I am reviewing a takeover plan and found this weird phrasing... (maybe it's not so weird, but the first time I saw it).

"The "Applicable Interest Rate" means the annual rate of interest on 30-year Treasury Securities determined as of the first day of the Plan Year during which the Annuity Starting Date occurs."

Do I take that to mean that there is a zero month lookback? Is that even allowed?

or does that mean December's rate, because the 30-year isn't published until mid January?

I think I printed a copy of the Senate version before Obama signed it. Towards the end, there was a section titled Section 315 Transition Rule for Certifications of Plan Status. Section (b)(2) of this section said if you wanted to change a past certification as a result of the new law you had to do so within 75 days after the enactment of the Act.

I printed the CCH version after it was signed, which was labeled Senate version as approved by the House and signed by the President; however, this section seems to be gone.

Did they delete the 75 day requirement before it was signed?

Error Msg when filing via Relius Web Client

Details of Plan are:

Fully Insured, Welfare Plan, LTD Plan

Beg. Yr Head Count: 512

End Yr Head Count: 0

Company acquired. Plan terminated on last day of Plan Year 12/31

Premiums paid out of company general assets

Part 1, B checked Final Return -

This is the message I get.

Fail when Form 5500, Line B (Final Return) is checked, unless "termination" criteria (Bypass-T) is set or (Form 5500 Lines, 9a(2) and 9b(2) are checked and line 6f equal zero) or (Form 5500, Line 8a contains "1H").

What is Termination Criteria (Bypass T). There are no assets., under a fully insured plan, the insurance company pays all claims that incurred prior to 12/31...

Does anyone have any ideas for how to design around a noncompete requirement? We want to set payment trigger as 3 years after termination of service, but full benefit is forfeited if participant violates noncompete clause in employment agreement.

I was surprised to find new LRM's for Traditional, Roth, and SIMPLE IRA's on the IRS website. They are effective June 2010.

http://www.irs.gov/retirement/article/0,,id=97182,00.html

(scroll towards bottom of the page).

Although these were long rumored (and it is assumed new model IRA plan documents will follow), I haven't read or heard anything about these being released. I'm curious if anyone has seen or heard of the LRM's being released from either IRS notifications/newsletters or any industry-type groups? I like to monitor these developments and want to be sure I'm tapped into the best resources for these types of things going forward. Thanks!

Plan B is merging into Plan A. Plan B allows in-service distributions from all vested accounts upon attaining age 59½. Plan A does not allow any in-service distributions. None of the current Plan B participants have attained age 59½.

Generally, in-service distributions are a protected benefit. The regulations allow the elimination of protected benefits with respect to benefits not yet accrued. Since none of the Plan B participants have attained age 59½, can the in-service distributions be eliminated in the merger of plans on the basis that this benefit has not accrued for any of the Plan B participants?

I am preparing a late Form 5500 filing (2007) and using Relius Web Client. This is a Defined Benefit Plan. I understand that I use a 2009 Form 5500, 2009 Schedule I. Also we prepared a 2007 Schedule B and Schedule R (both schedules as an other attachment using a .pdf file).

When we tried to file (can sign as service provider), it came up with the following errors:

"ERROR Fail when Filing Header, Form Year does not match Filing Header, Plan Year Begin, unless the Filing Header Prior Year Indicator is set to 1."

This error I do not understand. Any thoughts?

"ERROR Fail when Schedule SB is not attached and Form 5500, Line 8a (Pension benefit code) contains 1x (defined benefit), and either Part II of Form 5500, Line 9a(2) is not checked, or Line 9a(2) is checked and at least one of Lines 9a(1), 9a(3), 9a(4), are also checked, and Schedule H/I, Line 5a is not yes and Form 5500, Part I, Line A, single-employer plan or multiple-employer plan is checked."

I did not check the box at the bottom of the 2009 Form 5500 that a Schedule SB was attached since it's a 2007 Schedule B and its filed as an other attachment to the filing. Line 8a has 1A and 1G, Line 9(a)3 is checked, Schedule I, line 5a is No and Part I, Line A (single employer) is checked. Any thoughts?

I have an incident at Relius but thought I would ask the board.

Another note: these errors did not come up when I originally tried to file. I filed and then it had a submission failed. I tried again and then it came up with the errors when I tried to e-file again. When do these validation errors first come up?

Physicians group has two plans Safe Harbor 401(k) and Money Purchase. Yes, they have been told to terminate the pension plan in the past, but "liked the investments". Now that medicare has cut their payments by 21% and possibly more, they are scrambling. They are having a hard time paying rent, much less the $437,000 contribution receivable that is due for the plan year ending 12/31/09.

Going forward would a good course of action be to issue a Section 204(h) notice asap, freeze the plan, therefore limiting their 2010 plan year funding for the date the freeze took affect? They will have to fund based on comp paid to eligible participants up to that date. They could then rollover the assets into the Safe Harbor plan or merge the plans?

