My client just purchased a group health insurance plan for his business.He wants to pay for it 100 % .

The broker told him that if he charges the employees money for the plan if would make it less discrimatory? Is this true?

Thank you.

We are a TPA in the process of taking over a Cash Balance and 401k PSP from another TPA. We have noticed that no 5500-SF or 5500 has been filed for 2008, 2009 and 2010 for the Cash Balance Plan. Instead, the TPA has been filing the Schedule SB with the 5500-SF for the 401k Plan!!

We have already discussed going into the DFVCP with the client for this egregious error.

I just wanted to cover all my bases and put the question out there (in case I am missing something) to you all to see if under ANY circumstance the way the current TPA is doing this is ok? The current TPA says this is how they do all their Cash Balance Plans which worries me a lot, sounds like they have a major problem on their hands (as do their clients).

My client ABC Company allows participants to make up missed contributions from the time missed during a military leave. While they do have a payroll process in place, the participant would like to send a check for the amount of the missed contributions. The participant is aware of the loss of the pre-tax benefit by doing so.

Question - Is a participant permitted to make up the contributions to the 401k plan outside of payroll deferrals?

Does anyone know the TPA's responsibility for late 401k deposits, beyond informing the client? If the deposits are extremely late, does the TPA have any responsibility to participants? Any experience with this?

Thank you!

Can a plan be designed to limit matching contributions to compensation earned in an eligible job classification? My understanding is that it could, provided that the ACP test is satisfied using a 414(s) definition.

Ever since the advent of making every participant their own allocation class, I have normally eliminated the last day and service requirements to receive an allocation, figuring I just leave those terminees out of the allocation (assuming I satisfy 410(b) and 401(a)(4)). About the only downside that I have found is that I can not exclude a participant who terminates with less than 500 hours in the testing, when normally such employees are excludable.

On the flip side, I find that it gives me more flexibility in that: (1) I can use a young terminee with low pay and give them an allocation to help testing without the need to adopt an 11(g) amendment; and (2) that young terminee may not even be vested, and I can't do that with an 11(g) amendment.

However, I see some cross-tested documents out there that still have EOY and service requirements, and I am just wondering if I am missing something or others have reasons that outweigh my reasons.

Any thoughts would be much appreciated!!!

Do employers (with fewer than 100 participants) who contribute towards DB multiemployer plans qualify as “eligible employers” under Section 408(p)(2)©(i)?

The background to this question is as follows. Specifically, I want to determine whether small employers who contribute towards multiemployer DB plans are required to use an interest rate of 5.5% or higher (if so specified in the plan) per WRERA provisions.

The ACP test fails and distribution of the excess aggregate contribution is going to be made to the HCEs. Does the distribution still need to be paid within 2 1/2 months (to avoid the penalty) if the match won't be deposited until the extended tax return due date?

Until this year, my employer (less than 15 employees) paid our health insurance premiums in full. This is covered in our employee manual & was understood by all to be a part of our compensation.

This year premiums have risen to such an amount that he has decided that the employees will pay 25% of the monthly premium. Only 5 employees will be on the company plan; others are covered by their spouses plans - they are compensated for what they pay to be covered that way.

Since this is a small company, the insurance company required each employee who would be on the plan to submit a form giving health history, age, etc.

Individual rates were calculated, then the total being the monthly premium.

The individual rates are - from youngest to oldest:

$161.56

$277.48

$305.57

$744.61

$965.88

Total monthly premium $2455.10

Average of this would be $491.02

25% would be $122.75

The employer has decided that it is not fair to younger employees to pay 25% of the total monthly premium since their individual rates are lower.

So, each employee will be paying 25% of the individual rate determined by the insurance company.

Therefore employee portions of the premiums are:

$161.56 x 25% = $40.39

$277.48 x 25% = 69.37

$305.57 x 25% = 76.39

$744.61 x 25% = 186.15

$965.88 x 25% = $241.47

I have never heard of a company having employees pay different amount for their part of the premiums (except when spouse &/or family are added).

Is it lawful for employee premiums to be charged this way?

The plan year end is 9/30.

The Employer sponsored both a 401(k) plan and a prevailing wage pension plan until the plans were merged 3/31/2010.

Z's termination date is 7/1/07. Z was paid out of 401(k) plan during PYE 9/30/2008 so we did not report him on an SSA for that plan; however he was not paid out of the PWPP during PYE 9/30/2008 so we reported him on an SSA for the PWPP.

The PWPP merged into the 401(k) PSP 3/31/2010 and we filed a final 5500 for the PWPP (short PYE 3/31/2010).

Z still has an account balance in the 401(k) plan (PWPP money source) as of today.

Do you think we should prepare a 2009 8955-SSA for the PWPP and report Z as a code "D", and also prepare a 2009 8955-SSA for the 401(k) plan and report Z as a code "A"? Or should we not prepare any 8955-SSA until he is paid out of the 401(k) plan? Or? I don't want this to come back and haunt us 10 years from now...

Any input would be greatly appreciated.

Thanks!

Plan sponsor wants to terminate overfunded DB plan, transfer excess assets to existing 401(k) profit sharing plan that qualifies as a "qualified replacement plan", thus exempting the sponsor from the 4980 excise tax.

