Denise Camp was resigned to the double standard that had long applied to her medical bills, forcing her to skimp on other expenses so she could pay for mental health treatment.

While visits to her internist for physical problems required a $20 co-pay, her weekly therapy sessions with a social worker cost $50 and trips to the psychiatrist who prescribed her medication were $75. A similar disparity applied to medicines: Drugs to treat the crippling depression that ended her engineering career cost her twice what she paid for an antibiotic.

But recently, Camp's insurance coverage changed -- for the better. The 50-year-old Baltimore resident, who now runs a drop-in center for recovering psychiatric patients, is paying the same charge for physical and mental health treatments: a co-pay of $10 per visit and $25 for each prescription.

"I have to use mental health benefits no matter what," said Camp, who is insured through her employer. "This is going to make it more affordable for me."

Camp is among an estimated 140 million Americans, most of them covered by group insurance plans provided by employers, who are the beneficiaries of a sweeping new federal law designed to guarantee parity in insurance coverage.

The law, which took effect for most plans Jan. 1, applies to groups of more than 50 employees and is designed to end what Health and Human Services Secretary Kathleen Sebelius called "needless and arbitrary limits on care." Higher deductibles, steeper co-pays and other restrictions are no longer allowed for mental health and substance abuse treatment.

Refinance Rates

My Client, has an employee who made a pre-tax basic deferral election of 7.5% on 1/4/2010 for their retirement savings plan. The election was entered into their payroll system as an after tax basic deferral and has been contributed to the plan as after tax money for the entire year.

The client has requested to re-classify the money in the account as pre-tax since that is how it should have been contributed all year. Is this as simple as moving the money from the after-tax source to the pre-tax source and updating the tax buckets on our Recordkeeping system? I'm assuming that the client will need to correct his tax withholding from the participants checks for the year, but are there any other implications on Recordkeepers end from this reclassification?

Question - What needs to happen with the W-2 Form?

Are there any other implications on the Recordkeepers end with respect to the reclassification of moving the money

from the after-tax source to the pre-tax source and updating the tax buckets accordingly?

Can someone please tell me why an Auditor would dispute this explanation of a negative amount in the Loan Activtiy Report of the 401K Trust Statement? It makes sense to me???? Am I missing something? Help! The Auditor has the Employer questioning this negative amount - the Recordkeeper states it's not actual money - it's just activity...

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Recorkeeper Explanation -

the reason for the negative is because the amount applied exceeded the amount received during this time. This is just an activity section of the trust and does not reflect funds that were already deposited.

P.A. Explanation -

The activity in the loan section does NOT reflect funds that have been deposited. It only reflects activity during the year (activity of funds coming in and out of the Plan). The -$0.000 amount is 2008 activity and was not applied to funds deposited in 2009.

Monies may sit in the Money Market account at various times awaiting direction as to where those loan payments, funds, etc should be posted. There are no “missing” monies from the Plan, either on the Participant side nor the employer side, the loan activity report is just a report of the activity in the Plan.

It should be noted the first half of the 2010 Trust Statement also currently has a negative amount in the loan activity section because money flows in and out of the Plan all year long.

4 Person PBGC covered DB plan with 1 owner participant.

Plan is underfunded, but via 29 CFR §§ 4041.21(b)(2) "alternative treatment" election the majority owner can waive benefits and terminate the plan as standard termination.

Owner is in the midst of divorce and QDRO is being drafted.

Once divorce is final, my reading is spousal consent to elect waiver of benefit is not required, as there is no longer a spouse.

4041.21(b)(2)(iv) Neither the majority owner's election nor the spouse's consent is inconsistent with a qualified domestic relations order (as defined in section 206(d)(3) of ERISA).

If the QDRO states the alternate payee will receive 50% of whatever the owner is entitled to upon retirement or termination of the plan, can I deem the alternate payees benefit reduced when the owner (former spouse) makes the "alternative treatment" election because the election is not inconsistent with the QDRO?

I have dealt with an Auditor who has done the Employers 401K limited scope Audit for the past nine years. I have only been provided hands on training and have learned the 5500 the hard way. The Recordkeeper and the Auditor are the only trainers I have had (along with my research and sites like this).

My first question is "Isn't the Employer obligated to change Auditors at least once every 2 to 3 years" ?

The Auditor is required to only audit and report - correct? This Auditor walks a fine line between being an Auditor and being the one who dictates my job duties.

Each year it seems this Auditor adds another job duty to my responsibilities. I will be researching the fiduciary sites also. However, I need to ask this question, this auditor has prepared the "Statement of Financial Assets" and included it with his Table of Contents along with his "Independent Auditor's report" and "Independent Auditor's communication of internal Control related matters" for the past 9 years, and has never relayed to me that I should be preparing this "Statement of Financial Assets". Now after nine years, he states that there is some sort of new "law" that "I', as Plan Administrator should be preparing this (even though he includes it in his report). If I should have been preparaing this report for the last nine years, why has he just this year gone to my employer to tell them this report is my responsibility?

Is there any rule that requires a union to notify participants when they reach pension eligibility age?

I'm assuming (whether correctly or not) that most participants would know when they are eligible, but, just wondering if there is a rule requiring a formal notification.

Thanks

Because the regs distinguish between hardships from Custodial Accounts and annuity contracts, what would TIAA be? Most auditors were reporting the CREF funds as mutual funds, and not separate accounts - does that mean they are custodial accounts not eligible for hardship (with respect to employer money)?

Pulitzer Prize winning cartoon (1926) of Daniel Fitzpatrick, cartoonist for St. Louis Post-Dispatch

Code Section 414(u)(8)(A) states that "an individual reemployed under such chapter is treated with respect to such plan as not having incurred a break in service with the employer maintaining the plan by reason of such individual's period of qualified military service." The accompanying USERRA-related regulations, in 20 CFR 1002.259, say that "the employee is not treated as having a break in service with the employer...for purposes of participation, vesting and accrual of benefits..."

