Participant has submitted a preliminary consult bill for dental bills as a medical bill for supporting documenation on a hardship distribution. However, the previous telephone discussions with the participant have all been about expenses not allowed under IRS hardship reasons. The consult bill is dated the day after our telephone conversation.

I've never had a strectch on the "medically necessary" (as opposed the previously incurred) phrasing of the language before. The supporting documentation in no way shows that the participant is going back to get this work done, does not show that there is an immediate need, does not show an estimated treatment start date. Given the knowledge that I know, from telephone conversations, that the participant is more than likely not going to follow through with the dental procedures, don't I need to get more documentation to support the hardship? More of a commitment letter on the medically necessary since it is just a quote?

Any thoughts?

Two plans merge as of 12/31/2010, "Plan Continuing" and "Plan Eliminated". The auditor wants to report ALL investment types as zero (so no mutual funds, etc). But how should I report the schedule A? I'm having a hard time justifying not preparing the A based on the info provided by the insurance company, including reporting an ending balance. The contract itself will actually continue, it will just be re-registered in the name of Plan Continuing. But of course it looks odd to say "no ending balance" on the H and then an Ending balance on the A.

I work for the TPA division of a company that has a number of other functions. The TPA division is part of the retirement plan and wealth management group that includes both broker/dealer affiliations and RIAs. Although I report directly to the president of the retirement/wealth mgmt. group, the VP of the group is certainly in a position of higher authority than I am within the company. I'm posting my question here rather than ASPPA message board because I don't want my name identified with the question.

Recently one of the VP's plans discovered that they have not been operating in accordance with the provisions of a two amendments, one effective 1-1-2011 adding QACA, the other effective 7-1-2010 adding automatic enrollment. Both amendments specifically called for automatically enrolling any participant who had not completed a contrary election. The investment house that began handling the enrollment forms for them at the time of the 7-1-2010 amendment coded the amendment wrong and only enrolled new people. The client is looking to see how many enrollment forms they have on file from before the investment folks took over this responsibility. The investment house has identified up to 90 participants for whom they have no election on file.

This is a large plan, in the midst of a 2010 audit for their 5500. The auditor has not noticed this, nor asked any questions about the automatic enrollment process yet. I have been instructed by the VP that this is his plan, and I am not to say anything to the client, nor the compliance staff that reviews my work about the 2010 error. He intends to correct only the error for 2011.

I'm looking for something stronger than my own opinion or my possible issues with violating ASPPA's code of ethics, to explain to this VP why he can't just pretend he doesn't know about this.

when i go to the dol web site they have a schedule sb that you can fill out on line but it says "SAMPLE" in large letters on it. Does anyone know where this form exists without the word "SAMPLE"? I suppose this form can be used as it is, but it is not aesthetically appealing and would raise questions with plan sponsors.

thanks

I posted this topic under the "Correction of Plan Defects" section, but thought it might be more appropriate here. We have a multiemployer money purchase plan with a participating employer covering non-bargaining unit members, some of whom are HCEs. Apparently, it was believed by the administrator that all employees were covered by a cba, but it turns out this is not the case. The way this plan is designed, it does not look like it satisfies the safe harbor, so it is subject to the nondiscrimination rules. This is complicated, but it appears some of the HCEs were getting contributions of 15-20% of their salaries, while non-HCE were getting contributions in lower percentages. My questions are as follows: What type of discrimination testing needs to be done on a multiemployer money purchase pension plan? If the plan fails the testing, how can it be corrected? Also, one of the HCEs has retired and requested a distribution of his account balance. Can the plan delay the distribution until the nondescriminations problems are resolved? Any help would be appreciated.

Plan is invested in a custodial account with Fidelity and therefore there is no trust, and no trustee. What do I indicate the funding arrangement as on the 5500? My only choices are Insurance, Trust and some crazy insurance thing I've never heard of...

Why isn't "custodial accounts" an option?

Have any studies been performed regarding whether self-funded health plans that extend benefits to same-sex partners/same-sex spouses have had an increase in health claims experience?

My client is unsure of who legally should be the correct beneficiary in the following situation and would like our legal guidance: A participant changed their beneficiary on-line from their spouse to their sibling in April 2011. The participant passed away this month and now the spouse has come forward as the beneficiary. In reviewing the account we found that the spouse is not listed as the beneficiary, and in reviewing the death certificate we see that the participant and his spouse were separated. This would mean that the participant changed the beneficiary on-line without proper authorization from his spouse by selecting that he is not married (which is not true). Would the account still go 100% to the spouse? The client is concerned that because they were separated that it should not be given to the spouse and would like our legal opinion.

The IRS, in Notice 2011-35, discusses fees assessed to fund comparative clinical effectiveness research. For fully insured plans, the fee is to be paid "by the issuer of the policy." See Section 2.03. However, for jointly trusteed self-insured funds, the fees are to be paid by the plan sponsor. See Section 2.07. Plan sponsor is defined, in pertinent part, as the "joint board of trustees" in the case of a plan established jointly by one or more employers and one or more employee organizations. Id.

