Can a company grant phantom "units" which basically function the same as cash-settled SARs granted with a FMV exercise price come within the exemption to 409A or must they be true SARs?

For the brother-sister controlled group test, a "common owner" includes a trust. But beneficiaries' interests in the trust (if 5% or more) have to be attributed and treated as the individuals' ownership. Does this mean you would remove all of the attributed ownership from the trust's direct ownership to avoid double-counting? I think this would really only have an impact if an individual had ownership in one company by virtue of attribution from a trust, and also direct ownership in another company, creating common ownership for him/her in both (even though the trust itself isn't a common owner).

This could have the strange result of both the trust (as its own entity) and individuals who are owners by attribution from the trust being in the "5 common owner" determination. Then you would have to remove duplicate ownership from the total and identical ownership counts.

Similarly, if a corporation is an owner of one or more of the companies being tested, the individuals who own 5% or more of that corporation would then be treated as direct owners of the companies it owns.

Does this seem correct?

Thanks.

My wife enrolled to HDHP and opened HSA account starting from 01/01/2011 and can contribute up to $6150 during the year of 2011. I also included to this plan. We are both 55+

My company's enrollment starting from July 1, 2011 t0 June 30, 2012.

- Can I enroll to my company's Health plan? We have a PPO, Dental, Vision. I want to enroll as Employee Only, payment is much less, and I'm planning some dental work (implants, crowns, ...) during this year.

- Can I participate FSA?

If YES:

- How much I can contribute? (Company has a limit $5000)

- Can I claim not covered by insurances rest of Dental payment for implants, crowns, ...?

Thanks in advance

Has anyone seen any authority on whether a plan administrator may require distributions to be made via direct deposit? The anti-alienation regs (sec. 1.401(a)-13) permit direct deposits, but do not specify whether a direct deposit must be initiated by the participant. Also, the protected benefit regs (sec. 1.411(d)-4, Q.1) state that "administrative procedures for distributing benefits" are not protected benefits. Any thoughts on the permissibility of requiring that distributions be made via direct deposit? I am not convinced this is a state law wage issue, and in any event the plan sponsor already requires employees to receive wage payments via direct deposit, so the employer seems to feel there is no problem with state law, at least as regards the wages.

Thank you.

I have been asked to complete a Form 5500 for both a Profit Sharing Plan for a Collectively Bargained Group that has a total of 53 participants at the beginning of the year and 54 participants at the end and a 401(k) Plan that has 14 Participants (BOY & EOY). Both filings are for the same company. In 2009, the firm that completed the filings for this company completed a regular Form 5500 with Schedule's A & I.

Is there something I am missing or would they have been eligible to file as a small plan in 2009? Since they filed a regular 5500 in 2009, do I have to stick with the Form 5500 and the schedules.

Thanks

Dr. A is an Affiliated Service Group with Co. B. Dr. A. has a 401k safe harbor plan. Co. B does not have a retirement plan. I aggregated the two groups for 410b testing. The test did not pass. What happens at this point? How can an employee from Co. B be brought into the plan to pass testing when that company has not adopted the plan? All of the employees with Dr. A are benefiting so there isn't anyone to include from his group.

I have a PS plan that has an age weighted formula, the document says that you have to allocate top heavy minimums ONLY to non-keys. Does this mean that a client who only wants to allocate 3% PS to cover TH, he could not just do a straight 3% across the board? Either he would have to allocate 3% to non-keys only and keys would receive 0%, or would he have to allocate more than 3% so that the keys could also get the TH min? No way to allocate 3% TH to ALL participants?

How is the best way to refund health deductions from a defined benefit plan? There are many opinions discussed but none seem viable. What do you do if you have to refund a health deduction? Refund from the trust, modify future payments, what?

Ok, so I have a print out from Relius that has the different Transaction types, the Transaction Code, SubCode and Expected Sign (+, -, None) to use when creating a transaction import file... now I just need to figure out how to take that and get Relius to do what I want.

Can someone tell me how to add a Transcation SubCode to my transaction import file? I can't find it as a choice in the import/export setup area.

So for example. I have a participant that received a distribution. So they have a Di Transaction. I want to change some of the distributions to show that they are hardship distributions (subcode 1) for example.

I want to add this to my complete transaction import that includes my gains, contributions, distributions, etc. Is this possible?

We were discussing an EOY Cash Balance Valuation today. We use the 30 yr treasury for the ICR (November). For the actual interest credit rate that get the EOY Balance we use the rate preceeding the plan year. We are now in a debate on whether we should use that same rate for projecting balances out for the FT and NC or should we use the next novembers rate.

There are good arguement both ways, I guess I'd just like to get other's opinion.

Trying to calculate the amount for distribution for a terminated employee age 71 in 2011. Plan has a 5-year payout schedule for terminees (1/5 per year).

Account balance at 12/31/10 is $25,000.

Plan formula (for year 1) yields a distribution amount of $5,000.

RMD amount would be approx $945.

I am unsure whether the individual should receive both amounts, or receive the $945 as ineligible for rollover then the remaining $4,055 as an eligible rollover distribution. I do not see language in the document that addresses items such as this. Thoughts?

