The plan has forfeitures that far exceed current year expenses. Is it permissible to pay the fees to the TPA and then use them up over the next 3 or 4 years? My answer is no, but I was told to find out for sure.

If a person is going to be a fiduciary investment adviser to a plan under ERISA, could they do so and not be an investment adviser representative? This question stems from a 408(b)(2) notice I saw from a registered representative (who is not an IAR) that disclosed that the rep was providing fiduciary investment advice under ERISA, but that such advice was "solely incidental" to the brokerage services provided. Since incidental advice falls under an exemption from registration in the 40 Act, it seems possible for someone to provide fiduciary advice under ERISA without being overtly licensed to do so, which doesn't feel right to me.

If a plan sponsor, or other named fiduciary, would select an individual who wasn't an IAR to give investment advice, would that alone constitute a breach of their fiduciary duty to participants in that it's not acting "with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims?" If it would be a breach, can the arrangement meet the suitability requirements under FINRA?

ABC company has a 401(k) plan with a 1/1 plan year. Division A is spinning off - and employees of Division A are no longer able to defer to this plan effective 3/1/2013.

However, Division A does not set up their plan until 6/1/2013.

What should happen to the contributions of Divison A from 3/1/2013 to 6/1/2013? Should they go to the original plan and then transfer over to the new plan once its set up? Should these contributions go to an interest bearing account in the meantime?

I have a plan that used to be considered a one-participant plan, covering just an owner. He has recently had two employees become eligible for the plan. (It is a Money Purchase plan with a 0% contribution formula.) So, now the plan is subject to ERISA and must file an SF.

However, 98% of the assets are in non-qualifiying vehicles (an LLP and real estate). He must now get a bond for the $2MM in non-qualifying assets.

The wrinkle I have, is that ALL of the assets are the owner's. So any loss or theft (by him--he's the only one who handles the "funds" I would guess) would affect only his own assets.

Any thoughts on NOT getting a bond because of this?

We recently took over a 401(k) plan and generally received excellent information. However, there was one amendment executed a few years ago that did not have a corresponding Corporate Resolution.

Is the amendment valid?

Thanks

Plan's termination date was 12/31/2011.

Asset Distribution date is 7/31/2012.

Does the plan document have to be restated for EGTRRA or are "good-faith" amendments sufficient?

Thanks.

A client has approximately 10 different H&W benefits (medical, dental, vision, LTD, etc). With few exceptions, each benefit has a different insurance contract year, all of which are off-calendar. Currently, they bundle all of these benefits into one ERISA plan. The 5500 is based on a calendar year. The insurer for each benefit provides the 5500 information on a calendar year basis (even though the contract years are all off-calendar). The Schedule A for each benefit lists the "policy or contract year" as the same calendar year listed in Part I. Is this permissible?

Instructions on Form 5500 seem to suggest it is permissible, as long as the insurer maintains records for that benefit on a calendar-year basis:

"Information entered on Schedule A should pertain to the insurance contract or policy year ending with or within the plan year (for reporting purposes, a year cannot exceed 12 months).

Example. If an insurance contract year begins on July 1 and ends on June 30, and the plan year begins on January 1 and ends on December 31, the information on the Schedule A attached to the 2011 Form 5500 should be for the insurance

contract year ending on June 30, 2011.

Exception. If the insurance company maintains records on the basis of a plan year rather than a policy or contract year, the information entered on Schedule A may pertain to the plan year instead of the policy or contract year."

A client has changed from an HMO to an HMO-like plan from a different insurance provider. Although the coverage in the new plan is exactly the same for in-network services, additional deductibles and out-of-pocket maximums are added for the new plan's non-network providers. Under the HMO (the old plan), participants could only go out of network if a network provider was unavailable or the non-network benefit was "medically necessary". However, in such cases, the benefit received would be treated as an in-network benefit.

I was hoping to hang my hat on value-based insurance design, but I can only find approval for this related to preventive care (rather than deductibles or OOP maximums). Does anyone have any guidance as to whether this plan may still be grandfathered? Thank you!

Employer X maintains a prototype defined contribution plan for its employees. In 2011, X amended the plan to provide t hat nonelective employer contributions would be allocated on a weighted age and service formula. Such formula was not one of the permitted choices in the adoption agreement. The prototype sponsor has informed X that the amendment takes it out of preapproved status. According to the IRS Rev. Procs, X may use the preapproved plan cycle to submit its determination letter request for its now individually designed plan. For the next cycle, the employer is on the individually designed 5-year cycle. The IRS recently stopped accepting applications from sponsors for DC preapproved plans and it will announce when it will accept determination letter applications from adopting employers. Is my understanding correct that the employer would make a submission of its now individually designed plan during the period IRS states it is willing to accept determination letter submissions from employer adopting preapproved DC plans?

