FYI. I sent the following to my Congressman.

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I am an Enrolled Actuary who does not practice in the defined contribution arena. Nonetheless, I urge you to oppose Congressman Lloyd Doggett’s (D-TX) proposal that would eliminate retirement benefits for many workers.

Under present law, individual account retirement plans are permitted to provide older workers with higher benefits to facilitate their catching up on their retirement savings. Such plans are generally required to provide all workers with a minimum contribution of five percent of pay.

Certainly, the concern is that owner-employees tend to be older and often when they retire, the business ends. Nonetheless, a contribution of five percent of pay is a significant benefit even if accrued over a period shorter than the employee's remaining working career. Five percent is certainly more significant than 0% which is where the employee will be at if law destroys the incentive for the employer to sponsor such a plan.

Please contact Acting Chairman Sander M. Levin (D-MI) or Ranking Member Dave Camp (R-MI) and ask them to oppose the Doggett proposal. Simply put, this proposal is a retirement plan killer that would result in millions of Americans losing their valuable retirement benefits

The final regs say that the Rate of Return calc (for credit balance interest accumulations) must take into account the timing of contributions and distributions.

How are others doing this with regard to contributions, by actual time weighting of all contributions, or by a shortcut of mid year or beginning of year deposit assumptions?

Said another way, is there a generally accepted approach to the weighting of contributions for ROR purposes under PPA?

MEWA plan subject to state law in MD. Can they invest in mutual funds and more specifically ETFs as long as under 5%?

Thanks!

I had what I thought was a simple eligibility question. My boss and I disagree on the answer. I have looked the answer up in various locations and have different interpretations. I would appreciate any thoughts and references.

Corbel Prototype Calendar year plan. Switches to Calendar year for svc, 1 year svc. 1/1 7/1 entry dates.

Hired 8/15/08

Terminated 4/15/09

rehired 4/21/2010

1st computation Period 8/15/08-8/15/09 over 1000 hours, but did not complete 12 months of service.

2009 worked less than 500 hours

Was gone over 12 months.

I have read the document and I am looking at sections that say "rehired Eligible Employee who satisfied eligibility" He satisfied the 1000 hour requirement, but not the 12 months or doesn't that matter.

The other section said Rehired Employee who had not satisfied eligibility.

Would appreciate opinions.

Eligibility is getting more complicated these days with lay offs and rehires.

Thanks for your help

Pat

DB plan on a volume submitter, terminating effective June 1, 2010. The Rev. Proc. (2010-6) indicates that restatement is not necessary in every circumstance, but that plans must be amended to comply with all applicable laws up to date of termination. Volume Submitter sponsor has received letter and can go ahead with restatements by April 30, 2012.

Prior to May 1 it seemed that restatement would not be necessary and we could simply amend for interim law changes. However now that May 1 has passed, are we now required to restate?

OK...so I have a plan that typically fails 415 due to a very large profit sharing contribution. In most cases, all of the employees pretax ($16,500) amount needs to be refunded to "correct" the failure. Is this still permited? What about EPCRS? How does that now come into play? I believe this is now considered an "operational" defect, but it does not seem to change the correction method. The plan does not intend to change their practices and will still have numerous 415 failures every year.

Any thoughts, guidance would be greatly appreciated.

Hi,

Background:

Our company has a cafeteria plan- the plan covers employees (=while employed) and makes no mention of retiree benefits. PPO Employee health insurance through a commercial insurance carrier is one of the benefits offered through the Caf Plan (which also includes, FSA, STD, Life, etc).

Our board is considering offering medical coverage to retired employees who have held the office of President of the Company (only; no other retired employees); no length of service in that capacity is specified (if that matters).

It's not decided whether the Company will seek any premium co-pay (contribution) from the retired President(s).

My thinking is that it is fine to offer this (albeit expensive benefit), which would be offered outside the caf plan, from the same provider as covers our employees. The policy would be (as specified by our current carrier) a Medicare supplement/secondary payer policy.

I'd like to contain this by offering only to the current retiring President, but confining the benefit to a particular individual seems discriminatory.

My concerns are: whether offering the benefit is legally discriminatory, that the Company is allowed the full tax deduction for the premium and that there is no 1099 income to the retired President(s).

Thank you in advance for your input.

I know that a trust can be named as a beneficiary designation. I also know that there are some requriements to name a trust. one of which is that the required documentation has been provided to the plan administrator.

1) I beleive that a trust ID may be one of the pieces of "required documentation". Is this correct? Is this true for all trusts?

2) Can anyone tell me what the entire list of "required documentation" is?

3) Is there a good reference I can read more about this subject?

4) Are there any citations and can be provided?

