i) whether the plan or plan sponsor is controlled by a government entity, (ii) whether officers or members of the plan represent, or are selected by, a government entity, (iii) whether the plan or the plan sponsor is funded by a governmental entity, (iv) whether the plan’s participants are considered to be government employees, (v) whether the plan sponsor is treated under state or federal law as a governmental entity, (vi) whether there are any private interests involved, and (vii) whether a governmental entity has the powers and interests of an owner.”

            In section 4021(b)(2) the ERISA states, “There is no definitive statutory or regulatory definition of the term ‘governmental instrumentality.’” This lack of a concrete boundary causes confusion for organizations in regard to governmental exemptions.

            In opinion letter 96-2, a California case is in discussion. The conflict pertains to the company’s directors, who are not public agencies, but who affiliate the organization as a governmental one.

            The PBGC recognizes that the state of California possesses substantial authority over the company and that the state has final veto-power over any potential changes in the company. Because the state of California has so much power in the structure of the company, the PBGC grants the company the title of a governmental entity. The organization is exempt from coverage.

            In opinion letter 98-2, a corporation running a city transit system is in discussion. The corporation argues that they are in contract with the city and therefore the corporation is a government instrumentality, which makes them exempt from coverage.

             Although the corporation runs the “public enterprise” that the city owns, the contract between the city and the corporation does not hold the city liable to the plan or active plan participants for unfunded benefits. This lack of accountability on the city’s behalf directly puts the weight of the plan on the corporation’s shoulders.      The contract also implies that the corporation is in charge of compensation, discipline and day-to-day functions. Due to the corporation’s heavy hand in their own affairs, the PBGC does not recognize the corporation as being a governmental entity and therefore are not exempt.

We will be closing early on Wendesday and our offices will be closed on Thursday and Friday.

Have a safe and wonderful Holiday!

Below is a list of the most common 2012 retirement plan limits:

401(k) Elective Deferral Limit

• Increased to $17,000
• Increased for individuals age 50 or older to $22,500

Defined Contribution Maximum Annual Addition Limit

• Increased to $50,000
• Increased for individuals age 50 or older to $55,500

Annual Compensation Limit

• Increased to $250,000

Here is a  2012 Plan Limits flyer for your reference. If you have any questions about the limits or how they affect your plan, please contact your account manager.