I know this is a backwards question, so please skip the correction, but

If a client wanted help figuring out how to reply to his auditor's written inquiry about why their FAS LTROR assumption is 7% (or 6% or 6.5%, etc.) in a 50/50 balanced portfolio, what might be some helpful approaches?

Are there any "model" responses that could be considered.

Assume their ISP does not define a goal for an asset return.

In the old days, I would think that a reply might be that equities are expected to return u%-v% and fixed income might earn w% to y%, so apportion those to the asset allocations and you get Z%, but in the post-2008 world this seems a bit shaky.

Anybody dealt with this? Any auditor "traps" to be weary of?

I am preparing a 1/1/2010 valuation. You accrue a benefit if you work at least 1000 hours in a plan year. If we freeze the benefit accruals as of April 30, 2010 (adopting the amendment some time this month) there would be no benefit accrual in 2010. So when running the 1/1/2010 valuation I would think that there would be no Target Normal Cost for 2010. Does this seem right or would the Target Normal Cost be prorated by 4/12?

Participant takes an ISD and within 60 days they realize they didn't need it. Can they roll the mone back into the Plan? Wouldn't it just be a regular rollover? I get that they need to make up the 20% withholding.

We have a plan that failed the ACP test. However, the ER has not deposited the match yet. Therefore, I may not be able to do the refund from the HCEs account (it's the first year he's eligible for the match) by March 15.

Is the ER on the hook for the 10% excise tax?

We have a govenmental entity, a court system, that wants to spin off from their current 457b with the city, into a new 457b plan sponsored just by the court system. First my question is, does a spin off sound like the right term, or is this a plan to plan transfer? Apparently with a plan to plan transfer, all prior history comes over, but with a spin off only the account balances. I know this is sketchy, but just wanted any input on how others would address this.

Thanks!

Is Field Assistance Bulletin 2009-1 still the most recent guidance on the annual funding notice. I have not seen or heard of any updates but wanted to run it past this board.

Thanks.

I've been informed of a situation and I'm trying to determine its legitimacy. I think (but I’m not certain that) I’ve narrowed it down to the following issue:

Issue: Can an individual continue to accrue benefits in a DB plan if that individual has separated from service?

Background: Employer has instituted a “special leave” program whereby employees volunteer to be placed on “special leave” status and no longer perform any work for the employer. Individuals participating in this program, however, continue to earn/accrue benefits under the DB plan until they reach NRA, up to 7 years (whichever is less). Don’t you have to be actively employed to earn these benefits? Employees are not granted “additional years of service” as is the case in some early retirement programs. Instead, they continue to earn/accrue benefits

These same individuals will be allowed to continue participating in the employer’s 401(k) until they reach NRA or 7 years (whichever is less). They also earn w-2 compensation throughout this same time period.

With respect to the 401(k)s, I think the answer is clear: I.R.S. Regulation 1.415©-2 generally provides that payments received after a severance from employment cannot constitute “compensation” from which an individual may electively defer into a 401(k) (subject to certain limited exceptions, e.g., received within 2 ½ mos, etc.).

Does anyone have any thoughts on this weird situation? Perhaps the issue is whether these individuals are truly separated from service if they continue to earn w-2 compensation?

Thanks!

I directly converted the entirety ($10,000 to keep the numbers simple) of a 403(b) fixed annuity to a Roth IRA and the financial services company withheld 20% ($2,000) because I did not indicate on the form to not withhold. Thus, $8,000 ended up in the Roth IRA.

I wanted to maximize the amount in the Roth (the full $10,000) and not use tax advantaged funds to pay the taxes. If the financial services company does not refund the withheld $2,000 amount, I am looking for an alternative way to get the withheld amount back into tax advantaged status.

I know when an IRA distribution is received and taxes withheld it is possible (within 60 days) to put the entire amount back into an IRA by using outside funds to pay back the amount withheld. Something similar is what I would like to do in this case but am not sure if it is allowable.

Could I pay back the amount withheld right into the conversion Roth IRA without any recharacterization or redesignation?

Is it permissible to redesignate this type of conversion (403b directly to Roth)? I.e., leave the $8,000 in the same account and just have the title changed from Roth IRA to Traditional IRA. If so, could I put the withheld amount back into the redesignated IRA?

Is it permissible to recharacterize this type of conversion (403b directly to Roth)? If so, should the transfer of $8,000 be into a Traditional IRA or back into the original 403(b) account source of the funds? Presumably interest on the $8,000 since the conversion should be added but I am not sure. Using outside funds, could I put the withheld amount back into the account receiving the $8,000 (plus interest)?

If the above is all wrong, can you think of any other way to get the $2,000 withheld back into a tax advantaged account in a way which will pass muster with the IRS?

Thank you very much for any suggestions, theories, etc.

(this was also posted in Roth IRA forum)

I directly converted the entirety ($10,000 to keep the numbers simple) of a 403(b) fixed annuity to a Roth IRA and the financial services company withheld 20% ($2,000) because I did not indicate on the form to not withhold. Thus, $8,000 ended up in the Roth IRA.

I wanted to maximize the amount in the Roth (the full $10,000) and not use tax advantaged funds to pay the taxes. If the financial services company does not refund the withheld $2,000 amount, I am looking for an alternative way to get the withheld amount back into tax advantaged status.

