Employer is Self Employed and has 2 employees.

Employer does not provide health insurance.

Employer increased wages for 2 employees in order to assist them with purchasing their own policies.

Employer purchases own policy but has the company pay for his premiums only.

In addition, he takes a credit on his Form 1040.

Is this allowed or is this discrimation?

We are a TPA that obtained signing credentials to sign on behalf of our clients. We use Relius government forms to prepare the forms. We will follow the instructions with respect to the new procedure (authorization from client, .pdf file of first 2 pages of 5500, etc). With this new rule can we just import the .xml files (schedules, etc) generated by Relius government forms and import once logged in as the TPA at the DOL website or does Relius have to do a fix first? There was a note at the Relius website that "SunGuard will be incorporating the option into its software for later release". Since we are not using Relius Web Client I wouldn't think we have to wait for a fix. Any thoughts?

I have a question on church and religious organizations and adoption of a 457b plan.

I do not think a steeple church or QCCO under 3121 can sponsor a 457(b) plan. However, it appears that a 414(e) religious organization that is not a steeple church, can sponsor a 403(b) plan however since the employer is not subject to ERISA, the plan would be a deferred comp plan for all plans, and NOT a top hat plan. However, as a governmental plan, the features of the plan are similar to a top hat - ie no loans, no rollovers, no age 50 catchups

Can someone confirm??

Thanks!

45 year old male recently divorced, has IRA valued at $31,000, currently taking annual 72(t) distribution since 2005.

Divorce decree says they must split the IRA 50-50.

Continuing the same annual payments from 50% of IRA balance will deplete account prior to age 59 1/2.

Can payments be reduced for IRA owner due to divorce decree without tripping the tax liability for all prior payments?

Thanks!

I know certain DC plans can exclude collective bargaining employees or non resident aliens, but what situations can this apply to DB plans? A long time employee has never benefited from his company's plan. Assume he met eligibility requirements.

I an not familiar with 403(a) plans and appreciate our comments. It is my understanding that these plans are funded solely by employer contributions and thus are ERISA qualified arrangements. Do these plans requrie a plan document? Can monies from these plans be transferred to a 403(b)plan? Can the 403(a) be converted to a 401(a) plan?

We're looking for an IT firm on the West Coast, (first preference would in WA state), that is very familiar and experienced w/ Relius Software. Can anyone recommend a firm? We're planning on transferring our system to a data center so the IT firm would not have to be local to maintain the system.

Thanks for any recommendations you can send.

If you prefer to email directly, you can send to hr.retire@gmx.com

I have requested my 401k Plan to be terminated due to a financial hardship back on 4-1-10. I submitted my plan's form to my plan administrator back on

4-1-10. I marked the box to have tax withheld from my funds before the check is sent out. I still have not received my funds and it is 6-8-10. How long can my company take to return my funds to me? My plan administrator said they are holding the funds until 6-30-10. Can they do that? Also, the market has dropped drastically since 4-1-10. I have lost a LOT of money due to my company holding my funds. Any way to make them return my balance when originally requested on 4-1-10?

I have had a 401k loan for 18 mos. My employer is currently having some financial problems. Myself and 3 other employees just noticed that our loan payments have not been submitted to our 401k provider for 3 months now. They ARE deducted from each of our paychecks and have been every payroll period. I contacted our Plan Administrator and was told they were working on it. How long does an employer have to put our money into the loan repayment account once deducted from our paychecks? Any info would be very appreciated.

I have been asked a question by a plan participant. He apparently was a participant in a profit sharing plan which was valued annually. He terminated during the plan year 2008 and the plan sponsor/administrator made a distribution to him in 2008 based on the 2007 valuation. Well we all know what happened to the market. After the valuation was prepared for 2008, the plan sponsor requested he pay the funds back due to the stock market devaluation. I just want to know what anyone else's thoughts are on this. I have several thoughts. One being, did the plan sponsor make distributions to terminated plan participants immediately in past years, when the market was up and then make additional distributions to them for the market increase? Did the plan allow for distributions to be made immediately or did he go against the plan provisions? I have not seen the plan document, so I can't answer these questions. I am just wondering if anyone has run into this before. I remember from the recordkeeping days, we would never have made a distribution without a current valuation, especially with a market such as it was at that time. Plus, I know the plan participant's tax consequences will need to be corrected also if he is required to pay these funds back.

Thoughts anyone?

I have a request from an employee to drop her coverage and her spouses coverage due to him becoming entitled to Medicare. She has been entitled and covered by Medicare for over year but elected to enroll in our coverage for her and her spouse as well. It is my understanding that this is a qualifying event for him since he is just now becoming entitled to Medicare but I don't believe this is a qualifying event for her. Does she need to wait until the next annual enrollment period to drop her coverage?

an attorney drafted a EGTRRA document in 2005 it was adopted and the company then amended the plan in 2007 to change the NRA and received a revised SPD. Curiously, the vesting schedule remained at 7 year graded. This plan should have been using the accelerated 6 year schedule effective 1/1/07 for new participants, correct? The plan is on a remedial cycle E and has to be submitted for determination by 1/31/11.

