Have a health plan which provides $500 dollars for any claims that are deemed pre-existing. Can this benefit be eliminated without losing grandfathered status? On a somewhat related note, I have seem where some people have argued that because the grandfather rules only apply annual limits in terms of dollars that it would be permissible to impose different limits that would achieve the same effect (such as limiting the number of doctor visits or ambulance trips that are covered), any thoughts here?

A new TPA firm took over the DB plan adminitration of a small DB plan that had been administered by a prior TPA firm. My client's DB plan was recently restated for EGTRRA by the new TPA firm. The restatement's effective date was 7-1-2010 - the plan has a June 30 plan year end.

My client signed the restated prototype document in December of 2010. Now, my client says the formulas are wrong. The prior TPA today produced a signed amendment that was never provided to the new TPA. The amendment was signed in June 2009 and was effective 7-1-2009.

The formula in the 7-1-2009 amendment gave 0% for a handful of HCEs - that was the only change done by the amendment (proper 204(h) notices were provided).

The new plan, as restated, provided the pre-2009 formula of 0.5% of pay to those HCEs. The owner/plan sponsor did not intend any formula change and does not want these HCEs to accrue the 0.5% benefit for the 2010 plan year.

What do we do? Is there any way to argue that these benefits are not accrued - that the 2009 amendment still applies somehow? Would that require VCP to do that?

Defined benefit plan didn't begin required minimum distributions to former employee at age 70-1/2. The company intends to make a "catch up" contribution for the missed monthly payments, and beging monthly payments going forward. Participant is married. The Plan does not have retroactive annuity starting date provisions. IRS agent unofficially says we can make the "catch up" payment without needing RASD provisions. The question is whether the participant can elect the form of benefit payable, or must the plan just pay him the 50% J&S because his spouse did not retroactively waive that form of benefit? (And in the absence of his timely election, he just gets the normal form of benefit of the 50% J&S when RMDs start).

In the Corbel prototype, it explicitly prohibits the use of a J&S 100% as the normal form. In the administration of plans at a previous firm at which I worked, it was common practice to "fund" for the normal form with J&S 100% although the DB used a prototype and the stated normal form was "life only". The reason they thought that this was acceptable was that under the forms of distribution section, the subsidized benefit of J&S 100% at NRA was offered.

Is this permissible?

The 2010 5500 instructions state that beginning 1/1/2010, delinquent and amendeed T1 filings must be submitted electronically. However, EBSA's FAQs for DFVCP website permits written submissions. Is the DOL website current? I'm inclined to interpret the instructions as excluding plans exempt from T1's substantive requirement, and that a DFVCP filing for a top hat plan can be submitted physically.

Anyone have any information about this?

Here's a complicated matter, I'm going to explain as best as I can. Feel free to contact me if you guys need further clarification:

There is a Professional Corporation(PC) with 8 (equal) partners with less than 50 employees. Employees are provided with standards 401k and other benefits as well. These employees receive paychecks from PC, the main entity.

These 8 partners also own a surgical center(SC). SC leases employees from PC with certain term agreements. Any profit made from SC is split between partners based on percentage of ownership. Aside from leased employees, the SC has no other employees.

Is it possible to create SEP IRA exclusively for 8 partners? Does it have to be offered to leased employees?

Any help would be appreciated. Feel free to contact me

I've encountered an odd issue which is not in my scope of knowledge.

From what I understand, forfeited balances in retirement plans can only be used by the Company for a hand full of things such as promoting the plan, brouchures for the plan and/or paying the benefit plan auditor.

If the benefit plan auditor is paid from forfeited balances in the retirement plan but the check is cut on the plan administrators check stock, who is responsible for the 1099?

Although, it is third party check stock, I'm leaning towards us, since we had control over the funds and directed the plan administrator to do so.

Please advise.

I have a plan to plan transfer question. EIther an employer based transfer or a participant elected transfer, as permitted under the final 403bn regs. I understand, I think, the rules regarding a custodial account funded plan transfer, in that you have to restrict the employer contributions upon transfer so no in service are allowed prior to age 59 1/2. But what happens when an ERISA plan funded with an annuity contract under 403(b)(1) is transfered to a plan funded with 403(b)(7) custodial accounts and the annuity has more liberal in service w/d's of employer contributions - i.e. age 40 and the 5 year/2 year distributions? Do they have to be preserved, or can the funds fold into the custodial account and become subject to these more restrictive withdrawal rules? WHat about a vesting schedule - assume more generous vesting must be grandfathered?

Thanks!

Participant terminates in 2005 after working 600 hours; has a break-in-service in 2006, 2007, 2008 and 2009. He is rehired in December 2010, worked 100 hours. Does 2010 count as the 5th consecutive break-in-service whereby prior service is disregarded? My inclination is thta it does, but obviously not positive.

