In my opinion, the reimbursement/in-kind benefits provisions (e.g. 1.409A-3(i)(1)(iv)) are the nuttiest 409A rules.

Here is the current issue: An employment agreement, like most that I have reviewed, does not have any of the 409A reimbursement/in-kind benefits language for items like business expenses, auto allowance, country club membership dues.

Under Notice 2010-6, reimbursement/in-kind benefits provisions can be corrected by adding the 409A-required language, so long as the correction is made before the date that the employee would have become eligible for a reimbursement or in-kind benefits under the agreement (a requirement which, for all practical purposes, in my mind renders the correction fairly useless). Regardless - in the current transitional window under 2010-6, we are permitted to correct the failures addressed in the notice and it will be as though the document were in compliance on 1/1/2009. However, we must correct the failure "in accordance with the notice".

Does that mean that existing reimbursement/in-kind benefits arrangements cannot be corrected in the transitional window, assuming that reimbursements/in-kind benefits have been provided in the meantime? Or can we go ahead and correct now, no harm-no foul, so long as payments were made properly in the meantime though the document wasn't compliant?

I have been correcting anyway, figuring better now than never, but I'm not sure it's really fixing the document problem retroactively.

Employer has two DB plans. In 2009, several participants who should have been paid out of plan 1 were paid out of plan 2. Participants received the correct amount but from the wrong plan. I think one correction method would be to get a refund of the overpayment from plan 2 and make the payments out of plan 1. However, the particpants do not have the available cash to refund the money. I know they will be getting a check from plan 1 in the same amount but that doesn't guaranty that the check back to plan 2 will clear. Also, the plan will then have 1099 issues for the payment. Do you think the plans can avoid this hassel and just have plan 2 transfer the money to plan 1? Everyone is in the same position.

Another alternative would be for the employer to contribute the money to plan 2 and move on.

What are your thoughts?

OK - someone in our office filed some returns through EFAST2 and instead of attaching the "other attachment" *.pdf file with BOTH pages of the 5500 form they only included the signature page in the file.

Does anyone know if this would require doing an amended return? Page 2 of the 5500 is already there of course in the main filing.

I know that both pages were SUPPOSED to be included in the file, I'm just wondering what others think as far as amending and refiling.

any thoughts appreciated.

If you have plans of employers that have been under common control investing in a Master Trust, what happens to the Master Trust if the employers are no longer under common control? Is it now a collective trust? If so, is it a collective trust immediately or do new trust documents need to be prepared indicating that it is now a collective trust?

AFTAP for 2009 is certified based on 12/31/2008 valuation to be 89.54% on 9/30/2009.

2010 AFTAP is not certified until September 28, 2010 based on 12/31/2009 valuation. On 4/1/2010 the presumed 2010 AFTAP is deemed 10% lower than the 2009 AFTAP and a restriction would apply because it is now below 80% - but there was a carryover balance that when reduced brings it back up to 80% ($219 reduction).

Per the preamble to the regulations, the election is treated as having been made on the new AFTAP measurement date - 4/1/10.

When is this reduction treated as having occured? The reduction was based on the assets, FT and COB as of the 2008 valuation, so do I have to amend the 2008 SB to show the reduction occuring in that year (which would change my other valuation calcs such as shortfall) or does it show up on the SB line 12 for 2009 or 2010?

Some of these PPA timing issues have me completely lost.

My employer filed for bankruptcy in 2005 and in the process sold off two business units in attemp to return focus to the company's core competencies. Anyhow, these business units each maintained their own 401(k) plans and, upon bankruptcy, my employer terminated their respective plans.

We were recently notified by the record keeper--both company's employed the same rk--that they filed for and received a share of class action settlement proceeds on behalf of both plans. Because these plans are terminated (which may or may not change anything in terms of IRS rules regarding plan distributions), I would like to simply distribute the proceeds, pro-rata, to eligible participants in the plans. In the past, we've had a slew of issues distributing money to these participants because they obviously don't provide as updated addresses as they're not, and never were, in our personnel database.

It's my preference to distribute the money, withholding 20% of any distribution in excess of $200, and simply inform the participants that they may roll over the distribution within 60 days and, if they had 20% withheld, make up the 20% or have that portion considered a taxable distribution. Can I do this or do I have to provide the participants the opportunity to elect to have their distribution rolled over?

