Plan terminated in 2008, so the final actuarial valuation was performed for the 2008 plan year. However, the assets were distributed in 2009, so we are preparing a Form 5500-EZ for the 2009 plan year. For Line 10i(1) "Is this a defined benefit plan subject to minimum funding requirements" is the correct answer Yes or No? It is a defined benefit plan but it is no longer subject to minimum funding requirements, especially in the 2009 plan year. The directions indicate if you check Yes then you must have a Schedule SB. But there won't be a Schedule SB for 2009, none is required. So would the correct answer be No?

Are there any "next steps" if the PBGC rejects an application for involuntary termination?

In essence, the Corporation says that company is not "financially impaired". Is there anything like an appeal? Don't see anything in 4041 or 4043.

Thanks for your input.

Situation. ER has 45 employees and a $500 annual deductible group health insurance policy, with 20% co-insurance responsibility of the covered EE and $10,000 maximum out of pocket.

The ER is switching to a $10,000 annual deductible group health insurance policy. So that the EE is in the 'same position, the ER will be instituting a buy-down MERP that has a $500 annual dedutible. ER will pay 80% of dollars $501-$9,999 for the year. Then the insurance kicks in. Once the EE hits $10,000 paid out of pocket under the MERP and the insurance, the ER will then pay any additional co-insurance for the EE.

The new, $10,000 annual deductible group health insurance coverage is subject to COBRA, and will be administered by the insurance company.

Two questions:

1-Inasmuch as COBRA applies to the $10,000 annual deductible group health insurance policy, does COBRA also apply to the buy-down MERP?

2-If COBRA does apply to the buy-down MERP, how would the 'premium' cost for COBRA-continued coverage under the buy-down MERP be determined?

I have a client who has an underfunded Cash Balance Pension Plan (AFTAP is just under 70%). The Plan was terminated and the majority owner signed an election to forego benefits for PBGC purposes. The question is whether this will carry over for IRS purposes to allow the Plan to be considered 100% funded. We've not had a problem in the past because the terminating Plans have always been at lease 80% funded and not subject to limitations on how benefits are paid out (i.e., lump sum distributions of the entire benefit). I know the final Regulations have just been issued under 436, but I could not find anything particularly useful and wondered if anyone had any ideas, suggestions, or citations (or links) they wouldn't mind sharing.

Situation: A 2-ER control group situation where the plan is for only EEs of one ER. An EE of both ERs is plan eligible.

In determining that EE's EBARs, do you use her compensation just from the ER for which the plan is established and benefiting EEs or her combined compensation from both ERs in the control group?

In determining that EE's 'gateway' minimum, do you use her compensation just from the ER for which the plan is established and benefiting EEs or her combined compensation from both ERs in the control group?

Plan terminated in mid-06, last participant located and paid out 12/08, leaving approximately $3600 in plan to revert to sponsor sometime in 09. Since all plan lianbilities have been satisfied, can the 08 filing be considered a "final", even though there is still money in the trust?

Does anyone know of a listing of available managed, balanced and target-date funds that satisfy the QDIA requirements, such as no back end loads or other surrender charges if within 90 days of the first deposit the employee gives an investment directive outside of the QDIA?

A sole proprietor client deposited deferrals throughout the year in 2008. We just received his 2008 Sch C from his CPA and he has negative net income! How do we treat his deferrals? Can we consider this as violating 415 and therefore, we can distribute his deferrals back to him? or since he has no income, are we to consider that we can't even call these deferrals and therefore we forfeit the amount and reallocate?

Is it okay to use a signature stamp when signing Form 5500? If not, is it okay to have client sign a pdf of the Form 5500.

Does Michelle's Law apply to a Dental or Vision plan when it is NOT part of a health plan?

Code Section 415(n)(3) allows trustee-to-trustee transfers from 403(b) or 457(b) plans for the purchase of permissive service credits.

Code Section 402©(10) allows Section 457(b) plans to accept rollovers from 401(k) plans as long as such amounts are separately accounted for.

My question: Has the IRS issued guidance on whether an individual can rollover 401(k) monies into a governmental 457(b) plan and then transfer those amounts for the purpose of purchasing permissive service credits?

