I am working on my first PPA cash balance plan termination. The plan is only 4 years old but the business closed it's doors. The interest crediting rate and actuarial equivalence has always been the 30 year Treasury Rate.

In order to calculate the annuity options, it looks like I have to use the average of the rates used under the plan for the five year period ending on the termination date, is that correct? If so, even though the plan is only four years old would I use a five year average?

I thought I'd read something that changes the latest employer contribution deposit deadline to 8 1/2 months after the close of the Plan year (impacting sole props, partnerships, etc). I've not been able to find any information to that extent. Has anyone heard of deposit deadline changes for 2008 or 2009?

As everyone knows the economy is hitting the certain construction trades hard on unemployment. Alot of the membes maybe losing their homes, has outstanding medical bills, etc. Our union is in a money purchase pension plan under the Internal Revenue Code. I have be reading that money purchase pension plans may not make hardship distributions. Can the trustee's adopt loan provisions under which participants can take loans against their individual accounts for hardship purposes like how much or how often?

Is there any others multiemployer union plans that you can make hardship distributions other than 401(k) plans?

I have a plan (plan A) that acquired another company (company B) through a stock deal as of 12/31/08. The participants in Plan B's plan were terminated and given the option to rollover their money to Plan A's plan.

I am trying to determine HCEs for the 2009 plan year. Plan A uses the top 20% rule and it does apply. Do I need to include the employees of Company B. Normally for Stock deals, I would say yes, but since Plan A is not a successor plan I am thinking no. Also, Company A did give credit for prior service for eligibilty & vesting.

Any help would be appreciated.

Question - Does anyone know if it is required that all insurance benefits under a wrap plan have the same policy year when you are trying to file only one 5500 for all the welfare benefit plans under a cafeteria plan? I thought I had read or was told that when using a wrap plan for all of an employer's welfare benenfits (Group Health, Dental, Medical FSA, DCAP) that the polices all had to have the same reporting year in order to be able to file only one 5500 form. Anyone have experience with this situation?

On a side note is it proper to file the 5500 for the cafeteria plan year (Aug. 1 to July 31) when the welfare benefit policies run 11/1 to 10/31 of every year? Not sure why the cafeteria plan year was originally set up as Aug. 1 to July 31 as aren't they normally calendar year plans (1/1 to 12/31)? If we want to change the cafeteria plan year to Jan. 1 to Dec. 31 do we just amend the plan document and file a short plan year for the period Aug. 1 to Dec. 31 and not report any activity on the welfare benefit plans, and then report the welfare benefit plan's activity on the new plan year (1/1/ to 12/31)? Any help with this would be great, most of my experience has been with Qualified DC plans in the past.

Nathan

Assuming you read the July 29th letter signed by Aetna, Mercer, Willis and hundreds of large employers and trade associations addressed to Speaker Pelosi and Minority Leader Boehner, where is the citation requiring maintenance of effort with respect to voluntary employer sponsored retiree heath benefits (e.g., not subject to collective bargaining)?

My question is whether a top hat plan has to supply information as required by Title I of ERISA if it receives a QDRO. Although top hat plans are exempt from Parts 2, 3 and 4 of Title I of ERISA, they are subject to Part 1, which includes reporting and disclosure requirements, and Part 5, which includes criminal penalties for willful violation of the reporting and disclosure requirements.

ERISA Sections 104(b)(4) and 105 are included in Part 1 of Title I. A plan administrator will, however, be deemed to satisfy the reporting and disclosure provisions of Part 1 by filing a top hat filing with the Secretary of Labor. Thus, it seems to me that if a top hat filing was timely made, the plan administrator does not have to comply with any reporting or disclosure requirements under Part 1.

My question has two parts: 1) if a PA receives a signed authorization from particpant to release top hat plan info to requesting attorney (atty drafting qdro), does the PA have to distribute such information; and 2) does a top hat plan have to comply with a QDRO?

An ESOP gave a participant the right to put shares of stock distributed to the participant to the company in two 60 days periods in the year of distribution and the year after distribution. The participant did not exercise his or her put rights during such period. Am I correct that the law does not give the former participant any other rights to put the shares? How can the former participant liquidate the closely held stock in this situation?

With the new regs out - the retirement age for plans should be 62 or 65. I have a 412(e) plan with retirement age of 60.

I need to change it to 62. Can you leave the level premiums of the life insurance alone and just adjust the premiums for the annuity contracts to reflect the change. I have calculated cummulative contributions for the plan total and for each indiviudal against the insurance premiums. The percentage lay between 51% to 61%. Since the insurance premium is below the 66 2/3% does it look like it would be o.k. to keep the same life insurance premiums and just adjust the annuity premiums?

My question is whether a top hat plan has to supply information as required by Title I of ERISA if it receives a QDRO. Although top hat plans are exempt from Parts 2, 3 and 4 of Title I of ERISA, they are subject to Part 1, which includes reporting and disclosure requirements, and Part 5, which includes criminal penalties for willful violation of the reporting and disclosure requirements.

ERISA Sections 104(b)(4) and 105 are included in Part 1 of Title I. A plan administrator will, however, be deemed to satisfy the reporting and disclosure provisions of Part 1 by filing a top hat filing with the Secretary of Labor. Thus, it seems to me that if a top hat filing was timely made, the plan administrator does not have to comply with any reporting or disclosure requirements under Part 1.

