A new-to-us client has maintained a plan that dates back to 1981. It has never received a determination letter from the IRS. Originally, it was a money purchase pension plan.

Apparently, no TEFRA/DEFRA/REA amendment was timely made. This was discovered in the early 1990s, as part of the TRA '86 restatement process.

I'm assuming that in that pre-EPCRS era, the provider did not have the option of a plan document failure fix with minor penalty as there now is. It appears that provider simply restated the plan as a standardized money purchase pension plan in the early 1990s to give the plan reliance on that provider's standardized prototype notification letter, per Rev Proc 89-13, section 11.02.

Shortly thereafter, the plan was restated again, but this time as a standardized profit sharing plan. Again, reliance on provider's notification letter from the IRS. (This followed so closely on the heels of the restatement to the standardized money purchase pension plan that it appears that step may merely have been made by the prior provider to lay claim to Rev Proc 89-13, section 11.02 reliance.)

The plan was timely restated for GUST. Yet again, reliance on provider's notification letter from the IRS.

The employer recently hired our firm to restate for EGTRRA. The plan design changes now wanted require that the prototype used be in the non-standardized form.

If we prepare an IRS Form 5307 application, from which notification letter would we have to provide later documents? or would it be from plan inception?

The argument for the TRA '86 notification letter is that if a determination letter application (Form 5307) had been made in the later 1990s, that TRA '86 notification letter and adoption agreement (and amendment in the interim until the application was made) was all that would then have been required.

The argument for documents from plan inception is that beginning with the GUST restatements, reliance on adoption of a standardized prototype's notification letter did not count as the most recent determination letter for the plan.

Or, would it simply be better to prepare a document failure VCP application at the same time as now making a determination letter application?

So, it's a sunny Saturday afternoon and I've got nothing better to do but look at RP-2000 q's, projected to 2008. For the ages from 54 to 61, the girls are dying faster than the boys.

Anybody ever notice this? Does this make sense?

An employer with 8000+ lives wants to expand the list of potential recipients for its DB RFP that will include actuarial, admin, investment consulting, legal&compliance, domestic and international plans. Aside from the "big name players" can anyone recommend a boutique-type firm that might be able to provide services to support a DB plan that is complicated due to an extensive legacy plan/grandfathered benefit scenario? Client is located in the NYC metro area.

Are they many out there electronically filing the Form 5500, etc using EFAST? We have not tried it yet. It's not required until the plan year beginning in 2010 (or it is 2009?) but I was wondering if has been a time consuming process. Some clients, especially small ones, like to receive the forms in the mail, sign it, mail it and not have to deal with applying for an e-signature.

We use Relius to generate our Form 5500's.

Also, how about attachments. How are the attachments sent with the filing?

Does anyone know what subsequent law increased the $1,750 cash out amount under Reg. Section 1.401(a)-(11)(a)(2) to $5,000?

If an Enrolled Actuary issues Statements of Actuarial Opinion on ERISA plans as well post-retirement medical benefits, it looks to me like he/she must meet the new Qualification Standards, that is, 24 hours of credit for 2008, 30 for each year after 2008, and does not qualify for the EA exemption. Is that correct?? If not, what are the current qualifcation standards for such an EA? Thank you.

I have a QDRO that states that the alt. payee is to receive a flat dollar amount, based on the partic. account balance from two years ago.

Up until the date of transfer, the QDRO states to add in any gains and minus any losses, but only gains and losses associated with the flat dollar amount to receive.

Here is what I know:

Partic. Beginning balance 6/9/07 $75,000.00

Alternate payee portion $27,000.00

Partic. remaining portion $48,000.00

Partic. cont's 6/9/07 - current day $20,000.00

Net G/L 6/9/07 - current day ($21,000.00)

Ending acct. balance $74,000.00

Does anyone know of a QDRO calculator on the web that could help me determine what portion of the ($21,000) loss is attributable only to the alt. payee's $27,000 to receive?

I've looked at this a couple ways - one, treating it as if alt. payee's portion were an ADP refund. Another way was this calculation:

Partic. Balance portion after split $48,000.00

Partic. Cont's 6/9/07 - current day $20,000.00

Sum $68,000.00 Dollars from the participant that make-up the ending balance.

This sum / ending acct bal. = 91.89% 68,000 / 74,000

91.89% of net G/L = ($19,297.30) Partic's share in G/L 91.89% * (21,000.00)

Alternate payee G/L portion = ($1,702.70)

Plan uses Safe Harbor for Hardships.

Plan does not allow for loans.

Participant is building a new home and has a construction loan.

Current home is not selling (surprise - we live in MI)

He now is defaulting on the construction loan and wants a hardship.

Any ideas as to whether this fits under purchase of a principal residence or forclosure ?

Thanks

Pat

Is an employer-provided group life insurance policy considered an ERISA employee benefit for which an SPD is required?

Greetings,

I was wondering if anyone else has run into this problem yet.

