The employer withheld too much from an employee's pay and deposited it into the trust. Do we refund from the trust or do we forfeit and tell the employer to make this up in the employee's pay?

Can anyone recommend a firm that can review and monitor plan investment performance on a periodic basis, charges reasonable fees and doesn't want to be plan co-fiduciary or adviser to the plan?

So far I've heard that the new form 8955-SSA will be available in Spring or Summer 2010. I've also heard that there has been talk of making it an optional filing for the 2009 plan year since they aren't ready for it to be filed electronically yet. If it isn't going to be optional, i'd like to start thinking about how we are going to handle it. Once we get past 3/15, people will want to start preparing 5500's relatively soon. But I don't want to have to go back and do an SSA for clients that we've already prepared and filed the 5500 for. It makes more sense to do the SSA at the same time. Has anyone heard anything more definitive on this?

I heard a rumor that for a 2009 calendar year plan (not a terminated plan or a plan that is a short plan year), we can file the 2009 Form 5500-EZ with the IRS on the old 2008 form until the 2009 forms are released. Has anyone else heard anything about this?

We have a member on a non-embedded HSA plan and has family coverage. The spouse has met the entire $4000 deductible. The spouse is coming off the plan to go onto his employers plan. The employee will have a change in status and will move to a single plan with a $2000 deductible. Would this employee need to still satisfy her $2000 deductible since it was the spouse that met the entire family deductible and he will no longer be on the policy?

If two parachute payments will be made in the same year, one in January and another in June, can an employer delay withholding the excess parachute tax (20%) until the June payment or must it withhold the 20% for both payments. IRC section 4999 indicates that parachute taxes are subject to withholding just like ordinary income under IRC section 3402. I was wondering if there was any type of exception that would allow a company to avoid withholding the parachute tax on the first payment and withhold instead the entire 20% when the june payment comes due. i.e. if payment of $1,000 were made on January 31, and a second payment of $1,000 were made on June 31, and there is a $400 parachute tax, can you withhold the entire $400 from the second payment, rather than deducting $200 from the January payment and $200 from the June payment? Thanks.

Yikes! I was just told by a client's attorney that the Plan Sponsor, formerly a 9/30 FYE changed to calendar year as of 12/31/09, thus creating a Short Plan Year for 10/1/09-12/31/09... Another entity that also adopted this plan still has a 9/30 FYE. Is this a problem? Further, this Plan is Safe-Harbor but since we, as the TPA, were not told of this change to the year-end until today, no Safe Harbor Notice for the short PY Ending 12/31/09 or the new PY 1/1/10-12/31/10 was drafted. What do we do now? And finally, I know a pro-rated PS contribution can be made for the SPY, but what about deferrals?

Company A has union and nonunion employees and is owned by Mr. A. Company B is established by Mr. A's wife (Mrs.A) however, Mr. A runs Company B (so spousal exception does not apply, and its one controlled group). Company B was established solely to get non-union work (I'm not 100% sure of the business purpose, but it was something like this). So some of the union employees are also doing non-union work under Company B. Enough of them are doing this so that I am concerned that I will not be able to pass coverage treating those employees as not benefitting following the end of my 410b6c grace period (fortunately, not until 1/1/2011).

Is there any issue with treating people both as union and nonunion on the same test?

I was informed that a one participant plan sponsor has a private investment in a REIT.

The owner/participant terminated plan and wants to receive distribution in-kind so as not to sell investment at a low price.

He is being todl that since it is a private investment it must be liquidated.

Anyone know that to be accurate statement?

Thanks.

We have a client who failed the ADP test. Refunds are due, however one of the HCEs has passed away. Would we calculate the refund due and distribute to the participants beneficiary(s)?

I have been looking everywhere and can not find anything relating to this.

Thanks for any help!

I am new to benefits administration, so I apologize in advance for my ignorance. We are a small company with only 80 poeple and I am fairly certain that we have some shortcomings when it comes to "plan documents" and employee communication. I am in the process of cleaning this area and have a few questions.

