I have a client who is very concerned that public display of a company EIN (via EFAST2, BrightScope, or otherwise) is an invitation to possible fraud, hacking and other indentity theft at the corporate level. Also of concern, especially for very small plans, is that the plan balance essentially publicizes the account value of the owner.

I have not personally heard of any adverse situation arising out of the public information available on Form 5500. However, I wanted to ask this community if clients have ever expressed concern over the public information on Form 5500, or if any adverse situation has occurred based on the public information reported on Form 5500.

Additionally, has anyone ever heard any governmental agency express any concern over the public information on Form 5500? (my client believes that a company EIN should be protected the same way we protect SS#'s)

Assuming that nobody has expressed any concern to you over this information, I would ask "why not?" Is name, address, phone and EIN insufficient to do any harm? Is the EIN of a company available elsewhere and readily accessible through other sources?

I am certain if company EIN's were subject to the same identity theft issues that are associated with SS#'s, we would have heard about it by now. Obviously, there must be a difference between EIN's and SS#'s. If you know what those differences are, please let me know so that I can assure my client that Form 5500 is not an invitation to identity theft.

Trying to clarify the use of QMAC in the ADP Test.

Here is the situation:

ADP HCE=7.0 NHCE=4.10

ACP HCE=2.0 NHCE=0.9 (this is a QMAC)

Can I reverse borrow/shift the .9% of the NHCE Match to the ADP test? Result would be NHCE average of 5.0..So my ADP test would pass.

Then "Shfit" 2.0 from both the HCEs & NHCEs over to the ACP side so that would pass at 4/2?

Something seems fishy. I didn't think you could "reverse borrow" if it cause an ACP failure? Something also tells me bring the NHCE acp down to 0.0% is problem as well.

Any thought would be greatly appreciated!

When determining whether a plan covers only a select group of managment or highly compensated employees, can we count (i) everyone in the controlled group and affiliated service group or (ii) only those who work for the specific employer?

Hello.

I recently withdrew my money from my companys' 401k plan. I was vested as i had been there 25yrs. However, i want to say that i still work at the firm - but only part time.

Left behind was a Qnec of $133. I was not allowed to transfer that to my IRA.

I noticed that in 3months - there has already been 12dollars removed from the QNEC in fees. I annuallized that at approximately a 40% wouild be removed for the entire year. Seemed rather exhoribitant - so i asked the administrator to find out why i can't have the QNEC and why i have to lose the fees if it was mine.

The answer was that 'outside' plan administrator stated that a QNEC could not be distributed to someone who is still working at the firm. The only time it can be distributed is if that person is terminated.

Does anyone know if this is correct - since - doesn't seem quite fair to the participant that worked 25yrs that all their vested money should go into fees of the bookkeeper.

I am thinking also, of all those other employees, that might have QNEC fees...... thanks for listening..

Little Plan merges into Big Plan as of 9/30/2011. Question is, do we need to send the SAR to the participants of little Plan, who, as of 9/30/2011, have no money left in Little Plan (it was all transferred to Big Plan).

If Little Plan was TERMINATED, I typically would not send anyone an SAR, for the same reason that I would not send SAR to a participant who closed their account during the plan year. But in this situaiton, Little Plan sort of exists within Big Plan because Little Plan was MERGED INTO Big Plan. So for that reason I struggle not sending the SAR to the Little Plan Participants.

Please let me know what you think!

A large 401k plan pays one group of employees weekly and another group is paid semi-monthly. They only submit 401k deferrals and loan payments on a monthly basis, however. The TPA involved said the plan was fine to do this since the employer says they're segregating the participant assets from the general assets of the employer. Their auditors have not asked them to make up earnings on the late contributions.

Since the employer is stil holding the assets, it is my understanding that this would constitute a prohibited transaction because the assets are not invested in the participant accounts within the plan. Who is correct? Me or the TPA?

A governmental Plan requires employee contributions. When the participant terminates he/she receives the larger of the Plan Benefit and the Employee Contributions (accumulated with 2% interest). In general, the longer service participants always get paid out the Plan Benefit, since that lump sum is much larger.

My questions is about the taxes on the cash distributions. Let's say the accumulated employee contributions are $30,000. The lump sum of the Plan benefit turns out to be $100,000. And the employee had made $20,000 in employee contributions during his tenure.

The payout amount is the $100,000. If the participant takes a cash distribution is the full $100,000 subject the 20% mandatory withholding? Or is it only $80,000? Taking into account his $20,000 in after-tax contributions.

Prospect who currently has an ERISA 403b and they want to change to a 401k. When/if they terminate the 403b, do they have to allow participants the option to take a lump sum distribution? They want everyone to rollover to the new 401k.

Thanks!

We have a client who was part of a franchise and owned 3 companies in that franchise. First, the client sold one of the companies. As they were still a franchise, this plan became a closed MEP. Now, the client and the other owner have left the franchise which means we have an Open MEP. The problem is the client who owns 2 out of the 3 companies, does not wish to sponsor and Open MEP and is kicking the other owner out of the plan. This is effective 5/1/12. The client didn't tell us until now, so the company being kicked out of the plan is still deferring (only the owner makes deferrals). We have spoken with him, and he does not want to create a spin-off plan. We need to go back to him wit instructions on what his options are, but everything we have looked at only talks about ceating a spin-off, creating a MEP, etc. Nothing talks about when the client DOESN'T want to do any of those things.

