I have a plan (plan A) that acquired another company (company B) through a stock deal as of 12/31/08. The participants in Plan B's plan were terminated and given the option to rollover their money to Plan A's plan.

I am trying to determine HCEs for the 2009 plan year. Plan A uses the top 20% rule and it does apply. Do I need to include the employees of Company B. Normally for Stock deals, I would say yes, but since Plan A is not a successor plan I am thinking no. Also, Company A did give credit for prior service for eligibilty & vesting.

Any help would be appreciated.

Question - Does anyone know if it is required that all insurance benefits under a wrap plan have the same policy year when you are trying to file only one 5500 for all the welfare benefit plans under a cafeteria plan? I thought I had read or was told that when using a wrap plan for all of an employer's welfare benenfits (Group Health, Dental, Medical FSA, DCAP) that the polices all had to have the same reporting year in order to be able to file only one 5500 form. Anyone have experience with this situation?

On a side note is it proper to file the 5500 for the cafeteria plan year (Aug. 1 to July 31) when the welfare benefit policies run 11/1 to 10/31 of every year? Not sure why the cafeteria plan year was originally set up as Aug. 1 to July 31 as aren't they normally calendar year plans (1/1 to 12/31)? If we want to change the cafeteria plan year to Jan. 1 to Dec. 31 do we just amend the plan document and file a short plan year for the period Aug. 1 to Dec. 31 and not report any activity on the welfare benefit plans, and then report the welfare benefit plan's activity on the new plan year (1/1/ to 12/31)? Any help with this would be great, most of my experience has been with Qualified DC plans in the past.

Nathan

Assuming you read the July 29th letter signed by Aetna, Mercer, Willis and hundreds of large employers and trade associations addressed to Speaker Pelosi and Minority Leader Boehner, where is the citation requiring maintenance of effort with respect to voluntary employer sponsored retiree heath benefits (e.g., not subject to collective bargaining)?

My question is whether a top hat plan has to supply information as required by Title I of ERISA if it receives a QDRO. Although top hat plans are exempt from Parts 2, 3 and 4 of Title I of ERISA, they are subject to Part 1, which includes reporting and disclosure requirements, and Part 5, which includes criminal penalties for willful violation of the reporting and disclosure requirements.

ERISA Sections 104(b)(4) and 105 are included in Part 1 of Title I. A plan administrator will, however, be deemed to satisfy the reporting and disclosure provisions of Part 1 by filing a top hat filing with the Secretary of Labor. Thus, it seems to me that if a top hat filing was timely made, the plan administrator does not have to comply with any reporting or disclosure requirements under Part 1.

My question has two parts: 1) if a PA receives a signed authorization from particpant to release top hat plan info to requesting attorney (atty drafting qdro), does the PA have to distribute such information; and 2) does a top hat plan have to comply with a QDRO?

An ESOP gave a participant the right to put shares of stock distributed to the participant to the company in two 60 days periods in the year of distribution and the year after distribution. The participant did not exercise his or her put rights during such period. Am I correct that the law does not give the former participant any other rights to put the shares? How can the former participant liquidate the closely held stock in this situation?

With the new regs out - the retirement age for plans should be 62 or 65. I have a 412(e) plan with retirement age of 60.

I need to change it to 62. Can you leave the level premiums of the life insurance alone and just adjust the premiums for the annuity contracts to reflect the change. I have calculated cummulative contributions for the plan total and for each indiviudal against the insurance premiums. The percentage lay between 51% to 61%. Since the insurance premium is below the 66 2/3% does it look like it would be o.k. to keep the same life insurance premiums and just adjust the annuity premiums?

My question is whether a top hat plan has to supply information as required by Title I of ERISA if it receives a QDRO. Although top hat plans are exempt from Parts 2, 3 and 4 of Title I of ERISA, they are subject to Part 1, which includes reporting and disclosure requirements, and Part 5, which includes criminal penalties for willful violation of the reporting and disclosure requirements.

ERISA Sections 104(b)(4) and 105 are included in Part 1 of Title I. A plan administrator will, however, be deemed to satisfy the reporting and disclosure provisions of Part 1 by filing a top hat filing with the Secretary of Labor. Thus, it seems to me that if a top hat filing was timely made, the plan administrator does not have to comply with any reporting or disclosure requirements under Part 1.

My question has two parts: 1) if a PA receives a signed authorization from particpant to release top hat plan info to requesting attorney (atty drafting qdro), does the PA have to distribute such information; and 2) does a top hat plan have to comply with a QDRO?

Can an employer require pre-tax deductions only? We currently allow employees to elect pre or post-tax deductions for the health plans but wondered whether or not we could change to pre-tax only.

