Hi All,

An employee who was on our medical/dental plan (Family coverage) stated that his wife was having open enrollment and they would be leaving our plan.

When I asked for proof of her open enrollment (he became upset) and I was then told by one person that he did NOT need to provide proof and another told me that he HAD to show proof.

What are your thoughts? I have always collected proof for QE's.

Thanks,

N in NJ

We have a new one-participant client (husband & wife). Plan started in 2007 & assets exceeded $250K in the 2009 Plan year. He has not filed 2009 or 2010. Is their a corrective program by which he can file? Thanks in advance for your help.

We have a client that has a discretionary profit sharing provision which allocates said profit sharing to any employee that was eligible during the year, regardless of hours, employment, etc. They would like to add a 1,000 hour requirement as well as a last day of employment requirement. Can this be amended during the middle of the plan year? I understand that typically a discretionary amendment just has to be adopted before the end of the year. In this particular instance however, my concern is taking away an accrued benefit since they are trying to be more restrictive. i.e., an employee that terminates previously would have received a contribution, while under the new provisions they would not...even though the contribution is discretionary and they may decide not to even make a contribution at the end of the year.

Does anyone have any insight on this?

I need a quick answer if anyone can help-a terminated 401(k) plan has 12 months to liquidate the assets-what are the repurcussions if they fail to liquidate assets by the last day of the 12 month period?

I should mention that the Plan had been frozen for a period of at least 2 years prior to the vote to terminate.

we changed from datair using dos to datair using windows.

Would that be considered a change in valuation software, thus a change in funding method?

assuming it is a change in software, if the plan does not file a schedule r and instead files a 5500SF then does the sponsor have to approve the change in method? Schedule R item 8 requires sponsor approval, but what if there is no schedule R.

The alleged change in funding method receives automatic approval per IRS announcement 2010-3.

thanks

One of our client's just decided to take what he wanted for his RMD. It was $20k > the RMD amount.

The plan does NOT have an in-service provision.

What is the correction?

I suspect it is treated as a distribution without a distributeable event and needs to be paid back. That seems to be my memory of how it was handled the last time I heard of one of these.

Any cites would be helpful. I assume once again rev proc 2008-50 "overpayment" section is what is going to govern here, but want to make sure.

Plan sponsor would like to make a profit sharing contribution now (during 2012 but before due date for filing corporation's income taxes for 2011) related to the 2011 plan year. Can the plan be amended retroactively to allow for profit sharing contributions for 2011? Discretionary amendments are supposed to be made by the end of the plan year in which the change was implemented, but in this case, it is an amendment that is favorable to participants, and the amendment would be adopted by the due date for filing the corporation's income taxes.

I have an employer who is contemplating converting its non-safe harbor 401(k) plan to a QACA. This employer has always had a higher match rate for eligible employees whose annual comp is below a specfic dollar amount (let's say $30,000) than those making more. The current match rates for either group exceed the minimum rates required for a QACA and appear to me to be otherwise compliant with the enhanced match requirements. The only unique aspect of their formulas is that the match rate for the very lowest paid NHCEs is better than the match rate for the higher paid NHCEs and all HCEs. Anyone see a problem with maintaining these differing match rates under a QACA?

Employer has less than 30 employees, 5 of which are key ee's, therefore for TH purposes only top paid 3 are considered. So if 2012 is its first year for being TH, do the 2 excluded Key employees get the TH minimum? My thinking is no, but wanted verification.

Thanks

I read the COBRA time frames... 60 days to elect, then 45 days after the election to submit premiums during the initial COBRA start.

So what happens if an employee takes 55 days to elect (about 2 months), then doesn't pay the premiums, but they have submitted claims to insurance, and the insurance refuses to refund the premiums back because of those claims? As an administrator, when must I re-enroll the COBRA participant? Upon receiving the first premium check, or upon receiving the election? If it is upon receiving the election, we could be left with paying premiums for a deadbeat COBRA participant!

I feel like the answer is obvious, but thought I'd ask anyway... For purposes of providing a 2011 PS allocation to a larger group of employees, is it too late to amend the 2011 entry dates for Employer Non-Elective contributions? How about more lenient eligibility requirements for the same? Thanks.

I'm new to this plan so I would appreciate your experience with this.

I have a new severance pay plan, effective 1/1/2012, for a large company. The assets of the severance pay plan will remain a part of the general assets of the company, NO Trust.

What do I file with the Form 5500?

There are no insurance contracts, so no Schedule A.

There is no Trust, so no Schedule H.

Do I file Form 5500 without any attachments?

How do you count participants?

All officers and non-officers working more than 14 hours are eligible.

This would put them over the 100 threshold by counting eligible employees.

In a welfare benefit plan, you count actual participants on the first day of the plan year.

How/what do you count in a severance pay plan?

Thanking you for any help and guidance.

Hello, has anyone taken the ERPA (both I and II) this exam period (1/6/12 to to 2/17/12)? Interested in knowing how similiar to the 2009 and 2010 practice exams provided by AIRE? Any big surprises?

THanks

The plan has a QDIA that was timely distributed.

But the r/k system was not updated to reflect the correct QDIA. And participants were defaulted to incorrect funds.

How do we correct?

How do we correct the situation where the plan sent out QDIA notices, but people were not defaulted to the QDIA. The QDIA changed , and was properly noted in the notice, but the R/k system was not changed for the new funds. Therefore people were defaulted to the old funds.

What do we have to do to correct this?

Hello

I have a 401k plan and there is also a prevailing wage plan (which we do not administer). The participants particpate in both plans.

my question is can I combine these two plans for 401k adp and acp discrimination testing?

Thank you

sue

Company AB was owned 50% by A and 50% by B.

A and B recently sold the company. As part of the sale, both will receive consulting income of $200k for 5 years (or less if A or B terminates the consulting agreement).

A and B each set up an LLC to receive the consulting income. A would like to set up a DB plan and defer as much as possible. If the LLC is considered a successor to the Company AB then all the consulting can be deferred as there is a wage established.

If not a successor, then there needs to be wages (or earned income).

Is A's LLC considered a successor corp to Company AB?

Company AB was owned 50% by A and 50% by B.

A and B recently sold the company. As part of the sale, both will receive consulting income of $200k for 5 years (or less if A or B terminates the consulting agreement).

A and B each set up an LLC to receive the consulting income. A would like to set up a DB plan and defer as much as possible. If the LLC is considered a successor to the Company AB then all the consulting can be deferred as there is a wage established.

If not a successor, then there needs to be wages (or earned income).

Is A's LLC considered a successor corp to Company AB?

Does anyone know whether you can use compensation under an executive bonus plan to purchase an annuity, rather than whole or universal life?

Let's say a client sends their fee disclosures to everyone with account balances (despite our advice that everyone needs to receive it). Do they blow their 404© for the entire plan? Sungard mentioend that one of the implications of not complying was a loss of 404c protection. I'm just curious if not sending it to this one group would blow 404c, if they otherwise complied.