My husband is enrolled in an FSA at work, and has pre-tax dollars being withheld from his paycheck each pay period. The employer forwards the funds to a local Insurance agent to hold, and then we have to submit receipts to the Insurance Agent for reimbursement. In June of 2009, we submitted one receipt that was more than enough to account for his plan election for the entire year, but the agent continued to send us monthly checks through January of 2010, only after he had received the funds from my husband's employer.

The forms we were given for enrollment are clearly for a section 125 FSA plan, and carry the name "FlexSystems" from TASC, but that company has no record of the employer or our flex account.

I have asked both the employer and the insurance agent to clarify this, but the employer depends on the answers given by the agent, and the agent won't return my calls or emails.

Am I correct in thinking that since these were pre-tax dollars, that this FSA is subject to section 125 of the IRS code, and the full amount of the plan election should be available on day one of the plan year?

Employer's qualified plan permits Roth accounts. Participant, who is under age 59½ and has an AGI well in excess of $100,000, has made substantial after-tax contribution to the plan in prior years. Is it feasible to convert these prior contributions and accumulated investment income to Roth within the plan? If so, is it necessary to file an 8606 form and/or what records should be maintained with respect to the transaction?

Situation is in order for me as a TPA to be able to perform certain tasks on one of the mutual fund websites for my clients which are clearly not fiduciary, the authorization I need to perform those tasks, will also give me the ability to allow a distribution. So, if a participant submitts a request online for a distribution and it needs authorization, my electronic sign on into the plan could be used to authorize the distribution if I so chose to do that. Although I would never do this, we always have Trustees sign on distributions, the option would be there. So, although we would never exercise this option, will that make us a fidicuary, and if so, what are my options. Can we get a letter from the Trustees stating that we are only allowed to perform certain tasks with the authorization power we need?

Why do termianting plans have to restate for EGTRRA? If they have a vaild GUST doc and all of the pretinent amendments, I don't see why they would have to do a full restatement--I would think they are already operating under the proper rules & regs.

Any idea why the IRS wants these restated? Is it a money thing; do they want the Determination Letter fees?

The Instructions for Line 6 of Form 5307 tell an applicant that is a member of a group under common control to "[a]ttach a statement showing in detail: 1. All members of the group, 2. The relationship of each member to the plan sponsor, 3. The type(s) of plan(s) maintained by each employer, and 4. Plans common to all members."

If the application does not seek any assurance about whether the plan would meet any coverage or non-discrimination rule, is it really necessary to furnish this information? What (if anything) does the IRS do with the information?

A volume submitter plan generates a plan document signature page where a representative of the employer/plan sponsor is listed to sign the plan (eg. an officer of the employer) and the trustee is listed to sign the plan.

If the plan has two trustees (say a husband and wife) do both trustees have to sign plan or is one sufficient?

Thanks

Ignoring many other issues that the following scenario creates, would the following be excluded from an employee's income under IRC Section 106?

Employer X has new employees. Employer X does not maintain a group health plan. However, the new employees continue to be eligible to participate in their former employer's self-insured group health plan (not via COBRA; they simply continue to be eligible, even as non-employees). Employer X is going to pay a portion of the new employees' premiums directly to the former employer. Is the premium amount paid by Employer X to the former employer's group health plan on behalf of Employer X's new employees excluded from said employees' income under IRC Section 106?

I beleive the primary issue is what "employer provided" means under Section 106. Does it just mean "employer paid" or does the employer have to maintain the plan in some way? Of course, a similar issue is raised in the context of employers that pay premiums on individual policies for its employees, which I beleive has been held to be exempt under Section 106.

Any thoughts would be greatly appreciated.

Ptp defers 16,500 of Roth into a PYE 12/31/2009 qualified plan. He terminates his position and defers 16,500 of Roth into the qPYE 12/31/2009 ualified plan of his second unrelated employer. The year ends and he discovers that he has violated 402(g), but does not inform his current employer of the violation. Based on this scenario, he would have to "claim" the 16,500 (not CUC eligible) on his 2009 taxes. He would then be subject to taxation when the funds were withdrawn. The issue is since it is Roth, what are the tax implecations. He would not be paying taxes on the 16,500 for 2009 as he has already paid taxes on it (Roth). No earnings would be on the 2009 tax return as he never took a distribution. When he takes the money in the future (assuming that he has a qualified Roth distribution), he would not have to pay taxes on any of it.

Does this sound logical and correct? If so, why would anyone in this situation (or a similar situation) where 402(g) has been violated due purely to Roth deferrals ever inform either plan of the over contribution prior to 4/15? What is the implication for his personal taxes? My untrained tax eye does not see any.

Any comments are greatly appreciated.

So let me explain a little bit. I am turning 19 and I want to start saving now. I opened a Roth IRA with my bank and will invest $200 a month until I retire. I was not aware that when I started a Roth IRA I had to do my own investing

Im not sure what to invest in stocks MF or what

Any ideas?

P.S I would like if this were a setup and check here and there a couple times a year.

Our client wants us to Fed-Ex Form 5307 to the IRS. Can anyone confirm that the address below is the correct address?

