With major changes, moving everyone's cheese, what are some ways to present the benefits in a positive way rather than focusing on the obvious uncomfortable changes to the employees plans. Is there a way to spin the negatives into positives? We may be shifting additional 10% to 15% of the cost to employees through premiums and deductible/OOP and some minor copayment increases.

Our plan year is coming up and we are adopting the changes into the plan to reflect what we believe to treat the mental health and substance abuse equally as other benefits under the plan. My stomach turned with removing the current mental and substance abuse limits and wonder if there is anyway to provide this benefit with less risk to the plan?

The idea of having inpatient mental health with no limits leaves a self funded plan with a lot of exposure to future long term claims. We thought about removing both completely from the plan (assuming that you have to have mental health/substance abuse together and not one or the other?). What are you doing for your clients or your employer to protect the plan from a dependent who going through substance abuse rehab over and over (In patient treatment) and over again.

With the recession really taking hold of my current employer plans and requiring us to cut back on benefits offered to the employees, we are thinking about adding a buy (no selling) vacation policy for the employees.

Where in the world do I start with developing one of these type of programs? What are the risks to the employer and employee?

I think it will look something like all employees can buy up to one week of vacation. The vacation bought time would than be pretax(?) and the entire week would be available (not accrued like our normal vacation time) the first day of January. When the employee takes it, I would imagine that it becomes a taxable benefit and that pay check the employee would be taxed? At the end of the year, could this be some kind of "use it or loose it benefit" If they loose it, than does the employee pay taxes on it if it was never distributed to the employee? I would assume this week would be used first before any normal vacation time. Is it still ok for them to have a rollover in place for days that are company paid. It sound very complicated. Does it become a section 125 plan or subject to 5500 & SPD? As complicated as it may sound on the record keeping side, at least we could provide a benefit, that hopefully would not be a lot of additional cost to the employer and still add some work/life balance for employees. I guess this does leave some exposure that if an employee leaves in Feb, would we have to pay out that vacation time? One last question, is this subject to discrimination testing? Could we excluded section 16 officers or maybe a group of employees at a different location that work shifts (like one week on and one week off). Is this worth the administrative work?

Thanks!

I wanted to find out if any of you have adopted a cutting or splitting RX tablet program for employees?

A little background: The idea behind this program is that an employee gets a 15 day supply of 40mg and they split it in half to have a 20mg tablet for 30 days (the member doctor is basically prescribing the 20mg strengh for 30 days). This I believe saves the employer money and in some cases if this program is adopted by the PBM, than the member has a set list of drugs they can split (example a time release drug would not be listed because it may not be safe) and the employee pays only 1/2 of their normal copayment. We are looking at some brochures and are thinking about adding it to our current RX benefits. Please let me know how you think this should be marketed to the employees and how to enourage them to participate (for drugs that can safely be split). Thanks!

My mother-in-law passed away and my father-in-law is now entitled to her 401k. The company she worked for closed up shop and filed for bankruptcy in 2001. The money supposedly is frozen and everyone he talks to tells him to contact someone else. He has talked to Putnam ( Putnam told him in 2004 the dissolved company wanted nothing more to do with the assets and in turn turned them over to the IRS), he has also talked to the U.S. department of labor, the state department of labor, the state department of banking among others. He just keeps getting the run around. He does not know where to turn. Has anyone else had this type of problem? The money is out there but he cannot have access to any of it. Thank you,

My client funds employer benefits in a pooled account. 401(k) contributions are deposited to individually directed accounts with quarterly statements. I have been providing an Annual Statement with vesting, and a quarterly notice of multiple statements and PPA quarterly notice.

My question is, under PPA, how often am I required to value the pooled account? Currently, I have been valuing it annually.

Would someone kindly explain what the last item (no facility closing event/.........) in bold means? This is the waiver section for Form 10 for an active participant reduction.

What does this mean for an employer that is not in manufacturing and operates in one location? What about the same in several locations (a service employer). What about a manufacturing company with two locations?

Thanks for any help. I don't get this.

Reporting Waivers - Reporting of this event is waived if:

Small plan: The plan has fewer than 100 participants at the beginning of either the current or the previous plan year; or

Funding-based waivers: For the event year:

- No variable rate premium (see Part IV.B);

- Less than $1 million in unfunded vested benefits (see Part IV.C); or

- No facility closing event/80% funded: The plan is at least 80% funded for vested benefits (see Part IV.D) and the active participant reduction would not be reportable if only those participant reductions resulting from cessation of operations at one or more facilities were taken into account.

The May-June 2003 ASPA Journal contained an article pertaining to Davis-Bacon plans that stated "Davis-Bacon amounts can offset any other allocation that may be provided under the plan provided they are not restricted by the annualization rules." An example involving a 10% money purchase plan is provided. This example is also cited by the ERISA Outline Book. However, I can find no authority or reference source that provides for this. Please help.

My client was just asked by their CPA to obtain an engagement letter as the TPA for the plan. The client was also told this is a "requirement".

I have been in business for over 25 years and have used an engagement letter once in that time. I have found that most clients will not sign.

My engagement is getting my fee up front. If there is a requirement to do a retainer/engagement letter, who is requiring??

Can I, as the Enrolled Actuary, choose to keep the prefunding balance at $0, simply by entering $0 in line 11d of the Schedule SB? Thus avoiding the need for a sponsor election.

I'm trying to determine whether the failure to make a distribution is eligible for correction under 2008-113. I'm looking at Section V.D(2)(a) in particular, which allows a correction of "an amount that should not have been deferred compensation under the plan" that is "otherwise treated as defered compensation under the plan and such excess amount otherwise would have been paid to the servive provider during the service provider's taxable year in which the excess amount was...otherwise treated as defered comepnsaiton under the plan".

