ESOP currently provides that normal form of distribution is employer stock; ER would like to amend plan to make normal form of distribution cash, but have ER stock as optional form of distribuiton (i.e., participants have to affirmatively elect to receive distribution in ER stock). In my view, there is not a cutback issue because we are not eliminating an optional form of benefit (i.e., we are not eliminating optional protected right to receive distribution in form of employer securities). Any thoughts are appreciated.

Are business associates specifically required under the final HITECH regulations to appoint a privacy officer? If so, can someone provide the applicable regulation, as I can't seem to find one. Thanks!

Company A, Company B and Company C are a controlled group as Company A owns 100% of Company B and Company C.

Client would like to off the following:

1. 401(k) to all employees of companies A, B, C

2. One tier of Match to only all NHCE employees of Company A, another tier of Match to only NHCE employees of Company B and nothing to Company C.

Will this work? We should pass coverage on the match since coverage is automatically satisfied if NO HCEs are allowed to participate. Is my reasoning correct? What am I missing?

Thanks.

This 401(k) plan has an EACA at 4% of compensation. A participant has come forward in mid-April who says she opted out of the auto-enrollment at the beginning of the year, but she has had deferrals withheld anyway. The 90-day window for permissible withdrawals has passed. Nobody can find the participant's signed election form that states she opted out. The office manager believes the participant, but can't find the signed paperwork. The participant wants her money refunded from the plan.

Can the plan refund the participant's deferrals even though the 90 day window has passed? Can the employer assume responsibility for the error, since they lost the signed paperwork?

Any insight is appreciated!

we are trying to publish to webclient online and getting an error stating "publish aborted. Err: 0,". I have put in an incident to Relius but getting nowhere. I was wondering if anyone had this error before and knew how to fix it?

thank you!

Vicki

Hello,

If a plan has an 401k Profit sharing plan but is not funding this plan

Can they also adopt a sep in the name of the plan or does the profit sharing plan need to be terminated

Thank you

sue

15 doctors are partners in an LLC ;all but one partner has formed a PC;and the PC's are the aprtners of the LLC

a second company is also a partnership(used to be a corp) is a billing company owned by each of the 15 doctors (individually)

Q:in what circumstance would this NOT be an FSO/A-org asg?

thank you

slipton@intpen.com

Employer contributions to ESOP alocated based on compensation. ESOP provides that trust assets may be applied to pay loan. Upon repayment, shares are released under the Principal and Income method and are allocated pro rata based on compensation in the year of the loan repayment. ESOP has special "value rule" for the use of allocated dividends applied to pay loan.

ESOP has substantial Employer cash contributions allocated to participant cash accounts.

Can ESOP use allocated Employer cash contributions to pay off loan?

If so, are shares released under the P&I method?

How are released shares allocated back to participants? pro rata based on current year compensation under the formula (this seems unfair if the accounts were charged pro rata based on account balance)?

Pro rata among participants based on the contribution debited from their cash account to pay loan? (value of shares returned to participant may not equal cash debited.)

Must participant receive shares of equivalent value to the contribution debited from cash account to pay the loan (similar to treatment of dividends)? i.e., the loan payment is considered an equal exchange of cash for shares.

Is this exchange considered reshuffling as described by the IRS?

Should plan have a provision that address use of cash account to satisfy loan?

Any comments/authority would be helpful.

Had a strange situation come up recently, and I'm stumped as to how to go about correcting.

EE was deferring 5% pre-tax and 5% Roth. About 2 years ago, EE elected to reduce Roth to 3%. ER accidentally reduced pre-tax to 3%.

ER now wants to correct by making a QNEC for the missing 2% pre-tax deferral. I'm not sure this is the right approach, as the deferrals in total were correct and any new money contributed would be an undue windfall for the participant.

On the other hand, I see where some correction is needed since the participant has lost out on the pre-tax nature of the deferrals for the last 2 years.

A client has had a new Comparability PS plan for 10 years, and the groups are Owners & All Other participants.

Client started a new CB plan in 2012.

1st Question: Can the CB contributions be included towards the minimum gateway contribution?

2nd Question: CB administrator sends his report saying that the All Other participants need to get more PS to make CB plan work. The additional PS in his report is not pro rata, as each participant in this group has different %s. When adding the CB contribution though, they do become even. I think that the actual PS portion must be pro rata amongst the EEs in this group for this to be okay. Do you share the same belief? We can amend for next year to make each participant in their own group, but I would like to know what can be done for 2012.

Thank you!

I work on a plan where the plan is expected to have a liability associated with the Cadillac tax. In terms of recognition of the cadillac tax purposes for ASC 715 as of the close of FY ended March 31, would it be appropriate to include the cost of the cadillac tax in the APBO in the balance sheet, and correspondingly there will be an increase in the amortization of the (gain)/loss in the expense calculation (income statement)?

