In regard to a cash balanced db plan, is IRC Section 417(e)(3)(B) (Applicable mortality table) and © (Applicable Interest Rate) a floor against which the accrued benefit is measured? In other words, the present value of the accrued benefit can be more than the present value calculated by using the applicable mortality table and the applicable interest rate.

In regard to a cash balance plan, does anyone know whether the definitions of accrued benefit for purposes of testing under 401(a)(4) and backloading under 411 have to be the same?

Form 5558 question; do they still send out that letter that they inform taxpayers to keep with with their tax records?

Form 5558 question; do they still send out that letter that they inform taxpayers to keep with with their tax records?

Question about deducting a matching contribution on your tax return; does it make a difference what year you deduct the contribution for as long as you do not double dip?

If you make a contribution designated for the 2006 plan year in 2007 (you make the contribution before the tax return comes due for the 2006 tax year), but decided to deduct this contribution for the 2007 tax return, would they allow this? Does it matter just as long as a taxpayer does not double dip (i.e., take that contribution as a deduction for both years)?

Company seeks to adopt an adoption assistance plan. Does the plan have to have its own plan document or can it be part of the cafeteria plan document with the adoption ssistance plan having its own SPD? The plan currently has a main plan document with SPDs for domestic partner benefits, life ins., etc. Also can the plan be instituted mid plan year or does it have to begin with the start of a new plan year? Thanks.

Here is a health insurance challange. Employer has 42 employees. 10 are in Florida and the other 32 spread all over the country, mainly in rural areas. Employer wants to offer health insurance to all, but the carrier benefits outside of Florida are awful. There aren't enough people in any of the other states to offer anything meaningful.

Employer wants to provide group medical to the Florida group, and then have everyone else purchase private individual health insurance. Employer wants to reimburse the non-Florida employees an equal percentage of the private premium and allow them to pretax the balance of the premium in a separate private insurance reimbursement account. They will also have a medical FSA and a DCAP.

I advised that employer participation like this makes it an ERISA plan and also makes the individual plans subject to COBRA.

Does anyone have any comments or suggestions for this type of situation?

Thank you.

I have a client that has not funded their PYE 12/31/08 Profit Sharing, do I need to put their plan on extension or can I file now. Their corporate return is on extension so my thought is that we can go ahead and file the 5500 today without putting on extension.

How do you handle this situation?

Hypo: For 2009, a self-insured medical plan fails (i.e., will fail) the 70% eligibility test and the 70%/80% eligibility tests under the Code Section 105(h) nondiscrimination tests. The plan fails the nondiscriminatory classification eligibility test if only participants in the plan are counted (the conservative approach) and passes the test if all eligible employees are counted (the favorable approach).

I understand that there is some uncertainty as to which employees should be included in the test and guidance from the IRS would be helpful but are there any thoughts as to what should the plan do now?

If the plan chooses to rely on the more favorable approach and does nothing, what will be the consequence in the unlikely event that the IRS discovers this in a plan audit and takes the position that the more conservative approach is the correct one?

If the plan is "fixed" in 2009, the HCIs will pay taxes on their pro-rata portion of the excess reimbursements. Presumably, that will also be the effect if the issue arises in an audit. Are there additional penalties for failing to correct a discriminatory plan?

The plan passes the subjective benefits test.

Any thoughts would be extremely helpful.

A participant in a church plan has an outstanding loan. He's a 70 year-old retired minister, who would like to have the loan distributed to him, rather than pay it off. Can he offset this deemed distribution from his eligible Manse amount and essentially make it non-taxable? I can think of no reason he can't but couldn't find anything that said definately yes. Thanks.

I've always maintained that once an employer contribution is made to a plan, it should stay there, whether that means reallocating monies to other participants' accounts, or increasing contributions to others within a self-directed environment, or allocating contributions that an employer really didn't want to make in a pooled environment.

I know that the payroll companies that have jumped into this market with both feet have no qualms about "refunding" money that wasn't really meant to be in an account, be it PS, match, or whatever, and I guess I am just curious if that's become some kind of norm while I missed a memo or whatever. I have a couple of plans where that would really be a lot easier, and I'm ready to tell them that's too bad, but thought I'd check.

Hi, I'm a new member and first time poster. I have a situation where I am trying to confirm whether or not an independent contractor is part of an ASG.

I have two doctors each with their own professional corporations (PCs). The PCs are the two members (50/50) of an LLC, and the LLC performs medical services. Each doctor is the sole employee of his PC. I am pretty sure the two PCs and the LLC constitute an ASG. The doctors want to associate with another doctor who also has his own PC but will be an independent contractor (I/C) with the LLC. Neither the new doctor nor the new doctor's PC will have any ownership of the LLC. The new doctor will not be a manager or officer of the LLC but the new doctor will perform most if not all of his medical service through the LLC. The new doctor wants to be an I/C because he maintains a separate defined benefit plan that he is max funding. The LLC has employees - nurses, nurse practitioners, physicians assistants.

Question: Is the new doctor's PC part of an affiliated service group with the LLC or the other PCs?

I know that 415 limits don't apply to 457(b) plans (not that they would be relevant, since the 457 limits are lower), but for purposes of calculating the annual addition limit for the same employer's 401(a) plan, do you count contributions to the 457(b) plan? In other words, are these contributions "annual additions" for purposes of 415?

Hi. We have an employee that is working two positions within the organization, but for two different sister corporations under the same corporate parent. The parent is the paymaster. On a weekly basis, the employee is working 18 hours in one position and 20 hours in the other. So she is part-time for both. However, her hours collectively are full-time.

Can anyone direct me to regulations or guidance on how to handle health & welfare plan eligibility for this situation? Status is part-time, but total hours is full-time. Does she receive full-time benefits or part-time benefits?

According to the Plan Document, a participant will become 100% vested upon Plan Termination or upon discontinued contributions to the Plan.

The company plans to terminate the Plan in 2010, but the Plan is not making any further contributions for 2009.

When do the participants become 100% vested? When the official Plan Termination paperwork is signed or when the contributions stop?

Also, Who becomes 100% Vested? Only employee who are active at the date of Plan Termination, or all participants with account balances, even those who are termintaed and not employed by the company?

does this apply to participants in 401(k) accounts? are participant level accounts considered covered accounts that fall within the law?

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,