The plan document currently states the safe harbor match is made on a payroll basis.

The employer would like to change this to an annual basis.

Can the plan be amended in midyear to allow with this change

The loan policy states that loan payments must be withheld via payroll and upon termination the loan balance is due or it defaults.

Scenario:

Participant terminates with an outstanding loan and sends personal checks for loan payments to the record keeper. The record keeper accepts them and does not default the loan. The plan sponsor realizes that this is happening six months later. What is the proper correction method?

My thought is that this is an operational failure similar to the inclusion of an ineligible employee who is allowed to defer. In that scenario, either the plan is amended retroactively (411d6 issues may apply) or the ineligible deferrals are returned to the employee. Is it a stretch to apply the same logic in this loan scenario?

It seems there are two options:

1. Stop accepting payments and default the loan during 2013

2. Return the loan payments and default the loan based on the outstanding balance at the time of termination (6 months ago)

Any thougths?

Thank you

when determining whether two entities are a parent/subsidiary controlled group do you apply attribution to the shareholders/members of the parent? in this case 10 of the members of one LLC each own 2.70% in that LLC and those same 10 own 10% each in another entity.

the RMD calc rules require a separate table of factors if the participant receiving the payout is married, their spouse is more than 10 years younger, and the spouse is the designated beneficiary.

Does anyone know of any specific exception to this rule - for example, if you are unable to acquire the beneficiary information, is it ok to just use the Uniform Life Table I?

Can a plan that had a J&S option remove that options from its provisions? Plan number is 002, but the only money in the plan right now is Profit Sharing, Salary Deferrl and match.

Employee is terminated and has money remaining in their FSA account from payroll withholding. Can that employee get reimbursed for medical expenses after their employment terminated? If so, is their a cite for that? Thanks.

Have an almost frozen DB plan. About 110 participants, most inactive. No lump sums, not even if <=$5,000. Only one (union) participant is still earning benefits -- about $12/month in 2013.

At 2012, we had under MAP-21:

FT 1,610,000

Assets 1,700,000

FSCOB 835,000

MRC=15,900

FTAP= 45%

AFTAP=105%

Assets yielded about 10% during 2012 and there were no unusual demographic changes.

At 2013, we have:

FT 1,755,000*

Assets 1,695,000

FSCOB 900,000

MRC=138,000

FTAP=45%

AFTAP=45%

Consequently, must burn about 260,000 of FSCOB to get AFTAP to 60% so that one participant can earn $12/month.

Assets would have had to yield about 12.65% just to avoid the burn of the FSCOB (i.e., maintain AFTAP at 100%). Only hope is that employee still earning benefits quits. May I be retired as interest rates decline and assets suffer a loss. FSCOB will disappear real fast and contributions will skyrocket.

In short, this example illustrates how Congress has eroded the efficiency of DB plans. And the Big Guys at the EA meeting are so optimistic about DB plans!

*FT using 2011 assumptions=1,640,000

Last year my Dad passed away and named me the beneficiary of a SIP plan. At the end of the year, they sent an automatic distribution. I had planned to keep it in place as a retirement plan for myself, but just received a check for the balance less 20% withheld for Fed tax and 6% withheld for state tax. Plan admins told me that plan rules required closing after 180 days. Question is: 1)could I have rolled this entire amount into another qualified plan for myself with no taxable event? 2) Can I take the balance I received and roll it into another qualified plan without creating another taxable event?

Does anyone know if the PPACA 90 day elimination period also applies to health FSA?

The health insurance company has released copies of EOB's to the employer. Is this a violation of HIPAA laws?

Happy 18th birthday to BenefitsLink.

Attaboy, Dave!

We have an employee whose individual health insurance policy will have a 35% increase at renewal in June.

She previously waived enrollment in employer health plan, but enrolled in the dental and vision plans under our Section 125 plan.

Is the increase in the cost of her individual policy qualifiy as a change in status and therefor she can enroll in employer health plan?

We have a safe harbor plan in which some participants are making dollar amount deferral elections instead of an allocation percentage of comp. Their pay fluctuates each pay period and the employer is submitting a safe match each pay period. However, the employer is not adjusting the match to that period's compensation. The SHM is the same amount each pay period just like the deferral.

The plan does not have a true up provision.

For those that contribute a dollar amount deferral election, it would appear that they should be receiving the match = to 4% (enhanced and assumed that their deferral => 4% comp) of that periods comp, regardless of the fact that the deferral amount is the same. Am I correct or am I missing something?

Anybody know where I can find a chart/list of the required cafeteria plan document amendments over the past decade or so?

Thanks

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?