- Do I need an SPD for a POP and can I do my own year end testing? IF yes on the testing, what do I need to do?

As I research the requirements regarding Sect. 125 and Preimum Only Plans, I've been getting different answers. I've had some say that I need a plan document for a POP. I've had others tell me no plan doc is needed because it is for tax savings only. Which is it? Our company has also has an FSA (both medical and dependent care), so I believe my year end testing might be different than if I simply had POP. Can someome please help me deteremine what I need to have in order to be in compliance?

Thanks.

I am fairly certain of the answer to my question, but now a days I can never be too sure of anything.

I have a one participant DB plan with participant becoming 70.5 by end of 2009. The participant thought they would be able to use part of their RMD for the 2009 required contribution due. We did not give the participant this idea.

I am fairly certain that since the RMD cannot be rolled over into another plan, that it would not be able to be used for the required contr. due.

However, the participant's practice is no longer operating at an income level. It's basically a dormant company as of now.

Long story short, the RMD should not be deductible but could it still fulfill the req. contribution for the plan? Even if the contribution is technically not coming from the company?

Your response is greatly appreciated.

I have a short plan year (7/1/2009 to 12/31/2009) beginning of year valuation. I could only find in the regulations that the amortization payment is prorated for the short plan year.

Did I miss it or is the Target Normal Cost for the full year (not prorated)?

Does a TPA of section 125 plans have an obligation to keep enrollment forms/change in status forms or can they work completely from an electronic feed from the clients payroll company with client stating they will keep forms on file? Up until now we have collected all forms and held them on premisis and then later in secure storage.

sorry

First time poster!

I'm running a PS calculation using Grouping, A-HCE, B-NHCE. Plan sponsor complaining that group B's minimum % is too high. Even though the doc doesn't state this-can I just give all the eligible participants the same % & call it a day?

I'm confused about the time periods for qualifying events. For example, let's say I had child born a week ago. Would I be able to add the child to my health insurance or must I wait until mid year for the change? I believe you can only change your election at the middle of the year, but if adding a dependent would change your election, is that allowed?

If an employee has a HIPAA special enrollment event (marriage, birth, adoption) is the company required to allow that employee the option of switching between different levels of coverage or is the company simply required to allow that employee the option of adding/deleting dependents from his current level of coverage?

I have done quite a bit of calculating regarding non discrimination testing, but am limited in the amount of practical plan admin and communications for 401k plan investing.

With that said, below is a situation that I need to research further, but I submit a post to get some feedback as well:

A small company - (owner and say 10 eligible employees) implements a 401k profit sharing plan where such plan provides:

- elective 401k contributions

- 3% 401k safe harbor contributions

- discretionary profit sharing contributions w/ 3 year cliff vesting

the client wants to have one sub account for each participant that consists of the 401k deferrals and 3% safe harbor contribution - he wants this account self directed where each employee manages their own Schwab account and can invest in whatever they want

To my knowledge this approach seems allowed, though not likely a 404c protected situation. is that correct? Or other suggestions?

The client than wants a second account for each employee that consists of their profit sharing contributions - he has a few methods he wants to consider for this account:

1) he manages these assets until the employee is vested and then allows for self direction at that time

Is this approach allowed or other suggestions?

2) or he would have the account be self directed but with a menu of say 6 investment options or so to keep it more safe and simple for the employee and when the employee is vested he could then transfer the profit sharing account into the 401k account so employee can fully manage all assets.

Is this allowed or other suggestions?

In conclusion this 401k profit sharing plan investing and self direction can seem a bit awkward or unclear to me.

Any suggestions/alternatives in general to handle/respond to these types of client questions/ideas?

Thanks.

Hi,

Plan is cross tested, HCE group & NHCE group, only one participant in each group this year, the NHCE is older by ten years. I am failing 401(a)4 testing. If I bump up the NHCE to the same allocation percentage as HCE do I still need to run 401a4 test or am I fine with just running & passing 410b? Just wondering....

Thanks