We're considering offering an early retirement program whereby employees' age + service would be bridged for purposes of qualifying them for retiree medical (currently Rule of 70). Does management's decision to attribute additional age + service to an employee technically require a plan amendment in order to be recognized under the plan or can its decision to deem early retirees an additional number of years of age + service to get them to the vesting threshold be viewed as an administrative decision?

Hi. We will be scanning and electronically storing HR related documents as well as working towards on-line new hire enrollment and on-line status changes. Can someone point me to guidance on what are the issues we need to consider as we go through this process? What documents should be maintained with original signatures? As we attempt to go paperless, how long should we hold on to old enrollment forms? Other questions/issues I haven't thought of yet?

Thanks.

Hi. We will be scanning and electronically storing HR related documents as well as working towards on-line new hire enrollment and on-line status changes. Can someone point me to guidance on what are the issues we need to consider as we go through this process? What documents should be maintained with original signatures? As we attempt to go paperless, how long should we hold on to old enrollment forms? Other questions/issues I haven't thought of yet?

Thanks.

How do you reduce the formula in a 412(e) plan? The premiums for the insurance are the same each year - it is just the annuity that changes. If you reduce the formula the death benefit also gets reduced, doesn't it. Do you have to reduce the insurance policies death benefit? Do you do a fresh start like a typical DB plan if you reduce the formula?

The company has hit hard times - and instead of terminating the plan - they just want a smaller contribution.

Thanks

How do you report balance information for the SSA - do you report it as the employee's termination date or the last day of the plan year?

Does anybody know the IRC Section, the reg., the ruling, or letter, that makes this requirement:

"Internal Revenue Service (IRS) guidelines prohibit distributions from a qualified pension plan to participants who are actively employed in either a full-time or part-time position with an employer covered by the plan. This prohibition extends to participants under the age of 59 ½ years who are re-employed after retirement without a bona fide break in service. The IRS may impose a 10% penalty on your retirement benefit if you violate the prohibition.

Consequently, you must be removed from the County payroll for at least 30 days before being reemployed by the County. Also, your decision to retire must not be conditioned upon an offer of re-employment."

This requirement is in every plan but I can't find the source which requires it. Anybody know offhand or have any suggestions? And, may employees over the age of 59 1/2 be reemployed without any break in service--any prohibition on that?

New DB Plan as of 1/1/2008. Participant count is 114. So with my understanding of the 80/120 rule they do NOT need an audit and can file a Sch. I instead of a Sch. H. However, they do have a 401(k) Plan which is subject to an audit (over 120 participants). Is there a rule that says if one employer's Plan is subject to audit then all of the Employer's plans are subject to audit as well? And if so, can you reference a code section? Thanks!

Does a plan operating as a safe harbor (3% non-elective) lose its' safe harbor status if it also provides a match formula of 40% match on deferrals up to 10% compensation.

I know there have been some prior posts about this including reference to an old article (say around 2000 or 2001) entitled Pros and Cons of the the VFCP. I was wondering if anybody could correct me to a more recent article or checklist that one might use as a decision tool here. Have a 401(k) plan that failed to timely submit all 401(k) deferrals at the same time due to record transfer error. The failure resulted in a small amount of deferrals ($5,000) being a few days late last fall during which time general market incurred significant loss. Accordingly, we would expect loss, if any, to participants as a result to be very small. Willing to make up lost interest amounts, etc. but is it really worth going through VFCP filing?

Hi there, I tried to search but couldnt come up with anything (that I thought) that could help.

I pretty much need a worksheet kind of thing to work out just how a company can give their key emps more inan hsa than other emps.

thanks

Does anyone know if a Plan must obtain a new (presumably additional) EIN when it adds Roth deferrals?

Plan recently terminated and paid out all participants save one. The lone holdout is actually a participant who died several years ago. There is no beneficiary designation and the participant's estate was not probated. The Plan sponsor has tried to find heirs to the participant with no luck. The participant's account is in the range of $400. What can the Plan Sponsor do?

We have a self insured medical plan. We have a schedule A for the stop loss, do we file this with the 5500? The stop loss is between the carrier and the insurer not the plan.

Does a 403(b) plan run by a non profit have to comply with Non Discrimination Tests? I assume in the past no, but for 2009 with the new regs will it change? TIA

Can new loans be eliminated from a plan, prospectively? If so, is a 204(h) Notice required ahead of time? What would you do about existing loans?

Thanks in advance for any help.

We inherited a DB plan with Life Insurance. This plan is sponsored by a small corporation with 10 participants.

The Death Benefit under the plan is the greater of Insurance proceeds less cash value or the present value of accrued benefits.

The document indicates the face amount of policies shall be 100 times the anticipated monthly benefit. With an on-going plan the face amount for each participant is their projected monthly benefit X 100. Does anything change if the plan is frozen? In this case there were 2 new entrants in 2008 who accrued benefits. The plan was then frozen 1/1/2009. Must policies be based on their projected benefits even though the plan is frozen?

The goal here is to make sure all participants have the proper amount of insurance.

Speaking of the proper amount of insurance, the 100% owner of the corp (and only key employee) only has insurance of about 50 times his monthly benefit. Could he waive (in writing) the remaining amount that the plan would ordinarily purchase for him?

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?