We are the TPA on a 401(k) Plan who has a terminated participant who has requested distribution of her account. She has been separated from her husband for more than a year and she said he refuses to sign the Spouse's Consent. Her account consist of her 401(k) contributions and a rollover from a prior plan. The Plan Document states payment to terminated participants are made in the form of a lump sum. The amount of her distribution is about $5,500. Is the Spouse Consent required for this?

She said she had a legal separation drawn up, but he would not sign it.

Thanks for any help

KarenM

We have a very complex controlled group set of plans. One of the members does not pass coverage....They now want to be aggregated with one of the other members....We ran the 2008 Test in a timely fashion and it passes. They now want to rerun the 2008 test including this other plan. If we do this, can we apply the "statutory minimum" disaggregation rules still? If we do the test will pass. If we don't, it will not. In addition, they can only want to do this for the ADP test and not the ACP test. The plans have different testing methods (CY vs PY) for ADP and ACP. (which of course is a silly plan design because it limits the types of plan aggregation)...So Can your "covered" group be different for pretax vs match vs profit sharing?

Any thoughts greatly appreciated.

Calendar year plan, plan term date 04/30/10. TNC is zero, but there is a shortfall amortization installment. Has there been more info on pro-rating the shortfall amortization installment to date of plan term? Thanks...

Are all 403(b) church plans that meet the requirements to be a retirement income account (RIA) under Treas. Reg. Section 1.403(b)-9(a)(2)(i) considered to be RIA plans, or is the plan only an RIA if it designates itself as an RIA in a written plan document? The RIA written plan requirment in Treas. Reg. Section 1.403(b)-9(a)(2)(ii) uses the word "intent" which seems to indicate that the employer must elect to have its plan be an RIA plan. But, the definition of RIA and the exception from the written plan requirement in Treas. Reg Section 1.403(b)-3(b)(3)(iii) doesn't seem to leave any room for the empoyer to make an election. If a plan's RIA status is mandatory and not subject to an employer's election, it seems that all church 403(b) plans funded with variable annuities or custodial accounts are RAIs that must meet the written plan requirment. Can anyone point out a referrence to the contrary?

Employer terminated safe harbor match only a few months into the plan year (currently a calendar-year plan). Employer now wishes to reinstate safe harbor match. Not possible to do this earlier than first day of next plan year pursuant to regulations. Employer wants to amend plan to provide for short plan year so it may then reinstate the safe harbor match as of the first day of the new off-calendar-year plan year. Other than the obvious disadvantages of increased administration costs, is there any statutory or regulatory reason why an employer may not use this approach to get safe harbor provisions back into its plan at a date earlier than it would otherwise be able to do?

I have a plan that utilizes the maximum offset allowance per IRC section 401(l). A recently terminated employee significantly reduced her hours in the final three years of her employment. Since the 401(l) offset is based on final three-year average compensation, this employee's benefit has been leverage up considerably due solely to her reduced work schedule. I am wondering if anyone has experienced a similar situation and if anything can be done to mitigate this skewing of benefits. Thanks.

Client changed name and EIN in 1996. When they changed service provider in 2002, new TPA picked up the old EIN and filed 2002-2006 5500s under the wrong EIN. We filed for 2007 and 2008 using the correct EIN. Now IRS is looking for the 2007 5500 under the wrong EIN. How do I fix this?

Respond to IRS Notice noting in Section I of the notice that the Form 5500 for 2007 was filed under a different EIN (the correct EIN) and leave it at that.

Or do I need to amend each Form to show the correct EIN? I don't have copies of the forms from 2002-2006. Would I just print the 1st page of a 2009 Form and indicate an amended return, the appropriate PYE and correct EIN?

Thanks!

I have a client who has a 403b contract with company A. They have gotten on the "fiduciary bandwagon" and have been reviewing fees with their current provider, and have decided to move assets to a lower cost provider (company B) because they have decided that company A is not in the best interest of participants.

New money has begun to deposit into company B. The plan sponsor wants to transfer the accounts in company A over to company B. However, the accounts are individual annuities and require paperwork from every participant.

Company A has now started communicating directly with participants, advising them of their right to keep the money where it is.

The plan sponsor truly is trying to do the right thing, but they are wondering how they can possibly "force" employees to move since the accounts require individual participant signatures. A small group of employees has been swayed by Company A, and has started to complain about moving to Company B. The concern is that they will "refuse to sign".

The issue with keeping money in 2 places is due to the additional burden of administrative costs. To make matters worse, the company cannot afford to pay the administrative fees, and Company A will not pull administrative fees from individual contracts.

I know there have been attorneys who have fought (and won) to have surrender penalties or MVAs waived in instances such as this. However, was wondering if anyone has heard of a plan sponsor "winning" the battle to be able to direct these accounts be liquidated without participant signature, using plan sponsor signatures instead to direct plan assets?

I am representing neither Company A nor Company B...just trying to help the client. Seems a shame they are trying to do whats best but having issues with paperwork/signatures....this is a nice company with well-intentioned management.

Thanks!