Is Form 5500 required to be filed for a Health Reimbursement Arrangement when funding is made by the employer only and it is not a benefit under a cafeteria plan?

Any guidance would be appreciated. Thank You.

I have a client who is being bought and wants to terminate the plan before the purchase.

Supposed date of close of company is August 8. Payroll runs from 7/24 to 8/6, with payment date of 8/13. Is it okay for a check that is dated later than the plan termination to have deferrals?

There is a group in which one of the partners leaves the company along with over half the employees. All these employees have elected cobra from their former company. The prior company wants to change their name as well as their tax id number essentially closing the prior company business.

When the new company sets up their new benefits under the new name and tax id number, are they under any obligation to offer the prior cobra participants benefits under their new company?

What should a plan administrator do if it sent out a notice to interested parties that was premature? The plan administrator thought it would file a determination letter filing on a certain date, and sent out the notice to interested parties accordingly, but now has determined that it needs additional time to file the application. Should it send another notice out stating that the first notice is withdrawn, or should it ignore the first notice and send a second notice when it is time to file?

what is the difference? Is it that there is no exclusion of certain ERs? I am failing to see a nuance.

From what I have read, hardships for funeral expenses are available for immediate family members. Is a grandparent considered an immediate family member in this case?

Here is the situation. We have an owner of a corporation who unfortunately passed away. This owner always received a bonus at the end of each year, but this year the corporation was trying to process the bonus as soon as possible because of the health situation. However the bonus did not get paid prior to the passing of the owner. The plan document defines compensation as Form W-2 Compensation. From the initial research that has been done, it appears the compensation will be listed on the 1099-Misc and will be issued in the name of the deceased employees legal representative. But the compensation will be listed on the owner’s W-2 for FICA and FUTA but will not be listed on box 1 of W-2. The question is whether or not the compensation is counted for retirement plan purposes since it is not on box 1 but is on other boxes on the W-2.

Here is the situation. We have an owner of a corporation who unfortunately passed away. This owner always received a bonus at the end of each year, but this year the corporation was trying to process the bonus as soon as possible because of the health situation. However the bonus did not get paid prior to the passing of the owner. The plan document defines compensation as Form W-2 Compensation. From the initial research that has been done, it appears the compensation will be listed on the 1099-Misc and will be issued in the name of the deceased employees legal representative. But the compensation will be listed on the owner’s W-2 for FICA and FUTA but will not be listed on box 1 of W-2. The question is whether or not the compensation is counted for retirement plan purposes since it is not on box 1 but is on other boxes on the W-2.

New version of the form was released Friday. Did not see any mention of how long the IRS would continue to accept the prior version of the Form. Called the IRS and was told the old form would no longer be accepted now that the new version was released. Called back today to see if I get the same answer and was told they have not had any training on that subject. Our software vendor does not plan on issuing a service pack to update the form any time soon. Does anyone have any insight to offer regarding if/how long the IRS will accept the prior version of the form? We are wanting to send in extensions this week for all calendar year plans that have not signed their form 5500 yet but are hesitant to do so pending this form issue. Thanks

Situation: Plan document permits participants to defer up to the maximum permitted by law to the plan, no percent or dollar limits (other than statuatory) hardcoded in plan document.

Problem: Plan Sponsor has limited all participants (HCEs and NHCEs) to only defer up to 15% of compensation.

Timeframe: Plan Sponsor has operated the plan this way; "always".

Question: Do I have as big a corrective contribution situation as I think I have or is there another way to view this situation?

Thanks

Normally when we process a distribution, we charge a processing fee directly to the participant's account. The plan sponsor has a number of terminees who's whereabouts are unknown. If we use some sort of locator service, can we deduct those fees from the participant's account as well?

Is a non-ERISA 403(b) plan subject to Treas. Reg. §2510.3-102?

A church 403(b) plan has failed to submit payroll deductions to the plan for over 6 months. Would the plan need to calculate lost earnings using the VFCP calculator or use an alternative method by using the highest performing fund from the investment offerings under the plan from the date the monies should have been deposited through the date the monies were deposited? Also, would the employer have to file Form 5330 excise tax reporting the prohibited transaction and its correction?

403b plan has a match, whereby you only get a 2.5% if you contribute at least 2.5%. Therefore, they have always told employees the minimum ddeferral rate is 2.5% of pay, thus avoiding nayone missing out on the match.

Is this a problem, or is it OK? The document simply states that the employer can set the minimum contributions.

An ERISA 403(b) plan that excludes part-time employees from making deferrals would fail the universal availability requirements of IRC Section 403(b)(12) and Treasury Regulation Section 1.403(b)-3(a)(3) and would be an operational failure under Section 5.02(a) of EPCRS. Assuming the self-correction period has not expired, the correction for the improper exclusion of eligible employees from a 403(b) plan would be the same as for a 401(k) plan under Appendix A.05 and Appendix B 2.02 of EPCRS, correct?