Thanks

Section 1.409A-1(h)(4) contains a 409A "same desk rule" under which, in an asset sale, buyer and seller can agree that the asset sale does not result in a separation from service for participants in the NQDCP of seller. However, the regs say nothing about how to implement the same desk rule. Would the buyer adopt a plan that essentially mirrors the seller's plan (except for the definition of "employer," which would now refer to buyer rather than seller), with a transfer of assets, liabilities and participation to the buyer's mirror plan? Or would the employees remain participants in the seller's plan, with separation from service from buyer serving as the payment event from seller's plan. In that case, it's not clear how the seller's plan can authorize payment upon separation from service from an unrelated employer. In short, I'm not sure how to implement the 409A same desk rule, and any ideas would be appreciated.

ING Sched C information appears to be incorrect. They only have 2 months worth of info and they do not break down the fees. What is everyone doing on the Sched C for your plans with ING?

A client with a Sungard Prototype Profit Sharing Plan wishes to allow a participant (age 52) to receive a partial distribution from the plan. The participant has a rollover account in the plan that was an unrelated rollover into the plan several years ago. According to what I read in the plan document and in the ERISA book a participant can receive distribution of his/her rollover account in a PS plan at any time regardless of age or service. I have not read anything to the contrary in the plan document. This partial distribution would be a direct rollover into an IRA so that he can invest in a partnership holding real property. The plan does not allow this type of investment and the employer wants to keep it that way. The participant is under the plan's early retirement age of 55 but has over 10 years of service and is one of the company owners and is an HCE. The company also has a 401k plan but the participant does not have a rollover in that plan. Is this rollover direct to an IRA possible? If so, does the plan that currently only allows lump sum distributions need to be amended to allow partial withdrawals? Are there any other issues to consider?

A participant enters plan midway has total comp of 100k and comp as a participant of 50k for year.

my understanding is that:

gateway can be based on 50k

non discrimination rate group can be based on 50k

top heavy must be based on 100k

deduction limit based on 100k

Agreed?

thanks

An employee's spouse is under COBRA at another company. Can the employee cover the spouse's COBRA premiums via a premium reimbursement account (PRA) at the employee's (not the spouse's) company?

A different PRA question: Must an employee be covered by the insurance paid for under a PRA or can it cover only spouse and/or children?

It does not appear that the Small Business Jobs Act of 2010 (SBJA) changed the definition of “earned income” for retirement plan purposes. A temporary provision allows self-employed individuals who claim a deduction for health insurance premiums to reduce their earnings for self-employment tax purposes (SBJA § 2042, IRC 162(l)(4)) for one year. However, the SBJA did not change the definition of earned income for retirement plan purposes found in Code Section 401©(2) referring to and making adjustments to IRC 1402(a), net earning from sef-employment. The Technical Explanation of the Tax Provisions in the Senate Amendment 4594 To H.R. 5297 prepared by the Joint Committee on Taxation states that "It is intended that earned income within the meaning of section 401©(2) be computed without regard to this deduction for the cost of health insurance." The explanation indicates that "A technical correction may be needed to achieve this result."

For example, if net earnings from self-employment under IRC 1402(a) is reduced by the health insurance premium amount, then it would have to be added back in calculationg EI under 401©(2)--which it isn't--for the intended result to be achieved. As inteneded, earned income under 401© should not be reduced by the health insurance premium--thus, allowing higher contributions.

Law (enrolled version), available at: http://thomas.loc.gov/cgi-bin/query/D?c111...p/~c111DFUn1V::

Official Explanation, available at: http://www.jct.gov/publications.html?func=...own&id=3707 See pages 22-23.

Note. The SPJA also created "internal" rollover conversions into DRA portability for 401(k), 403(b), and 457 governmental plans (see Explanation pages 39-43) and provisions for partial annuitization for certain nonqualified annuity contracts (see Explanation pages 44-46). It is unclear to what extent the new "internal rollover" provisions will apply to governmental 457 plans before 2011 (which may affect the ability to spread conversion income to 2011 and 2012 with a "2010" internal rollover to a DRA. The rollover provisions are effective sooner that the ability to have a DRA in a governmental 457 plan.

Hope this helps.

We only have a few ESOP plans in our practice. We are filing our first ESOP 2009 Form 5500 of the year. The plan is a Stock Bonus - a money purchase provision along with a stock bonus.

