If you missed a 2008 RMD for an employee that was due 4/1/09 and it is under $75 does it actually have to be made? Do they still expect me to file a VCP application if I am using this De Minimus rule? Obviously based on the amount, I would just pay the excise tax instead of filing VCP.

I would think this de minimus rule clearly relates to SCP situations but does it apply to situations where a VCP application is required?

Thanks

Plan has monthly entry dates.

Per all our discussions last year, the ADP test will be done using only 1 semi-annual entry date.

Plan allows ADP test to exclude compensation before employee/participant is eligible for the plan.

So when I get the compensation for the tester, do I get the compensation after the employee actually entered the plan according to the plan provisions, or do I get the compensation as though the employee did not enter the plan until the semi-annual date used for testing purposes?

I still do not fully understand what is allowed when I am "tweaking" the rules for maximum test benefit.

My questions concerns COBRA and AFLAC. My wife was recently laid off and we are now on COBRA insurance from her work. I have the oportunity to sign up for AFLAC with my company ( it is my own company and have 2 other employees, and we are in process of looking at AFLAC and currently do not offer any type of medical insurance ) I am worried that the AFLAC would be considered Group insurance and thus make us disqualified from taking COBRA. I know COBRA is negated if you become eligable to take a group plan elsewhere. I dont want to take the chance of losing the COBRA. I had read on this board the following link

http://benefitslink.com/boards/index.php?a...5610929e80e8d44

It sounds like it would be considered a group since I also am in TEXAS.

Please can someone give an acuurate determination or tell me how to find out.

Thanks,

This looks like a great board.....

I found the answer thanks

(1) Is anything in the works (under discussion in the IRS or Congress) to perhaps lessen the Lump Sum restrictions that will result when 2009 AFTAPs falls below 80% ?

(2) Is there any way to bring into the 2009 AFTAP calc the INCREASES in asset values since 1/01/09 .... to avoid a 2009 AFTAP< 80% ?

We're getting calls from plan sponsors about a report that Shephard Smith made today. They are concerned that they can't take money out of 401(k) plans anymore and I'm looking for information about what he actually said. I assume this was targeted at stable value funds that are being locked down, but am having trouble confirming.

If anyone saw this, I'd love to hear what the story was about!

I have a 12 participant profit sharing plan that acquired land as an asset 15 years ago. For the last 7 years, the land has been for sale. The state wanted to purchase the land as part of highway expansion but then backed out a couple of years ago leaving the trustees shocked. They have wanted to terminate the plan for about 7 years as well.

The plan also has an investment fund that is used to cover the administrative expense of holding the land until it sells. The investment fund has dropped to 1/2 it's value. The land is appriased for 2 million and there is $200,000 left in the investment account. We have two retirees and a recent death benefit claim. However the trustees need to conserve the investment account to pay for the $16K to $20K it costs to cover all of the ERISA requirements (annual appriasal, 2 million dollar bond, TPA fees) and local taxes.

So my question is, how do we legally cover the benefit cliams for our two retired people and our beneficiary without using up all of the cash flow needed to maintain the land until it sells? Worst case scenario is that it takes five more years to sell the land and thus at least $100,000 is needed in cash reserves.

Thanks.

Company A sponsors Plan A; Company B sponsors Plan B. After Company B buys Company A, Plan A is frozen and merged into Plan B. Company A employees begin accruing new benefits under Plan B. Normal retirement age (NRA) under Plan A was 62; Plan B's NRA is 65.

Plan B has been amended to provide that former Plan A participants fully vest in their frozen Plan A benefit at 62. Must Plan B also be amended to provide that former Company A employees retain the NRA of 62 with respect to Plan B accruals? If so, is that just for vesting purposes, or for all purposes where the Code triggers something at NRA (suspension of benefits, 411(b)(1)(H), top-heavy minimum contribution, etc.)?

This seems extreme, given that these are new accruals. On the other hand, not "lowering" NRA for the Plan A transferees would mean that each transferred Plan A participant would have two NRAs--62 for their frozen Plan A benefit, 65 for their new accruals. I can see an argument under § 411(a)(10) that the merger is an amendment lengthening the vesting schedule for Plan A participants with respect to post-merger accruals, as well as problems for the actuaries, but can't close the loop on whether two NRAs is flat out impermissible.

Thanks for any comments.

