We have an employer that offers various insured benefits through their wrap cafeteria plan. Because the benefits are with different insurance carriers, the contract years are different. Because of the different contract years, the employer has different open enrollment periods for the various benefits it offers through the wrap cafeteria plan. So, for example, to enroll in medical insurance coverage, the open enrollment period begins in July for enrollments that take effect in September. For dental insurance coverage, the open enrollment is in May for enrollments that take effect in July. Does anyone know if the different open enrollment periods for benefits that comprise one plan are permitted under the cafeteria regulations? I have not yet found anything in the cafeteria regulations prohibiting this practice. Thanks for your help.

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Have a plan that ended in 06/30/2010 that has a failed ADP test, excess deferrals were not distributed. What are the remaining options for corrections since they are beyond 2 1/2 month time frame?

My client has 44 new hires from an acquisition that participated in a SEP- IRA plan and now they are in a 401(k) Plan.

Are individual contribution limits to a SEP - IRA separate from the limit to a 401(k) Plan or added together.

If a participant contributes $5,000 to the SEP - IRA Plan but now is eligible to participate in a 401(k) Plan, are they limited to contributing $11,500 to the 401(k) Plan? or Can they contribute the full $16,500 to the 401(k) Plan?

Doctor A sells his dental practice in 2010. Doctor A buys the assets of another practice in the summer of 2011. There are 3 employees at this other practice, one of whom (believe it or not) worked for Doctor at practice A. Can we recognize service with Doctor A's OldCo when he sets up a plan an NewCo? This will bring the Doctor AND that one older employee from day 1.

My question hopefully demonstrates that I am aware that I need to be wary of discrimination issues. The amendment will benefit 1/3 of the NHCE's, so it does at least benefit a decent percentage. But I did not see what the measure of testing was. Is it BR&F? It seemed to be based on facts and circumstnaces, whiuch for a 3 person plan I might be inclined to advise liberally (with ample CYA).

My client has 44 new hires from an acquisition that participated in a SEP- IRA plan and now they are in a 401(k) Plan.

Are individual contribution limits to a SEP - IRA separate from the limit to a 401(k) Plan or added together.

If a participant contributes $5,000 to the SEP - IRA but now is eligible to participate in a 401(k) Plan, are they limited to contributing $11,500 to the 401(k) Plan? or Can they contribute the full $16,500 to the 401(k) Plan?

One of our clients/sponsors is electing an HSA starting May 1, 2011. Right now they have FSA and Premium only Plan. They are saying that their carrier of the HSA says that they can make a one time transfer of FSA allocated money into the HSA if elected for those in FSA now, I need to know if this correct? This qualifies them for a limited FSA for those who elect the HSA, right? They also want a full FSA for those who do not elect the HSA, is this acceptable also? So they would have an FSA, a Limited FSA, an HSA and a POP...

Employer has a SEP, but has not made contributions to rank and file ees for a couple of years. He did contribute for himself.

Can he use an EPCRS program to correct or are those not available to a SEP?

Thanks!!

EDIT: I just saw the same question below. I don't know exactly how many employees were missed or how many years this goes back. I will provide more info as I get it. Thanks.

My client has asked for advice concerning outstanding checks from a prior recordkeeper who has gone bankrupt. The clients question is...

"I came across an old file with distribution checks from ABC Company, the XZY Company 401(k) recordkeeper. There are 7 checks and the amounts range from $174.47 to $1,773.39. It doesn't look like accounts for these people were sent over from the ABC Company to the new trustee and recordkeeper, so I'm not sure what happened to the assets since these checks were never cashed. The checks are not valid anymore and the former recordkeeper went bankrupt so there's no one to contact. What do you suggest we do?"

I am really not sure what the best way to address this situation would be and would appreciate any guidance.

Can anyone provide guidance on this situation?

I'm just not sure. The non standardized prototype says match is fixed at 100% on deferrals up to 1% of comp. Calendar year plan and comp is annual for the match calculation. There are no hours or last day allocation requirements. They are having growing pains and would like to stop the match. I told them they can stop paying match every pay and make annual payment. But their question to me is can they stop the match midyear?

