If an employee transfers to another company within the controlled group, does the employee become entitled to a distribution from the defined benefit plan of the company the employee is transferring from?

A frozen DB plan is now terminating, and for a limited "window" period a lump sum option is being offered. The communications expert (working for the plan sponsor) wants to provide on the distribution paperwork the amount of the lump sum applicable to the participant, but NOT disclose the amount(s) of the normal form of benefit (QJSA) or any of the alternate forms (other annuities, etc.) and only wants to put a general description of normal form and those alternates on the form - requiring the participant to inquire, if they want to know what the annuitized payment stream would be. The comm expert says she doesn't want to "confuse" the participants, nor does she think "anyone in their right mind would select anything but the lump sum" (which, of course, has a more favorable impact on the plan's funding status at termination, costs the plan sponsor less, and which, in my mind is reason enough to have to disclose the values for the other forms of benefit payments).

Other than "it doesn't smell right" and in my mind, it is clearly the much more prudent as a fiduciary to provide all salient information to participants who have to make decision, is anyone aware of any specific authority or requirement for the contents of a distribution request form (other than the tax notice, etc.) that governs the specificity with which alternate forms of benefits need to be described/values provided? I've searched, but haven't found the majic google keywords, nor have I found anything in my ERISA/Code/Regs library.

Thanks.

Any problem with the Buyer in a deal providing credit for prior service with the seller under the 401(k) Plan but limiting that to only selective benefits. For example, if new hires under Buyer's 401(k) must attain a Year of Service to get matching contributions and profit sharing contributions, could the Buyer provide credit for prior service just for matching contribution purposes so that all or nearly all received matching contributions right away but were required to have a year of service with Buyer to get profit sharing contributions?

Suppose you have a safe harbor 401(k) plan.

An Employee participated in the plan for several years, then she terminated had a distribution and returned to work 3 years later. However,

she returned under an excluded class of employees. Normally, she would have re-entered the plan the day she was re-hired.

Can she be excluded by class under a safe harbor 401(k) plan?

I would think so as long as the plan passes 410(b).

Anyone agree / disagree?

We are dealing with an individual who owns 100% of a business with employees. That business does not have a retirement plan. This individual also teaches for a totally unrelated entity on a part-time basis and he is paid for those services on a 1099. Is it possible for this person to set up a SEP and contribute to it with his 1099 income, without having to take into consideration the fact that he is also the owner of another business, and pulling in the control group rules? Thanks!

Does anyone know if FLMA is required for employees working outside of the US but for a US based employer? In some cases the overseas workers are US citizens and in other cases they are not US citizens but have US work visas.

It appears that DOL may have a 75 mile requirement and these employees are located much more than 75 miles away from any employer office employing more than 50 people.

Any idea if FMLA is required? Thank you.

We have a trucking compnay as a potential client that is looking to implement wellness among its drivers and mechanics. A tough group that does not have a "be healthy" culture or history

Does anyone have information regarding independent wellness programs that can be augmented to an existng ASO health plan or has experience with wellnes and trucking/transportation industry

thank you all in advance

When testing using compensation less deferrals, are 401(k) ROTH deferrals

excluded from compensation?

I would think they would be included in compensation since they are post-tax deferrals.

I have a start up 401(k) Plan. The client previously had a DB/403(b) plan. Both are now frozen. The plan is failing the ADP/ACP test. The match in the plan is qualified..therefore is available to reverse borrow. My question is if the plan's testing method is prior and they decide to use the "3%" option for both ADP/ACP, can I borrow the extra from the ACP to improve the ADP results?

HCE ADP 6.13 ACP 2.59 So, if I use 3% for ACP I have an excess of 1.7%. Can I add the 1.7 to the deemed 3% to get an NHCE average of 4.7 which would be a pass?

Not sure if I'm overthinking this, but:

EOY valuation for a sole proprietor. Schedule C Income for year is such that Net Earned Income (Sch C - SET - Contribution) will be under the maximum salary.

Believe there is a solution to solve for IRC 430 so that there is a specific Net Earned Income that will generate a 430 contribution such that these equal Sch C - SET.

For maximum contribution, which would be a higher number, believe that I need to solve for a separate Net Earned Income such that this 404 Net Earned Income plux max equals Sch C - SET as well (don't think it makes sense to just plug in the 430 NEI and solve for maximum as would overstate situation).

So now have a range for the client of minimum to maximum. However, client will contribute what they contribute (probably the maximum). Question is now for showing what do I show on the Schedule SB? I now have an actual Net Earned Income figure for 2011 equal to Sch C - SET - actual contribution made to the plan. Should I recompute the Funding Target and Target Normal Cost based on this actual NEI and show on Schedule SB, or should I show my hypothetical numbers that I solved for the minimum contribution solution?

Let me put some quick and dirty numbers in play to illustrate (not to dimension, but just to show what I'm getting wrapped up on):

Let's say Sch C - SET (my target) is $100,000.

