I know this topic was cover in these boards about 5 years ago but I am still can't find a definite answer. During a takeover, client was asked for a signed copy of their DB Plan doc (they had provided an unexecuted copy). They cannot locate a signed copy (and most likely never had one) in their files or archives. I have read everything from the "plan doesn't exist" or it's "disqualified" to "it's no big deal, you can provide signed board resolutions or a determination letter showing establishment of the plan effective date". I don't see anything in VCP that covers this exact issue. Thanks.

Employee waives medical coverage when hired. Employee doesn't not have other medical coverage. Employee is married. Is this a qualifying event and is the employee allowed to enroll in medical plan because he added a dependent even though he currently has no medical coverage?

The Form 8955-SSA instructions do not specifically address this.

Here is my question:

Since the IRS gave an extended due date of until January 17, 2012 to complete Form 8955-SSA for plan years that end before April 1, 2011, does the box special extension under Part I, Line C need to be checked?

Thank you,

Annette Leerhoff

Does anyone have any recent information on the use of a DB Plan Sub-Trust owning Life Insurance to keep it out of the taxable state. I cannot seem to find any recent articles on the subject.

I would appreciate any info you have.

1065 is amended and generates extra income for partners. Can the partners make additional profit sharing contributions together with the amended?

I'm assumign the answer is "maybe" but if and only if the return was on extension through octboer 17, and the additional amounts are funded by October 17th. Because the contriubtions are deducted on the 1040, many people suggest that this is when you have to fund the contributions by for a partnership.

Any thoughts?

Why do kids that are into heavy metal music want to become actuaries when they grow up?

I'm at a new company that has the following parameters in place for new employee initial enrollment:

All benefits are effective on the first of the month after date of hire. Employees may make elections for 30 days after eligibility starts. Example, an employee who starts 9/10/11, will have a benefit effective date of 10/1/11 and have until 10/31 to make changes to his/her elections. I have been told that all elections made in this initial 30 day window will have an effective date retroactive back to 10/1/11. I am concerned because I do not know if this is permissible for certain benefits.

HSA account - From what I know about HSA's, the effective start date of an HSA is tied to when an employee actually establishes the HSA at the bank. HSA establishment guidelines vary from state to state depending on the particular state law pertaining to trust/custional arrangements. Some states do not consider an HSA established until it has been funded. Expenses that are incurred prior to the establishment of the HSA are not qualified medical expnses under the HSA. It is being communicated to the employees that they can seek reimbursement from the first of the month following hire date. Can someone please confirm that

FSA account - I believe that Sect. 125 allows for employees to make elections that are retroactive up to 30 days from an employees hire date. Meaning if an employee is hired on 9/10 and makes and election within 30 days, the law allows for the FSA effective date to go back to 9/10. However, what I am seeing in practice at the new employer - with a Hire date of 9/10, they are allowing emoployees until 10/31 (beyond the 30 days from start) to make elections and telling them that it is retroactive back until 10/1. Is this permissible.....I don't think it is. If the eleciton is made after 30 days of hire, the effective date of the plan would be the day the employee signed the document...right? Can somone provide some insight or point me to a document that supports this.

Thanks in advance.

Employer maintains an account balance deferred compensation plan covering several employees that is subject to 409A. Plan cannot be amended by the employer in a fashion that would have an adverse effect on any participant's accrued benefits.

Employer would like to make a limited-time offer to some participating employees (in writing, although I don't think that matters) to cash them out of the plan early and terminate their participation in the plan. Only employees who accept this offer will be cashed out and cease to participate.

Questions:

1. Will the mere offer by the employer, prior to acceptance of the offer by any employee, violate the anti-acceleration rule? (Remember, the offer can't be considered a plan amendment because the employer can't amend the plan to cash-out people.)

2. Assuming the answer to #1 is "yes," what if the offer is made only to those employees whose cash-out amount will be $16,500 or less?

Preparing an investment policy statement is a fiduciary function, right?

A business owner sponsors a 401K plan for his employees in which he participates. He also has some income he receives as self-employed income. Could he make a SEP contribution from the self-employed income?

If so, are contributions allocated to him in the 401K plan aggregated with the SEP contributions in determining his maximum 415 annual additions limit?

Sponsor of large 401(k) plan remitted deferrals and loan payments monthly, although payroll is biweekly.

So at least half of pay periods, amounts were remitted after 3rd business day following payroll.

We have calculated lost earnings on deferrals and loan payments using DOL's VFCP calculator.

We will prepare 5330, and sponsor will deposit lost earnings and pay excise tax.

Question: will the fact that the loan payments were remitted late to the plan change the outstanding balances on the loans?

The amortization schedules are based on biweekly payments, not monthly payments.

Thanks.

When filing the Form 5500, Schedule I {Financial Information - Small Plan}, is it just the PSP's primary account held at the financial institution that is being reported on or should the reporting also include all sub-accounts which are individual participant accounts with investments directed by the participants and account statements from the financial institutions provided directly to the participant?