Thanks.

Hi,

A plan has a year end of 9/30, it amended for a short plan year to 6/30, and changed year end to 12/31. So one 5500 filing will be 10/1/07 through 6/30/08, then one for 7/1/08 through 12/31/08. Is it permissible to have two short plan years back to back? I cant seem to find much on the subject.

Thanks in advance.

Jason

Time magazine here takes aim at 401k plans. Apparently, 401k plans are the problem to all of America's retirement woes. 401k plans are apparentently a 'lousy idea'. And the "idea that we could ever save enough to pay for 30 years of leisure is a relatively recent invention." No mention in the article how lengthening durations of retirement (unproductive years) at the end of life due to retirement in mid-60s but life expectancies growing to mid-80s impacts DB plans and the companies that sponsor them.

Does anyone have a link to the 3 col. version of the new 430/436 regs. ?? - I call it the actual Fed. Reg. version and it's easier to read and less pages than the one in the recent ACOPA newsflash .

The third party administrator of a 401(k) plan had a system error such that participants were overpaid benefit payments. In order to correct their mistake, the third party administrator agreed to make a contribution to the plan equal to the overpayments (rather than settle their mistake with the plan sponsor outside of the plan). I think this is definitely an operational error because I don't think a non-participating employer of the Plan can make employer contributions to the plan. Practically speaking, though I think the correction would be for the contribution made by the 3rd party administrator be pulled out and the employer to put that money back in. I guess in the end, the result is no net difference. So, maybe no corrective action is required? Any thoughts on other correction ideas? Also, would there be any prohibited transaction issue with the third party administrator having made a contribution to the Plan, rather than the employer?

I am calculating the benefit options for a plan that offers a ten year installment payment option. The normal form is a life annuity. I see that a term certain annuity is subject to 417(e). How do I calculate that installment payment? BTW, the plan has switched to PPA for 417(e). Do I amortize the 417(e) lump sum value of the life annuity over the 10 year certain period using the first two segment rates?

I just received word from our insurance company on their plan design change for 2010 and mental health parity. Our mental health benefits go from the regular percentage coverage up to $50 reimbursement per visit to: regular percentage coverage and after 12 visits, the provider has to send in a pre-certification for insurance company review.

Have you had your mental health benefits changed for 2010 to meet the mental health parity rules?

Husband wife small pension plan so no Annual Funding Notice, but is a Summary Annual Report still required (being husband/wife as opposed to just a small plan)?

I'm preparing a final 5500 for a Master Trust. The MT was set up for two plans of the same employer. The plans have merged so there is no need for the MT. How do I prepare the final? Do they assets have to show as being transferred out? The assets aren't really going anywhere since they were also reported on the 5500s for the two separate plans.

Thanks

Wow! Would appreciate any thoughts on proper analysis under these remarkable facts:

1. Participant and second wife take steps toward divorce

2. Wife dies shortly after divorce action starts and before divorce is final

3. The Participant, a month after second wife's death, files new 401(k) beneficiary designation indicating he is single and names his son as the 401(k) beneficiary.

4. 5 months later, participant dies without any final action on the prior divorce proceedings

5. 2 months after participant's death, plan distributes 401(k) account to son named as beneficiary

6. 4 months after participant's death and 10 months or so after deceased second wife's death, the court enters an Equitable Distribution Judgment dividing participant's rights in the 401(k) 50/50 with deceased second wife. (Equitable Distribution was in response to continued efforts to prosecute the divorce by the estates of both the wife and the participant).

7. Plan is being pressured to provide deceased wife's estate 50% of the participant's 401(k) account.

8. Plan requests QDRO in addition to provisions in equitable distribution judgment.

So, we have not only a possible post-death QDRO but a post-death divorce. Plan presumably had no reason to know of pending divorce at time of participant's death since there was no divorce or draft QDRO, etc. at that point. Plan knows participant was a widower and has what it assumes to be a fully valid and recent beneficiary designation naming son as beneficiary of 401(k) and so pays that out in ordinary course. Does deceased wife's estate have any interest in the 401(k) plan by time divorce and QDRO are provided? Can Plan even accept QDRO under these facts?