I set up a spreadsheet to determine the IRC 430 minimum contribution, and I end up with a hypothetical Net Earned Income of $60,000 and a minimum contribution of $40,000.

I then continue and solve for IRC 404; now I have a hypothetical Net Earned Income of $10,000 and a maximum deductible contribution of $90,000. I don't think that I would use a NEI of $60,000 and calculate the 404 off of that as think overstates maximum deductible.

Let's say client decides to contribute $70,000 for 2011, so my actual Net Earned Income for 2011 is $30,000. Think I should recompute the Target Normal Cost on this actual NEI (FT shouldn't change since EOY val); should this final TNC etc. based on the $30,000 NEI be what's used for disclosure on the SB and AFTAP?

Took over a plan that is a Money Purchase. The Form 5500 has never checked that it's subject to the minimum funding rules section. Plan has been effective since 1983. Can someone please give me direction on this as far as what should I do, if anything, other than say I wasn't responsible for those years and move forward? I feel I need to give them the option of correction and also tell them to have their former TPA pick up the cost. What correction options is there and how far back?

One of the brokers I work with asked me for the brand new list of medications which lost their FDA status and went from Rx to otc. I have not seen such a list.

Any help would be greatly appreciated.

I have inherited a Money Purchase Plan and a 403(b) Plan. The money purchase last document was signed 1992. There is no 403(b) doc. My concern is the MP doc. I want to be sure I am understanding VCP. Because it has missed many regulatory updates, I am assuming, that I can simply restate the plan completely with a brand new document currently which will include Tra 86, Gust, PPA..... and use the streamline VCP approach. That's the first question. Second question is, do I have to also submit for determination letter as well with the VCP? It appears based on one of the appendixes under VCP, that I do because it's one of the steps and goes on to state that you have to send 2 separate checks.... I want to be sure I'm not missing something when I explain this to the client.

The 403(b), which is a non-Erisa 403(b), I am doing a document now. Haven't really seen a correction program for that.

Any advise as I have a meeting tomorrow 9/6 in the afternoon and I"m trying to gather all the info.

Thanks.

Sort of warms the cockles of your heart:

"The IRA owner argued that it did not make sense that he could take a distribution from his law firm's plan without owing the 10% additional tax, but would have to pay the extra 10% tax if he took a distribution from an IRA after having rolled his law firm's plan benefits to the IRA. The appellate court responded that the Code says that the difference here matters and that many of the provisions in the Code are compromises and are arbitrary."

During 2011 it was determined that an employee deferred too much money due to a payroll system error. Most of the excess was recategorized as catch-up because the employee was over age 50. About $1,000 excess deferral remained and, due to another error, $1,500 was refunded, or $500 too much. Is this an operational error that needs to be corrected? There is no match so he did not miss out on any matching contributions.

Any replies are appreciated.

LL&P

Can an HRA pay out a deceased participant's claims for qualified medical expenes that were incurred prior to death? Based on the IRS guidance and other secondary sources I have seen, it looks like you can, and that it is a matter of plan design. I found these comments from the ABA regarding this:

http://www.americanbar.org/content/dam/aba...uthcheckdam.pdf

I've also found HRA SPDs allowing an authorized rep or the estate to submit claims on behalf of the deceased participant.

Any thoughts or insights would be helpful. Thanks!

Does the same use of forfeitures rules for 401k plans also apply to 403(b) plans?

The current 403(b) document provides that forfeiture are allocated to participants in the plan year following the year of the forfeiture. The sponsor would like to change so they have more discretion and can keep money in the forfeiture account in the case of a required reinstatement by a rehired employee (apparently this happens!)

I told client that the money in the forfeiture account as of the beginning of they year has to be used for the current year but they have already funded and do not want to allocate more to participants.

But then I remembered this is a 403b plan and we work mostly with 401k plans.

Does anyone know if the same rule applies to 403b plans?

Thanks!!

Section 111 of MMSEA requires group health plans to collect and report information on covered participants/dependents who are or may become eligible for Medicare coverage.

A TPA has been performing this task as required but recently came across Social Security Numbers provided by a plan participant that appear to be false. (The Area Numbers are all in the 900's.)

Given the penalties for non-compliance the TPA is trying to determine if it has any obligation to report the problem or if should merely pass the reported information along to CMS.

Thanks in advance.

Among other things, our company serves as TPA and processes HRA claims for one of our clients. Today, a participant indicated to one of our reps that he/she is suicidal (not related to her claim). For purposes of the HRA administration, we are a business associate authorized to access PHI for purposes of claims admin.

For the safety of the participant, can we tell their employer that the participant indicated they are suicidal? If not, any advice on how to handle.

100% Owner of the business wants the plan's admin for two quarters (around $1,000) paid from just his own 401(k) plan account. Does anyone see a problem with this? I think it should be treated as a taxcable distriubtion to the owner considering the circumstances. It just smells like an in-service distribution disguised as a fee.