Is there a mandatory federal withholding tax rate on post-retirement distributions made directly to the participant from a government 457(b) plan?

which left be totally baffled.

Married Couples (not limited to newlyweds, though perhaps an emphasis placed on them) would be given a flitch if the lived in harmony for a year and a day.

A flitch is a side of bacon, hence the expression "taking home the bacon" which according to one site rarely happened. hmmmm.

on the other hand, if you couldn't prove you deserved a flitch, then you were given gammon.

gee whiz, now I had to look that up.

Basically gammon is a raw piece of meat. If it was cooked it is known as ham.

more useless info for you.

I am preparing the 2010 Schedule SB for a 10/31/2011 year end. Say the minimum required contribution was $20,000 as of 11/1/2010. The client makes a contribution of $30,000 on 7/1/2012 and $10,000 on 7/12/2012.

The $30,000 contribution satisfied the minimum required contribution. The additional $10,000 contribution brought the AFTAP up to 80.10%.

Is 19b the discounted value of $10,000 (since brought the plan up to 80%?) and 19c the discounted value of only $30,000?

What if the full $40,000 was deposited on 7/12/2012. Would you break up the contribution between 19b and 19c?

Would it make a difference if the plan was frozen on 6/1/2006 and the plan doesn't pay lump sums over $5,000?

We are reporting Code A participants who have deferred vested benefits and have not been previously reported for a 403(b) plan whose assets are invested in annuities. The plan allows distribution in the form of lumpsum, instalments or annuities.

Under line 9d (annuity code) I am using code A (a single sum) and under line 9e (payment code) I am using code A (lump sum). I notice that another practitioner is using code G (J&S) and code B (annually) respectively.

What is the right way? Thanks for your opinions and comments!

Hi, i'm trying to determine whether this is an operational or form defect, and whether proper correction should be made through EPCRS or VCP?

Facts:

A subsidiary of Company who participates in the Company's 401(k) plan did not adopt the plan. The plan adoption agreement and document requires an employer other than the sponsor (i.e. a subsidiary) to adopt the plan.

Thoughts?

Thank you!

I am interested in providing total reward statements to my employees next year. I will obivously get some quotes from different providers but I was wondering if any of you have an idea of what might be a typical price for paper based statements. It will certainly vary depending on the complexity of the statement but I am just looking for some ballpark ideas.

My organization has about 6,500 employees.

I've run into several clients recently who want to name their record keeper as a directed trustee. In most cases the companies have insisted on using a separate trust agreement that was not approved to go with our document, requiring an IRS submission. I am at a loss to think of any advantage that the client might gain by going to the time and expense of making these modifications, although I suspect the clients think they are escaping liability by naming someone else as trustee. Am I missing something?

Say the face amount of a life policy is 100k and the CSV is 20k

At death say 100k goes to plan and trustee pays 80k to beneficiary and 20k CSV remains in plan.

does this mean that PS 58 costs do not apply since plan retains some of the proceeds? per 1.72-16(b)(6)?

thanks

The employer restricts the ER contributions to an Interest Accumulation Account which is classified by the custodian as a cash & cash equivalents account per the statement issued by the Custodian below:

However, when we conducted an evaluation of the characteristics of the General Account, we concluded that the General Account was comparable to a cash equivalent and therefore exempt from classification as a Level 1, 2 or 3 asset under ASU 820-10 for the following reasons:

• There are no front- or back-end charges, so investments in the General Account are completely liquid;

• The interest rate credited to investments in the General Account is a current rate, and is not dependent upon the length of time the assets are invested with Mutual of America;

• Requests for withdrawal can be made at any time and are processed on the day that they are received; they are not dependent on the Company having to liquidate securities in order to generate a payment; and

• The value shown on the pension fund report is the redeemable value of the fund; there are no deferred sales charges, load assessments or interest rate adjustments that would affect the value as a result of a withdrawal request.

So, my question is since the account is not considered an investment, do I have to break it out as nonparticipant directed in the footnotes and disclose the cost on the Schedule of Assets Held?

An S-corporation sponsors a 401(k) plan. The plan covers 2 employees including the 100% shareholder.

The corporation pays medical insurance premiums for the shareholder. These premiums do show up as income in box 1 of the shareholders W-2 but not in box 5 (medicare wages).

The plan defines wages as W-2 salary subject to code section 3401(a).

We believe plan salary (less than $100k in this case) should only be wages subject to withholding at the source (i.e. box 5)

Does anyone disagree and believe the taxable premiums need to be part of plan salary?

Thanks.

A profit sharing plan has a is 4/1/2011 through 3/31/2012 plan year. Does the 2011 limits or apply or the 2012 limits?

Thanks.