A terminated participant in a defined benefit plan has attained the plan's normal retirement age (age 65). In accordance with the plan provisions, distribution to a terminated participant must begin no later than the participant's normal retirement date. The plan does not offer a lump sum provision. The available forms of benefit are a single life annuity, a 50% J&S annuity and a 75% J&S annuity.

The benefit calculation has been prepared and the appropriate forms have been provided to the terminated participant. After repeated requests, the participant has failed to return the forms to the plan administrator.

The plan's normal form in the case of a married participant is a 50% J&S annuity. Can the age 65 monthly benefit be paid to the participant without the participant's consent in the form of a joing and survivor annuity? If the answer is yes, would you suggest the 50% J&S annuity or the 75% J&S annuity be paid to the participant? These forms of benefit have been calculated using the spouse's exact date of birth.

If the benefit can not be paid without the participant's consent, what other options are available to the plan administrator. Note that this individual is not lost or missing. The participant just does not care to respond.

Hi All. Here is my situation: I have a ~$9,000 balance in my Roth 401(k), with a vested balance of approximately $4,500 (employer match has not yet vested). I am leaving my job that I have been at for 2 years and I am 23 years old.

For argument's sake, let's say I contributed $4,000 from my paycheck and the remaining $500 of the vested balance were capital gains. Because it is a Roth 401(k), the ~$4,000 or so I have contributed has been after-tax money.

I have the option to withdrawal, rollover to new employer, or just keep it. In my current life situation, my preference is to withdrawal and finish paying off some student loans and get out of my parent's house and forgo the "financially correct" move and allow the $4,500 to grow tax-free into retirement and withdraw that tax-free.

However, what is the tax penalty for doing this? I am comfortable paying the following penalty:

10% on $4,500 withdrawal

30% (or whatever my income tax rate is) on the $500 capital gains.

So altogether, I would net about $4,000.

However, will this $4,500 also be counted as income at the end of the year? Then I will be double-taxed and will only net about $2,800. That wouldn't make sense to me because I have already paid income taxes on that money once when I was paid.

Could someone clear this up for me please? I am reading conflicting things on the internet. Let me know if any further information is needed and I really appreciate your help! This board is a wealth of knowledge.

A 401(k) plan must refund excess contributions to an HCE. The amount of the excess contributions, correctly computed, is $8,000.

Scenario #1.

The TPA makes a mistake and refunds $8,500 to the HCE. After the refund has been made, the mistake is discovered. Should the plan sponsor correct the mistaken refund?

Scenario #2.

The HCE asks the TPA to add an extra $2,000 to the $8,000 refund. The TPA refunds $10,000 to the HCE. Should the plan sponsor correct the mistaken refund?

When the actual excess contribution refund exceeds the correct amount, how, if at all, is the excess amount recovered/corrected?

Thanks in advance for any suggestions.

(Pardon the multiple postings of this question. I couldn't determine which forum it best fit under.)

Question regarding the exclusion for “Health FSAs” for purposes of the exemption from the annual limit restrictions under the PPACA:

The interim final regulations governing the lifetime and annual limits under the PPACA include an exception for Health FSAs under IRC 106©(2). See Treas. Reg. 54.9815-2711T(a)(2)(ii). IRC 106©(2) defines a Health FSA as a benefit program under which specified medical expenses may be reimbursed and the maximum amount of reimbursement reasonably available to a participant is less than 500% (5x) the value of such coverage. While there is no clear IRS guidance on how to determine the “value” of coverage under an HRA/Health FSA, the “value” of coverage is generally presumed to be equal to the plan’s average per-participant reimbursement amount (i.e., the average claims cost per participant). For example, if an HRA has 10 participants, a maximum reimbursement of $2,000, and $4,500 in claims during the plan year, it is typically considered to be a Health FSA because the maximum reimbursement of $2,000 is less than 5x the presumed $450 per-participant claims cost—i.e., the “value” of coverage.

My question is this:

Does anyone have any guidance on how “value” of coverage may be affected if an HRA will reimburse the purchase of health insurance premiums (not just medical expenses)? Arguably, if health insurance premiums can be reimbursed, the “value” of the HRA coverage would be more than just the plan’s average per-participant reimbursement amount or even the plan’s maximum benefit amount, because participants can purchase insurance that will pay for larger amounts. Does anyone have guidance or thoughts on this?

Thanks!