There has been recent guidance indicating that 401(k) "safe harbor" contributions cannot be funded by forfeitures, since the contributions leading to the forfeiture account weren't fully vested at the time they were made.

I haven't heard much discussion as to whether this same restriction would apply to excess assets transferred from a terminated defined benefit plan. I can see an argument both ways, and have found no official guidance at all.

Any unofficial guidance would be appreciated!

Dog

Participant DOB 1/11/1940, she turns 70.5 on 7/11/2010 and her required beginning date is 4/1/2011, the participant does not want to wait and decides to take her first RMD in 2010 and it is distributed to the participant on 9/30/2010.

The participant dies on 1/27/11 before her required beginning date of 4/1/2011.

Question - Should the 2011 RMD payment be calculated using the life expectancy of the deceased participant's or the beneficiary? Please note that the beneficary is the spouse.

I have a PSP that is a controlled group. Two companies, one owned by wife and one by husband. They have the plan together.

No other EE's.

They are going through a divorce. Company's will no longer be a controlled group.

As a result Company A (husband) will retain his plan and Company B(wife) will cease to be a participating ER.

The wife wants to set up her own plan and be able to put a contribution in for 2011.

Company A plan does not have a last days requirement.

For the year end PS contribution for Company A - would Company B have to deposit the same percentage as company A for payroll through date or cessation?

In Company B's new plan for the year then would I have to count only pay from the date the plan started.

Goal is to separate ASAP and have each make their own year end contribution in their own plan.

Thanks for your help.

Pat

ER sponsors PS plan with discretionary PS contribution based on uniform allocation formula. ER is switching to a high deductible health plan and wants to ease the burden on ees by offering them an election to have any PS contribution contributed to the ee's HSA account (up to applicable limits). Can the ER do this? Would an ee that makes this election be "treated as" receiving an allocation under the PS plan (see 1.401(a)(4)-2©(ii))? I think it is a bad idea but need something more to convince the ER. Thanks!

This report will give a listing of all plans on the system.

this is not run out of Report Writer - rather you open the report in Crystal

View/Print Preview

This version will only print the most recent plan year of any given plan (not all plan years)

the 'select' option is set to pull only DC plans (but you could change that if you want or have DB plans.

the report is currently what I call a 'sample' of what you could pull - it currently shows NRA, top heavy status for next year and the vesting schedule (I think of the first account), but obviously could be modified to pull any particular item from plan specs you might want.

Hello all. I read a few posts on this subject from a few years ago, but I'm still not clear on this.

I have a broker with two groups that wants to set up one POP and one POP/FSA plan for these two groups. The group employees hundreds and at times 1000’s of seasonal employees. Some of these seasonal employees work full time, year round but are still considered seasonal, and are not eligible for their underlying benefits. They basically want to set their plans up for the office and sales employees and exclude all seasonal employees from the POP and FSA (their definition of seasonal employee has been recorded in their corporate minutes and is used to define who is eligible for their healthcare) .

Is it okay to exclude all of their 'seasonal' workers. Also, does the 'definition' of seasonal employees found in TREAS. REG. § 1.105-11 (1981) " ....any employee whose customary weekly employment is less than 25 hours or any employee whose customary annual employment is less than 7 months may be considered as a part-time or seasonal employee" overridge their definition of seasonal employees?

Lastly, if they are excluded from participating, are they also excluded from the testing? Thank you for any insight on this issue.

If a 401k plan without automatic enrollment chooses a QDIA just in case someone doesn't complete an enrollment form, does that plan sponsor need to provide a QDIA notice each year, even if every participant has completed an enrollment form and chosen investments?

A year ago I found proof to submit to my employer that I indeed can have a Flexible Spending account with an HDHP, I simply researched it on the internet, and I therefore was allowed to do so for the 2011 year. I can't find any information on it now. Everyone gives me the same thing "you can not have a Flex plan with an HDHP and you can not have a FLex plan with an HSA (well, you can within limits, but I'm not talking about that here)". Well, I've proven that you can, I already did, but now people say I shouldn't have been able to.

I DO NOT have an HSA and I don't want one. The reason is I need the entire amount of the Flex account available to me in January, and I pay for it every paycheck for the rest of the year. Where can I find information as to the reasoning why I CAN have an HDHP with a Flex account. If I indeed can't do that, where is that proof?

Secondly, is an employer legally allowed to contribute money into a flex plan, like they are allowed to contribute to an HSA? Again, I don't have and don't want an HSA, I need a flex plan.

I'm so confused.

Thanks.

Qualified Charitable Distributions are available ONLY from IRA's, not qualified plans. Correct?

Does anyone know if a services agreement with a service provider, which covers recordkeeping services provided to a 401(k) plan, and a group annuity contract issued to the plan as its investment option, would fall under the category of "executory contracts" as defined in the Bankruptcy Code? I suspect that they do because there are obligations which still have to be performed on an ongoing basis under both agreements. The issue has arisen because the plan sponsor is now filing for bankruptcy and if these two agreements are "executory contracts", the sponsor may exercise its right to "reject" or "assume" both agreements.

Thank you.