I am in the midst of an on-cycle FDL request and working with reviewer through his issues. Final issue relates to an original adoption agreement/prototype plan with an original effective date (as noted within provisions of adoption agreement) of 7/1/01. The adoption agreement was signed by the employer/officer, but not dated. IRS is threatening plan with heavy sanction because I cannot find a board resolution or other proof of the date of formal adoption. Any ideas on how to argue that the absence of a signature date beside the signature should not invalidate the adoption of the plan on 7/1/01, when the adoption agreement indicates that is the original effective date?

I am grateful for any suggestions - other than looking for a dated document. I have traced the ends of the earth for something to indicate a date of adoption of the plan - and am coming up with nothing. Has anybody had success negotiating with an IRS reviewer that the lack of a date on an original adoption agreement should not invalidate the proper adoption of the plan and render the plan "nonqualified"?

I understand the lack of a date on an amendment that has a drop dead execution date per statute is damning, but this was the original plan document and it seems to me that there is some argument that the date typed into the "Effective Date" section of the adoption agreement should constitute the "dated" element that the reviewer is looking for.

Thank you in advance for any thoughts.

Is anyone aware of any official guidance on requirements or restrictions relating to private entities establishing "exchanges" or "marketplaces" for individuals to purchase health coverage that satisfies the ACA?

I have an agreement under which an entity reimburses an individual for certain expenses. At the end of the reimbursement period, the individual must pay the entity back. However, so long as the individual continues to practice in a specified geographic area, the amount is forgiven so that the individual has no obligation to repay.

The agreement specifically provides that the individual is not an employee of the entity. Do I have any 409A issues here?

First off, I realize this should not happen, but it has so now I need to fix it.

2012 Plan Year

Participant Contributions $20,000 in pretax...Not catchup eligible. They receive a $40,000 ER contribution. (This is a Taft Plan so multiemployer.)

Which Excess do I correct first? Do I reduce the $20,000 to $17,000 and then remove an additional $7000 for pretax for the 415 failure?

The difference if done by April 15th, 402g would be taxable in year contributed. If done as all 415 excess, all would be taxable in year distributed.

Any thoughts?

Does anyone have an electronic copy of the US Airways plan that was lodged with the clerk of the Supreme Court? I would like to see it.

Participant with $800,000 in plan has $75,000 in after tax account. the basis is about $52,000. Can he roll the $75,000 after tax to Roth and pay tax only on the $23,000 gain?

Hello,

Been a while since this came up. Plan currently has a fixed option and are moving to our platform. They would incur about $20k in penalty --employer asked about making the participants whole and "repaying " their accounts the surrender penalty.

I thought if it is allowable, it would be treated as annual addition, and would be a contribution to the participants accounts. Because not all participants are in the fixed option, it would be a non-uniform allocation --therefore general test it (?)

Has anyone run into this ?

Thanks

My client who is an S corp has 2 s/h that > than 2% .They have 2 types of medical plans through the company/ There are 15 employees. 7 of the employees do not get medical insurance because they are either covered by a spouse of they were government employees and have insurance elsewhere. They opted out of the plan.

There are a total of 8 employees on both plans.The owners are over 65 and they are on medicare . They also have a medicare supplement through the company.

3 employees have either a family plan or a single. and 5 are on a medicare supplement. The company pays for both plans 100%. 

Question: The owners want to have reimburse their Medicare premiums ( which is taken out by social security) reimbursed by the company. They pay more in because there W2's are more than the employees..

1) Can they be reimbursed by the company for the medicare that is taken out of their social security? Would this be discriminatory  because their reimbursement is higher than the other employees? 

 2) Also would it be discriminatory because the other 8  employees WHO have insurance elsewhere also have medicare. DO they need to be reimbursed . They are not part of the medical plan. Thank you

I have a client that was covered by insurance in his 401k plan. Each year we received a letter from his insurance agent with the PS58 costs (Table 2001) and included that amount on his personal income tax return.

In the middle of 2012 the plan sold the policy for cash -- so as of 12/31/12 there was no insurance policy in the plan.

What do I have to report for the PS58 cost on his tax return? Here are some options

1. Nothing -- because there was no life insurance as of 12/31/12
2. A prorated amount based on the number of days the policy was owned divided by 365
3. It depends on when the premium was actually paid. If paid while still owned by 401k, then a full year’s PS58 cost has to be included --- and if paid after policy sold then nothing to include
4. Other

I was trying to post a poll but I am not sure if it worked.