Thanks in advance for any guidance.

this is a modified version of the ADP/ACP correction report.

this report shows the results of the test after the dollar leveling - proof that the plan does indeed pass under the old rules.

yesterday was the first time I have ever seen the correction 'fail'. ended up with 8.67 HCE and 6.66 for the NHCE after $ leveling. my hand calculation says I'd have to return an additional $10 or so to make it pass.

Ok, I elected a single HDHP at open enrollment and then opened a HSA. My husband has insurance through his work, I think a PPO plan. With my HSA I can use it for both my expenses and his.....is that correct?

Thank You!

Wife works for husband Docotor doing books for 10+ years, but never was on the payroll. Wife's involvement is clearly documented by workflow, emails, etc., so the existence of her service would be verifiable on audit. Well, now the plan is safe ahrbor, so the wife now wants to get paid so she can defer the max as well.

Plan requires 1 Year of Service.

Option 1: Wife is eligible from day of compensation because we can count all of her pre-pay check service. This is based on the fact that she was "entitled to compenation for services rendered" even though none was actually paid.

Option 2: Because the wife never actually received any compensation, and most hours of service crediting rules reference "hour of service for which compensation was paid" or soemthing to that affect, wife must satisfy eligibliy treating day 1 as the first day of her paycheck, delaying her entry for at least a year.

[ignore the fact that wife should have been on the payroll all along, and probably was not to avoid the social security tax by tacking it on to the Doctor's paycheck, whcih was above the wage base - that is someone else's BIG problem - not mine! The question presented to me is solely "can she participate from day 1"].

So which option is it? Option 1 or Option 2?

Since Eligible Charity Plans are on a delayed PPA effective date, are Annual Funding Notices required for them and if so, what information must be included? Any help is appreciated. Thanks.

In the Corbel prototype, it explicitly prohibits the use of a J&S 100% as the normal form. In the administration of plans at a previous firm at which I worked, it was common practice to "fund" for the normal form with J&S 100% although the DB used a prototype and the stated normal form was "life only". The reason they thought that this was acceptable was that under the forms of distribution section, the subsidized benefit of J&S 100% at NRA was offered.

Is this permissible?

Is the ability to take a distribution from your rollover account from a 401k Plan "at anyt time" a protected benefit?

True or False:

Service can NEVER be disregarded under the rule of parity in a 401k plan, becuase the participant always has a nonforfeitable right to their 401k contributions (even if they never made 401k contributions, and even if they never had a balance in the plan).

They always mentioned "Employer provided benefit" but my understanding from somewhereorother (very reliable source!) is that this is a TRUE statement.

I and my husband have the separate insurance under different companies. His coverage is 01/01/11 to 12/31/11 and he also has FSA.

My company's coverage is 02/01/11-01/31/12, this year I start to have HSA. I am not eligible for HSA because my husband has FSA. My question is if he drop his now (his HR said that he can drop), am I eligible for my company's HSA?

Thanks in advance.

We just assumed administration responsibility for what we thought was a multiple employer plan sponsored by Company A, a nursing home business. Company A owns and manages a number of nursing homes, including Company B, owned by unrelated person. We originally assumed that Company B would be a partiicipating employer in Company A's plan, creating a multiple employer plan.

We have since learned that Company B pays Company A an annual management fee to manage the facility and to pay the employees, who remain employees of Company B. However, the manager of Company B is an employee of Company A, and makes all the hiring and firing decisions, sets salaries, and has total control over the activities of B's employees.

1) Do we have a management affiliated service group, requiring the employees of B to be included in A's coverage test, or a multiple employer plan requiring B to tested separately from A?

2) If #1 is yes, do we have to worry about the other companies owned by the owner of B as we would if we tested B separately as part of a multiple employer plan?

Thanks.

I have a client that values their workers compensation liability as FAS 112. I just realized that the amount of the biweekly workers comp payment includes a payment to the employees attorney. Apparently the payments are to be paid as long as the workers comp benefit (ie-lifetime).

Is the piece of the payment paid to the attorney a FAS 112 liability or should it be broken out somewhere else?

Does anyone have any thoughts about whether a multiemployer plan can issue/sell bonds through a financial institution? I see all kinds of ERISA issues (fiduciary obligations, prohibited transactions, misuse of plan assets, etc.) but the trustees won't let it go (primarily because other entities, like schools, issue bonds). Is anyone aware of a particular case, advisory opinion, rule, or regulation addressing the legal issues relating to issuing debt instruments and giving non-participants a secured priority interest over plan participants? Any input anyone could provide would be most appreciated!