1. Is the only applicable code on the new form the 2C? There is no ESOP code anymore.

2. On the Schedule R Section IV, we assume we answer all the questions 10, 11 and 12. This is not a leveraged plan. It is also a non-public firm.

Any insights??? Thank you.

We have a client who has received a compliance statement from the IRS agreeing to waive the 50% excise tax on previously missed RMDs, some of which were already rolled over into IRAs.

Question is, how does the participant (after taking the correction distribution) report to the IRS that his excise tax was waived? Do he simply file a 1099 and say nothing of it. Does he have to attach a copy of the Plan's compliance statement? The company would rather not provide the compliance statement to the participant, would a signed statement from the company work?

I am curious to know what others are doing for these types of situations...If a one person DB plan does not get the AFTAP certified until after the 10/1/ deadline, are you preparing a notice of benefit restriction and then another notice when the AFTAP is certified (say 10/15) letting it be known that the restrictions are lifted? Are there specific rules about wheher these notice requirements apply to one person plans?

For more information, find us on Twitter @BestDoctorsUS, Facebook and LinkedIn or Contact:

Lisa Astor or Mariana Pinner

PAN Communications

978-474-1900

bestdoctors@pancomm.com

Best Doctors Announces Physician Selection Service That Matches Members with Expert Specialists

Service Provides Access to the Right Resources to Improve Medical Outcomes and Lower Healthcare Costs

Boston, MA – September 29, 2010 – Best Doctors, Inc., the trusted expert medical resource that helps members take control of their healthcare, today announced the process behind its physician selection service, “FindBestDocTM”. The service matches members to a physician specialist who has the specific expertise needed for their medical condition, ensuring the most accurate assessment and treatment options.

Better than physician referral services offered through most health plans, Best Doctors FindBestDoc team delivers personalized guidance, addressing each individual’s unique needs. Members are matched to the expert specialist or sub-specialist best suited for their medical condition the first time, and are also properly prepared for their doctor visit. The service takes advantage of Best Doctors’ highly specialized registry of physicians that tracks areas of special interest, published research and other data that qualifies each doctor as an undisputed expert in a particular area.

“Best Doctors truly led me in the right direction to address my healthcare needs and eased my mind about my medical situation,” said Tom Galluze, Best Doctors member through Allegheny County Schools Health Insurance Consortium. “Matched with the right specialist who closely reviewed my medical history, I got the right cardiac surgeon for my situation and avoided unnecessary and painful procedures. Best Doctors is truly an invaluable resource that helps people get the right medical care.”

Targeted Physician Selection for Better Care and Outcomes

By getting members better, faster access to the physician with the right expertise, the FindBestDoc physician selection service results in better decisions and diagnoses while reducing healthcare costs associated with unnecessary appointments. The Best Doctors register of 46,000 U.S. expert physicians is the core of the Best Doctors physician selection service and is the result of 20 years of polling and research. It entails the largest, continuous, peer-to-peer survey of the medical profession ever conducted, and represents the top 5% of physician specialists and sub-specialists recognized as the highest caliber doctors in the nation. The comprehensive nature of the Best Doctors physician register allows the FindBestDoc team to match members with the right expert doctor in their geographic area and within their health plan network.

“At Best Doctors, our goal is to help our members take control of their own healthcare. We differentiate ourselves in that we do not rely on a limited network of specialists or a set ’panel‘ of doctors,” said David Seligman, CEO of Best Doctors. “Instead, we tap our carefully vetted physician register to zero-in on the most specialized expert for our member. This is invaluable to members and employers as it prevents misdiagnoses, improves patient outcomes and drives down healthcare costs.”

To learn more about the FindBestDoc service, please visit http://www.bestdoctors.com/us/What-We-Do/F...indBestDoc.aspx.

About Best Doctors

Best Doctors, Inc. is the trusted medical resource that helps members take control of their healthcare. By connecting members and their treating physicians with world renowned experts, Best Doctors has a dramatic impact on the quality and cost of healthcare. Founded in 1989 by two Harvard Medical School professors, Best Doctors serves insurers, employers and health plans worldwide, touching 20 million lives in 40 countries. For more information, visit www.bestdoctors.com or call 800-223-5003.