Internal Revenue Service

201 West Rivercenter Blvd.

Attn: Extracting Stop 312

Covington, KY 41011

Wasn't sure where to post this question. Does anyone know of any good articles on the pros and cons and adopting Employee Stock Purchase Plans? Not finding all that much on the web.

This is purely hypothetical but I want to make sure I have this right if it ever comes up in the future.

Company A sponsors a DB plan that is underfunded. They are looking to sell their company. Company B offers to buy Company A through asset purchase. Upon review of Company A's plans, Company B realizes that Company A's defined benefit plan is significantly underfunded. Company B goes through with the asset purchase with language in the agreement making it clear that they are not assuming any plans.

Company A proceeds to begin termination of the DB plan and files with PBGC upon the asset sale to Company B. Company A does not have enough money to meet the undefunded obligation.

What risk if any does Company B have?

Thank you!

Is there a problem with a plan setting a minimum deferral % of lets say 3%?

I recall an issue with maybe effective opportunity for the NHCE's, but maybe there is a range that is considered reasonable?

Have others encountered this issue?

Situation is in order for me as a TPA to be able to perform certain tasks on one of the mutual fund websites for my clients which are clearly not fiduciary, the authorization I need to perform those tasks, will also give me the ability to allow a distribution. So, if a participant submitts a request online for a distribution and it needs authorization, my electronic sign on into the plan could be used to authorize the distribution if I so chose to do that. Although I would never do this, we always have Trustees sign on distributions, the option would be there. So, although we would never exercise this option, will that make us a fidicuary, and if so, what are my options. Can we get a letter from the Trustees stating that we are only allowed to perform certain tasks with the authorization power we need?

Plan document states that it allows rollovers from 408(a) and 408(b). No reference to 408(k) - which is the code section for SEPs. Can the plan accept a rollover from a SEP-IRA?

Following a number of TPA/provider changes, the employer discovers that the amount of old after-tax basis--for the few participants with after-tax contributions--is not known, and may not now be determinable. What alternative is there to treating everything as pre-tax upon distribution?

Has anyone seen anything from the IRS regarding when they will issue EGTRAA letters to volume submitter plans? I know they initially said they were going to issue them beginning March 31st, but I haven't seen anything since then. The list of M&P and VS plans on the IRS website has not been changed to show any letters being issued. Any help will is appreciated!

Client adopted a prototype profit sharing plan through financial advisor. Client recently terminated it and with help of financial advisor sent in a Form 5310. Appears that IRS is now asking for a plan doc from 1991. Client moved offices a number of times over the years and could not locate original document. Financial advisor appears to not have a copy either as she says financial advisor company was not required to keep a copy so she did not do so. My initial thoughts are to have client turn over every stone to see if he can locate a doc from 1991 incl adoption agreement. I assume that there will be a closing agreement necessary since it is in the midst of a Form 5310 review? Any thoughts on avenues to locate a copy of the original doc? Thanks for any suggestions....

Our plan document calls for a PRSA benefit based on a 50% JS form of benefit and a survivor benefit is paid using the 50% JS form if the participant dies prior to the annuity starting date. However, it was pointed out this may not be correct per IRS Reg. 1.401(a)-2, Q&A 18, because of the last sentence in that Q&A whcih states:

"Q-18: What is a qualified preretirement survivor annuity (QPSA) in a defined benefit plan?

A-18: A QPSA is an immediate annuity for the life of the surviving spouse of a participant. Each payment under a QPSA under a defined benefit plan is not to be less than the payment that would have been made to the survivor under the QJSA payable under the plan if (a) in the case of a participant who dies after attaining the earliest retirement age under the plan, the participant had retired with a QJSA on the day before the participant's death, and (b) in the case of a participant who dies on or before the participant's earliest retirement age under the plan, the participant had separated from service at the earlier of the actual time of separation or death, survived until the earliest retirement age, retired at that time with a QJSA, and died on the day thereafter. If the participant elects before the annuity starting date a form of joint and survivor annuity that satisfies the requirements for a QJSA and dies before the annuity starting date, the elected form is treated as the QJSA and the QPSA must be based on such form.

The Plan appears to be inconsistent with the Q&A since the plan will pay based on a 50% JS but the Q&A seems to requires the payment be based on the election the Particicpant may have made 180 days prior to the annuity starting date.

Has anyone dealt with this question?

We have a situation where the facts are that there is a single person money purchase plan established back in the early 1970's. Participant properly contributed to the plan during that time until his death in 2008. His wife is the sole beneficiary. Upon review of the plan, it was discovered that it was never properly amended since its initial establishment. The plan also failed to file Forms 5500-EZ once it reached the asset requirement. The participant also missed one RMD in the year prior to his death. What do you recommend to shut this plan down? Prepare all the amendments since the 70's, file under the late amender, make the proper RMD distribution, then file a request to terminate? The only thing that has been done is the late Forms 5500 were filed. The spouse wants to receive the money as soon as possible and we are trying to move forward.

Any suggestions would be greatly appreciated.