I know when an IRA distribution is received and taxes withheld it is possible (within 60 days) to put the entire amount back into an IRA by using outside funds to pay back the amount withheld. Something similar is what I would like to do in this case but am not sure if it is allowable.

Could I pay back the amount withheld right into the conversion Roth IRA without any recharacterization or redesignation?

Is it permissible to redesignate this type of conversion (403b directly to Roth)? I.e., leave the $8,000 in the same account and just have the title changed from Roth IRA to Traditional IRA. If so, could I put the withheld amount back into the redesignated IRA?

Is it permissible to recharacterize this type of conversion (403b directly to Roth)? If so, should the transfer of $8,000 be into a Traditional IRA or back into the original 403(b) account source of the funds? Presumably interest on the $8,000 since the conversion should be added but I am not sure. Using outside funds, could I put the withheld amount back into the account receiving the $8,000 (plus interest)?

If the above is all wrong, can you think of any other way to get the $2,000 withheld back into a tax advantaged account in a way which will pass muster with the IRS?

Thank you very much for any suggestions, theories, etc.

What is the consequence if a governmental housing authority lets say, adopts a volume submitter document that is clearly an ERISA corporate plan? It has ERISA provisions and IRC provisions that are not applicable to a governmental entity. Is this just superfluous language as the attorney drafter (with huge legal fees) claims, or could this subject the employer to unnecessary provisions, which could be enforceable in an IRS audit?

A DB plan was terminated in summer 2009.

Is it reasonable to apply for dl letter now?

Assets were distributed in 2009 and plan was a one participant plan not covered by PBGC.

Thanks.

I have a client who is a participant in an ERISA plan. A QDRO was issued in favor of her ex spouse as an alternate payee. The ex-xpouse owes child support arrears to my client. As I understand, a QDRO can not issue against the ex-spouse's, alternate payee's, share of the benefits in favor of the children for who he owes support. Is there any advice on ways of collecting or reducing the alternate payee's share of the benefits to satisfy the alternate payees obligation for support?

I have an Employer that has given a Partner a K-1 with both self employement income as item 14 A, and Non-farm optional income as item 14 C.

Are both to be considered as earned income in a Defined Benefit Plan?

Thanks for all your help.

Hi. Company A is currently leasing employees to Company B. Company B is anticipating hiring most or all of the leased employees. Can anyonetell me at what point Company A can share employee data (including HIPAA PHI) with Company B? Company B needs the PHI in order to negotiate a contract with a TPA for what will be its self-funded group health care plan. It needs to have the group health plan ready to go on the date the employees are hired.

I have mostly thought that once the check is issued and mailed, I'm done with the distribution. But we received a list of 15 checks that were not cashed. They were issued from 2003 to 2007 and range from $36 to $700.

I am trying to understand the responsibility of the Employer. (This is a great client who will pay my hourly fee without complaining. But I don't want to charge him for unnecessary work.)

What is the minimum required? Should I just go through the whole process I would for a terminated employee that has moved? Or can I just move these into an auto IRA?

Any thoughts would be appreciated.

Hi. Company A is currently leasing employees to Company B. Company B is anticipating hiring most or all of the leased employees. Can you tell me at what point Company A can share employee data (including HIPAA PHI) with Company B? Company B needs the PHI in order to negotiate a contract with a TPA for what will be its self-funded group health care plan. It needs to have the group health plan ready to go on the date the employees are hired.

Hello all,

Remember during late 2008 there was all the talk about deemed elections to reduce COB to raise AFTAP etc. Well, its been a while and now that we have some better ground to stand on I would like some clarification.

If 2008 AFTAP is < 80%, you may not use the 1/1/2009 COB/PFB to reduce the required contribution due for the 2009 plan year... TRUE OR FALSE?

If 2008 AFTAP is 79% and the 1/1/2009 COB/PFB are high enough so that if a portion was applied to your assets you would have what is called a mandatory burn or deemed election...this mandatory burn is applied at 1/1/2009 to increase your 1/1/2009 assets to raise the 2008 AFTAP as of 1/1/2009... TRUE OR FALSE?

Please stop me if I have a misconception or explain if false.

Thanks in advance.

The 401(k) PSP that we administer for this dentist was created on 10/1/2000. REcently one of his former employees got a letter from the SSA stating that he/she had a benefit. Apparently, the client had a plan in the past that began in 1983.

I can't help him, but I wanted to steer him in some kind of direction. Yes, he should be looking for his old plan's records but is there somewhere he can turn for help is he needs it? Will the DOL help him try to recover info on this old plan to verify if this person was actually paid out and not due a benefit of $600?

We are working on a plan in which a participant who left the company 20+ years ago never began receiving his monthly pension benefit. He was originally due a $500/month life annuity. He is now 75 and has missed 10 years of payments (and also RMDs).

Do we have to actuarially increase his benefit? Or can we calculate the amount of the missed payments (+ interest) and make a payment to him in that amount and begin the $500/month annuity?

Our software is old enough that it can't handle the year 2010, so time to make a change. Only problem is the current version of the same product wants $149.95 per user.

Can anyone suggest a decent expense statement software? Just your standard "employee takes a trip and turns in a summary to accounting" type of expense statement. "Would be nice to have" features include multi-currency and spliting of bills to multiple categories (like splitting out room service meals from the hotel bill).

I'm currently at square #1, so any comments and suggestions are welcome.

Alternatively, if anyone has a good Excel or Access template they'd be willing to share, I'm more than willing to look at those too.