I just found out last week that the Florida Retirement System has me classified as retired. In 2005, I rolled over an ORP account to another qualified retirement plan. Under Florida law, I am now retired because of this. I had a job offer rescinded because of my retired status with the FRS so I am trying to find out if I have any options. When I did the rollover in 2005, I did not sign anything that said I understood I would be considered retired. I think some law was passed retroactively and would like to know when the word "retired" was put on my account. I am wondering if it was just July 1, 2010 with the passage of HB 479. I am only 46 years old and now my future career opportunities are extremely limited because of this situation. The FRS will not allow me to reverse the rollover.

The linked-to paper argues that health coverage reform sets up incentives for an employer to design its “self-insured” group health plan to motivate those who consume more medical care than others to prefer individual insurance over employment-based coverage.

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1651308

Do you think that the authors’ theory is realistic?

The authors suggest that one inducement for an employee (and his or her family) to leave an employment-based plan might be the employer’s cash-wages payment in an amount somewhat more (recognizing some tax differential) than what would have been the employer’s “contribution” to the employment-based health plan. [Pages 22-23 of the paper, pages 23-24 of the .pdf] Is this realistic?

If an employer were to offer such a cash-wages payment, would the choice run into constructive-receipt issues? Or would Section 125 protect those who chose the group health coverage as not having had constructive receipt of the available but not-taken cash payment?

Plan sponsor failed to make 2007 minimum required contribution which is $100,000. Excise tax due for 2007 = 10% * 100,000. Client froze the plan in 2008 to "stop the bleeding". Minimum required contribution for 2008 is $120,000, which is the $100,000 from 2007 plus an additional $20,000 shortfall installment. Plan sponsor made no contributions for 2008. Is the excise tax due for 2008 = 10% * 120,000, or 10% * 20,000? My understanding is that it is 10% of the entire minimum required contribution (10% * $120,000) even though a portion of the 2008 MRC is due to unpaid MRC from prior year. Is this correct? [For simplicity sake I am not taking into account any discounting that would apply to the $100,000 contribution from 2007].

My wife's company was just purchased by a much larger company. Her share values in her ESOP increased by 250%. The total value is over $200,000. She became fully vested immediately.

There will be 2 distributions, 1 within 90 days and the 2nd distribution will be within 1 year due to IRS review.

We are currently in the 28% marginal Federal tax bracket and pay about 22.5% taxes. We live in New York State.

Here are my questions/observations:

Is this distribution handled as a retirement account liquidation (non-Roth IRA or non-Roth 401K)?

Will it have to be rolled over within 60 days to a non-Roth IRA or non-Roth 401k or else risk being taxed on it as ordinary income and also have to pay the 10% early withdrawal penalty (excise tax), thereby moving us up into 33% or 35% marginal Federal Tax Bracket?

Or, will it be handled as Capital Gains and will it be considered short-term or long-term or a combination thereof?

She has been with the company for 6 years and been an ESOP participant for that time.

Thank you in advance!!

Michael

Here is the situation:

There is a company called Company A. Employees participate in an FSA:

* On January 1, 2010, assume $1,000 is available in John Smith's FSA.

* On June 30, 2010, Company A is sold to Company B. Former Company A employees now work at Company B.

* After the sale, FSA coverage continues under the Seller's plan (Company A) through the end of 2010. This follows Revenue Ruling 2002-32.

* However, for the remainder of 2010, the Buyer (Company B) deducts $500 from John Smith's pay check to re-imburse Seller for a portion of the FSA amount (recoupment).

Question: Does this violate the Uniform Coverage Rule and IRS Chief Counsel Advice No. 201012060?

Thanks for your input!

I have a QDRO that states that the alternate payee is to receive 28% of the participants benefit in the plan (dc plan-daily valued). The QDRO does not specify treatment of an existing loan balance. Of course, there is one. I am of the thinking that the loan balance is an "asset" or alternate investment in the participant's account - and therefore the loan balance is included when totaling up the benefit prior to calculating the 28%. Is this correct, or have I lost my way somewhere?

HAs a model 204(h) notice been released by the IRS? If so, where can I find it? If not, does anyone have a good reference for a list of the requirements for the notice? Thanks!

HAs a model 204(h) notice been released by the IRS? If so, where can I find it? If not, does anyone have a good reference for a list of the requirements for the notice? Thanks!

Management Fees are withdrawn by the broker/dealer directly from the plan assets. The broker/dealer then pays the RIA. What should be reported on the Schedule C?

Anyone know where I can find old DOL Opinion Letters? Specifically, I am looking for 77-07 and 77-08.

Thanks

I am a TPA and having a hard time getting the requested Schedule C Fee Disclosure information from various Investment Managers / Custodians.

Are they legally required to provide this information and what legislation / documentation can I site that will show they that they are legally required to disclose the fees?

Any help is grealty appreciated.

If a participant in a 457(f) plan is promised $50,000 provided he is continuously employed from January 1, 2010 through December 31, 2012, is the $50,000 includible in his 2012 income, or in his 2013 income? The statute and regulations refer to income inclusion in the "first taxable year in which there is no substantial risk of forfeiture." Given that the forfeiture lapses on December 31, 2012, presumably it is includible in his 2012 income. I'm just concerned that the statute could be read to mean 2013 was the first year in which there was absolutely "no" risk of forfeiture.