One good thing PPA funding has brought us is the ability to fund a large maximum contribution (when appropriate) to most plans that have existed for a while.

Speaking of appropriate, could an employer purposely fund far more than accrued benefits just before terminating a plan, knowing that excess assets will be allocated?

For example, suppose you have a 1 participant plan and the 2008 PVAB and assets were $700,000. Suppose the participant has many years of service and participation and is nowhere near his 415 limit. Also, the participant will not work the required 1,000 hours to accrue a benefit in 2009. There would be no TNC in 2009 but the maximum contribution could be $300,000. Could such a contribution be made? I would think so.

Thanks.

Say a one participant (owner) plan has a plan year from 8/1/08 through 7/31/09.

On 8/4/09 they decide to adopt a plan amendment to freeze plan accruals effective 8/1/08.

Of course we know that accrued benefits as of 8/4/09 cannot be reduced, so this would violate 411d6 and 412d2 for funding purposes.

What are the consequences of such an amendment?

Plan disqualification? Other?

I always read that it is not allowed, but never do I see anything reporting on the consequences.

Thanks.

Client has existing 401(k) plan. Salaried employees were not eligible to participate. Client wants to make salaried employees eligible 10/1. Does the amendment have to be adopted before 10/1, that is, before these employees begin participating? Or do we have until the end of the year to adopt the amendment.

I have heard Jim Holland state and now i've heard someone else say that if the plan's 2008 FTAP is at least 92% quarterly contributions are not required for the 2009 plan year. I can not find any cite that applies the transitional funding levels (92%, 94%...) to the definition of funding shortfall for quarterly purposes, only for the exemption of shortfall amortization charge (and also in 436). Does anyone have a cite that says the transitional levels can be applied to the FTAP for quarterly requirement?? Thanks.

Is there a problem with using forfeitures to make a corrective contribution (assume the plan specifically allows for it)?

Client has two plans - one Union and one nonunion.

1. Can the two plans be covered under one bond?

2. If the one plan needs $500,000, and the other 70,000 do we add the two together or is their one limit per employer?

I think they have to have the two added together, but I cannot find something to "prove" it to the client.

Thanks - any comments or help appreicated.

Pat

Is it possible for union employees to bargain for some of their retirement benefits, but not all?

An employer is telling me that they have union employees and they bargain for a DB plan. This plan is only for the union employees.

But the employer also sponsors a 401(k) plan. Everyone is eligible for this plan (both union and non-union). But the employer is indicating that the union employees do NOT bargain for the 401(k) - but they can participate in it if they want to.

So if that's the case, then there would be no union employees when it comes to nondiscrimination and coverage testing on the 401(k)? That means no bargaining exclusions for coverage and everyone is included in ADP/ACP?

Does that seem legitimate?

Stupid question, but when you are putting the 5500 packages together, are you putting the "SB" after the the "R" and before the "SSA" or are you still putting it in the old "B" slot?

From my accounting 101 class I was always told to organize schedules in alpha order, but the schedule checklist section of the 5500 still lists just "Schedule B" and doesn't say "SB" or "MB". However, the directions list the schedules in alpha order with the "SB" after the "R".

I know, stupid question, but is everyone else putting the "SB" after the "R"?

I would appreciate advice on the following situation:

I was employed by a company that offered a HDHP and HSA from 9/08 thru 5/09. I made excess pre-tax contributions to the HSA in both 2008 and 2009 and have a balance of approximately $5,000. I contributed ~ $3000 pre-tax in 2008 and another $1650 pre-tax in 2009. My company contributed approximately $2000 over the same period. I used some of the funds to cover health care costs, resulting in the roughly $5000 HSA balance.

I left the company at the end of May, 2009 and received a severance. Part of my severance was an agreement by the company to fund my health care through the end of 2009 (under COBRA), or until I started at a new job that provided health care.

I started at a new company on 8/3/09 that does not offer a HDHP -- only a PPO with the option of a Flexible Spending Account to contribute pre-tax dollars. My previous company ended my coverage when I advised them I had started work at a new employer.

My questions:

-- Can I leave the $5,000 balance in my exisiting HSA where it is (credit union account) and use this to cover health care costs later on in retirement? If not, what happens to the money? Must it be refunded to me and if so, is there a 10% tax, plus the refund appears as ordinary taxable income at year-end?

-- Can I enroll in the FSA offered by my new company and contribute pre-tax $'s from 8/09 thru year end while still leaving money in the HSA? Can the FSA funds only be used to pay for unreimbursed health care costs incurred from the date of my employment (8/3/09) thru year end -- or can they be used for any 2009 unreimbursed expense, including the deductible from the previous HDHP?

