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.

Is is possible to use the 2010 compensation to determine the 2010 maximum contribution for sole proprietor and partnership?

Most likely, we cannot use the compensation to calculate the 1/1/2010 FT; but can we use the compensation to determine the TNC?

The argument FOR using the compensation is that the 2010 deductible amount must reflect the 2010 compensation; the larger the compensation, the larger the deductible acmount.

Of course, using the compensation will delay the valuation for one year (2011) and create AFTAP problem.

The regs include an IPO as an example of a condition related to a purpose of the compensation, i.e., as relating to the employer's business activities or organizational goals. An IPO is a type of CIC, so can a CIC also constitute a SROF? Ignore fact that CIC is a valid payment event.

We administer a calendar year 401(k) plan that previously had two participants (the owner and one employee), and each year we filed a 5500. In 2008, the non-owner participant was fully paid out. The only remaining employee is the owner, and the plan is being terminated in 2010. Is there a reason we can't switch to a 5500-EZ for the 2009 & future filings?

Any input would be greatly appreciated. Thanks!

If a participant exceeded the 402g limit for 2009 and the plan failed to distribute the excess by April 15, 2010, what are the consequences? Can the plan self correct under EPCRS to distribute the excess and thus the participant is subject to double tax? Is this a plan disqualification issue or just a contract issue since it is a 403b contract rather than 401k plan.

Thanks

Question - If an employer is moving from one H.S.A.(insurance side of the H.S.A.) carrier to another carrier...can those deductible limits that been accrued carried over to the new carrier?

I.E. Moving from Anthem Blue Cross H.S.A. plan and have paid $1500 of my $2250 deductible, moving to a United Healthcare H.S.A. $2000. Is there any rulingregs that would not allow my $1500 dollars of the deductible to be carried over?

Question - If an employer is moving from one H.S.A.(insurance side of the H.S.A.) carrier to another carrier...can those deductible limits that been accrued carried over to the new carrier?

I.E. Moving from Anthem Blue Cross H.S.A. plan and have paid $1500 of my $2250 deductible, moving to a United Healthcare H.S.A. $2000. Is there any rulingregs that would not allow my $1500 dollars of the deductible to be carried over?

A newly hired executive and the employing closely held coroporation enter into an undated "proposed" term sheet in late 2003.

Term sheet proposes "equity participation" equal to a 5% grant of shares outstanding at 1/1/2004, and stock options equal to 15% of the company based on fiscal year end values (April 30 of 2004, 2005 and 2006).

The "equity participation" shares vest in 1% increments at 6 months, 12 months, 18, 30 and 42 months, such that shares equal to 2% are vested and nonforfeitable as of December 31, 2004. No shares actually change hands nor is any additional compensation provided to the executive at any time.

The options vest in 5% increments at June 30, 2004, June 30, 2005 and June 30, 2006; each increment expires after 10 years. Thus options equal to 5% are vested as of December 31, 2004. No further documentation of the options is made.

Fast forward to 2010; parties to "proposed" term sheet want to give it effect to the extent possible and primarily desire to continue deferral of the options and "equity participation"/appreciation rights to extend until change in control of closely held company.

To the extent the term sheet constitutes an "issue" or "grant" of stock rights before January 1, 2005, all stock rights would appear to be entitled to "grandfathered" valuation rules under Notice 2006-4 which states in relevant part:

"Until further guidance is issued, with respect to a stock right issued before January 1, 2005, for purposes of determining whether the stock option results in a deferral of compensation pursuant to Notice 2005-1, Q&A-4(d)(ii), or the stock appreciation rights results in a deferral of compensation pursuant to 1.409A-1(b)(5)(i)(B) of the proposed regulation, prinviples similar to those set forth in Sec. 1.422-2(e)(2) will be applied. Accordingly where there was a good faith attempt to set the exercise price of a stock right granted before January 1, 2005, at a price not less than the fair market value of the stock subject to the stock right at the time the stock right was granted, that such exercise price will be treated as being not less than the fair market value of the stock at the time of grant for purposes of determining whether the stock right is excluded from the requirements applicable to deferred compensation under section 409A."

As grandfathering of valuation method = all stock rights, whenever "vested" are deemed to be non-discounted and hence not subject to 409A, is the whole arrangement exempt from 409A and thus capable of being revised and restated at any time in any way the parties see fit?

Last year I filed a 5500 for a plan. In 2009 , the owner was the only Participant. Assets are only about $40,000. So I am not required to file this year, I think.

If I don't file, will the employer get a letter asking for the 5500?

Will anything else bad happen?

Am I wrong about not needing to file a 5500, or 5500EZ?

My specific situation is with respect to a Keogh plan but I understand these issues are the same as for a traditional IRA.

Situation:

I am over 60.

Last year I had high income from my consulting business.

I deferred filing my 2009 return with a 6-month extension.

I can deposit to the Keogh account, deferring 2009 taxes on the deposited amount, any time before I file the 2009 return.

This year to date I have had no income.

The question:

Can I

1) withdraw an amount from the Keogh plan,

2) pay (low) 2010 taxes on the withdrawn amount,

3) then redeposit some or all of it in the same Keogh plan, and

4) thereby avoid paying the (high) 2009 taxes on the deposited amount?

I understand that I could use the rollover provisions of the law to avoid paying tax on the withdrawn amount if I redeposit cash, but must I do so?