A grandfathered plan can deny an adult dependent coverage if he is eligible to enroll in an "eligible employer-sponsored health plan."

Does an "eligible employer-sponsored health plan" include a plan of which the employer is not the adult dependent's employer? For instance, if an adult dependent's spouse has health coverage due to her employment and the adult depedent is eligible to participate in his spouse's plan, can the parent's health plan deny the adult dependent coverage under the parent's plan because he is eligible to participate in his spouse's plan?

Plan has many participants on workman's comp which is paid by an outside party. Thus, they don't pay through their payroll system, and do not deduct loan payments. Should participants on workman's compensation be required to make loan payments assuming this is not considered a bonafide leave of absence since they are receiving pay? If they are receiving compensation from a third party via "workman's comp", is this still considered being paid, and thus they are required to continue to make payments just as an active participant (in other words, they LOA regs would not apply)?

I am looking for guidance as to if a participant out on LTD receiving workman's compensation should make payments or not in order to determine how to proceed with many delinquent loans that are well past the cure period.

(1) The Plan defines the Normal Retirement Benefit as 1% x FASNRD x Min (svcnrd, 25).

(2) The Plan defines the Accrued Benefit as (1) x svc / svcnrd where FASNRD is determined at time of determining accrued benefit rather than at NRD and svcnrd is a projected amount.

(3) The Plan provides in the early retirement section that for an employee who retires from active service after age 55 and 10 years of service calculate the early retirement benefit as the amount computed under (1) with svcnrd determined as svc and FASNRD is determined at the time for determining the accrued benefit. I.e., eliminate the proration.

So, a participant is age 57 and has completed 12 years of service, then I would consider his accrued benefit to be the greater of (1) and (2), which means (2).

But what about someone who is age 45? We would determine his accrued benefit in accordance with (1) but then when valuing the funding target, recalculate the benefit when we loop to age 55? Obviously, if the participant left today, formula (1) would apply. This would mean if there were no pre-retirement decrements, we would value his accrued benefit using only formula (2)?

I have been assured over the years (though not necessarily am I convinced) that the we are talking about an early retirement subsidy rather than backloading.

I am trying to confirm the computation of "net pension income " for partners ( K-1).

Before any pension cost deductions you begin with their K-1.

Then you subtract the partner's share of any employee contributions ( 3% safe harbor and any profit sharing allocation )

The you subtract the partners own 3% safe harbor contribution plus his share of the profit sharing allocation.

Finally you subtract his self employment tax deduction.

THis gives you his "net pension income " to calculate the 3% safe harbor as well as his share of the profit sharing allocation.

You do not subtract his 401K plan salary deferrals in this calculation.

Is this correct ?

THank you.

Has anyone heard about an investment product known as a premium life insurance arrangement. Under the arrangement, the multiemployer plan would purchase so called index universal life insurance policies for its participants and the participants would be the owners of policies and would receive 20% of proceeds and would agree to assign 80% of proceeds to plan. Any thoughts on the validity of such an arrangement?

If an employer is exepmpt from PBGC coverage for their DBP because they are, say, a service employer with fewer than 25 EEs....and the business goes bankrupt, who takes over the operation of the DBP trust and services the plan?

If the plan is underfunded, who speaks for the plan in BK court in persuing any company assets to bring the plan to full funding to pay accrued benefits?

Thanks

BruceM

Two or more high net worth clients (who are unrelated) with large IRAs form LLC capitalized 99% non-voting and 1% voting. The purpose of the LLC is to provide enhanced investment opportunity and long-term growth. IRAs contribute assets to LLC and take back pro rata ownership of LLC units. No owner has voting control (alternatively an unrelated independent third party owns voting interest – either economic or non-economic). LLC would have typical restrictions on transferability, distributions, liquidation, etc. (except each member would have the right/obligation to distribute NV units from his/her IRA to meet RMDs and comply with applicable law and IRS rules). Clients do Roth conversion in 2010 or 2011. Qualified appraiser values the LLC units, which should be eligible for marketability and minority interest discounts (which also depend on type of assets/investments in LLC, as determined by independent voting member/manager).

Would there be a UBTI issue? If so, is there a work around?

Obamacare requires coverage be provided by employers with some exceptions.