-- Can I use the HSA funds already contributed and in my accout to pay for unreibursed health care costs from the PPO plan?

Thanks in advance for your help....

(I am not a benefits person -- hopefully I explained this well enough to elicit a few replies...

I'm having a brain cramp. I remember that for small plans, there was an alternative to the long form SAR language in 2520.104b-10.

In lieu of preparing a full SAR, a Plan Administrator could distribute a notice that said a copy of the entire 5500 would be supplied on request. Another alternative was that a copy of the 5500 could be provided in full in lieu of preparing an SAR with the long form language.

I see that as late as 2007 TIAA-CREF was advising that these alternate approaches are still permissible. I just can't find the language in 2520.104b-10 anymore. Are my regs out of date, or is this small plan alternate rule to the full SAR in another location? Or, are these alternatives no longer available for small plans?

Thanks.

I'd be very interested to hear others thoughts on this one....

Our DB plan has recently (in the last couple of years) had a dramatic increase in the number of child support QDROs issued with respect to the plan. Most of these QDROs are not handled by attorneys but rather handled by child support enforcement officers and signed by the AG's office of the particular state. Certain of these QDROs call for back child support in a lump sum amount. (We require them to clarify that they actually want a portion of the PPT's accrued benefit which, if converted to a lump sum, would = [blank]). Some of these also call for a future monthly payment that represents what the court deems to be reasonable future support.

The plan has very detailed QDRO procedures that are given to APs (or their reps) upon notice of a proposed QDRO and freezes the PPT's benefit upon any type of notice that we are expecting a proposed QDRO, and we do not release the freeze unless it is 100% clear that no QDRO will be issued, the parties sign a notarized consent to that effect, or of course until the QDRO is qualified and processed. These procedures also clearly state that no payments under any QDRO will begin until (1) the plan issues a letter qualifying the order; (2) sixty days passes, during which time the parties can review the plan's interpretation of the order and object if necessary; and (3) the AP requests and completes election forms from the Plan administrator.

When we are in the stage of reviewing the proposed DRO and giving comments to ensure that it qualifies under the terms of our plan, we always make sure to remind APs of the fact that payments won't be made until the plan's process is complete, so that they can take that into consideration in determining the appropriate amount to be assigned. When an order calls for an "immediate payment", we ask that they change that to "payment as soon as administratively possible after the Plan qualifies the Order as a QDRO". Accordingly, if the June 1, 2009 order calls for a $5,000 lump sum (representing back support), and $500 monthly payments (representing future support), and that language is in the order, the plan will begin to make those payments as soon as possible following the administrative process discussed above (approximately September 1, 2009). Accordingly, on 9/1, AP will get a check for $5,000 and a check representing September's $500 payment.

This recent influx of these types of payments (in most other cases the AP only wants a lump sum) has us wondering whether the plan should be segregating the "future" monthly payments as of the date of the initial DRO under the 18 month rule. This is due to the language in IRC Section 414(p)(7)(A) (paraphrasing) "During any period in which the issue of whether a domestic relations order is a QDRO is being determined by a plan administrator, by a court or otherwise, the plan adminsitrator shall separatelyu account for the amounts which would have been payable if the order had been determined to be a QDRO " In that case, the $500 monthly payments should have been segregated as of June 1, 2009, and as of September 1, 2009, the AP would get the $5,000 lump sum, a payment of $1500 representing the three months of monthly payments, and a check for $500 for September. However, this seems inconsistent with my understanding of the 18 month rule, and perhaps more importantly (given the ambiguity regarding the interpertation of QDROs) contrary to the precise language of the order. If the language of the order contemplates the plan's review process and therefore payments are not "required to be made under the order" until that review process is complete, does the plan still have a responsibility to segregate those three months and pay it out, notwithstanding the terms of the order?

Sorry for the long post, and thank you for any thoughts.

501©(3) employer (that is not otherwise excepted from ERISA coverage) provides for a 403(b) deferral-only plan and is "hands-off" in such a way that it should be eligible for the ERISA exception under DOL reg 2510.3-2(f). (I recognize there are many pitfalls with this, but assume the exception would apply here.)

In preparing its plan document, the employer wants to provide that loans and hardships are not allowed under the plan. The only motivation for this is to avoid having to take discretionary action that would trigger ERISA, as the vendor will not agree to administer hardships and do everything required to administer loans.

Does the employer's decision not to allow hardships/loans violate the ERISA exception, by virtue of the employer exercising some discretion in "plan design"? This would seem to be a bad result, as the employer is trying to avoid ERISA application, but I welcome any thoughts.