What about where a plan requires a certain length of service to even be eligible for the plan? Does USERRA require an employer to count an employee's military service toward that service eligibility requirement? Or would USERRA's protections only kick in once the employee is already eligible to participate in the plan? USERRA's choice of the phrase "not treated as having a break in service" seems to imply that the employee is already eligible to participate.

Thanks.

We have a small DB plan that had RA of 55 and we changed to RA 62 with a fully subsidized ER benefit at 55. The owner is at the 415 limit. My concern is that should the plan terminate when the owner is under 55, we could have a overfunding problem. We use the Corbel DB prototype and my interpretation is that distributions made prior to ER would be calculated using age 62 factors. Is this pretty much standard? Anything we can do to prevent this problem?

I have someone (non-owner) who needs to take an RMD for 2010. She is 74 and separated from service in September 2010. Her RMD is slated to be about $600.

However, earlier in the year, she took a hardship distribution for $1,000.

Does she still need to take the RMD?

I would tend to think not because the hardship:

1. was paid to her (not rolled over)

2. wasn't eligible for rollover

3. taxes were withheld

4. it was for more than the RMD

5. tax form will still be code '7'

Your thoughts are appreciated.

If a company has 100+ employees in multiple QSLOBs but no single QSLOB has >100 participants is an audit still required?

as long as it is less than 10%, can an employer contribute and deduct the FMV of a contribution of employer stock to a defined benefit plan?

We have received conflicting information regarding when the first required minimum distribution may occur. The information received implies that the first RMD may not occur until the actual Required Beginning Date (RBD). However, can't a participant request their first RMD to be paid at any time after they retire as long as it occurs on or before their RBD?

The RBD as defined by the document is April 1 of the calendar year following the later of the calendar year in which a Participant attains age 70½ or the calendar year in which the Participant retires, except that the benefit distributions to a “5-percent owner” must commence by April 1 of the calendar year following the calendar year in which the Participant attains age 70½.

The document further defines the “Distribution calendar year” to be the calendar year for which a minimum distribution is required. For distributions beginning before the Participant’s death, the first “distribution calendar year” is the calendar year immediately preceding the calendar year which contains the Participant’s “required beginning date”. The required minimum distribution for the Participant’s first “distribution calendar year” will be made on or before the Participant’s “required beginning date.” The require minimum distributions for other “distribution calendar years,” including the required minimum distribution for the “distribution calendar year” in which the Participant’s RBD occurs, will be made on or before December 31 of that “distribution calendar year.”

Example: A non-5% owner participant who is age 74 retires as of January 15, 2010 and would like to take his first required minimum distribution before the end of this year to avoid having two minimum distributions processed in 2011. His RBD is April 1, 2011.

The Forms of Distribution selected in the Adoption Agreement are: 1) Lump sum and 2) Partial withdrawals or installments are only permitted for required minimum distributions under Code Section 401(a)(9).

Is this permissible or is he restricted to having to receive his first RMD on April 1, 2011 and second RMD by December 31, 2011 as suggested by the prototype provider?

Plan fails ADP, one of the HCE's who requires a refund took a hardship and earlier in the year and is about $800 short of the refund amount. How is the ADP failure corrected when this happens?

Can part of the earlier hardship be 'recharacterized' as part the the ADP refund? I would assume that the 'recharacterized' amount would be the $800 or could it be the entire ADP refund amount (the hardship was well over the ADP failure amount).

Thanks for the help.

In a SIMPLE IRA plan that allows for catch-up contributions and the employer contribution is in the form of a matching contribution, are catch-up contributions matched:

(1) all of the time

(2) none of the time

(3) at the discretion of the plan sponsor

Thanks

We elected the "5 Yeear Rule" in the adoption agreement for RMD's after death, but before distributions begin. Participant dies, spouse is sole designated beneficiary. Particiapnt turned 70.5 in 2009 which was the year of death. So

a) Does the 5 year rule apply, because he died before his distriubtions began? OR

b) Will the beneficiary (who is basically the same age) be required to begin taking distributions by 12/31/2010 (12/31 following end of year of death).

I know the participant can roll it to an IRA, etc.,, but before she rolls it over, the question is do I need to do an RMD using the single life table.

Could someone summarize the IRO requirements for Cafeteria Plans based on the new Healthcare reform?

We have a DB plan with 2 participants. One participant has terminated employment. The owner is trying to termiante the DB plan and get the terminated participant's benefit out of the plan. The problem is that the terminated participant is being "difficult" and claims they will not accept a distribution.

I believe the employer can simply purchase an irrevocable annuity for the terminated participant, but I have two distribution questions: (1) Could the employer distribute a Lump Sum to the participant (assuming the plan allows for a lump sum upon the plan's termination)? (2) Alternatively, could the employer unilaterally transfer the "difficult" participant's benefit to the employer's profit sharing plan without the participant's consent? Of course, the benefit would retain the same distribution features of the DB plan and would be tracked separately within the profit sharing plan.

At the ASPPA annual conference, Lorraine Dorsa mentioned that she tries to avoid using an employee's name when defining a rate class for benefit accrual (DB plans), to avoid the possibility of it creating a problem because of the 'similarly situated employee' issue. This approach was mentioned not just for NHCEs, but also for HCEs.

We have a few plans where the HCE accrual rate groups are defined by using the HCE's name, for example "Group A consists Captain John Smith, an owner-employee" and the document has a definition for owner-employee.

I think the potential problem exists any time one person ends up in a class by themselves, regardless of what language was used to get them into their own class.

Do you think this poses a significant issue or problem that would merit re-writing a few plans?