Hello,

10 HCE - 2 of them are receiving zero

20 NHCE - all of them are receiving 5%

Can I divide into two component plans as following?

Plan 1: 2 (zero allocation) out of 10 HCE, and 19 NHCE

Plan 2: 8 of 10 HCE, and 1 NHCE with the EBAR that's higher than any HCE

Does each component Plan have to have at least one HCE and one NHCE?

Thanks.

Are SEP-IRAs covered under ERISA?

With all due apologies (haven't seen the sun for days),

Q & A from 6.02 am to 6.02 pm on 10^23

Q: What did Avogadro invent for his wife to use as a night cream?

A: Oil of Molay

Q: What did Avogadro teach his students in math class?

A: Moletiplication

or these:

http://www.moleday.org/htdocs/mole_jokes.html

I have a situation where a state governmental entity would arguably control a tax-exempt (501©(3)) entity under the new controlled group rules. 1.414©-5. The tax-exempt entity, in turn, owns one or more physician practice groups. It seems pretty clear that I have a controlled group as between the tax-exempt and the physician practice group(s). But is the governmental entity also aggregated? I note that the preamble to the final regulations states that these controlled group rules "do not apply to a state or local government or a federal government entity." It seems clear that these rules do not apply to aggregate two or more related governmental entities. But would this also apply in my situation to "break the chain" between the governmental entity and the tax exempt entity? Any thoughts or insights would be appreciated.

The plan's compensation definition = 415 Compensation. An employee receives "settlement" compensation 4 months following their severence from employment and the employer runs this through payroll. The "settlement" compensation represents claims for back-pay, front-pay, and benefits. Would this be considered plan compensation?

I am reviewing a potential customer's calculation and they have the basic SH match/100% first 3%/50% next 2%. If someone contributed 4%, they obviously should have a match of 3.5%. However, they are rounding the deferral percentages to whole percentages. To me, if someone contributed 3.3%, they should get a match of 3.15%, but they are only giving 3% as a match. How many decimal places do you go out? I have never run into this before.

Hi. We are about to add a working spouse premium (spousal surcharge) for spouses of employees that are working and are eligible for health benefits at their employers. However, we have a lot of married couples that work here for our company. For the married couples with both spouses working here, do we apply the spousal surcharge? Some of them have one spouse full-time and the other working on an ESO (enhanced salary option) basis, meaning they have elected to be paid more for waiving certain benefits.

The idea behind the working spouse premium is to encourage working spouses to use their own employer's plan, and not ours. This wouldn't be accomplished by applying the premium to couples with both spouses working for us. But are we violating any laws if we don't apply the premium to everyone with a working spouse that is benefits eligible?

Employer deposited a few weeks ago a ps contribution for 2008 to their 401k plan which has not yet been allocated to participants. Employer now wants to take it back. Can they do that?

It is my understanding that EGTRRA removed the restriction on making elective deferrals under both 403(b) and 457(b) plans. In other words, an employee participating in both types of plans can defer $16,500 under each plan in 2010, for a total of $33,000 in elective deferrals. If the employee has reached age 50, can he also make a catch-up under each plan ($5,500 +5,500 = 11,000)? I have read various restrictions, such as the requirement that the employee must be within 3 years of retirement and that the 457(b) catch-up can only be made if the plan is a governmental plan. Also, there is mention of a "special" catch-up. Is that in addition to the "regular" catch-up of $5,500?

As you can tell, 457 is new to me. Thanks much.

Setting aside the 411(d)(4) and (6) problems (just like the reg drafters did), what is everyone doing re: plan language for benefit restrictions based on funding. Will a bare-bones "If the plan becomes subject to 430/436, it will comply" suffice or do we have to numbingly lay it all out. Pre-regs I liked bare-bones, post I am leaning towards a hybrid. Referencing the statute and regs for all defined terms but spelling out the options. ...

The plan terminated and the short plan year Final F5500 is due January 13, 2010. I'm trying to figure out if I can file 5500 now w/ a paper 2008 return marked up for 2009 or if I have to wait until EFAST 2. The FAQ at DOL makes reference to a short year w/ a due date before 1/1/2010 getting an automatic extension so they can use EFAST 2 (encouraged to use EFAST). So, I'm thinking that means anything due after 1/1/2010 MUST wait and use EFAST 2. Thoughts?

