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?

Assuming the Plan Document allows for in service withdrawals and a participant meets the requirements for that withdrawal, are there any tax benefits for a participants who is using the proceeds to purchase a primary residence (first or otherwise?)???? Thanks.

Has anyone ever run into trouble with their auditor for having a non-qualified cash balance plan? A consultant infomred us that some sponsors of a qualfied cash balance plans hit snags with their auditors for having a non-qualifed cash balance plan that restores benefits lost because of the 401(a)(17) limit.

Has anyone run into this issue?

Thx.

Am i correct in thinking that under PPA valuations, assets for section 404 purposes are

always the same as section 430 assets. In other words ,we adjust for contributions made

for the current plan year prior to the valuation date at the effective rate,but there is

no adjustment for contributons made during prior plan years but not previously deducted?

A participant in a profit sharing plan cannot be located and the trustee has contacted the social security admin. to no avail. How much time is required to pass before the participant's account is forfeited assuming that is an option?

Any help is appreciated.

Our 401(k) plan states that the estate will be the default beneficiary of an unmarried participant. We have several very small balances (under $1000) payable to the estates of employees for whom we have very little information on family relationships -- although most have designated a beneficiary for their employer-paid insurance.

If I could find a family member I could get an Affidavit of Heirship completed but I have a couple of foreign nationals where this does not appear possible.

How has anyone else handled similar cases?

I would like to petition the probate court in the county of residence to either supply contact information for the personal administrator or, if the estate has not been filed with the court, to accept the life insurance beneficiary as the beneficiary of the estate comprised of the 401(k) balance. But it isn't worth the legal fees to hire an attorney in each jurisdiction. Eventually administrative fees will deplete the accounts.

A company is experiencing difficult economic times and is short on cash flow. It does, however, believe that in the next couple of years, it will sell either stock or assets to an unrelated purchaser. Effective January 1, 2010, the company wants executives to be able to defer receipt of 50% of their compensation. These amounts will only be paid if a change in control occurs. We will have a single distribution event. Is this permitted under 409A? Also, directors will also defer fees. Is this ok since the directors will have some control over when a change in control occurs. Thanks in advance for your consideration. Ed