Apparently, the custodian does not offer tax qualified accounts because of the potential accounting regulations that might be imposed upon brokerages for custodying such accounts. The available option is a trust account but trusts have year end 1099 reporting. Can the existing tax qualified plan set up account at new custodian because there is a way to account for these circumstances? Any additional filings in conjunction with 5500?

One of my health plans has a provision in place clarifying that they will not cover undocumented or illegal workers. The administrator is interested in sending an I-9 form with the initial enrollment material. Is this permitted under federal law? Also, any what other steps do plans take to ensure all participants are legal?

We administer a DB plan that is terminating due to sale of the company and retirement of the sole prop owner. The plan has been frozen for the last several years - however when it was active it had a pretty robust formula, and a Joint and 100% Survivor normal form. There are only five individuals with accrued benefits. It's PBGC covered.

There is a former participant who, in the middle of the plan termination, just reached normal retirement age, and has selected the annuity form of payment over the lump sum. Now here is what gets a little strange and disturbing.

Under the terms of the plan, his $4,000 monthly benefit equates to a $561,000 lump sum (he's at 415(b) limit, so what's kicking in is 5.5% and life only form). However, when the sponsor goes to shop the immediate annuity, no insurer out there is going to assume 5.5%, and they have to price it based on the 100% J&S. Because of these two factors, the premium is MUCH higher than the $561,000 lump sum - like around $900,000.

Of course the plan is underfunded to begin with, and the owner was going to waive benefits in order to go through a standard termination with the PBGC. But with this additional outlay to buy the annuity, the owner's benefit will be completely wiped out, and then some.

It's like the "perfect storm" of plan terminations. Short of rescinding the plan termination, does anyone have any "outside-the-box" thoughts?

a plan sponsor/owner is terminating his plan.

it is pbgc covered and other than owner there are 3 employees.

if each chose a lumo sum the owner would get say 300k and forfeit rest of pension.

however, one participant in pay status has a lump sum payout value of close to 600k if he takes remaining distribution in lump sum.

excpet the participant wants to continue payment as annuity. (100% j&s mind you)

insurance annuity quotes have averaged about 900k. ouch!

i suppose to due low interest rates, fees, commissions and who knows what.

the owner is in his 70s and closed his company.

if they buy annuity owner gets $0 instead of 300k (per above).

what to do?????

they can beg participant to take lump sum

they can have owner maintain plan (thought MRCs will continue, etc., not desirable) sponsored by himself as sole prop.

or maybe go through a distress pbgc termination

i haven't spoken to owner but i believe he does not want to sacrifice entire pension.

thanks

Here's a new one, I think.

Employer A is on the verge of bankruptcy. Operations were being kept a afloat using funds obtained from a bank note. Bank decides to sell the note to a 3rd party, who is not related in any way to the company or bank. 3rd party calls note and via foreclosure, seizes all company assets. 3rd party then restarts operations as a new firm using assets of old firm. Even hires a few of the old firm's employees. The old employer still exits on paper, but for intents is gone.

Company maintained a 401(k) Plan, which has an outstanding value from a matching contribution. How does the preceding impact the Plan? Specifically, who is the sponsor and who owes the match and must pay cost of the Plan? I suspect that the preceding is an asset purchase making the old firm wholly responsible for the plan, with no liability for the 3rd party. Since Employer A has no money I also guess that the owners of Employer A could be liable for the match and costs of the plan. Is taking those monies from the accounts of the owner/participants feasible? As an in-service distribution? Can they forgo their match?

Seems to be a real mess.

An employee is enrolled in a regional HMO with a standard FSA. He is relocating and needs to select another health plan. We offer a national HDHP/HSA (in order to enroll in the HDHP you must qualify under the HSA rules) and he wants to enroll (note there is another health plan choice available to him). Is he prevented from enrolling in the HDHP/HSA since he has an FSA or can I let him enroll in this plan due to his relocation and the fact that he can change to a Limited FSA?

Hi everyone, i am new to the boards and just found this site today. I have been researching the issues below without luck. If anyone could help, that would be much appreciated.

Open Enrollment Starts June 1 2012

My Plan: HMO w/FSA @ $3k/Year

Switch to: HSA @ max $4k Deductible, will take max HSA Contribution @ $6250 (Family)

1. Can I contribute to my FSA until 5/30/2012, then start HSA June 1, 2012?

2. If #1 can be done, can I transfer my FSA funds to the HSA account?

3. If #1 & 2 are not possible, do I need to start my contributions starting 6/1/2012, ($6250 over 7 months?)

When a client overfunds a wire (contributions to much money to the Recordkeeper and Trustee) or participants are taken out of the payroll file and money is left over, is the client permitted to ask the Recordkeeper/Trustee to move the money to the forfeiture account? or must the Recordkeeper/Trustee return the money to the client?

Question - Is moving the money to the forfeiture account a violation of the exclusive benefit rule? Should the overfunded amounts be returned to the client? Please state the Code/Regulation? Please note, the excess money was never placed into the participants' accounts and is truly the client's money.