My thought is that he needs to have his deferrals refunded to him as of 5/1/12, sign a resolution ceasing participation in the plan, and that's it. Does anyone have an opinion and/or a source for that opinion I could use with this client? He isn't going to be happy when we tell him he has to get all of his money back.

Can you tell me if a participant returns from Military leave and wants to make up a missed contribution for a prior tax year, does the participant have to amend that prior year's tax return or does the participant just claim it on the current year's tax form?

Can you provide me with the Regulations that provides this information? Thanks.

I know this has been discussed before. But I am wondering if there is anything new. There is a mortgage and we are being told there is no unrelated business taxable income and no return needs to be filed.

I thought that if there was any debt that a UBTI return had to be filed and often there were taxes due.

What do you all think?

The regulations state that the most valuable accrual rate should be based on the increase in the participant's most valuable optional form of benefit, and further, that the most valuable optional form is determined by calculating the normalized QJSA associated with the accrued benefit. (1.401(a)(4)-3(d)(1)(ii))

Does anyone believe that a lump sum would be the most valuable optional form of benefit if a plan offers a lump sum as an optional form of benefit?

The difference in the most valuable accrual rate is substantial.

Thanks.

My ex-husband who is 56 has NOT commenced early retirement benefits even though he is not expected to live more than 1-2 years. He most certainly will NOT live to be 65. I have a QDRO which states, "If the plan participant should die before either party has commenced benefits under the Plan, the Alternate Payee (me) shall be entitled ONLY to any preretirement survivor benefits under the plan attributable to the awarded benefit share as would be determined at the time of the Participant's death." The QDRO people at Boeing can't advise me and told me that the survivor benefits people probably won't even talk to me without my ex-husband's consent! I don't know what to do. Is it in my best interest to commence benefits for myself now while my ex is still alive, even though benefits will be at a lower rate, or should I wait until he dies and just claim the preretirement survivor benefit? The word "only" sounds rather ominous to me, and it would be very helpful to know which amount is generally greater so I can make a better-informed decision! Does anybody know? Thank you in advance!

SOB Notices have not been provided for participants in the plan I'm reviewing. However, the plan doc states that for those employed after their NRD (age 65), either thru continuing service or being rehired, they get the greater of the following benefits:

1) - AE of AB at NRD

2) - AB at any previous termination on or after NRD

3) - AB based on service and pay at actual retirement

I have a couple of questions:

A - Does the inclusion of 1) above preclude the need for a SOB notice?

B - If the answer to A is yes, is it still good practice to issue the SOB Notice just to clarify that the pension cannot commence until after retirement?

C - If the answer to A is no, do I have to incorporate any additional comparison in my calculation of benefits at retirement? I have seen reference in various places of different calculations, such as:

I - a ratcheted/ladder calculation where a benefit is calculated at the end of each year prior to retirement, and the AB at EOY is compared to the AE of the AB at the end of the prior year, with the greater 1 moving forward.

II - actuarially increased age 65 benefit + post 65 accruals

III - actuarially increased age 65 offset by post 65 accruals.

My thinking is that this client is OK in that it provides for the comparison of benefits in the plan provisions, but that they still may want to start issuing SOB notices.

I welcome any thoughts...

Does anyone know of an actuarial firm that specializes in small Governmental DB plans

Up here in the Arctic, we escaped all but some moderate rain and a bit of wind. Minor inconveniences. For all of you and your families and friends who are affected, my best wishes for whatever you will need to overcome. Hang in there.

Scenario: For qualified medical (and dental and vision, but let's focus on medical) coverage that is part of Cafeteria plan, when there is a midyear election change event, coverage change effective date is first of the month following the event or notification of the event within 30-day window, whichever is later. Exceptions, of course, for birth and adoption.

If the midyear election change event results in end of coverage, the end date is the last day of the month in which the event occurred.

What are the best practices for beginning and ending corresponding payroll deductions? Pay cycle is biweekly, and different populations have alternating biweekly cycle.

Option 1.

--For new or change coverage, begin deduction or change deduction effective with the pay period in which the effective date (beginning of the month) falls, or the first pay period that is administratively feasible thereafter.

--For terminating coverage, stop deduction effective after the pay period in which the effective date of the termination (end of month) falls.

What other options? How do you handle this? Thanks!

Where I work we have an FSA Plan. I used to receive my reimbursement checks within a week or two. Lately, I have to practically beg to get reimbursed after two or more months. What is the maximum period of time between submission and and reimbursed allowed in the regulations? Thanks.

Have a plan that covers ONLY Union Employees. It just so happens that all the full-time employees of this organization happen to be hihgly paid skilled professionals, and they get quite a generous contribution and make a decent salary; some earn more than the $115,000.

Is there some sort of a piercing of the coverage exemption? There is no plan covering the part-time staff. To make this really controversial, let's assume they work 1,100 hours a year and make up 40% of the workforce, and average benefits would never pass...

Of course, the union covers the "trades people" - coverage in the union is not based on how many hours you work.

I have a situation where a TPA failed to timely inform a surviving spouse of rights under a tax-exempt employer's plan to elect a form of benefit other than the default and to defer commencement of distributions. The benefits have not commmenced, but the period for where elections can be made has expired.

Would a plan amendment to adjust the election timing to permit the spouse to make the elections would be respected by the IRS? Seems if the spouse is permitted to make the election notwithstanding the plan terms, 457(f) would slam down on the plan. Thanks for any thoughts on self-correcting!