We are looking for someone who can help us create a crystal report that can be run in relius. The report will need to have formulas within as well as some graphs. We are attempting to run a gap analysis which can be mailed to participants or saved as a report to the participant website. If interested, please send me a message.

Is anyone familiar with the Public Employee's Retirement Fund that Indiana University has? I am trying to figure out if an employee can roll over their balance from this PERF plan into a 401(k). Any help would be much appreciated.

I was on maternity leave from mid-January to a few weeks ago. While I tried to stay abreast of what was going on in the retirement plan arena, I have to admit that I was slightly pre-occupied with my darling daughter and probably missed a thing or two!

I want to confirm the status of the DOL's three-part fee disclosure initiative:

The proposed regulations for the participant-fee disclsoures under ERISA 404(a)(5) and the service provider disclosures under ERISA 408(b)(2) were not finalized and have been put on hold indefinitely.

Part III of the initiative, which affected the Schedule C attachment to the Form 5500, has been finalized. No changes have been made to the 1/1/2009 effective date or the scope of these rules in light of the new administration.

Did I miss anything?

Thank you!

Laura

Considering the fact that Payroll needs to reduce the amount of taxes paid to the Feds, are you providing a roster of the AEI's or just a total number? Would this fall under the health care operations of HIPAA? Thaks for your thoughts.

Do you think this will fly? A non-profit currently sponsors a 401k PSP. They are having trouble with the 401(k) test. Should they consider amending the 401(k) provision out of the plan (making it a PS only plan), then start a non-ERISA 403(b) that accepts only 403(b) contributions? This would solve the 401(k) test, correct?

Thanks

Changing a model SEP plan to a plain SEP plain; how does one do that? What variations in eligibility requirements occur between the two?

For 1/1/2009 valuations, most of my small DB plans would "normally" use the September, 2008 transitional segment rates of 5.41%, 6.09% and 6.41% (for the 1/1/2008 valuations, we typically used the September, 2007 transitional segment rates of 5.66%, 5.85%, and 6.03%).

What options, if any, does the IRS's March 31, 2009 Special Edition of Employee Plan News give us to use different rates?

For example, could we use the October, 2008 spot rates of 7.35%, 8.61% and 7.26%?

With interest rates used to convert accrued benefits to lump sums in the process of changing from US Treasury rates to corporate bond rates, and being phased in over the 2008 to 2012 plan years, would it not be cheaper to pay out lump sums 3 years from now than it is today, considering bond rates are higher? This would be something to consider if deciding whether to terminate a DB plan or not? yes?

One member of a multiple employer plan maybe purchased soon and they are trying to determine whether to spin off, freeze or terminate current DB plan.

Have a client that has a restrictive eligiblity requirement for the match.

Only 1 (approx. 270 contributing) out of 7 (325 contributing) divisions is eligible to receive the match. They do have hour and last day requirements as well.

As a result, they failed coverage. 410(b) for the match.

Plan has lousy participation, and a very high eligiblity population. 900 accounts w/ balances, approx. 6000 eligible & only 595 participating.

To pass coverage it was discovered that plan needed to bring in 677 newly eligible employees.

-Will retroactively making everyone eligible for the match reflect the plan to be 100% benefiting?

-QNEC only made to those participants that contributed (325)

-does a QNEC still need to be funded for the remaining 352 (677-325) since now everyone is now considered benefiting

Am I way off base? I am by no means a coverage expert. HELP

I rarely ever deal with 11(g) amendments, but I've 3 situations come across my desk within just two weeks that may require these amendments!

Here is the one I am dealing with now:

403(b) plan with discretionary New Comparability feature. 3 groups. Groups 1 & 2 are made up of HCEs. Group 3 is all of the NHCEs. For sake of the conversation let's say Groups 1 & 2 received 12% and Group 3 8%.

We are doing the 12/31/2008 plan year end work, although we did not restate the plan to our document until 1/1/2009.

The document in effect as of 12/31/2008 states the plan will satisfy the gateway rules using the broadly available allocation option. Why it was drafted this way is beyond comprehension, but that is indeed what it says.

The allocation does not satisfy the broadly available allocation option, so cross-testing is not an option. The plan cannot satisfy the rate-group test using the allocation rates or allocation rates with permited disparity, so based on the allocation of 12% to HCEs and 8% to NHCEs, the general nondiscrimination requirements are not satisfied.

Obviously, we could raise everyone in Group 3 to 12% to correct the violation without an 11(g) amendment. But let's say the client wishes instead to retroactively amend the plan.

If we were using the minimum contribution gateway (i.e. lesser of 1/3 of highest HCE rate or 5%) the gateway would be satisfied. The rate-group test would also pass using accrual rates.

Could the plan be retroactively amended to state that the gateway will be satisfied using the minimum contribution option? Or does the amendment have to state that certain NHCEs will be raised to 12% in order for the test to pass?

Hello all,

I have a plan that uses a safe harbor enhanced match, 100% of 6% of comp calculated and paid on a per pay period basis. I am doing the year end valuation and run a quick check of the match and see where the hce's are overfunded by $3000. The plan document does not call for a true up. Is the self correction to consider the excess match as ineligible and forfeit it?