Thanks.

If say as of 1/1/2009 the AFTAP is < 60% and benefits are frozen as of 1/1/2009.

Say the plan is calendar year and for the 1/1/10 valuation my understanding is that the funding target is based on the frozen benefit as of 1/1/2009, but that there is a target normal cost for an accrual during 2010.

Is this correct?

I'll go through the regs more, but just wanted a preliminary opinion.

Personally it seems that if there is a 436 freeze than there would be no accrual for a target normal cost.

thanks

An employer was participating in a PEO plan and decided to de-participate in the plan and create a new plan. Assets in the PEO plan attributable to that employer were spun off into the new plan. Plan has effective date of 1/1/2009 as a new plan, as administrator prefers this method, and it is cleaner from a 5500 perspective as prior year 5500's will not be available for this new sponsor. So we have a successor plan and is also a new plan. However, an issue comes up as to running the ADP test, because as a successor plan you cannot use the deemed 3% rule. Plan document for 2009 had prior year testing elected. Client does not have data from 2008, most likely because the plan was safe harbor in 2008 so the test was not run. So how do you perform ADP test for 2009 plan year if prior year was elected and this is not a new plan because it is a successor plan? It is too late to change the testing method for 2009.

Do 2 tests need to be performed by the new administrator - 2008 in order to run 2009?

Any thoughts would be great!!

I’d like to learn more about what TPAs and recordkeepers do in processing distributions under a retirement plan that includes Roth and non-Roth amounts.

Do you permit a participant (or a beneficiary) to specify his or her preference on which portion of a distribution is taken from Roth amounts?

Do you require a claimant to direct an allocation between Roth and non-Roth amounts?

For example, I have a client that’s considering whether its plan documents should specify that a claim will be denied unless the claim specifies the claimant’s allocation between Roth and non-Roth amounts.

If a participant isn’t permitted or fails to specify a preference, what ordering rule do you use to allocate a distribution between Roth and non-Roth amounts? What were your reasons for choosing that ordering rule? How much of the ordering rules is in the plan document, and how much is the plan administrator’s interpretation?

Is there any particular kind of distribution for which you don’t permit a claimant to request his or her preferred allocation between Roth and non-Roth amounts? If so, why do you preclude the choice?

If a qualified domestic relations order doesn’t state details on which portion of the alternate payee’s portion is to be credited as Roth amounts, what ordering rule do you use? Is that rule stated in the plan document? Stated in the QDRO procedure? A rule you interpret for practical administration?

Can you apply facts and circumstances for hardship purposes to deferral contributions, without meeting a safe harbor need/event and without requiring suspension for 6 months? So all accounts - employer contributions and 401k deferrals - can be distributed based on facts and circumstance approval to buy a car, if this was determined to be an immediate and heavy need. Also, since plan has not elected to apply safe harbor standard, deferrals do not have to be suspended? Assume this is a volume submitter document. Is this permitted?

Thanks!

I have the newest update on Relius (aug 10,2010)

Now 5500 SB won't print

Anyone know what is wrong?

Thanks in advance to all respondents. (Let me know if additional information is required)

Corp A, 100% owned by Dr. A setup two plans - DB & 401(k) effective 01/01/2002. Plan covers Dr, his spouse and 5EEs.

Dr. A establishes Corp B (100% owned by himself) beginning 2005. He and 5 EEs are paid from Corp B and his wife is paid from Corp A.

I guess this is a controlled group situation and the plans must cover all EEs of both A & B. However, the Corp B did not adopt the plans sponsored by Corp. A and all reporting went on until 2008 assuming all employees were employed by Corp A. The recent DC restatement was adopted by both employers A & B. Also, earlier paln documents had provisions considering employment from related employers. In addition, deduction for employer contributions was taken on the tax returns of Corp. A.

I have a few questions:

1. Is the plan a nonamender and VCP is the only correction method?

2. What is the required correction in re: on erroneous deductions?

Please excuse the cryptic topic title!

Assume:

Cash Balance Plan Year 1/1/2009-12/31/2009

Valuation Date 12/31/2009

Valuation Assets $300,000

Funding Target $300,000

Target Normal Cost $80,000

Minimum Required Quarterly Installments $10,000 4/15/2009, 7/15/2009, 10/15/2009, 1/15/2010

Actual Contribution 3/15/2010 $100,000

Effective Rate 6%

2009 Schedule SB lines 19a and 19b are $0

What should be the entry on the 2009 Schedule SB line 19c?

How about 100,000 / {(1.11 ^ (2 /12)) * (1.06 ^ (.5 / 12))} = $98,037?

That seems to follow the Schedule SB instructions, but totally ignores the late MRQs from 2009!

May this type of transfer be made on a trustee-to-trustee basis and continue the tax deferral (rather than individually elected rollovers to IRAs)?

If so, would that effectively be a 401(a) plan termination if all the assets were so transferred?

If not allowed now, has there ever been a time when this type of transfer be made on a trustee-to-trustee basis and continue the tax deferral?