For a governmental DB pension plan which does not participate in Social Security, what are good options to track who is still alive and who is not? This plan has a high percentage of direct deposits.

It is my understanding that survivors, funeral directors, and doctors often report deaths to the Social Security Administration. However, we are concerned with both timeliness and completeness, especially since this public entity does not participate in Social Security. I am expecting that there are private sector providers who consolidate data from multiple sources to supplement the SSA database and provide updates on a monthly basis.

1. Company A spins off Company B. As part of the spin-off agreement, Company A agrees to keep Company B's employees on their health plan, so now Company A's health plan is covering non-employees. Five years later, Company A stops offering coverage to Company B's employees.

Does Company A have to offer COBRA? The qualifying event (termination of employment with Company A) that led to the loss of coverage happened five years ago, so outside the "maximum coverage period." On the other hand, no one was given COBRA notices five years ago, because there was no loss of coverage.

What say you? Outside of a MEWA, I don't see any guidance when a Company is insuring another Company's employees.

2. Simple question, but one I can't find the answer for.

Company A used to offer dependent coverage for spouses and children. For the new plan year, they drop dependent coverage and only offer insurance to employees. A qualifying event for COBRA is defined as "(5) A dependent child's ceasing to be a dependent child of a covered employee under the generally applicable requirements of the plan;" Is dropping dependent coverage a qualifying event? Under the strict language of this section, it appears that the dependent child is no longer a "dependent child . . . under the requirements of the plan." But I've only seen that section used if the dependent ages out (or stops being a student), not because the definition of "dependent child" changes in the plan. Also, there's no comparable language for a spouse. Do we have to offer coverage to a child who was formerly a "dependent child" under the plan requirements, but is no longer one because of a change in plan language?

Thanks.

A pension plan has several participants with cash value life policies in it. What are the participants options with regards to the plan termination? Can the policies be assigned to the participants? How would the participant be taxed on it? Current cash value? Could the participant roll the policy over to another plan assuming it allows for ins.?

Thanks

I have a client who has a solo 401(k) and has never filed a Form 5500-EZ even though the balance has been over the limit for years. We are going to prepare returns for the prior years. Can I use the 2010 form to complete these or should I use the form from the applicable year?

Has anyone done any preliminary calculations to see if any adjustments to limits will be made in 2012

How do you discontinue a SIMPLE IRA as of the end of a calendar year? Client is starting a 401k with us 1/1/2012.

oh this topic always stumps me...5500 for wrap benefits plan has always been filed as a single employer plan, but employer is a hr leasing company with many companies under the plan. looked up one of their competitors and they file as multi, but seems to me the definition of multiple is more apropros. now i dunno if this should be single, multi or multiple? i know theres info i need to make the determination, just not full on clear what it is.

I am trying to obtain Form 5500 Schedules I and R.

Aside from third party software where, how can I obtain those forms such that they can be completed on the computer and then printed or scanned to a pdf file? So this ins't a form that says for information purposes only.

IFILE does not have such schedules. They start in 2009.

thanks

A single member LLC set up a DB plan about 7 years ago. He owned other businesses, but his investment advisor told him that since those businesses weren't related to his LLC, he did not have to include the employees of those businesses in the plan. Fast forward seven years, and the employer discovers that there is indeed a problem. Financially, it makes more sense for us to do a VCP application under the premise that the plan was never qualified from day one. There would be 1041s filed for the taxable trust, and amended personal tax returns for the client. The plan document does not automatically bring in employees of a related business. It says "Furthermore, with respect to a Non-Standardized Adoption Agreement, Employees of an Affiliated Employer will not be treated as "Eligible Employees" prior to the date the Affiliated Employer adopts the Plan as a Participating Employer."

My question is should we be concerned that the IRS might refuse to allow the plan to be disqualified, and instead force the employer to go back and cover those employees from the beginning? Since there's nothing new under the sun, perhaps someone has run into a similar scenario?

With regard to an amended volume submitter plan, what is the current applicable deadline for an employer to submit a determination letter application?

Is it the two year period yet to be announced by the IRS for employers to adopt plans and submit determination letter applications that will end some time prior to the end of the six year remedial amendment cycle (described in Revenue Procedure 2007-44 section 19.05)? Or is it January 31, 2012? January 31, 2017?

If a DB plan was frozen several years ago and is in the form of a VS document which needs to be restated for EGTRRA by the end of next April, may the EGTRRA restatement (which will be effective 1/1/2011) contain a zero benefit formula and pretty much eliminate anything that is inapplicable to a frozen plan?

It is likely my employer will convert a traditional DB to CB in the near future, and I will be running the plan. Now is my opportunity to advise on the conversion...and to impact the design of the plan.

The traditional DB has about 1,000 actives. Several years ago it was frozen for new entrants, with new hires receiving a DC pension benefit instead.

