Is it possible to change from a PPO to a HDHP with HSA and maintain grandfathered status (for example, if employer increased its contributions to the extent necessary to ensure that employer contribution percentage is greater under HDHP than under PPO)? Or, as I think is more likely the case, is it impossible for an employer that offered only a PPO on March 23, 2010, to offer a HDHP and have that HDHP be a grandfathered plan because the HDHP "benefit package" was not offered on March 23, 2010?

I have looked at several other posts regarding controlled groups but just want to make sure my thinking is correct. I have a person who owns 100% of Co. A and 70% of Co. B. (I don't know who owns remaining 30% of Co. B.) I think this does not constitute a controlled group because there is not 80% common ownership. Is this correct?

Is there any way it would be considered a controlled group if remaining 30% is owned by a family member that is subject to attribution?

We have been asked to draft plan termination paperwork for a single participant profit sharing plan for a sole proprietorship. Years ago when the plan was established a corporate trustee was named. Although the plan appears to have been amended and restated on a timely basis, the plan sponsor has had no contact with the corporate trustee for many years and would like to terminate the plan without involving them any further.

I know that the employer has the authority to terminate the plan. I believe that there will be no problem with having the assets distributed, as they are no longer held at the bank that is the trustee. Other than notifying the trustee that the plan is terminated, is there a requirement that the trustee sign off on the resolution?

We currently sponsor a Corbel prototype. Beginning with the PPA restatement we are considering scrapping the prototype & sponsoring the Corbel VS instead. Does the prototype offer any advantage over the VS that might cause us pause? Just want to make sure that we are not missing anything.

Thanks in advance for any guidance.

The instructions says to enter the beginning and ending dates for the 2009 plan year when combining information for the 2009 and 2010 plan years. For example, a plan that reports on a calendar year basis and combines information for the 2009 and 2010 plan years should enter January 1, 2009 as the beginining date and December 31, 2009 as the end date.

Here is my question:

There was a participant who was reported on a previous SSA form (2008) with an A and in 2009 received a distribution. (This is a calendar year plan.) Therefore, I reported this participant with a D. Because this participant was paid out in 2009, should I include the the dates of 1/1/2009 to 12/31/2009 in Part I.

Thank you for your help.

Annette Leerhoff

the Sept CPI-U was just released, and is 226.889

so according to the code, the following should be the limits for next year:

close, so close to getting an extra jump in the 415 limit to 51,000

xxxxxxxx catch deferral compen dc 415. db 415. key emp hce

unround 5,752 17,255 254,780 50,956 203,824 165,607 115,120

rounded 5,500 17,000 250,000 50,000 200,000 165,000 115,000

of course, I guess Congress could always jump in and say "We are changing the rules. you will never ever see an increase because we spent all your money and are short of cash"

for soc sec, which is based on the CPI-W factors

I come up with

an increase of 1.0359

depending on the rounding I make that a 3.6% increase

We are wondering if an HRA (such as a deductible reimbursement plan) that is intertwined with a group major medical plan will require a separate SBC. Presumably so. However, in attempting to write one, it makes no sense without constant reference to the group major medical plan.

It seems to us that the group major medical SBC should incorporate the HRA info for it to make complete sense. In so doing, a separate SBC for the HRA would not be necessary.

Your comments and thoughts?

Thanks!

Looking for advice regarding the termination / dissolution of a MEWA. In particular, we are trying to be sure we have reviewed any and all applicable sources of restrictions on the distribution of remaining trust assets once all MEWA claims have been satisfied and the applicable state department of insurance regulators have signed off on dissolution of the remaining trust assets.

In this case, the MEWA was a long-running MEWA established by a bona fide employer organization consisting of a professional trade association limited to employers in a single industry. The MEWA has always been operated as an ERISA welfare benefit plan and has always complied with all applicable state insurance laws and requirements for MEWAs and is working through the termination of coverage period currently. The funds have always been held in trust but the trust was not established as a tax-exempt VEBA under Code Section 501©(9). The MEWA anticipates a fair amount of trust funds remaining after all claims / liabilities have been paid. The remaining employers want to know whether they can get the remaining money and, if so, how it is to be divided or are there various restrictions on how those assets get used (e.g., having to be used for the benefit of participants / employees rather than reverting back to the employers).

Would welcome any thoughts on applicable rules or sources of restrictions. Assume the trust agreement and plan documents would be the two most direct sources of restrictions on use of remaining assets. Would also assume the State's MEWA regulations may factor in here if they specifically address the dissolution of MEWAs (unclear there are any express rules on this though). Also assume that ERISA's general fiduciary obligations to act solely in the best interests of plan participants, etc. may factor in here even though the decision to terminate the MEWA was a settlor decision of the Plan Sponsor. (Is there any reason to think that the Trustee's general fiduciary duty with respect to remaining assets and general restrictions on the use of those for participant benefit somehow goes away and the assets revert back following termination of the plan.)

Thanks for any thoughts from those that have been through the process before.

Doing a 2009 and 2010 combined form. Only have 1 Participant to report under Code D as the Plan is now closed out as all other Participants have received their distributions. Final 5500-SF already filed.

Question: Do I enter the Code D Participant under line 6b, since I am voluntarily reporting this Participant?

Any help will be greatly appreciated.

Thank you.

DPSRich

Yesterday during the mad rush to file we had a few clients that got their PINS from the DOL and received the "processing stopped" filing status. When they went through and reset their PIN and refiled, it was approved.