My question has two parts: 1) if a PA receives a signed authorization from particpant to release top hat plan info to requesting attorney (atty drafting qdro), does the PA have to distribute such information; and 2) does a top hat plan have to comply with a QDRO?

Can an employer require pre-tax deductions only? We currently allow employees to elect pre or post-tax deductions for the health plans but wondered whether or not we could change to pre-tax only.

One good thing PPA funding has brought us is the ability to fund a large maximum contribution (when appropriate) to most plans that have existed for a while.

Speaking of appropriate, could an employer purposely fund far more than accrued benefits just before terminating a plan, knowing that excess assets will be allocated?

For example, suppose you have a 1 participant plan and the 2008 PVAB and assets were $700,000. Suppose the participant has many years of service and participation and is nowhere near his 415 limit. Also, the participant will not work the required 1,000 hours to accrue a benefit in 2009. There would be no TNC in 2009 but the maximum contribution could be $300,000. Could such a contribution be made? I would think so.

Thanks.

Say a one participant (owner) plan has a plan year from 8/1/08 through 7/31/09.

On 8/4/09 they decide to adopt a plan amendment to freeze plan accruals effective 8/1/08.

Of course we know that accrued benefits as of 8/4/09 cannot be reduced, so this would violate 411d6 and 412d2 for funding purposes.

What are the consequences of such an amendment?

Plan disqualification? Other?

I always read that it is not allowed, but never do I see anything reporting on the consequences.

Thanks.

Client has existing 401(k) plan. Salaried employees were not eligible to participate. Client wants to make salaried employees eligible 10/1. Does the amendment have to be adopted before 10/1, that is, before these employees begin participating? Or do we have until the end of the year to adopt the amendment.

I have heard Jim Holland state and now i've heard someone else say that if the plan's 2008 FTAP is at least 92% quarterly contributions are not required for the 2009 plan year. I can not find any cite that applies the transitional funding levels (92%, 94%...) to the definition of funding shortfall for quarterly purposes, only for the exemption of shortfall amortization charge (and also in 436). Does anyone have a cite that says the transitional levels can be applied to the FTAP for quarterly requirement?? Thanks.

Is there a problem with using forfeitures to make a corrective contribution (assume the plan specifically allows for it)?

Client has two plans - one Union and one nonunion.

1. Can the two plans be covered under one bond?

2. If the one plan needs $500,000, and the other 70,000 do we add the two together or is their one limit per employer?

I think they have to have the two added together, but I cannot find something to "prove" it to the client.

Thanks - any comments or help appreicated.

Pat

Is it possible for union employees to bargain for some of their retirement benefits, but not all?

An employer is telling me that they have union employees and they bargain for a DB plan. This plan is only for the union employees.

But the employer also sponsors a 401(k) plan. Everyone is eligible for this plan (both union and non-union). But the employer is indicating that the union employees do NOT bargain for the 401(k) - but they can participate in it if they want to.

So if that's the case, then there would be no union employees when it comes to nondiscrimination and coverage testing on the 401(k)? That means no bargaining exclusions for coverage and everyone is included in ADP/ACP?

Does that seem legitimate?

Stupid question, but when you are putting the 5500 packages together, are you putting the "SB" after the the "R" and before the "SSA" or are you still putting it in the old "B" slot?

From my accounting 101 class I was always told to organize schedules in alpha order, but the schedule checklist section of the 5500 still lists just "Schedule B" and doesn't say "SB" or "MB". However, the directions list the schedules in alpha order with the "SB" after the "R".

I know, stupid question, but is everyone else putting the "SB" after the "R"?

I would appreciate advice on the following situation:

I was employed by a company that offered a HDHP and HSA from 9/08 thru 5/09. I made excess pre-tax contributions to the HSA in both 2008 and 2009 and have a balance of approximately $5,000. I contributed ~ $3000 pre-tax in 2008 and another $1650 pre-tax in 2009. My company contributed approximately $2000 over the same period. I used some of the funds to cover health care costs, resulting in the roughly $5000 HSA balance.

I left the company at the end of May, 2009 and received a severance. Part of my severance was an agreement by the company to fund my health care through the end of 2009 (under COBRA), or until I started at a new job that provided health care.

I started at a new company on 8/3/09 that does not offer a HDHP -- only a PPO with the option of a Flexible Spending Account to contribute pre-tax dollars. My previous company ended my coverage when I advised them I had started work at a new employer.

My questions:

-- Can I leave the $5,000 balance in my exisiting HSA where it is (credit union account) and use this to cover health care costs later on in retirement? If not, what happens to the money? Must it be refunded to me and if so, is there a 10% tax, plus the refund appears as ordinary taxable income at year-end?

-- Can I enroll in the FSA offered by my new company and contribute pre-tax $'s from 8/09 thru year end while still leaving money in the HSA? Can the FSA funds only be used to pay for unreimbursed health care costs incurred from the date of my employment (8/3/09) thru year end -- or can they be used for any 2009 unreimbursed expense, including the deductible from the previous HDHP?

-- Can I use the HSA funds already contributed and in my accout to pay for unreibursed health care costs from the PPO plan?

Thanks in advance for your help....

(I am not a benefits person -- hopefully I explained this well enough to elicit a few replies...