For 2009 I believe there will be a 10 percent excise penalty involved on the UNPAID amount if they can not fund the plan by 8 and a half months after the plan year(Sept 15). I assume a lot of physicians will have problems due to the new medicare cuts. This particular plan has 51 participants. Has anyone had problems with pension plan funding? Do you think these reasons would be reason to apply for a waiver? Probably not. And I would assume the plan could not be merged with the Safe Harbor until the funding was made?

How is the value of employer stock calculated during diversification? Specifically for a publicly traded plan using internal accounting and not necessarily going out to market. Is it the price/value as of the last day of the plan year? Or is it based on the day the diversification is completed?

I know the 25% - 50% limits, but am not sure about the dollar value assigned. Any help is appreciated!!!

Cash Balance Plan - Maximum deductible contribution for 2009 plan year was $150,000. An amount of $200,000 was contributed during the calendar year 2009, leaving $50,000 in non-deductible contributions.

It is my understanding that a deduction for this $50,000 can never be taken? Obviously not for 2009, but not for 2010 either, correct? So the plan sponsor just loses out on any deduciton for this $50,000?

A private college (the "Institution") offers a salary reduction only TIAA-CREF 403(b) in which participation in the plan is voluntary. There is an SPD that indicates:

-The Institution is the administrator of the plan and is responsible for plan operation.

-The plan administrator is responsible for enrolling participants, ...and performing other duties required for operating the plan.

It's not clear what the actual "other" duties are.

Does this seem like a plan subject to ERISA?

Despite the SPD language, if they only forwarded contributions then it would likely be a Non-ERISA plan, correct?

Assume:

1. DB plan was certified as critical in March 2010 and trustees diligently work to develop a rehabilition plan with default and alternative schedules. The default schedule costs $1.00 per hour, while the alternative schedule is $2.00.

2. This rehab plan is then presented to the bargaining parties before their primary collective bargaining agreement (PCBA) expires.

3. During bargaining over the PCBA the parties agree to provide funding of the alternative schedule. At this point the surcharges stop and the trustees implement the alternative schedule. Many adjustable benefits are saved.

4. A couple of months later a secondary collective bargaining agreement (SCBA) covering a small number of participants expires. During negotiations that group of employers agrees to provide funding of only $1.00 per hour required by the default schedule.

5. Plan participants routinely float between work covered by the PCBA and SCBA.

Questions:

Under this scenario how is the Board to proceed? The SCBA provides for the money needed under a default scenario, therefore the surcharges would not seem to apply. However, the participants who work under the SCBA are clearly earning a benefit that is not being fulled paid for by the SCBA employers. Moreover, because the work force is fluid, there is no practical way to bifurcate the plan and create a second tier of benefits for those working under the SCBA.

I need a push in the right direction. (Regulations would also be nice...)

A friend of ours turns 70.5 next year. They want to know if they will be able to make a direct payment from their IRA to a religious charity. Was that rule extended? If so, was it only temporary? How does it work or benefit the IRA holder?

We try to do some due diligence prior to distribution by looking participants up on LexusNexus and we're running into a situation on a construction company plan where the SSN of the participant does not match up to the name or address we find on LexusNexus. I most cases these are "force outs" of small balances and we're not sure we have a good address either.

Where do we go from there? We don't really want to issue a taxable distribution under that SSN and cause the wrong person to be taxed on a distribution they never receive. I was planning on just forfeiting these small balances if the name doesn't match up to the SSN. I don't think the plan document addresses false IDs.

We have a company that is considering establishing an intranet or web-based site for providing all of its required ERISA SPDs. This includes various health and welfare benefit plans combined under a wrap document plus it's 401(k) plan. Previously, the company basically prepared paper copies of the various SPDs and then sent a pdf or copy electronically per the applicable ERISA rules so that participants received an electronic copy of the SPD but really had a document that resembled the paper SPD. (Company is aware of special rules required for delivery to those without email / intranet site as part of work functions and need to provide paper copies to COBRA participants and former employees, etc.)

The new arrangement--organized by a national benefits consultant--however takes a new format and delivery approach. In essence, it attempts to provide all the same basic content as the old form SPDs but in a "deconstructed" manner. For example, they try and divide up discussion of the key terms and provisions of each of the various plans / benefits. That also has a separate "administrative" and regulations section that gets cross-listed in the separate benefits descriptions and includes the required ERISA rights section and epparently even the general ERISA-required provisions for the individual plans (e.g., plan administrator contact, plan number, plan funding info.)

In some ways, I think this approach will be easier and quicker for participants--e.g., if you want to see just the eligiblity provisions for the LTD plan, you can click just on the eligibility bar or button and get a page that discusses only the eligibility provisions without getting bogged down in other details. However, on the other hand, I can see how this approach may deprive some participants of the full info they might otherwise obtain if they had a paper copy of the SPD with a table of contents, etc. that more readily listed out other sections and provisions, including provisions that the participants might not have even been aware of or known to take a look at if they didn't stumble across them in getting to the provision they were looking for, etc.