I have a leveraged ESOP that just became leveraged in 2007. So, its two years into its loan. For 2008, the value of the stock dropped over 20%. Now, if you look at the net assets of the plan, the value of the plan is negative.

My question is how do I report this on the 5500? Is it ok to have a negative value? Do I leave the Schedule I out of balance?

Any help you can provide would be greatly appreciated.

I know this may have been asked before, but would appreciate any help.

I am doing a retirement calculation for a rehiree.

She termed in 1997 and took a lumpsum payment. Was rehired in 2000 and is now retiring.

The benefit is based on high 3 years of compensation.

Can I use the compensation prior to rehire date in order to compute the average comp?

The plan document has no clear guidelines on the said matter.

When adjusting the 415 dollar limit for benefit commencement before age 62 during plan year 2008.

I have read sources that indicate the mortality to make adjustments for payment before age 62 to the dollar limit is done using GAR 94 for benefit commencement in 2008 plan year. That is, the app table before 2008.

Of course there was a new app mort table in 2008 I would expect that table to be used for 415 dollar adjustments.

I also bellieve I have read in a more recent source that it is indeed the new app mort table.

Which one is it? And can you provide a pertinent cite?

Thanks.

Does anyone have experience administering a trust (VEBA or taxable) designed to hold COBRA premiums with respect to an unfunded, self-insured group health plan?

Is it necessary that trust assets be directly used to pay claims experienced by COBRA recipients (qualified beneficiaries) or is it sufficient that trust assets replenish employer general assets used to pay claims experienced by COBRA recipients (or active participants)?

Is the answer any different in instances where the employer heavily subsidizes COBRA premiums?

Any comments appreciated.

I serve a client's retirement plan and I informed the pension attorney in writing that the plan should be amended to incorporate a unit accrual formula of 3.25% per year.

The attorney delivered the client a two page amendment that provides for an amended formula of 3.5% instead of the 3.25% he was instructed to do.

To me it seems reasonable to just provide the client with a replacement page that shows the correct intended formula of 3.25% instead of 3.5% and he can just toss the old page.

FYI It is a one participant plan. He is the owner.

The valuation was performed with the intended 3.25% formula.

Any thoughts?

Thanks.

A Participant joined the Plan in the middle of 2008, and already made $15,500 in Employee Deferrals with his previous Employer's Plan.

The he made Employee contributions of $9,000 into his new company's Plan for the remainder on 2008.

This was caught at the beginning on 2009, and a refund was processed in 2009 becuase they went over the 402(g) limit.

My question is how do I account for this on Scheudle I?

Do I include the $9,000 in Employee Deferrals even thought it was not supposed to go into the Plan and refund to the participant in 2009?

The money was invetsed and is showing up as part of the 12/31/2008 balance in the Trust.

Do I need to deduct the $9,000 from the ending marking value to report on Schedule I?

Any help would be greatly appreciated.

If one wants the "PPA" statutory prohibited-transactions exemption for an eligible investment advice arrangement, ERISA 408(g)(5) requires an annual compliance audit on whether the arrangement meets the conditions of ERISA 408(g), and requires that the independent compliance auditor's written report be issued to the independent fiduciary who approved the plan's use of the arrangement.

Has anyone seen such a report? Is anyone in America doing this?

An employer has two plans, a 401(k) and DB Plan. The owner pays his two children approx. $5,000 per year however, they have never met the eligibility requirements for either Plan because they never work even close to 1,000 hours. There is one other employee who works about 700 hours per year and is paid approximately $16k.

The owner is the only participant in the 401(k) and DB Plans. Is this ok? Is there a nondiscrim or coverage problem that should be considered? Or because the other employees never meet the eligibility requirements then it is ok for the owner to be the only participant in either Plan?

Thanks for any help.

The recent thread on hardships being grossed up for taxes got me thinking (I hate when that happens!)

What if someone overestimates the amount of taxes? For example, say someone requests 10,000 in a base hardship. Then includes the 10% penalty tax (1,000). And for Federal tax they assume a 35% rate (3,500) for a total of 14,500.

What happens if the person is in the 25% bracket at the end of the year? Obviously the h'ship was more than the need + taxes & penalty.

This employer has a 401(k) Plan and a Defined Benefit Plan. He pays his two children about $5,000 each year and they work minimal hours (definitely less than $1,000). There is one other employee who makes approximately $16,000 per year but never works 1,000 hours.

He is the only participant in the DB and 401(k) Plans. Is this ok? Is there a nondiscrimination problem I should be worrying about because of this other employee? Or as long as she never works 1,000 hours or more is it ok?

I don't know much about 403(b) plans.

I understand the final regs don't allow employees to self certify hardships. However, my understanding has always been that if the employer certifies the hardship, they might inadvertently make the plan subject to ERISA. Am I missing something on this? How does a plan with hardships keep its non-ERISA status? Would having the vendor make the determination solve this issue? TIAA-CREF has offered to either have the employer make the determination or let the employer make the determination.