Anyone else have this problem? It's very frustrating that the DOL can't take the PIN the first time! ARGH.

BTW, I'm using Relius WebClient.

Thanks!

Vicki

Okay to add a new participating employer (controlled group member) to a basic-match safe harbor plan mid-year?

DB plan, which we'll call the ABC pension plan, is on an individually designed document and they were/are in Cycle A. They filed under the Cycle A RAP back in 2006 and rec'd a favorable determination letter.

Cycle A is coming up again - but this plan merged into another DB plan (which we'll call the XYZ plan) effective 1/1/2011. The XYZ plan is also an individually designed plan and they are in Cycle D.

So is there any reason for the ABC plan to file under Cycle A? Considering that ABC plan technically doesn't exist anymore and there are no longer any assets under ABC - I don't think that there is really any point. But I've been wrong before.

Now, when XYZ files for a determination letter in 2014, then they'll need to provide information regarding the merger - as required on question 7f of Form 5300.

Thoughts?

Our company has a Supplemental Executive Retirement Plan (SERP). This is a non-qualifed plan and benefits are paid from general assets. Upon retirement we pay participating executives either a lump sum or stream of payments over x years.

My question: will a SERP payment impact SSA benefits?

I called the SSA and they said no. They were not familiar with SERPs, so I explained it as being a non-qualifed retirement plan. They stated clearly that any retirement benefit is not considered earned income regardless of when paid out, and thus would not reduce SSA benefits.

I spoke with our CPA who said otherwise, the SERP payments would reduce SSA benefits if the payouts were made prior to age 66.

???

Employer with a daily valued plan persuaded the recordkeeper to set up an account for unallocated funds to which they made deposits in anticipation of making a profit sharing contribution. The employer has now encountered some cash flow difficulties and wants to take the money back out of the plan and not allocate a profit sharing contribution. I know that, absent a mistake of fact, they can't do that, but the recordkeeper has told them they can. I need a succint resource to show the client explaining why they cannot simply withdraw the funds.

To further complicate matters, it is invested in mutual funds that have lost money.

Has anyone heard of the following:

If a plan begins mid year with greater than 100 participants, is there a transition rule which would allow them to defer the audit to the following year?

Then in the following year, the audit would include both years.

I appreciate any guidance.

Thank You

What are people entering for the hurricane Irene extension under special extensions box?

I am working on a quarterly valuation for a client and two people are coming up with this error message. One person is a reservist, so his overage is part of the make-up for the 3 months he was on leave last year. I am good with him. It's the other person that is causing my query.

She is 54 so is catch-up eligible. The plan offers traditional 401(k) and Roth 401(k). She has elected to defer into each. So far this year, she has deferred $11,264.10 into each source, taking her over the $22,500 limit by $528.20 (assuming that she did not make any deferrals for the 10/15 payroll).

She'll need a correction - am I taking it out of each source equally? They added Roth in 2006, and I am going to assume (for now) that she has made Roth deferrals since then.

edited to correct typo.

I have a publicly traded client that wants to contribute certain operating assets to a new joint venture (an LLC) in return for a 20% equity interest. These operating assets are subject to an obligation to contribute to a multiemployer pension fund. The other 80% member will be a private unrelated non-union company that will contribute assets for an 80% equity interest. The new joint venture will assume the obligation to continue making contributions to the pension fund at issue. Under Section 4218 of ERISA, a change in corporate structure does not trigger withdrawal liability (this exception covers a merger, consolidation or division of an employer). The Second Circuit in Bowers (27 F.3d 800) in 1994 held that two companies that formed a separate joint venture and transferred to it their unincorporated operations were subject to withdrawal liaiblity since there was no division or merger. Citing several PBGC Opinions, the Court viewed a division as requiring some kind of stock transaction where stock is divided away from a control group and acquired by a new owner. The asset transfer and contribution to the joint venture for an equity position thus did not qualify as a division exempt from liability. The Court also held that such a transaction was not a merger or consolidation. Any ideas on how my client can form a joint venture without triggering withdrawal liability? Since my client is publicly traded, I do not believe that the joint venture can be considered part of its control group (and thus exempt) even if it owns more than 50% of the new venture. Any thoughts are appreciated.

We missed an amendment for a welfare plan that amended the year end from 1/31 to a 12/31 year end effective 1/1/2010. However, the 2009 Form 5500 was filed for 2/1/209 - 1/31/2010 py. The extension was filed on July 28, however using the 1/31/11 year end so it is due date 11/15/11. Anyone run into this before, best options? Could I file under short year today (10/17/11) even though the extension has the incorrect plan year end of 1/31/2011? Thanks.

The client has hired a PT bookkeeper who will work only 650 or so hours each calendar year. To vest, 1000 hours is needed each calendar year. The 401k plan has a 6 yr graded vesting schedule (there is also a CB plan with a 3 year cliff). In order to help this participant vest are either of the two following options OK to use and which would you prefer..

1) Fully vest the participant right out the gate - make her 100% vested outright (obvious downside, the participant leaves in under 6 or 3 years with contributions she would not have been vested in

2) For this participant only define a year of service as 500 hours for vesting purpose - while perhaps a challenge to keep track of, it would still require 6 or 3 years for full vesting on contributions to the plans -

The participant is an NHCE and always will be an NHCE - My main question is can I choose to define a year of service for vesting for an NHCE differently than all other participants in the plan.