Has anyone seen/heard anything about IRS regulations or the IRS' position currently on whether a covenant not to compete will work as a substantial risk of forfeiture in a 457(f) plan?

A plan has a plan year that ends 7/31/09.

As of 8/1/08 the AB was 20k after 15 years of service.

As of 7/31/09 the AB is 40k.

The reason for the large increase in AB is due to a large increase in compensation.

So what happens is that the plan has no shortfall amortization, but a monumental target normal cost that is much more than plan sponsor wants to contribute.

If the beg. yr AB could be significantly increased to say 38k then the normal cost would be low and the funding would virtually all be a part of the shortfall amortiation thus reducing costs.

However, the 415 limit is only 22k at beg yr. so a large increase is not possible.

Of course this could be resolved if the AB at beg of yr and 415 limit at beg of yr. were able to b e based on the end of year avg comp but service at beg yr.

While the above probably isn't an option are there other creative ideas?

Thanks.

What are the ramifications of an employer failing to immediately respond to an appeal regarding COBRA premium subsidies? Say if the employer fails to respond within the 2 days upon receipt requested in the notice. Does anybody have experience with what the DOL does if the employer does not respond at all? Are there rules or more guidance with respect to the appeals process set out anywhere--I cannot seem to find anything other than the basic forms.

Our situation is one where we are advising employer that the individual is not eligible based on date of termination and that the appeal should be denied. Apparently some at employer do not want to be seen as actively working against the former employee and so some thought has been given to just not responding. I guess if I knew or felt the former employee had accurately described the situation and provided all documentation, that might not be so bad; however, in this case we have concerns with the way the employer is characterizing the termination / severance--i.e., employee is basically trying to claim amounts paid as severance reflect continued wages and pay as active employee which would carry him into eligible AEI period.

At the very least a nonresponse seems risky and possibly likely to invite additional DOL attention. At the worst though it concerns me that a nonresponse or non-explanation might be viewed as misrepresentation if the employer does not counter false employee claims.

Any guidance would be appreciated.

Form 5500 has the Schedule R which asks the question whether there was an election made under IRC 412(d)(2) [previously 412©(8) for retroactive amendments]. Since the 5500-EZ does not have a Schedule R does the 412(d)(2) election still need to be attached to the annual return (Form 5500) as explicitly required with the Form 5500 per Schedule R instructions ?

As the electronic distribution regulations say an employee has to affirmatively consent to receive benefits information electronically, are employers doing this? Or are any employers posting or sending out a notice saying distribution will be electronic unless a person opts out and gives instructions on how to opt out.

2-doctor medical practice sponsors a profit sharing plan.

Doctors are the trustees; employer is plan administrator

Participants have self-directed individual brokerage accounts.

Plan allows for plan loans and hardship distributions.

No other inservice distributions are allowed

In 2007 one doctor took $59,500 out of his account as a plan loan.

Repayments were deposited into plan account in 2007 in amounts sufficient to restore excess loan amount and pay interest.

Loan balance at 12/31/07 was $46,940

No loan payments were made in 2008.

In November 2008, same doctor took out an additional $25,000 loan from his account.

The first loan is in default (no payments in 2008), but can a fiduciary default on a loan?

Any suggestions on how they can fix this plan - VCP, VFC?

I have a client with a non-Safe Harbor 401(k) plan. The plan is a prototype that includes the typical amendment language. The plan has a calendar year plan year and provides for a 2% nonelective employer contribution and a fixed employer matching contribution equal to 50% of the first 3% of elective deferrals with a last day of plan year employment requirement and a 1,000 HOS requirement (both of which are waived upon death, disability or retirement on or after 65). Due to the current economic conditions, the employer would like to cease both the nonelective employer contributions and the matching contributions for this entire plan year (including retroactive to January 1, 2009).

Can the employer suspend both the nonelective employer contribution and the matching contributions for this entire plan year because no one has yet attained both 1,000 HOS and employment on the last day of plan year? Or to eliminate any 411(d)(6) or other concerns, can the suspension be only prospective such that participants receive a match from January 1, 2009 through the date of the suspension using compensation through the date of the suspension? Based on previous threads, it appears that this may be possible because there is no allocation formula accrual here based on the fact that the end of the year has not been reached.

Has anyone amended a non-Safe Harbor plan midyear to eliminate the nonelective employer contribution and/or matching contribution in its entirety rather than from the date of the plan amendment?

Is anyone aware of any lawsuits by participants based upon contract law or reliance theories due to fixed formulas included in summary plan descriptions? I have not found any yet during my initial online research.

Thanks. I appreciate any help that any of you can provide.

It is my understanding that multiple employer plans that wanted individual determination letters for EGTRRA were required to file in Cycle B. Is there a similar rule pertaining to multiemployer plans? If not, then how do I handle our MEPs? We have a number of them and I need to know how many must be filed in January for planning purposes.

Also, can anybody refer me to a useful, easy to understand EGTRRA restatement guide? I want this stuff down on paper because it makes my head spin.

Thank you so much!

From the IRS Code Section 132(f) - Qualified parking. - The term "qualified parking" means parking provided to an employee on or near the business premises of the employer or on or near a location from which the employee commutes to work by transportation described in subparagraph (A), in a commuter highway vehicle, or by carpool. Such term shall not include any parking on or near property used by the employee for residential purposes.

Can an employer define which parking lots they will reimburse for, and which parking lots they will not reimburse for under Section 132? What about a parking lot next to a building, versus a parking garage underneath a building? If an employer only wants to reimburse for costs for parking in the building, and not for costs of parking in the surface lot across the street, is that okay?

The "parking provided to an employee" language seems to indicate this, but I can't find any documentation.

Certainly, there are situations where the Alternate Payee's benefits must remain in the Participant's plan until the "later of" date is reached, but if this plan allows for immediate distributions, can the QDRO specify that the assets shall remain in the plan until requested by the AP at some later date?

Hi,

I am completing a annual trustee directed plan and was wondering when the participant statements are due? Is it Sept 30? If they extend what is the date?

Thanks in advance!

Jasofk

Does anyone have any recommendations on software that can be purchased, somewhat inexpensively, to perform cross tested calcs? We use Relius for our recordkeeping and they offer an Employer Contribution Optimization feature, but it doesn't come up with the best result, only the first result that will pass. I know they also have Documents software that is better (from what I'm told) at the calcs, but we still want to look into something else. I've been looking into FlexSoft and see they actually offer a web based application PSCNet that is supposed to do calcs.

Does anyone have any experience with these or any suggestions? Currently we have a few attorneys and/or actuaries we use but want something we can use in house so we have more freedom to play around with options as needed, etc.

thanks!

can a non safe harbor plan and a safe harbor plan be merged midyear?

Is there anything out there that softens the regs' EACA requirements (such as universal availability) that would allow a plan the ability to return automatic deferrals within 90 days without a full-blown EACA?

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.