Can anyone confirm that this fee can be paid by the joint board of trustees out of plan assets (rather than out of their own pocket)? Thank you in advance for any insight on this topic.

I have a strange case involving a multiemployer money purchase plan. One of the participating employers covers non-bargaining unit employess, some of whom are highly-compensated. It appears that the employer will not satisfy the nondiscrimination requirements of IRC section 401(a)(4) due to certain highly compensated employees receiving excess contributions. It looks like this has been happening for several years. Two questions in this regard: 1) Does anyone have any insight into the appropriate correction method?; and, 2) 1 of the highly-comped individuals who has received the excess contributions has now retired and requsted a distribution. Can the plan deny the distribution request pending resolution of the problem? Any help would be appreciated.

Would use of a separate trust agreement jeopardize prototype status?

If a cash balance planuses interest credit equal to the actual return on assets and the plan experiences say a 15% return for the year, does that mean that for funding purposes the participants' accounts are increased by 15% per year right up until ARA?

Ironically a high rate of return can result in higher funding target and target normal costs.

thanks

My gut tells me it won't and I have to consider that this plan is now top heavy for the 2008 year. Thoughts?

We have a plan that has two subrogation clauses. One was in effect when the initial claim came through and the current one was in effect when the matter was settled. The terms do not clearly state which clause to use. Does anyone know of any guidance or general practice on how to handle this?

A Doctor's practice shut its doors in February and all of their employees work for a hospital now. The Doctor’s whom are owners of the orgainzation do as well. The practice is still collecting receivables from their pre-Hospital service, thus the doctors are still receiving compensation (W-2). There has yet to be an establishment of a termination date in the form of a resolution or amendment as the practice is just now beginning to "wind things down."

The Doctors are still handling "administrative" issues related to the practice, but are no longer performing medical practices. The work they are doing relates to paying old bills, collecting receivables and winding down the practice.

Issue 1: Termination Date:

When talking about prorating limits is there anything to stop me from using (for example) a 12/31/2011 termination date, thus avoiding proration? Or is there some date where the IRS could argue, "OK, you're monkeyhing with the rules here to avoid proration."

Issue 2: Post-severance compensation

I am also concerned with w-2 wages paid after May 15 (which is 2.5 months post transfer). When does my 2.5 month clock start ticking?

My spouse underwent bowl obstruction surgery today (all went fine). The surgical procedure took 45 minutes. What are the chances of completing a DB 5500 (large plan) in 45 minutes, including filling out the form, the CYA, and navigating the DOL website?

Another Gateway question(s):

I have two separate definitions of Plan Compensation (i.e. compensation on which the plan allocation is based) in my Controlled Group:

Plan #1 -- Total pay earned for period of the year in which employee was a participant in the plan (1-year eligibility period)

Plan #2 -- Base pay earned for the entire year (immediate eligibility)

For Testing puposes, I am currently using total pay for the entire year for all participants in the aggregated plan. The plan is failing the minimum allocation gateway test, so as of now I am calculating the required gateway contribution based on total pay for the entire plan year.

My questions are:

1.) Can I base the gateway for Plan #1 on Earned-While-Eligible pay? I assume if I do, then I would also have to use this defintion of compensation in my General Test. Sinc this will only improve results for that test (as it will result in higher accrual rates for a group of all NHCE's), that will not be a problem.

2.) Can I base the gateway for Plan #2 on Base Pay? I'm guessing this is a No, unless I can somehow use Base Pay as my Testing Compensation. Which leads to my third question....

3.) Can I use Base Pay as my Testing Compensation if this definition of pay is deemed non-discriminatory using the compensation percentage test?

4.) If #4 is Yes, does that mean I have to use Base Pay as the Testing Compensation for the entire Aggregated Plan (including Plan #1)?

I tried searching and I'm sure this has come up before, so please humor me.

On what dollar amount is the RMD calculated in the year of divorce when 1/2 was transferred to the ex-spouse pursuant to the divorce decree?

Example: 12/31/10 value was $2,000,000. Divorce takes place 3/1/11 and $1,100,000 is transferred to ex-spouse (1/2 of FMV). This leaves $1,100,000 for IRA holder.

Thanks in advance.

I am allowed to run separate gateway test for Otherwise Excludable Employees? I know for Component plans the answer is No. But I'm hoping I can exclude a large number of 2010 hires from having to receive a gateway allocation for a plan that is failing (even though some of these employees did receive an allocation in 2010 as part of a plan with immediate eligibility).

Hi All,

We have been getting into some debate over the "special extension" box on the new 8955-SSA. Does anyone know if the January 17th extension needs to be noted? Also, can we call it the "IRS takes too long issuing forms extension" or is that too long.

The first question is serious, obviously the second is not. Any help would be greatly appreciated.

Thanks!