I must say I'm a bit confused on this. I have seen various opinions on the subject of restatement, but without citations.

Is there anything official that says governmental plans don't need to be restated?

Assuming the answer is no, then there appear to be two possibilities. First, they are using a VS document, and have until April 30, 2012. Second, they are an IDP, and would have already gone long past the Cycle C deadline (or Cycle E if they so elected) to restate and submit for a determination letter.

What am I missing?

We administer a 401(k) plan with about 60 participants. The plan sponsor is a partnership that is owned by 5 corporations. Each of the corporations employs one physician. They are all related employers and considered an affiliated service group. Each of the corporations adopted the plan as participating employers. One of the corporations will now drop to a 3% interest in the partnership and the physician who is employed by that corporation (and the 100% shareholder) will only have salary of about $20k per year for the next 5 years. Will that physician still be considered an HCE going forward? In other words, is he considered an HCE because of his ownership in his corporation?

Thanks

Matching contribution is used to pay down ESOP loan. Also, a portion of S distribution on suspense shares is used to pay debt. Would Compensation expense for GAAP still reflect the full average value of shares released from both sources?

Can a multiemployer pension plan require contributing employers to increase plan contributions without having to re-open collective bargaining?

Is this purely a contractual issue, or is there controlling authority on point?

We have an employee who is a Canadian citizen, no US SSN, receives compensation in US dollars. Are they eligible for our 401k plan? If not, what are our options for this employee?

We have been looking for DC Administrators for our full service, non-producing TPA practice (which includes Balance Forward Plans). We have had a very hard time finding candidates with experience in this type of firm. We get lots of applications from people who've worked in very big firms such as Vanguard, ExpertPlan, etc. But very few from small, full service, firms. We've advertised repeatedly on BenefitsLink and Monster. We're considering using head-hunters, but their fees are very high for a small TPA.

Do you have any insights into how to find Administrators? We used to be able to hire well-educated administrators straight out of the Philadelphia Institute for Paralegal Training; they had a certificate program in retirement plans. Where do they grow administrators now - and how can they be found?

We are located in the Philadelphia suburb of Bucks County. If you, or anyone you know is a potential candidate, please check our ad - Law Offices of R. David Danziger. As mentioned in the ad, we are offering a referral fee.

Thanks.

Dave

I just found out that our payroll company has treated our pre-tax employee HSA contributions as post-tax and our employees are not sure if they filed their returns as pre or post. Would they have had to have filed as post-tax since that is how their W-2 treated it?

Now, how do we fix it? Is my understanding that really all they lost out on was FICA, since they were able to deduct their contributions when they filed their taxes? What a mess. Any suggestions would be appreciated.

Kathy, the bookkeeper

This question is related to Hardship Withdrawals (purchase of a principal residence).

The client has a participant who currently owns a home with his ex-wife. The existing mortage is in both of their names. The participant is still living in this residence, and he would like to buy his wife out of the house. An agreement of sale and other necessary legal documentation would be provided. The question is though, since he is technically purchasing the house (I believe a new mortgage will be done in just his name) and he will continue to live in it, would that be considered the purchase of a primary residence, or since he already owns a portion of the house, is it not considered a new purchase?

Third Party is requesting duplicate statements in accordance with the Insider & Trading Securities Fraud Enforcement Act of 1988. The participant this is in reference to is terminated deferred and letter states he is a trader or associated with a broker dealer registered with the CBOE.

Please advise if this request is something the Recordkeeper/Trustee should adhere to in terms of distributing statements to other parties or if Plan Sponsor should be notified and involved?

A participant recently took a hardship distribution. A portion of the withdrawal was taken from his Salary Deferral benefit, and as such he is not allowed to make salary deferral contributions to his self directed account for 6 months following the date of the withdrawal.

Employer went ahead and deducted the contribution from his paycheck anyway. Do we let it slide or reimburse the participant?

Note: Sal-Def Contribution amount is approximately $75.00

During an IRS audit the agent discovered that the employer deducted an amount greater than the 404 limit. The accountant clearly dropped the ball on this one. In addition to the tax deficiency, the IRS is imposing excise tax under 4972. The employer is going to pay the tax deficiency, but it does not want to pay the excise tax since it reasonably relied on its tax professional. Is there any such exception to the 4972 excise tax? Is the IRS open to waiving excise tax in unique situations, or should the employer just pay it and attempt to collect from the accountant?