Maybe I'm just too old fashioned but this approach arguably makes the overall SPD more difficult to read and be sure that I've found all the pertinent information when you have to jump from section to section or link to link and might even fail to ever click on or get to the ERISA rights info unless you read all the pages or are otherwise specifically hunting for this.

I am curious if others have gone to a similar system? (Seems that others must have as this is product of a national benefits consulting firm.) If so, I am curious if there have been any particular issues or concerns or if this has been an improvement.

I also have some specific questions or concerns about this approach that I'd be glad for any thoughts on:

1. What do you do with insured benefits (e.g., group life and LTD) where the insurer typically provides a certificate of coverage with a signed letter and seal, etc. from the insurer per applicable dept. of insurance rules, etc. Do you include a copy of this in the SPD for the insured benefits or is it ok to just provide the general summary info? Have the insurers approved delivery of a scaled-down version? (Note, in the sample I've seen, the pertinent info on the plan and benefits is included but not the typical opening page with the certificate and policy info--it just skips to a summary of the pertinent eligiblity, benefits, claims provisions, etc.)

2. Have you encountered any concerns that the choppy and divided nature of the information may fail to satisfy iwth the general format and content requirements for an SPD--i.e., seems like this may make it tougher for some participants to read the SPD than a paper approach but I suppose an argument may be made by some that this is easier.

3. How do you comply with requests for paper copies or sending copies to those without access to the site. It seems to me ideally a paper version of the SPD in its regular written SPD format really should be provided rather than simply printing out all the various sections related to a single plan or benefit but I suppose simply printing out the intranet content should technically satisfy the requirement. Do you provide copies of the entire intranet site on a CD so that you eliminate the problem re lack of access to the intranet site but also avoid having to print out paper copies? (Note, I'm assuming a participant always has the right to request a paper copy although some without intranet access (e.g., former employees) may simply prefer getting the info electronically on disk.) Do you give such individuals a choice between paper and CD?

4. Do you include the provider list for the health plan on the site or just a link to an external site. I understand per the DOL rules updated provider lists should automatically be made available but seems a link to a continuously updated provider list should satisfy that requirement.

5. Do you provide initial COBRA notices through this site. Don't you still need to send those out by mail when participants' spouses and dependents are included and don't have access to the site?

Thanks for any thoughts or insight on this.

A 501©(3) organization is designated as a beneficiary of a qualified plan account. Does the organization recognize taxable income on a death benefit distribution? Is there a withholding requirement?

We have a Davis Bacon Prevailing Wage Plan we administer. In the past the plan sponsor has contributed 25% of wages (non-elective) into the plan. The plan has immediate eligibility and 100% immediate vesting.

Someone has told The Plan sponsor they can further increase their contributions above 25% to take further advantage of FICA savings and lower workers comp. We were under the belief that these plans must comply with ERISA and 404c deduction limits. Since these are employer contributions and not employee deferrals the deductibility limit should be capped at 25% ? Any thoughts?

My wife and son are on one health care plan and I am on another. I went to sign up for two separate HSA accounts at my bank. The problem is that I put them both in my name, and the bank was using my SSN as the "owner" of the account, which means that they will report it for tax purposes as being my account. However, I've been using one of the HSAs for my wife and son for the last few months. In short, I've been paying their medical expenses out of my HSA.

A few questions...

1) What do I do when tax time comes around and now I have a form from my bank stating that I contributed X dollars to my HSA and then spent it, when I actually spent it on my wife and son's expenses

2) Since we're on separate health care plans, do I need to have separate HSA accounts (one for me, one for them)?

3) Since we're on separate plans, can I contribute $3050 for myself and $6100 for my wife and son (since they're on a family plan)

Thanks!

The interim final rule on grandfathered plans has a requirement that, in order to maintain status as a grandfathered plan, a plan or insurer must include a statement in "any plan materials provided to a participant or beneficiary describing the benefits provided under the plan or health insurance coverage" that the plan believes it is a grandfathered plan. The interim final rule provides a model notice to use.

What exactly is encompassed by "any plan materials provided to a participant or beneficiary describing the benefits"? Obviously, this would include an SPD or a certificate of coverage. But what about other communications, such as an EOB, summary of benefits, open enrollment information, COBRA notices, etc.?

Do these documents have to include the statement?

We have a plan, 6/30 year end. ADP refund was issued and check cut August 2009, prior to 2 1/2 month deadline. We were just notified that this refund check is still outstanding, HCE never cashed it. We are currently having the check re-issued to the HCE. Would you consider this a late refund and the plan subject to the 10% penalty?

Technically the refund check was issued in time, and all funds have been liquidated from the participants account, however the check was never cashed.

Thanks for all input.