Hey, he answered the question!!!

My favorite all time quote of his, was after Jack Morris pitched a no-hitter, and Sparky's comment was

"I never managed a no-hitter before"

(Thank heavens no one else was managing who might have blown it!)

But I bet the Sieve has better stories and memories.

I have a Cash Balance Plan that has different compensation credit for different employee groups.

There is no DC plan involved.

Is it correct that there is no gateway test to comply?

Thanks.

Facts:

Assume that 401k plan's annual fees paid by the plan assets are $10. $2.50 is the TPA's fee and $7.50 is the IQPA fee paid to the auditor. The plan document permits fees to be paid from plan assets and the plan fidcudiaries believe these are reasonable (amounts hypothetical) fees for the services rendered.

In reality the fees are of course larger but I don't want to state the fee amount in a public forum.

Assume that a new investment carrier can only handle paying one service provider from the assets. Assume that the investment provider will cut one check and one check only for fees (not negotiable). Assume that the plan sponsor wishes to stay w/ this investment carrier (eg I'm not looking for the suggestion of "find a carrier that can accoommodate you.").

How the TPA proposes to handle the situation:

TPA proposes to set up a "trust account" so-to-speak to house the check from the carrier. This account is in the FEIN# of the TPA (eg when I say "trust" account I don't mean the 401k plan trust). TPA will then forward $7.50 auditor's portion of the check to the auditor. TPA acts only as a paying agent. TPA will then transfer the TPA's portion to the TPA's general checking account as "fees earned" (kind of like how a lawyer handles IOLTA account).

However due to the limitation of the carrier that they will only cut one check, the Schedule A produced by the carrier will reflect that 100% of the payment went to the TPA.

The TPA will prepare the Form 5500 for the client to give to the auditor for the audit. The TPA will present Schedule A showing BOTH service providers and the amount each actually ends up w/. If Sch C reporting is necessary the same position will be taken on Sch C.

The TPA will keep a paper trail of the transaction and will never put the auditor's funds into the TPA's general checking account.

Question:

Does anyone out there do this and is it common practice? Are there any pitfalls to the TPA of doing this? Are there any problems w/ the TPA's proposed method of handling the transactions as outlined above (especially "re configuring" Sch A data as presented by the carrier)?

*****

Thank you for any assistance!

Can a loan be paid back with non-cash assets? It is publicly traded stock so value is not the issue, just the concept.

The loan policy does not specify "repaid in cash payments".

We sent several 5500-EZs out to Ogden before the 10/15/2010 deadline. We usually include a cover letter to the form (to identify client, date, etc.).

Last couple of days just started receiving the cover letters on some clients back from Ogden with a date stamp as to when received (after the 15th, but forms definitely mailed prior to that date).

Anyone else getting something back from the IRS (shades of the old days when they sent back the 5558s).

IRC section 219(d)(1) does not allow for deductions to traditional IRA's once an individual is 70 1/2. (There is an exception for Roths SEPs & SIMPLEs.) Does 219(d)(1) apply to 401k's, or any other code section or regulation have a similar disallowance for 401k's? If not, and in the absence of any 401k plan provision, can a 71 year old 401k participant continue to contribute to the plan?

Does anyone know if an S corp shareholder or LLC member pays his part of the premium with after tax dollars, can this still be deductbed back off on the 1040?

Or, does it have to be on the Schedule C or K 1 to do this?

In order to pass the new 105h tests for fully insured plans, the owners can no longer have the company pay a larger percentage of the premiums for themselves. This was never an issue in Section 125 plans, as they cannot participate in those plans. But for the underlying insurance now, what happens?

Thanks.

If the lump sum in a Cash Balance Plan is set to be the vested hypothetical account balance, then why does the Funding Target, which I understand to be the present value of accrued benefits, for each participant not equal their vested hypothetical account balanace as of the valuation date?

Court ordered. Qualifying expense? I'm guessing no because usually these things should come via a doctor's prescription/note. But will a court order or court agreement in lieu of punishment suffice?

Situation. Client elects to do a rollover out of his 401(k) plan into an IRA. After the transaction has been completed (and the money is in the IRA), it is determined that the rollover should never have been allowed. The funds are being requested back from the IRA custodian.

Question

What consequences are there to the client on any earnings (or losses) that occured while the money was in the IRA (and before it was sent back to the 401k plan)? If the rollover wasn't valid in the first place, it seems to me the same amount should be redeposited back into the 401k plan as came out. ie....if the rollover is invalid, doesn't seem proper the client should be able to benefit from any postive investment experience that occured in the IRA. Similarily, but on the other end of things, what if they took a loss and the gross rollover amount is not still available to move back to the 401K plan?

ASPPA submitted a comment letter to the IRS in August of 2008, requesting that the safe harbor definition of compensation provided in Treas. Reg. Section 1.414(s)-1© be modified to include definitions that exclude all post-severance compensation (including "regular" compensation, such as base pay). Q&A 7 of the 2010 JCEB conference with the IRS indicates that the IRS representative declined to comment on the assertion that "safe harbor compensation" used in safe harbor 401(k) plans must include post-severance amounts (which arguably suggests the IRS is still considering ASPPA's proposal). Does anyone have any additional insight into how the IRS is handling this issue, such as in the context of determination letter filings?

Thanks.

Can the plan sponsor of an MEP plan get paid on the assets in the plan, (to cover "marketing expenses" to market the MEP to its potential employers who might want to adopt the plan?)

I am working with an MEP plan where the plan sponsor is being offered a trail of ongoing revenue stream by the custodian. The justification is that the plan sponsor is going out to market the meetings with its member firms on a quarterly basis, and that the plan sponsor "drives to these meetings to help the advisor market the plan, and often buys lunch". So the custodian has the plan sponsor set up to get a percentage of assets annually paid out automatically (not from direct plan assets but like as some kind of finders fee from the custodian?)

We are also being told that "this happens all the time" and that this custodian has "tons of MEPs and this is very common"

I dont know, it is just hitting us strangely.....is this "normal"?

Got a plan with just one HCE. Plan is a 6/30 year end. For the Plan Year 6/30/2010, the ADP test is failing. The HCE will be age 50 in December 2010. He did not defer more than 16,500 in the first 6 months of 2010 (but of course he could have!).

Can he have his deferrals reclassed as catch-up contribtions? I believe the answer should be yes, but please confirm!

We took a plan over where a participant has terminated, has two outstanding loans, he is still sending payments by check on one of the loans but stopped on the other one which still has an outstanding balance.

Does the plan administrator/sponsor have a responsibility to inform the former participant that his loan payments are behind and the loan will be defaulted?

Thanks.

Hi. We offer an EAP whereby employees and their dependents can receive mental health and substance abuse services. The first several visits per year are free, and then there is a copay thereafter. Employees and dependents can also access mental health and substance abuse services through participating providers under our health plan, although there are copays for all visits. Our EAP office has a patient who is an eligible dependent of an employee who is very disruptive, repeatedly misses appointments, etc. It is possible that her demeanor and the way she treats the EAP staff is due to her illness. However, none of the EAP staff want to see or treat her any longer. If we dismiss her from the EAP, what issues do we encounter? Is it lawful to deny someone access to the EAP?

Thanks.

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...

======================

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?