We currently use Relius for Documents and Government forms, but ASC for reporting/report writer.

I used Datair for the past 8 years, half of that time the DOS system, but since 2009, the WIN system.

I was wondering what you use in your office?

Does anyone know the withholding and reporting requirements for SARs exercised by a former employee? The rules are pretty clear for nonqualified deferred compensation paid to former employees, but the SARs at issue are designed to avoid 409A, so they don't fall under those rules.

Should this be reported on a W-2, even though the employee is no longer with the company? Does withholding apply (and, if so, at what rate)?

In taking a spin through DOL 2550.404a-2( c), I don't see anything specifically permitting (or prohibiting) taking the intial set-up fee from the former participant account holder on whose behalf an automatic IRA has been established. Subsection ( c)(3)(iv) only states:

Would it be permissible under PPACA to require that a participant have two years of participation in the plan before they are eligible for a particular benefit? Would it matter if the benefit is not an essential health benefit (e.g., weight loss surgery, TMJ surgery)? Thanks.

Company A has a 401k plan. Company B has a 401k plan. Both companies are unrelated. On 12/30, company A terminates its 401k plan. On 12/31, Company B purchases the stock of Company A.

What is the impact on the retirement plan of Company B...and even Company A?

It is our understanding that the the intent of Company A was to allow its employees to distribute their account balances before they were considered employees of Company B.

Due to the stock sale, wouldn't we have a controlled group and therefore no "severance from employment" due to having the "same employer", and wouldn't that prevent the participants from taking distributions (successor plan issue)?

Or does the fact that Company A terminated the plan before the sale take precedence?

Pursuant to California Gov’t Code § 31838.5 and a case interpreting it, Block v. OCERS, in a situation where a member retires on disability from one public system and receives one-half his or her compensation as disability retirement benefits, and also retires from and receives service retirement benefits from another reciprocal public entity for which he/she has also worked, the combination of disability and service retirement amounts cannot be greater than the amount the member would have received if all of his service had been with one entity. If it is, Section 31838.5 states: “Each entity shall calculate its respective obligations based upon the member’s service with that entity and each shall adjust its payment on a pro rata basis.”

I don’t understand how the entities are supposed to adjust their payments. As an example, the member retires on disability after 7 years with System B, at a disability retirement of $3,000 per month. Member worked for System A for 15 years and would have received an additional service retirement of $1,800, except for the cap of "all service with one entity." Due to the cap, the most John can receive is a total of $3,300.

The original calculation was $4,800 total--$3,000 from System B and $1,800 from System A. But per section 31838.5 it is now $3,300 total. How do the entities subtract the $1,500 from their respective payments—what percentage of a reduction can they each take, and what is that percentage based on?

Thanks for your help!--Mary

I read the following article, which suggests that the pay or play mandate can be put off for almost a year if insured employers change their plan year.

http://www.huffingtonpost.com/2013/04/04/aetna-obamacare_n_3009589.html?utm_hp_ref=business

It’s my understanding, based on the January 2 proposed regs, that a plan couldn’t switch from a calendar plan year to another plan year and avoid the pay or play mandate; only plans that had non-calendar plan years as of December 27, 2012 were grandfathered in. I’m trying to figure out if I’m missing something. Has anyone else encountered this? Do you have any thoughts?

Currently my client sponors two plans: a prevailing wage plan and a 401(k) Plan.

Can the 401(k) plan be merged into the prevailing wage plan? If so, can the plan have different eligibility requirements for the 401(k) portion and prevailing wage portion? (It is my understanding that the prevailing wage plan must provide for immediate eligibility and 100% immediate vesting.)

If they terminate the 401(k), is the prevailing wage plan considered a successor plan?

Thanks,

m

Is it a prohibited transaction to pay life insurance premiums (for a policy held within a defined contribution plan) with personal assets?

Can a Simple 401(k) Plan be merged into a Traditional 401(k) Plan?

Treas. Reg. §1.401)f)-1© states that "Any custodial account or annuity contract which satisfies the requirements of paragraph (b) of this section is treated as a qualified trust for all purposes of the Internal Revenue Code of 1954. Such a custodial account or annuity contract is treated as a separate legal person which is exempt from the income tax under section 501(a). In addition, the person holding the assets of such account or holding such contract is treated as the trustee thereof."

It would appear based on this regulation that a governmental 401(a) plan administered under a group annuity contract or custodial arrangement satisfies the trust requirement and no designated trust is required.

Would you agree?