There are 4 configurations of coverage, specifying the amount of annual deductible that the employee will face.

Has there been any indication from the government whether the employer can purchase a higher deductible policy and couple it with a buy-down (MERP) so that the net coverage to the employee is the same as if it were just the lower deductible policy?

Can a Third Party Administrator who is neither an enrolled agent or holds a Power of Attorney, obtain a signed authorization from the client along with the signed 5500-SF and submit the form by obtaining author credentials? Would it help to obtain a Form 8821 also signed by the client? The I.R.S. does not recognize my rep# as an unenrolled preparer.

Your advice would be most helpful.

Thank you.

DPSRICH

A COBRA notice was sent to the ex-spouse of an employee and the amount was incorrectly calculated. The correct premium is only a small amount more than what was quoted (approximately $5.00). The former spouse has already made 2 payments. Can an amended notice be sent with the correct premium and a letter requesting payment of the balance for the two months already paid?

A large plan is selling one of its stores, the number of affected participants is 20, the total number of participants is 230. I know the rule of thumb is 20%, however, in this case, since the ER is selling the store, what are the chances of this being a partial termination? Since the ER is the one initiating, I am tempted to to call it a partial term to be on the safe side, any thoughts?

Thanks!

Jason

Has anyone heard anything about the release of a new 5558?

We are waiting to hear before filing extensions for 12/31/09 Plans.

Thanks.

DPSRICH

Please ignore this message-I would like to delete it. If I can do so, please let me know

NQS

>2 years work experience. working in a samll consulting firm. Any thoughts?

I am working for a small retirement benefit consulting firm. It seems that no one is interested in taking SOA exams. However, I heard that people need to have a SOA designation in order to become a pension actuary in big retirement consulting firms. Any comments?

A one participant plan owner takes a 10k loan in 2008.

We find out now that he defaulted on loan at outset.

So it is a deemed distribution.

It would seem that the person should amend their 2008 tax return and report income.

Should a 1099R be prepared for 2008 or 2010 to report distribution?

thanks

Can a 403(b) plan be established for a non-profit corporation under 501©(3), but only allow employer contributions (nonelectives) - thus allowing no salary deferrals? The employer has no other plan (no 457 etc). Is this a universal availability problem?

The reason for the question is because 415 compensation continues 5 years after separation and the director (a NHCE) would like to set up a plan to provide nonelective ER contributions (which would continue after separation), but they are not interested in allowing salary deferrals.

Anyone encounter this error after Publishing Forms? If so, how did you/Relius correct it? There were no validation error on RGF nor on WebClient.

Thanks.

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I'm looking at a prototype profit sharing plan that states that: Forfeitures occur as of the earlier of (1) the last day of the PY in which the former participant incures 5 consecutive 1 year breaks in service, or (2) the distribution of the entire Vested portion of the Participant's account AND the forfeiture will be disposed of in the PY in which the forfeiture occurs. Pretty standard. Forfeitures may be used first to pay admin. expenses and the remainder will be "allocated to all Participants eligible to share in the allocation of profit sharing contributions or Forfeitures in the same proportion that each participant's compensation for the PY bears to the compensation of all participants for such year." This plan has variable annuities for investments and can't have a forfeiture account set up using the same investments. The investment co. wants an allocation of the nonvested money of a distribution at the time of the distribution. It seems to me that the allocation can't be made until the end of the year to find out the % of compensation, but that it also has to be done before the year end (since the forfeiture is to be disposed of in the PY in which the forfeiture occurs). It doesn't make sense for that to be in the document if it's not a feasible option. Can we use the 2009 compensation to determine the % of comp for the participants' reallocation or do we have to wait until the final payroll in 2010 and then quick get the allocation done as of 12/31/10?

Hello,

I was wondering if anyone had heard of a union defined contribution plan--money purchase plan actually--that has a provision prohibiting participants from receiving benefits under the plan for at least one year after they discontinue work in a particular industry?

Basically, my client was a union worker for many years, but now he works for himself and he wants to access his money purchase pension plan. The plan says he can't b/c he is performing work similar to that covered by the union. I've heard of this with defined benefit plans, but never defined contribution plans.

Anyone have any experience? Is this OK?

As always, thanks!