I am doing some research on the following scenario: Company sponsors self-directed 401(k) plan and wants to set up an LLC to hold land that would be leased by franchisees. 401(k) Participants would be given the option to invest in LLC through self directed 401k. The issues I am looking into:

1. Does the land meet the requirements of qualified employer real property as defined in ERISA 407? It meets the geographical dispersment requirement and no commissions would be charged on the transcations. Since it is in a participant directed account, it is exempt from the "10% of assets" rule. Does the fact that it is held in an LLC come into play?

2. Company wants to impose a $15,000 minimum investement in LLC option. My understanding of the nondiscrimination rules require the plan to test the number of participants with $15,000 or more, based on the first part of the average benefits test. If it passes this, the option is nondiscriminatory.

Any other issues I need to research further? Thanks.

Can someone tell me the difference and pros and cons of an HRA vs a MERP?

Thanks!

Full time participant (age 64) in a calendar year PS plan converts to part time in mid 2008. Total hours in 2008 are 800 so there is not a break in service. Rate of work in 2009 is about 400 hours and he no longer receives benefits. No distributable event since he has not been terminated from service. Does the change in hours make him eligible for a distribution of his account now? Or would working under 501 hours in 2009 make him eligible as of 1/1/10? Or is he simply not eligible until actual termination? Thank you.

A client has a balance in its forfeiture account that has accumulated over several plan years. The plan document allows forfeitures that have accumulated since the last anniversary date to be used reinstate previously forfeited accounts, pay any plan expenses, reduce employer contributions, or be realloacted among participants. Has anyone encountered a similar situation with respect to accumulated forfeitures that failed to be allocated timely, if so, how was the situation handled? Will the client have to go back several years and allocate the forfeitures in the years they should have been allocated, or is there an alternative method for handling this? Any suggestions would be appreciated. Thanks.

The 401(k) plan effectively terminated as of 12/31/08. No contributions have been made since that date and no new participants have been allowed to participate. In fact, the company no longer has employees, since the company was bought by another company that hired all of them. We are filing for a determination letter on June 30, 2009 and are not sure if the proposed termination date can be 12/31/08, or should we/can we use 6/30/09? Or does it even matter?

Thank you!

Does the DB and DC plan combination have to pass a comparability test from a rights and features perspective in order to permissively aggregate?

For instance DC plans can take a lump sum at termination of employment whereas a DB plan can only do it at early retirement and retirement?

Would this be a failure in the “features”?

Our company has now purchased two other companies. Both, including our site have 401(k) plans. It will be a controlled group situation. Can anyone share the risks and benefits of merging the three locations together under one plan? Is there a benefit other than the possibility of a reduced expense situation? Are there risks to merging these plans in a down market?

Really appreciate any helpful advice!

We have an individually designed plan that filed an 8905 that we are putting on a pre-approved volume submitter plan. It looks like we will need to use a separate trust agreement which we understand destroys reliance on a pre-approved plan. If this is the only change to the pre-approved plan, can we file a 5307 or do we need to file a 5300? If we file a 5307 and it goes through, do we get the 6 year reliance or are we still on the 5 year reliance for an individually designed plan? Any thoughts would be appreciated.

I have an ESOP that was timely submitted in Cycle B. To date, nothing has happened on the application. Does that plan receive extended remedial amendment protection with respect to any interim amendments required since the filing? If not, why not?

What is the proper order for credit balance adjustments for the following example:

COB as of 1/1/2008 = $100,000

MRC for 2008 $50,000

Discounted contributions as of 1/1/2008 $100,000 (contribution date 3/15/2009)

Actual Rate of Return for 2008 -40%

Effective Rate 6%

When does the sponsor need to elect whether or not to add the $50,000 excess contribution to the PFB?

Assume the sponsor elects to add the $50,000 excess to the PFB. What is the COB and PFB at 1/1/2009?

The AFTAP based on 1/1/2009 assets and 2008 contributions is 75%. Assuming COB and PFB are sufficiently large enough to burn to get to an AFTAP of 80%, does the mandatory burn take precedence over an election to use the COB or PFB to offset the MRC for 2009? In other words, can the sponsor make an election to use the COB and PFB to offset the MRC for 2009 before a mandatory burn takes place for the AFTAP?

Is 1099 compensation includable for retirement plan purposes? Plan Doc defines comp as W-2. what if employee was independent contractor and then hired full time midway through the year? do you only take into account his full time W-2 compensation?

I am working to put together a report on the history of retirement plans from the beginning of time. Does anyone have a good link or know of a good book or two that could help me put this report together? Thanks for your help!