Is it acceptable to charge an employees flex account for the issuing of a debit card against the account? My thought was that the employee nor the employer/administrator could use those funds for anything but an eligilble healthcare expense. I don't see how the cost charged for issuing a debit card is an eligible flex expense. Any thoughts?

The National Academy of Social Insurance writes, "The Social Security legislation of 1983 achieved the important goal of remedying a short-term financing crisis and keeping the program solvent. But for the long term, it scheduled far more in benefit cuts than in new revenues for the 21st century. Those benefit cuts are only beginning to be felt. People reaching age 65 in 2025 will get retirement benefits for the rest of their lives that are about 19 percent lower than they would have been without the 1983 reductions."

Whine, whine, whine. 42 years advance notice seems more than adequate. Moreover, the SSA each year mails to prospective recipients a history of earnings and projected benefits. Nothing has been swept under the table.

Had the designers of 8955 been responsible for negotiating the WWII peace settlement, we would still be at war. Am I missing something or does the draft of 8955 look remarkably similar to what used to be SSA? 8955 is possibly the most costly-to-design form of the 20th century. While I'm whining, I'm also tired of 3 page consulting and society newsletters on this pathetic ordeal. With about 1/2 as much effort, we could have wiped out pellagra and beri-beri.

I am looking at trying to compile information regarding retirement plans specific to the retirement industry. Items such as participation rates, eligibility requirements for 401(k) and employer matching contributions, vesting requirements for employer contributions, etc. We aren't having much luck finding this type of information related specifically to the retirement industry. Does anyone have any links or suggestions as far as where we might be able to find information relating to this industry?

29 CFR § 4.171(b)(2) states a contractor may request approval by the Administrator of an unfunded self-insured fringe benefit plan in order to allow credit for payments under the plan to meet the fringe benefit requirements of the Davis-Bacon Act.

Has anyone gone through this approval process? If so, what is the official procedure, and what is required to be submitted to the Administrator? And how long does the process take? I have been unable to find a detailed description of the process on the Department of Labor's Wage and Hour Division website.

Thanks!

Doing a 410(b) test using the Average Benefit Test.

1.410(b)-(5)(d)(7) says that under certain conditions (which do apply to my situation) the Most Valuable Accrual/Allocation Rate must be substituted for the Normal Accrual/Allocation rate if the average early retirement reduction during the last 5 years prior to NRA is less than 4%.

In this situation, the reduction in the last 5 years is less than 4% for employees who separate from service on or after age 55. It is more than 5% for employees who separate prior to age 55.

The average participant age is about 50.

Must the MVAR be substituted for the NAR?

Question 2: Should the MVAR reflect the subsidy for someone who has not attained age 50?

Plan covers 100% owners and the employees of her small office. There were 4 people eligible for 2010 and only the owner and another employee/participant made deferrals. My concern is regarding the deposit of owner's deferrals. I have a W-2 for her, so should I assume that she is paid with some regularity?

My real question is do the safe harbor deposit rules on deferral deposits apply to her? Regardless of whether she is paid with regularity or takes draws? My problem is that all of their deposits made to the pooled account for 2010 are listed as "EE Contributions" (plan has safe harbor match) and while there was a large deposit made in January 2010, it was not large enough to cover the deferral receivable from 2009. In fact, when I add up the deposits, it takes until May 2010 to cover that receivable. While I do not have a breakdown of the deposits, you can tell that the small deposits are for the employee, and the larger ones are for the owner, due to their annual deferral reported on the W-2.

So would owner's deferrals be considered late? Thanks for your help in this argument.

Does anyone know of any procedural guidance regarding plan terminations that occur while there is a Form 5300 pending? Can you substitute a From 5310 in its place?

I have a client whose plan is a fiscal year plan with a Sept 30 year end. He changed his business entity structure so that now his business is a single member LLC, which is a disregarded entity for tax purposes. He files his business return as a Schedule C on his 1040 on a calendar year basis.

For the first time since he changed his business entity structure, he has decided he wants to make a profit sharing contribution for his 2009 - 2010 plan year. His cpa has advised him that as long as he makes the deposit by the extended due date of his 2010 return (Oct 15, 2011), it will be deductible on his 2010 return. Everything I find says that when there is a mismatch in year ends, the deposit would be for the employer year ending with or within the plan year. To me, this means that for the 2009 - 2010 plan year, the contribution would be taken on the employer's 2009 tax return as long as he made the deposit by the extended due date of his 2009 tax return. As he did not make the deposit by then, the contribution would be a deduction in the year the deposit is actually made.

One of my problems with this is the regulations make no sense to me (yes, I know that they don't have to). The client would have had to make the deposit by October 15, 2010 (assuming his 2009 return was put on extension,) and his plan year would have just ended on Sept 30, 2010. In theory, if his plan year ended on October 31, then he would have had to make the deposit before his plan year even ended.

Can anyone offer any advice or help? We are amending the plan so that the plan year will be Dec 31 and we will not have this issue again. However, we have it now and the cpa wants our concurrence with how he is handling the contribution. Thanks.