It appears that this Section was drafted for deferrals that exceeded the participant's deferral election. It does not specifically reference amounts that should have been distributed. However, an amount that should have been distributed under the plan but wasn't certainly "should not have been deferred compensation under the plan" for the remainder of that tax year. In addition, the amount was "otherwise treated as deferred compensation under the plan." Am I reaching too far on this interpretation?

Once the income restrictions fall away, what would discourage an IRA holder from converting his big $ IRAs to Roth IRAs? Other than the obvious requirement that he pay the tax liabilitly and the fact that he's 75+ so is rolling the dice on how much income he can generate and then shelter ... why not? Based on the Washington Follies, there is no way taxes will be going down any further in his lifetime, likely mine, and probably my kids'. (whoops, is my bias showing?) What do you think?

We have a client who sponsors a 403(b) plan with over 100 active and former participants. They have some questions regarding the new regulations for Form 5500 reporting for the 2009 Plan year. I have read the Field Assistance Bulletin No. 2009-2 regarding transitional relief for annual reporting and still don't have a clear answer to their question.

403(b) plan has annuity contracts of former participants. It seems that these former participants would fall under the transitional relief because

1) The contract was issued prior to 01/01/2009

2) There were no obligations to make any additional contributions to the contracts prior to 01/01/2009

3) The employer no longer hand any involvement regarding the rights and benefits under the contracts

4) The employees were fully vested

So the question is, can we segregate these former participants from the participant counts, which will in turn drop their participant count below 100 and relieve them from the independent audit requirement?

Hoping one of you has some insight.

I just ran across a plan that has profit share using the "super-integrated allocation formula." It is a 2 step formula, giving the following:

Level One: At least 8% given to eligible participant's compensation not in excess of $65,000.

Level Two: Any remaining contributions will be given to eligible participant's compensation in excess of $65,000.

I was told that the client has provided in years past a 25% contribution for the 2nd level, and for the 2008 plan year they amended the $65k to $100k.

Does the formula breach any contribution rules?

I have a plan that is not passing coverage with either the ration % or ABT. A colleague insists that you can restructure the plan into component plans to pass 410(b) testing for the 401(k) and 401(m) portions of the plan, as long as you test the plan as a whole for ADP/ACP. I don't believe this is possible. My basis for this position is Treas Reg 1.401(k)-1(b)(4) which indicates plans cannot be restructured to satisfy 401(k) testing and that the testing method used for satisfying 410(b) must be consistent with the method used to satisfy 401(k). Who's correct?

If an employee has an outstatnding loan when they separate from service and then are rehired 45 days later, can they continue making payments on the loan and avoid it going into default?

My wife is a participant in a PSP (no 401k provision) and a DB plan maintained by a mid-size physicians practice. She has separated from employment there after over 9 yrs of service. The Trustees terminated the DB plan a/o 12/31/08.

There are 18 participants in the DB plan and a/o 12/31/07 it had about $750,000. Though she is an RN who had relatively high compensation within the group, we are being told her lump-sum benefit is only around $9,000.

Assuming both plans are top-heavy a/o 12/31/07 and 12/31/08, what could the employer do within the PSP to preclude top heavy benefits in the DB plan from kicking in?

The Plans' putz attorney has advised that top-heavy DB benefits are not applicable b/c the PSP "provides top-heavy benefits." Zero PSP contribution was made for '08 and the '07 and prior contributions were all compensation-based. The PSP has a 5 yr vesting sched, 20% per yr.

We are having a very difficult time collecting benefits from the DB plan (in part because we caught the Trustees' error in failing to notify participants of an intended benefits freeze for 2008 - now they evidently have to re-do the 2008 valuation and appear reluctant to absorb the addl cost.)

Sorry for the complexity but the Trustees have turned me over to an attorney who doesn't understand ERISA and I can't afford heavy-duty legal fees to sort this out. Is it true that the Trustees don't have to disclose results of top-heavy testing to a participant who makes a formal request?

Maybe I should just turn this over to EBSA for investigation - does anyone have an opinion on whether EBSA would take something like this seriously?? Thanks for any feedback, all the best for success!

Our office has been very reluctant to increase what it charges for administration post-PPA. It would be helpful to me for future discussions if any people in other offices would share with me what they are billing, relatively, for their PPA administration. After PPA how much did you increase your annual administration charges for plans with 1, 10, 100, and 500 lives? Thanks.

I have an auditor coming in tomorrow for a routine audit on a 401(k) plan. We were able to get the audit location switched from the client's office to ours (for convenience and also to lessen costs for the client - if I have to sit around for 1-2 days at their office, costs would be dramatically higher).

My question is this: from talking to other people in our office, this auditor is a bit of a strange duck. We had him located in a spare office the last time, and the next door person sweared she heard him opening and closing file cabinets in the office, looking at other clients' files. Know this isn't the bad old days (we had one auditor in the late 80s using our phones blatantly to talk to his bookie, and he wasn't even subtle about it), but what gives this guy the right to basically spy on our other clients? I can somewhat understand them looking around the client's office (they are after all being audited), but WTF?

Does anyone have any experience or know of case law where an intended DB contribution went to the wrong place? I have a situation presented by a colleague where a terminating DB plan paid out the assets. The owner's amount was short, so they funded the contribution to make up his shortfall many months later, but by the due date of the tax return for the year of termination. The problem is that the plan account was closed at the time of final funding, so instead of making the contribution to the plan, it was made directly to his IRA.

Now the plan's under audit and my colleague wants to find a way to get this straightened out.