Thanks in advance.

Has anyone successfully transmitted a Form 5500 to DOL using Relius Government Forms but without using Web Client? I get an error message on the DOL site that processing is stopped because the form has not been signed by the plan administrator or plan sponsor. We were under the impresion that we did not need Web Client to use the Relius Government Forms to transmit our client's 5500s to DOL.

If a partner in a plan receives a K1 which represents a return on an investment and not compensation for services, should he be included in the ADP test? Does it mater on how the partner reported it on the K1 and 1040? If so, when would such partner become an Employee for testing purposes

Just curious as to what other TPA firms out there do as far as following-up and maintaing executed (signed) documents both initial plan documents and amendments/restatements.

We have a hard time getting signed copies back on a lot of clients and spend a lot of time following up with them, but I'm wondering if this is needed. Doesn't the plan sponsor have the legal reponsibility to maintain (store) the executed documents.

I'd appreciate hearing what other TPAs do on this and whether you state the responsiblity in your service agreements or in some other written form. Thanks in advance.

Client wants to terminate an underfunded non-electing church DB plan. I was going to recommend that the client submit a 5310 FDL application, since the most recent FDL is from the 1980's. But will the IRS refuse to issue a favorable letter because of the underfunding? The plan is exempt from Title IV but I'm wondering if there's anything in the pre-ERISA qualification rules that the IRS might hang its hat on to require full funding as a condition for a favorable letter.

A plan has 100% vesting right now, all HCEs are under this schedule and all NHCEs. To change vesting to a 3 year cliff, you could do this for new hires as of July 1. There is no cut back in vesting. However I believe you to test the plan under BRF testing. As long as the prior better schedule covers at least 70% of the NHCEs then you are ok correct? IF not then you can run the nondiscrim class. test and use the safe harbor %.

An employer who is negotiating a new CBA doesn't want to get tagged for withdrawal liability, so it is trying to negotiate a situation in which it has to pay in as little as possible to the pension fund under a new CBA by restricting eligibility. This employer would obviously like to avoid a finding of a partial withdrawal under a 70% decline. Is there any way for an employer to ensure that it isn't going to run into this problem negotiating a new contribution obligation under these circumstances? Is it going to have to hire an actuary in order to determine whether a bargaining proposal triggers this liability?

Prohibited transaction occurred when loan made to disqualified person. Disqualified person does not have sufficient funds to repay the outstanding loan balance. May disqualified person take an in-service distribution for which the person is otherwise eligible, and then use the funds from that in-service distribution to repay the loan?

Grew up in Michigan, listening to the Detroit Tiger ballgames with my dad.

I don't think my dad ever missed a game.

ah the memories

as an 'ignorant' little kid, wondering how the heck Ernie knew, when a fan caught a foul ball, that the person was from some obscure little town.

'complaining' because the color man in the booth was leaving peanut shells all over the scorecard

a strikeout was often "He stood there like the house by the side of the road and watched that one go by"

when the Tigers were behind, it was "Here comes Vince Desmond, the old run maker"

and his "back, back, back, its looooooonnnngggg gone" for a homer.

an excellent broadcaster, but more importantly, a good honest man!

Confusion: Can you have a 412(e) Plan with 100% life insurance? I thought the 412(e) plans had to follow the 74-307 rules and limit life insurance to 50%. Also what about a group life or annuity contract?

I didn't think you could have either (100% insurance, and a group contract). If you can have a group contract - how do you pay particiapnts out when terminated and adjust the contract?

I always thought 412(e) Plan was 50% insurance (or less) and annuities, or 100% annuities. I also thought they had to be individual contracts also.

Thanks

We have a former client who didnt send in the 2006 5500. They want to file it now. Do they have to do it electronically?

They got a letter from the IRS about it and they can not file it thru the DFVC program because they were already notified by the IRS.

Just want to know if they file electronically for a previous year 5500 when it is late.

Thanks

All,

Although the concept seems obvious, does anyone know of a good cite (law/regulations/other IRS/Treasury guidance) for the following proposition:

A failure to operate in compliance with the terms of a 401(a) qualified plan will cause the plan to fail to be qualified, even if the failure is with respect to a provision other than a tax qualification provision, e.g., loans, hardships, payment of benefits in installments when payment should have been a lump sum.

A cite to the Code, Treasury regulations, or another piece of IRS/Treasury guidance would be very helpful.

Thank you!

I cannot find any guidance about what constititutes "retirement" under 401(a)(9). I doubt that some nominal onging connection with the employer would be sufficient to avoid starting required distributions, but where to draw the line?

While on the subject, once required distributions start, could they be suspended if the retired participant resumes employment at some acceptable level?