Or, would this failure be considered "egregious" for purposes of Section 4.11 of EPCRS, and thus require a VCP application under Appendix D to EPCRS?

Plan has tiered matching contribution based on participant's years of service but the match is made regardless of the elective deferral amount. For example, participants with 2 years of service who make elective deferrals to the plan get a matching contribution of 2% of pay, while participants with 3 years of service who make elective deferrals to the plan get a matching contribution of 3% of pay, and so on.

But the matching contribution doesn't depend on the amount of the elective deferrals contributed, so one participant with 2 years of service could defer $2,000 and get the 2% match, while another participant also with 2 years of service could defer $20 and still get the 2% match, even if 2% of pay is more than the $20 deferred. Is it really a match if the same percentage is contributed for deferring participants with the same years of service, regardless of the specific amounts they defer? (It seems like a cross between a matching and a nonelective contribution.) And would this tiered match be subject to some sort of cross-testing, or does the ACP test cover it?

Thanks.

Here's the situation: Particpant A receives a bonus on 1/31/2011 and the company treats the bonus as eligible 401(k) compensation. Particpant has an election in place and the Company funds the contribution to the Plan on 2/02/11. However, under the bonus program, a participant forfeits a prorated portion of the bonus if he or she fails to remain employed through the end of the year. Participant terminates on 3/1/2011. Company decides to remove a portion of the 401(k) contribution that was made out of the bonus under the rationale that the participant did not have a right to the entire bonus b/c he did not remain employed. this seems problematic. Any thoughts?

The regs say that you may not fund contributions before the participant has perfomred the services to which the deferral relates. See treas. reg. 1.401(k)-1(a)(3)(iii)©. If there is a restriction on the bonus, i.e., continued employment, has the particpant peformed the services to which the deferral relates before satisfying the continued employment requirement?

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Based upon a situation a client has - I've been researching and I found an ASPPA ASAP from 2009 in reference to the treatment settlement checks. The article states that there are 3 options: reallocate pro rata to current participants with balances, reallocate per capita to participants with balances or reallocate to affected participants only. It also mentions that the $$ may be used to reduce plan fees if the Plan Doc so dictates.

The article also states that "the settlement fund proceeds should not be used to benefit employers, fiduciaries or other parties of interest, other than through the payment of reasonable plan expenses".

Here is my question: Doesn't the payment of "reasonable plan expenses" benefit the Employer? I'm trying to understand why the payment of fees would be allowed but not using the $$ as forfeiture $$ to reduce the Employer obligation.

First, sorry for the contsant posts on gateway's and testing issues. I am having a nightmare of a time with a large controlled group that froze all but one of it's small DB plans (and such small DB plan is mostly HCE's) and I'm just looking for any way I can to save the client from having to make a large contribution to satisfy the gateway (even more annoying is that without the gateway issue, the regular coverage and benefits tests are satisfied rather easily through aggregation).

Anyway, my main question/issue for this post is as follows:

In order to satisfy the "primarily DB in character" gateway (and thus avoid having to contribute millions meet the minimum allocation gateway) for 2010, I'd have to reflect frozen DB benefits on an Accrued-to-Date basis for a plan that froze it's DB plan on 12/31/2009. Through much research, it appears that the only way I can include the frozen accruals from the DB plan is if the same participants from that plan received a 401(a) allocation in 2010. Currently, the frozen DB group is only getting a match, so I cannot include the DB frozen accrual in my accrued-to-date accrual. However, if this group was to receive a profit sharing allocation, then I would be able to include the total benefit earned (Frozen DB plus new PS) in the accrued to date test. So my question is, can amend the 401(k) plan to provide a very small PS allocation to the frozen DB group (let's say 0.1% of pay for sake of argument) and thus be able to include the DB frozen benefits in my accrued to date accrual, and in turn satisfy the primarily DB in character gateway?

Would the way to do this be to amend the plan (prior to 9/15/2011) to say "provide all NCHE's with a 0.25% allocation for the 2010 plan year" or something as simple as that?

Any help that can be provided is greatly appreciated.

I work in HR at an organization that is a for-profit joint venture between two hospitals. My employer is going to be dissolved. Many of our employees will receive employment at the two hospitals, but some will not have jobs. My question is this: we have an FSA. How is this handled? My employer is not being acquired. It is going to be terminated/dissolved. I am not sure that the two hospitals are considered successor employers. How do we handle employee FSA accounts where money has been set aside but unused for claims?

Thanks.