Our executive physical program covers annual colonoscopies and CT full body and angiograms. Do your policies also cover these on an annual basis, or should these services be performed only every other year? Currently those eligible for the plan range in age from mid-40's to 60. I understand why the lab work would be needed every year along with the EKG and stress tests.

Thanks for your help!

Can anyone explain the advantages to a Bank or Bank Executive of Bank Owned Life Insurance in a NQ plan for the executive? Other than deferral of taxation on growth of a life insurance policy (which I am admittedly skeptical about), are there any other legitimate selling points? Are there any advantages due to the banking industry's tax or capitalization rules?

Any contrary arguments?

Is it possible for a physician group to have both an HSA and MERP? Or, is it only permitable as an either/or situation? This would be set up for the physicians in the group- all highly-compensated professionals.

If possible, are there any restrictions or special regulations that govern? Would the MERP have to cover medical expenses first, before the HSA could be used?

I appreciate any help you can provide. Also, if there are any sources or publications that cover this, that would be helpful too.

Thank you!

There are two employers. They are a brother-sister controlled group, but each has it own plan. The plans are identical. Both plans cover union as well as non-union employees. The owners receive compensation from both companies, but only make deferrals to one or the other, but not both.

How is testing handled under these circumstances? Do the plans have to be combined to do ADP Testing?

If an employer establishes a revocable rabbi trust, may the employer (as the settlor) use the assets in that trust for other general purposes without revoking and terminating the trust? Or is there some applicable general trust law principle that prohibits settlors from using the funds of a trust without revoking the trust completely? For example, would the trust be seen as 'illusory'? Would there be any negative accounting effect?

(this is, of course, putting aside the practical question of why the employer would want to set up the trust if it may want to use the funds anyway.)

Thanks for any advice/input.

If, for a variety of reasons, the TPA is just unable to collect all the information necessary to complete the 5500 forms and mail to the client for signature and filing prior to the due date, what is the best course of action, particularly if the missing information is the annual investment reporting? What do you do if you do have the information but you just dont have time or staff to analyse it and complete the forms sufficiently before the due date? Reason for my questions is not to make a new decision but to understand decisions made by a prior TPA.

I met with an investment professional working with several Conservation Districts in our state. They currently operate 403(b) plans and are considering the move to 401(k). These entities are identified as 170(b)1(A) organizations which receive government funding, but seem to fall under the category of a "public charity." I found the following information at the IRS website (http://www.irs.gov/irm/part7/irm_07-026-003.html), but it doesn't help me resolve the question of their ability to sponsor a 401(k) plan.

Has anyone had experience with this type of an entity? They were told by some type of state governing board that they were eligible to sponsor a 403(b) plan. Thanks in advance for any input or information.

Our doctor client owns a medical research clinic which is an LLC in which he is sole owner which I guess is treated the same as a sole proprietor. He has now joined a medical group (corporation w/5 Drs. and 20 EEs) in which he is a 20% shareholder. The research clinic and medical group are 2 separate businesses and have very limited common business dealings or patients (certainly less than 5%). I have concerns about 2 issues.

First, is the issue of "regularly performing services for the FSO or regularly be associated with the FSO in performing services for 3rd parties." It would seem that this is not the case since our client says there is very little common business or patients.

Second, I want to confirm that the Doctor's personal services for the corporation as an employee are separate and distinct from his LLC or sole proprietorship such that the LLC is not considered to be performing the services for the corporation. Since the LLC has 5 employees who are not associated with the medical group in any way, I think there is a clear business distinction, but want to be sure. I think it would be better if the research clinic were incorporated, but that is not the case.

What do you think?

Thanks,

HW

I am trying to find information on terminating a leveraged ESOP where the ESOP loan from the LLC has been "forgiven" and the stock has a FMV of zero. I think the shares still need to be distributed to the participants even though they have no monetary value; they still have voting rights associated with them. However, I cannot find any guidance on treating the "forgiveness" of the ESOP loan. Is it still treated as a leveraged ESOP? Presumably the loan was forgiven sometime in 2008 (still tracking that down). The 5500 for 2008 shows income to the plan in the amount of the loan balance that was forgiven. Any ideas?