Third Party is requesting duplicate statements in accordance with the Insider & Trading Securities Fraud Enforcement Act of 1988. The participant this is in reference to is terminated deferred and the letter states he is a trader or associated with a broker dealer registered with the CBOE. Please advise if this request is something the Recordkeeper/Trustee should adhere to in terms of distributing statements to other parties or if the Plan Sponsor should be notified and involved.

401k plan has immediate eligibility. Owners wife is hired late in the year and contributes. She is the only eligible employee that is a statutory exlcusion and is obviosuly an hce. The excludable employee group includes only her and thus the ADP test passes for the excludable employees. The question is does the statutory exlcusion group pass coverage as all of the nhces are in the non-excludable group? Any input appreciated.

For HRAs that carryover unused employer contributions, does this impact nondiscrimination testing (i.e., $1000 per employee every year is contributed to the HRA, and unused amounts can be used in the following years).

Do actual reimbursements need to be considered for testing, or can contributions be used somehow?

DB Plan that has 150 active and term vest participants and 150 retirees provides that participant eligible for retirement may elect lump sum if lump sum >$5,000 but does not exceed $10,000. There are no active and term vest participants to whom this voluntary cash-out might apply during 2012. As of 1/1/2012 the AFTAP is less than 80%.

Has anyone seen any guidance that reliees providing the 101(j) notice to all 300 participants in a similar situation?

We provided a former employee a COBRA notice with wording along the lines of "you must complete and return this form by the due date shown, or you will lose your right to elect COBRA continuation coverage."

We have a copy of the mailed notice, and proof of mailing and delivery (USPS deliver confirmation).

We never received an election notice from the former employee, but did receive a check for 3-months of premium payments from the State Office of Health Services (state medicaid). The check itself makes no reference to the former employee's name , and was mailed to our company's old address and not discovered until much later. The only reference on the check connecting it to the employee beneficiary is his PPO plan ID # written in the "memo" section of the check. The former employee has provided no evidence of timely mailing of the election notice.

My question is whether the former employee should be reinstated for COBRA coverage or has he not properly elected COBRA coverage?

The check was received within the first 60 days of the Election Notice mailing, so it was delivered well within the the 60 days+45 days election+premium payment period.

Thank you!

http://www.irs.gov/pub/irs-tege/early_distributions.pdf

according to this link it does, just looking for confirmation if anyone has experience on this. Thanks.

We have one company with 5 divisions. 3 allocation groups for each division. Each division decides what their allocation rate will be.

The plan as a whole passes the general test.

Does each division have to pass the general test separately?

Coverage is not an issue.

Thank you.

Kate Smith

Suppose an employer terminated a DB plan several years ago. The plan was 100% funded, the 100% owner was not even close to the 415 limit and was paid a lump sum based on the low 417(e) rates at the time, which were less than 5.50%. The 415 lump sum limit was not exceeded at the time even though the 417(e) rate was under 5.5%.

The same employer sets up a new DB plan now and the 100% owner will again be accruing benefits. The offset of the 415 limit is the question. Since the 1st lump sum was based on rates below 5.5%, should the "extra" amount (the amount paid which exceeded the lump sum valued at 5.5%) be also considered as part of the offset of the new plan's 415 limit?

Also consider the converse: If the 417 rates were high so the lump sum paid was less than an amount calculated at 5.5%, can the participant get any "extra" accrual to make up for that in the new plan?

What if that DB plan terminated before the 5.5% rules were in effect?

What if the second plan is a cash balance plan?

This may help illustrate what I am asking: If an employer had 2 DB plans at the same time, and each plan accrues 50% of the 415 limit for the 100% owner, the maximum lump sum is still based on the 5.5% interest rates which override the lump sum that would otherwise be required based on the much lower 417(e) rates, right?

I am inclined to say that the rates at the time for the old plan were simply the rates at the time, so just offset the 415 limit in the new plan by the accrued benefit that was paid. Thus, if rates are higher or lower than 5.5% either time, a consistent result might be achieved?

Your thoughts?

US Residents can finally transfer their UK pensions to an IRS approved and compliant Qrops US Plan