NQDC plan says that executive receives an amount in his "account". Each year, account is "credited" with an amount determined pursuant to a formula. Service provider is fully vested -no SRF. Parties want to "amend" the formula? Is that a permissible change? If so, what is the authority? Thanks.

I have a plan that requires that participants work a minimum of 1,000 hours to receive a profit sharing contribuiton. There is one participant who did not work 1,000 hours and the trustee has indicated that she shouldn't receive a contribution. The plan is top heavy. Doesn't she have to receive a top heavy minimum contribution?

Plan is a small profit sharing plan. It is expected that termination and trust liquidation will be completed any day now. Can we use 2008 paper forms (marked as for 2009) for last 5500, or must we wait until the electronic version for 2009 is available?

Under EPCRS, there's a reduced fee if the only operational issues being corrected are failures to timely adopt interim amendments. Good-faith EGTRRA is certainly an interim amendment. What about the amendments for final 401(k)/(m) regs and 415 regs? Are all amendments, even if IRS required, considered interim if they occur between restatements on the 5- or 6-year cycles?

My mother-in-law has a Veba with a large school system in the midwest that is Ran by Met. I am a financial advisor after looking over the funds they are full of unneccesary expenses and we both share the belief that money for healthcare should not be gambled (ie in the stock market, which by the way should be criminal). We just want something that earns a little interest like a savings account would (steady as she goes). There is only one fixed option that probably hasn't paid 3% since the early 1980's when intrest rates were in the high teens. Is it possible to move these funds outside the control of Met? Or is the money locked in like 401k plan or worse?

Thanks in advance

The participant count for a calendar-year plan as of 12/31/06 was 86. On 1/1/07 and 12/31/07 the counts jumped to 105 and 121, respectively, the first time the plan ever had a count of over 100. The plan was considered a small plan due to the BOY nature of the 80-120 rule for 2007.

The participant count as of 1/1/08 remained slightly over 120 but dropped to 71 by 12/31/08 and probably will never go over 100 again.

The sudden and significant increase and decrease in the participant count was due to the fact that the employer has high turnover and it seems the TPA failed to process distributions for about a year or so, and then the new TPA cleaned everything up in 2008.

I could not find anything that would justify allowing the plan to file as a small plan for 2008 and I would like to be sure before I tell the client they have to get an audit for the plan just because the payables piled up due to the TPA's neglect - I'm sure many of you know that the audits are not cheap. Is the employer forced to file as a large plan and get an audit just for this one year? All help is greatly appreciated.

Here's the Story (of a man named Brady ....):

I'm looking for observations on a practical level, not extremely technical.

A client has a 401(k) plan with match that is administered by another firm. Presumably they have certified that the plan meets the ADP and ACP tests.

My firm then implemented a cross tested plan that includes a profit sharing plan component and a defined benefit plan component.

We are to now value the plan for its second plan year.

The client provides data that he thinks is sufficient, but really isn't ideal, unless they just can't get complete data.

For example regarding the 401(k) plan we have account balances as of end of last year but not this year and we have the amount of deferrals and matches for the current year. So in order to compute the average benefit percentage, I don't have year end account balances but can impute some estimate.

For the profit sharing plan (which our firm handles) the client did not provide year end balances, but of course we know the allocations for the first year of the plan. So again we can simply estimate year end balances for non discrimination and average benefit testing. The testing is done on an accrued to date basis.

I don't know for sure but I beleive they do not have sub accounts for the PS plan and just one account with a total value.

As practioners, I am looking for a consensus. Are most of you getting year end account balance data or imputing year end data?

While year-end balances are not imperative yet, after a couple more years the estimates will be all but worthless.

Regarding plan distributions. 2 employees terminated and are due benefits from the profit sharing plan. Let's assume all assets are combined in one account. The plan provides that the valuation date be the last day of plan year or any other date the administrator deems appropriate. These are to be the first plan distributions from the plan. The plan year end is 3/31/09. Logistically any suggestions?

That is, would you just recommend to take the value as of 3/31/09? And if not what day might you use (recommend to client), as the values change daily?

Thanks.

Can the sponsor of a VEBA pledge the assets as collateral?

We have two trusts for which this question has arisen.

One trust has language in the VEBA indicating that the assets can be pledged, but it is not a well-crafted document and does not indicate the circumstances under which the assets can be pledged.

The second trust is silent on the issue.

Does anyone have an authority to cite? That would be very helpful.

Thank you!

OK, plan failed ADP test and made refunds from all roth-K source on 3/14/2009 for calander year 2008 test failure.

Roth - Deferral to correct, $1,000

Loss on Roth Deferral, $200

Check to Participant $800

I get the 1099-R ($800 box 1, $0 box 2a, $1,000 box 5) reporting and that the participant has no taxable income on this distribution because it is 100% Roth-k with no gain. The question is can the participant claim the $200 loss on his/her 2009 tax return?

I'm pretty sure the answer is yes they can but if anyone can point me to any specific IRS guidence confirming this I'd be very appreciative.