I think no. What do you all think.

I want to make sure I have this correct.

Participant retired March 2011. He is 70. (Turns 70.5 in August)

RBD 4/1/2012

He wants to do a Rollover to an IRA.

I say since is is in the year that he is required to take a RMD, 2011. He must take the RMD first if he takes any distribution in 2011.

He wanted to take a partial distsribution now and hold the RMD until 2012.

I was thinking if he took any distribution in 2011 the RMD would have to come first, even though RBD is 4/1/2012.

The broker says since he is 70, not 70.5 yet - he could rollover the balance to the IRA and then take the RMD from there in April 2012.

Thanks - I just need something to go back to the broker with. I have looked up the Q & A and most of those are the person was already 70.5.

Thanks

Pat

A company sponsors a db plan and a dc plan.

The company contributes more than 6% of covered comp under DC plan thus the combined limit applies.

The amount contributed to dc plan above 6% is 20,000.

Say the minimum DB funding is computed to be 200,000.

Say the 31% of aggregate compensation is 150,000; so the minimum is greater than the 31% total limit.

The DB plan has a large pre funding balance of 100,000.

Presumably if the DB plan contributes the 200,000 it is deducted, but the 20,000 excess discussed above would not be deductible.

However, say the contribution made to the db plan is only 180,000 where 20,000 of pfb is used to meet funding requirement.

Note the 180,000 still exceeds the 150,000 or 31% limit.

Of course the 180,000 contribution to db plan is deductible.

Since the minimum funding was 200,000 does it follow that the 20,000 excess contribution to dc plan can now be deducted reaching the grand total of 200,000?

404(a)(7)(ii) says amount of contributions to db plan to extent it does not exceed minimum funding requirement.

So this seems to mean only the contributions to db plan are deductible in this case and not the excess dc contributions.

Any thoughts on whether the 20,000 to dc plan can be deducted?

thanks.

I can't help but think this isn't out there some place, but I can't seem to master search function.

If you change both Enrolled actuary and firm do you put the person's or firm's name of old and new actuary?

I am thinking it is person in each case but would like to double check.

Thanks.

We have a sponosr that wants to cease automatic enrollment mid plan year, and the plan was structured as an EACA with the 90 day permissive withdrawal feature and an annual escalator. It appears that an EACA is supposed to be based on a 12 month plan year unless the plan allows mid year entry for new hires, and then the 6 month extension on testing is lost, but the 90 day withdrawal can still be used for the new hires. But can the feature cease mid-year, provided the client does not use the 6 month extension?

Thanks!

Why woluld you have a separate plan for each owner? We're taking over a plan from someone we know is "legendary" so we know there is probably a very good reason!

Hi - we are looking for a vendor that can produce either hard copy or electronic Total Compensation statements. Any suggestions? Thanks.

Has anyone thought about whether the regulations issued for the pre-existing condition insurance plan program (i.e., the high risk pool program under PPACA) prohibit employers from offering cash to employees to waive employer-sponsored health coverage? I am curious about whether these cash incentives could be considered insurer dumping under 45 CFR 152.28. How are you handling this? Are you discontinuing the cash incentives? Thanks.

What happens to an unallocated account holding excess annual additions when the plan terminates? Are the amounts in the unallocated account allocated to participants? If so, what is the tax treatment of the allocated funds? The funds were initially removed from participants accounts because they were in excess of the 415 limits (and could therefore not benefit from the tax advantages of the plan), but are they now supposed to be allocated to such participants regardless?

Will allowing non-employer sponsored insurance to be paid pre-tax via a premium only plan constitute endorsement?

Anyone know offhand what the penalties are for a late Form 10 filing for a PBGC reportable event due to failure to meet minimum funding requirements ?

In this case it looks like the Form 10 filing is about 11 months late. It's on a plan with over 100 participants.