Assume a group health plan complies with the ERISA regulations and properly denies a claim and subsequent appeal.

What options are available to the plan and/or participant if new evidence is discovered (post-appeal) that would have impacted the outcome of the decision?

It would seem that the plan may want to reopen the appeal in order to be fair to the participant. On the other hand, it would seem that the plan could be inviting trouble with by reviving a claim that has been properly moved through the claims and appeals procedure-- especially if it involved a claim that would trigger stop-loss reimbursement.

Any thoughts would be appreciated.

I am confused as to how to complete Form 8606. I have no previous IRAs and do not qualify for a Roth IRA contribution. However, I made a non-deductible IRA contribution of $5,000 for 2011. Shortly thereafter i converted $5,020 it to a Roth IRA. I know $20 is taxable and seems as though in Part 2: #16 on the form should be $5,020, #17 should be $5,000 and #18 being the $20. Do I even need to complete Part 1? If so, it just doesn't seem to work out following the instructions. What am I missing?

Plan is a safe harbor plan, but allows for after-tax. Plan ues the "prior" year testing method. When running the test, can we include and not include the match in the ACP test to achieve the best results.

For example,

2009 testing: HCEs AT only compared to 2008 NHCE AT only

2010 testing: HCEs SH Match & AT compared to 2009 NHCE AT and SH Match

2011 testing: HCEs AT only compared to 2010 NHCEs AT only

It would be eaiser if the plan changed to current year testing. Which we are working on!

Any thoughts would be greatly appreciated!

An employer with 2 employees has a profit sharing plan and a money purchase plan. The owner was cutting costs by doing everything in-house for the last umpteen years, so neither plan has been restated for EGTRRA, GUST was also done late, and the 415 limits have been exceeded each year for many years now (10% in one plan and 15% in the other: overall 25% of $245,000).

The IRS just sent a random audit letter regarding ONLY the money purchase plan.

This employer is now willing to pay whatever it takes for someone to help him and admits to having handled the plan poorly. The PS and MP plans are not combined for 401(a)(4) or 410(b).

Under section 4.02 of EPCRS: If the plan or Plan Sponsor is Under Examination, VCP is not available.

Under section 5.07(2) it explains what is meant by Under Examination, and it says the plan is considered to be under examination if it is aggregated for 415.

I don't think the PS plan can be submitted under VCP now, due to that language.

Agree?

When you look at how section 402A was amended by the Small Jobs Act to allow in-plan Roth rollovers, it seems that Congress amended the rollover section to include these conversions in the exemption from the 10% tax but forgot to amend the qualified distribution section to include the rollovers as a contribution for starting the 5 year clock. I see that the IRS is clear the plan must have a Roth provision to allow in-plan Roth rollovers, but presumably a participant does not have to have a designated roth account in order to take advantage of this new law, right? Has anyone seen or heard anything from the IRS on when the clock starts if a participant does a conversion and has never made a designated roth contribution?

We just took in a plan that was described as a 401(k). However, under the terms of the document, there are no pre-tax deferrals. The participants are allowed to make discretionary after-tax contributions. These after-tax contributions are then eligible for an employer match which is not discretionary - the amount is specified in the document.

Our group spends most of our time doing DB plans, but this does seem like a money purchase plan to us (even though the lawyers say it isn't). Any thoughts?

Thanks.

an 8 participant 403(b) has not been following the plans eligibility rules for several years. plan doc has no service/age requirement, so immediate eligibility. However, sponsor has been making participants wait for one year to enter the plan on a uniform and non discriminatory basis. I understand this is a VCP case and they are aware of it. My question is....would you think the IRS/DOL would allow the sponsor to go back and amend retroactively to install the eligibility(1 YOS) they were actually using OR is it more likely that they will have to go back and make up the 6% employer contribution to all employees they had excluded? The plan has an effective date of 7/1/05. Sponsor has been contributing 6% irregardless of whether the participant actually deferred since plan inception.

Thanks a heap!

Are students (of a plan sponsor university) excludable employees for 410(b) coverage testing purposes when testing matching and other employer contributions? I find no support in the Code or regs for this, but I've read uncited commentary indicating you can exclude students and disregard them for coverage testing purposes.

I understand they are excludable for universal availability, but don't find the same exclusion for employer contribution testing.

Thanks

I have been having lots of questions this year concerning what is included in compensation and what is excluded. This particular plan uses 3401(a) as their plan definition of compensation. Can someone tell me what types of compensation is included in 3401a comp? Would education reimbursements or relocation expenses be included?

Does anyone have a chart of the different types of compensations and what in included in each?

Thanks

Hi,

My peers and I have had a discussion as to whether a person who sits on a board of directors for a corporation is considered an employee under the defenition of an employee with respect to a qualified retirment plan, e.g. 401(k) plan. Would such a director, if his/her only responsibility to the corporation was to serve on the board, not be considered an employee under a qualified plan and be considered excludable for coverage testing purposes similar to an independent contractor, or would such a director be considered an employee, and if excluded from participation, need to be considered as non excludable for coverage testing?

Thanks,

What a mess.... An eligible participant elected to have a dollar amount deferred each pay starting in September 2011. The sponsor deposited the $ amount each pay into the deferral account of the participant. In January 2012 (after all January 2012 deposits have been made) the sponsor realizes that the payroll company never withheld any $ from the participant's pay. The W2 will show no withholding for 2011. How do they correct this?

What types of governmental plans may implement automatic contribution arrangements?

Sponsor has a floating interest crediting rate with a 4% floor. Assuming that the floating rate is in compliance with the market rate of return rules(e.g. Treasury Bond rate), can the 4% floor be reduced or removed? What are the ramifications? This would require a 204(h) notice, right?

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.