FBD_FINAL_for_wire.doc

For more information, find us on Twitter @BestDoctorsUS, Facebook and LinkedIn or Contact:

Lisa Astor or Mariana Pinner

PAN Communications

978-474-1900

bestdoctors@pancomm.com

Best Doctors Announces Physician Selection Service That Matches Members with Expert Specialists

Service Provides Access to the Right Resources to Improve Medical Outcomes and Lower Healthcare Costs

Boston, MA – September 29, 2010 – Best Doctors, Inc., the trusted expert medical resource that helps members take control of their healthcare, today announced the process behind its physician selection service, “FindBestDocTM”. The service matches members to a physician specialist who has the specific expertise needed for their medical condition, ensuring the most accurate assessment and treatment options.

Better than physician referral services offered through most health plans, Best Doctors FindBestDoc team delivers personalized guidance, addressing each individual’s unique needs. Members are matched to the expert specialist or sub-specialist best suited for their medical condition the first time, and are also properly prepared for their doctor visit. The service takes advantage of Best Doctors’ highly specialized registry of physicians that tracks areas of special interest, published research and other data that qualifies each doctor as an undisputed expert in a particular area.

“Best Doctors truly led me in the right direction to address my healthcare needs and eased my mind about my medical situation,” said Tom Galluze, Best Doctors member through Allegheny County Schools Health Insurance Consortium. “Matched with the right specialist who closely reviewed my medical history, I got the right cardiac surgeon for my situation and avoided unnecessary and painful procedures. Best Doctors is truly an invaluable resource that helps people get the right medical care.”

Targeted Physician Selection for Better Care and Outcomes

By getting members better, faster access to the physician with the right expertise, the FindBestDoc physician selection service results in better decisions and diagnoses while reducing healthcare costs associated with unnecessary appointments. The Best Doctors register of 46,000 U.S. expert physicians is the core of the Best Doctors physician selection service and is the result of 20 years of polling and research. It entails the largest, continuous, peer-to-peer survey of the medical profession ever conducted, and represents the top 5% of physician specialists and sub-specialists recognized as the highest caliber doctors in the nation. The comprehensive nature of the Best Doctors physician register allows the FindBestDoc team to match members with the right expert doctor in their geographic area and within their health plan network.

“At Best Doctors, our goal is to help our members take control of their own healthcare. We differentiate ourselves in that we do not rely on a limited network of specialists or a set ’panel‘ of doctors,” said David Seligman, CEO of Best Doctors. “Instead, we tap our carefully vetted physician register to zero-in on the most specialized expert for our member. This is invaluable to members and employers as it prevents misdiagnoses, improves patient outcomes and drives down healthcare costs.”

To learn more about the FindBestDoc service, please visit http://www.bestdoctors.com/us/What-We-Do/F...indBestDoc.aspx.

About Best Doctors

Best Doctors, Inc. is the trusted medical resource that helps members take control of their healthcare. By connecting members and their treating physicians with world renowned experts, Best Doctors has a dramatic impact on the quality and cost of healthcare. Founded in 1989 by two Harvard Medical School professors, Best Doctors serves insurers, employers and health plans worldwide, touching 20 million lives in 40 countries. For more information, visit www.bestdoctors.com or call 800-223-5003.

FBD_FINAL_for_wire.doc

Plan year is 12/31/2008 to 12/31/2009. It gets filed on a 2008 form.

Does it get filed on paper or electronic

We have always advised our clients who offer domestic partner benefits that the premiums for the domestic partner (1) are imputed income to the employee if the premiums are paid by the employer and (2) premiums the employee is required to pay for the domestic partner coverage must be taken from the employee's paycheck on an after tax basis. Today, someone told me that their attorney said the IRS doesn't like the after tax basis for the employee contribution, that it must be taken as pretax and then imputed income back to the employee. EBIA does not agree. Has anyone else heard anything like this?

Thanks so much.

Webclient submission failed

We have transmitted several Planbooks successfully. However, we have 3 Planbooks with a filing status of Submission Failed. I understand Webclient resubmits these, but after 6 attempts throughout the night by Webclient all 3 Planbooks still have a status of Submission Failed. Now in attempting to retrieve the Planbooks to republish them, they are grayed out and we get a response of “grid rows that are grayed out are Not Retrievable”. Relius has not responded to Incident Requests.