Steve

Question regarding the exclusion for “Health FSAs” for purposes of the exemption from the annual limit restrictions under the PPACA:

The interim final regulations governing the lifetime and annual limits under the PPACA include an exception for Health FSAs under IRC 106©(2). See Treas. Reg. 54.9815-2711T(a)(2)(ii). IRC 106©(2) defines a Health FSA as a benefit program under which specified medical expenses may be reimbursed and the maximum amount of reimbursement reasonably available to a participant is less than 500% (5x) the value of such coverage. While there is no clear IRS guidance on how to determine the “value” of coverage under an HRA/Health FSA, the “value” of coverage is generally presumed to be equal to the plan’s average per-participant reimbursement amount (i.e., the average claims cost per participant). For example, if an HRA has 10 participants, a maximum reimbursement of $2,000, and $4,500 in claims during the plan year, it is typically considered to be a Health FSA because the maximum reimbursement of $2,000 is less than 5x the presumed $450 per-participant claims cost—i.e., the “value” of coverage.

My question is this:

Does anyone have any guidance on how “value” of coverage may be affected if an HRA will reimburse the purchase of health insurance premiums (not just medical expenses)? Arguably, if health insurance premiums can be reimbursed, the “value” of the HRA coverage would be more than just the plan’s average per-participant reimbursement amount or even the plan’s maximum benefit amount, because participants can purchase insurance that will pay for larger amounts. Does anyone have guidance or thoughts on this?

Thanks!

Steve

(Pardon the multiple postings of this question, but I couldn't determine which forum it best fit under.)

Question regarding “Integrated HRAs” for purposes of the exemption from the annual limit restrictions under the ACA:

The recent Q&As under the January 24, 2013, FAQs about the Affordable Care Act Implementation (Part XI) that is available on the DOL’s website noted that an HRA is not considered “integrated” with and employer’s primary health coverage unless the HRA is available only to employees who are covered by the primary health plan (i.e., the employee must actually be enrolled in the primary coverage). What is left unsaid is the treatment of coverage for spouses and dependents—i.e., whether an employee must enroll their spouse and/or dependents in the primary health plan to receive reimbursements under the HRA for medical expenses incurred by the spouse and/or dependents.

Based on the statement that an employee must actually be enrolled in/covered by the primary coverage for the HRA to be considered “integrated” it would make sense that the same requirements would apply for spouses/dependents, but I have seen no clear guidance on this aspect. If such is the case, employees who select “employee-only” primary coverage could only receive HRA reimbursements for their own medical expenses, not for medical expenses incurred by their spouse and/or dependents. To do otherwise would run the risk that the HRA is not “integrated” because the spouse/dependents could receive HRA benefits (subject to an annual limit) but not primary coverage (which would be unlimited).

Has anyone seen any guidance on this?

Thanks!

Steve

Question regarding “Integrated HRAs” for purposes of the exemption from the annual limit restrictions under the ACA:

The recent Q&As under the January 24, 2013, FAQs about the Affordable Care Act Implementation (Part XI) that is available on the DOL’s website noted that an HRA is not considered “integrated” with and employer’s primary health coverage unless the HRA is available only to employees who are covered by the primary health plan (i.e., the employee must actually be enrolled in the primary coverage). What is left unsaid is the treatment of coverage for spouses and dependents—i.e., whether an employee must enroll their spouse and/or dependents in the primary health plan to receive reimbursements under the HRA for medical expenses incurred by the spouse and/or dependents.

Based on the statement that an employee must actually be enrolled in/covered by the primary coverage for the HRA to be considered “integrated” it would make sense that the same requirements would apply for spouses/dependents, but I have seen no clear guidance on this aspect. If such is the case, employees who select “employee-only” primary coverage could only receive HRA reimbursements for their own medical expenses, not for medical expenses incurred by their spouse and/or dependents. To do otherwise would run the risk that the HRA is not “integrated” because the spouse/dependents could receive HRA benefits (subject to an annual limit) but not primary coverage (which would be unlimited).

Has anyone seen any guidance on this?

Thanks!

Steve

What compensation is used to determine whether or not a person is a HCE?

Example: If a person receives compensation of $60,000 from one employer from Jan 2012-May 2012, then works for another employer from June-Dec 2012 and earns $75,000 all under the same collectively bargained agreement and the same plan document, would they be considered a HCE for 2013?

My "strange" questions/problems seem to be coming out of the woodwork along with the pollen!!

I have a doctor's group that for several years has been a quasi self-directed. Meaning, there are 5 different accounts set up from which participants may choose to go into, based upon their risk tolerance (ie, high risk, moderate, low risk, etc.). They have been able to change 2x per year, and I prepare a year-end allocation report as well as a mid-year.

The doctors wish to change from this set-up to a plain Trustee-Directed account.

Do I need to prepare a Blackout Notice? My inkling is "no", but I do think that some form of a notice must be given.

Please help! Thank you!!