It looks like the CB contribution will be a fixed % of compensation with a fixed interest credit. All eligible employees will receive this...no one will receive future accruals under the traditional DB formula.

It's been years since I dealt with CB plans, and I know the law has changed with PPA, etc. What are the basic design considerations for the conversion and the attendant pros and cons? Thanks.

AK supreme ct held that employee was not liable to spouse for drop in value of spouse's interest in 401k plan after spouse's share valued at 319k was segregated in separate account in 401k plan in 2007 pursuant to a property settlement agreement. After divorce AP disputed value of her share of employee's account. When spouse collected funds in 2009 value had declined by 116K and she asked trial court to order ex to make up the loss. Judge ruled in her favor but appeals ct reversed b/c after account was segregated, ex husband had no control over its value. Drop in value was due to AP failure to collect payment.

This case is a good reason why the AP's interest in a DC plan should be segregated as a separate interest as soon as DRO is recieved.

http://arkansasnews.com/2011/09/15/court-m...-drop-in-value/

We need assistance to fix efast.

Who can we talk to that can make eFast more flexible to accept filings from plans that have 52/53 week years? This must be resolved quickly as the current plan year end is only two and a half months away.

Client sponsors MPPP using non-std prototype document.

Plan year is defined as 52/53 week year, ending on the Saturday closest to November 30 of each year.

Plan has several hundred participants and must be audited every year.

We contacted the Efast Help Line because the 2009 Form 5500 for plan year ending 11/27/2010 could not be efiled.

We were advised that the only way to efile it was to check the box indicating a short plan year (364 days).

The current plan year ending 12/3/2010 will be a 53-week year (371 days), which will be un-file-able because it will be longer than 365 days.

If you can help, please respond to this post or email JMFPension@jmf.com

Just a reminder that a policy on the message boards is the prohibition against posting of articles published elsewhere.

Thanks.

(Back reference: http://benefitslink.com/boards/index.php?s...8057&st=40)

A company has a Health Plan A that all of the employees of Division X (and their beneficiaries) are enrolled in. During a routine audit, it is discovered that the employees of Division X are not eligible to be in Health Plan A. Rather, they are eligible for Health Plan B, which does not offer dependent coverage. All of the employees of Division X are moved from Health Plan A to Health Plan B. All of the dependents lose their coverage.

Are the dependents of the employees of Division X entitled to COBRA? If so, is it from Health Plan A or Health Plan B?

Has anyone run into a situation where a plan subject to funding restrictions under Code Section 436 is required to pay out a death benefit over 5 years to meet the RMD requirements of 401(a)(9)? Normally the RMD rules take precedence, but I am not sure that is true in this situation. Any assistance would be appreciated.

Employer does not want to make any of the monthly withdrawal liability payments to the plan during a soon-to-be review process because there has been no withdrawal--just a change of employer name & EIN while payments under the contract continue--and the emoployer fears that we will be unsuccessful getting these payments, plus interest, back from the union.

What rights, if any, will the employer be waiving with regard to future appeals or withdrawal liability if timely payments aren't made as required? For example, if there turns out to be withdrawal liability, will the employer be able to make up these missed payments, or will suit for collection of missed payments accelerate the entire libaility and foreclose future monthly payments (in addition to imposing 20% liquidated damages)?

The arrangement is an exempt separation pay plan where the individual can leave with good reason within 1 year following change in control. The CIC has occurred and good reason exists, but new company would like for individual to stay on. Are there any issues with creating a new arrangement under which individual will be paid the same amount under a 409A-compliant separation from service plan?

The arrangement is exempt so not subject to the substitution rules, but I am concerned that the new arrangement may be viewed as an impermissible deferral election for the separation pay payment under the old arrangement.

What about allowing the existing arrangement to continue and then lapse with the new arrangemetn kicking-im immediately thereafter?

Thoughts?

A minor was named as the beneficiary of a cash balance DB plan. The amount payable to the minor is over $10,000 and the plan document does not say anything about how a distribution to a minor should proceed.

The minor has a custodial parent, but the law in this jurisdiction (CA) does not permit money to be transferred to a parent on behalf of a minor for sums over $10,000.

Is it possible to amend the plan to allow a transfer to a parent even though state law does not allow such transfers?

If the custodial parent or some other individual obtained a guardianship of the estate for the minor, we would be able to make a distribution, but no one has taken this step for the minor.

How long can the plan hold onto the money that is owed to the minor beneficiary before pursuing other distribution options?

How do a plan's fiduciaries duties to beneficiaries affect how it approaches distributions to minors? Even if we are able to amend the plan to allow distributions to a parent on behalf of a minor, does our fiduciary duty to the minor require us to take additional steps to ensure the minor actually receives the benefit of the money to be distributed?

The plan's main concern is to find an administratively feasible solution for these types of distributions. Thank you for any guidance or practical experience you have which might shed light on how to approach this situation.