I posted this under the 401(k) Plan Forum, but I am posting here as well, since it involves a DB plan, too:

If a DB and a DC plan are permissively aggregated, and the DB plan provides a subsidized death benefit to the surviving spouse of an active employee, how can such a benefit be provided for in the DC plan in order to pass testing? Will providing such a benefit under the DC plan result in any limit violations, such as 415?

If a DB and a DC plan are permissively aggregated, and the DB plan provides a subsidized death benefit to the surviving spouse of an active employee, how can such a benefit be provided for in the DC plan in order to pass testing? Will providing such a benefit under the DC plan result in any limit violations, such as 415?

My brother has a small business that is starting to offer health insurance to his employees. They cannot qualify for a group plan because they don't have enough participation. However, as the employer, he would still like to pay for half of the premiums for his employees and have the other half paid on a pretax basis by the employees. Can he do this thru a cafeteria plan? We can't find anything saying one way or another. Since it is individual policies can he still pay for part of it and have the rest pretax for his employees?

I was discussing this with an EA this morning, and we both were in agreement, but I thought I'd toss it out for discussion just for the heck of it. If a DB plan is in an AFTAP position such that distributions are restricted, can the HC still take participant loans?

We both agreed that they could, as the distribution restrictions do not specify participant loans as a restricted or impermissible distribution. This makes sense, because a loan is not a "distribution" per se.

Any other thoughts, opinions, or discussion?

Plan states forfeitures are to be reallocated. Forfeitures have accumulated for 3-4 years and have not been reallocated. Employer now wants to dispose of all these forfeitures. Assume the correction is to go back and determine who should have received the forfeiture reallocation for each year the plan required reallocation.

This forfeiture reallocation would be counted as a annual addition for the current plan year wouldn't it 1-1 plan year/fiscal year and no extensions)? If that's the case but what about former participants who are no longer actively employed and no compensation for this year? Is this a problem or are they due a share of the forfeiture regardless and no 415 issue for them.

Also - seems a significant enough of an error that VCP should be followed?

DB client establishes plan in 2008 and funds before 9/15 but after tax return due date.

Client intends to double up in 2009.

How is the 2009 maximum computed? Used to be the 2008 amount plus the 2009 minimum, I think. I know we have no regs.

This is a cash balance plan, so funding the 2009 minimum plus 2008 won't cover the total account balances, I am expecting.

Opinions please?

Situation:

1. Calendar Plan Year (Jan thru Dec)

2. School Year (Sept thru June)

Newly eligible ee has already, before becomming eligible, paid for day care up front for an entire school year (school not associated with day care center). How should we handle a dependent care election in this case. Is the amount not eligible at all because it is already paid or can it be eligible because it is not yet incurred? What about the monies for next plan year already spent? Just elect what's for this year and then plan on the rest for next year?

Anybody willing to share any new Cash Balance design suggestions?

In addition to the obvious interest credit question, what are others using for actuarial equivalency? I've heard that most used 417(e) rates but that seem unnecessarily complex with the segment rate 417(e) changes and phase-ins. I recently saw a takeover with actuarial equivalence defined as UP84 at 8.50% which obviously equalled testing rates and I suppose eliminated the MVAR calculation - interesting. Thoughts?

What about interest on payouts to terms - are most calculating interest quarterly? daily?

An employer wishes to terminate their old Keogh PS plan and adopt a SEP plan this year. I understand that the IRS Model SEP Form 5305 prohibits an employer from establishing a SEP if they "maintain another qualified plan".

Question: If the Keogh is terminated in 2009 and SEP started later in 2009 after the termination, does this fail to meet the requirements of Form 5305? Stated another way, does the employer "maintain another plan" if it's terminated mid year? Could we start the SEP in same calendar year using the IRS Model form?

Thanks for all help on this!!

Does anyone know of a reason why a plan would not file a schedule SSA for a multiemployer plan? I looked at the instructions to the Schedule SSA and it states..."In general, for a plan to which more than one employer contributes, a participant must be reported on Schedule SSA if: (1) the particiant incurs two successive 1-year breaks in service, and (2) the participant is (or may be) entitled to a deferred vested benefit under the plan."

We have taken over a new multiemployer plan that has over 3,000 participants but didn't have an SSA last year. Only employer contributions are made to the plan. I find it hard to believe out of that many partipants there's no one that doesn't need to be reported on Schedule SSA.

Any thoughts would be appreciated!

I am reviewing a health plan that says that dependents in military service are not covered by the plan. Any prohibitions on such a provision?

I have looked at TRICARE nondiscrimination rules and commentary, and the provision does not on its face violate the TRICARE provisions.

10 U.S.C. §1097c(a) prohibits offering incentives to waive other coverage and take TRICARE--no incentive involved here.

10 U.S.C. §1097c(b) says, "A TRICARE-eligible employee shall have the opportunity to elect to participate in the group health plan offered by the employer of the employee and receive primary coverage for health care services under the plan in the same manner and to the same extent as similarly situated employees of such employer who are not TRICARE-eligible employees." The questionable provision does not affect the opportunity of TRICARE-eligible employees to elect participation to the same extent as non-TRICARE-eligible.

If the SPD was originally written with misleading information and needs to be modified - SMM; how long does the Fidiaciary have until the information must be in the employees' hands? Under current laws.

How are people completing Line 23 of the 2008 SB if they are using 417(e) mortality as required under 1.430(d)-1(f)(4)(iii)?

For most plans that pay lump sums, 1.430 requires you to use the appliciable 417(e) mortality table to determine the funding target. This option doens't fit with any available options under line 23.

Our thought is to check the "prescribed" box, but add a footnote that we are using the table prescribed under 1.430(d)-1(f)(4)(iii).

Anyone have a different opinion?

An owner only plan terminates where say plan assets equal 70% of value of benefits.

436 would not allow full lump sum distribution.

Does anyone know of a practical example where such a plan distributed plan assets? And if there were any consequences, violations, damages, etc.?

Point being, if such a plan distributed lump sum to owner, what might IRS do? Anyone know of ramifications? Actual better than theoretical.

Thanks.

Hi,

I know I have asked this question in some manner before, but I am still having a tough time with this topic.

Plan with multiple match formulas:

Group 1: 50% up to 6%

Group 2: 50% up to 4%

Group 3: 10% up to 8%

Group 4: 50% up to 4%, plus 25% on next 2%

Group 5: No Match

For BRF, would I run the test as such-

Group 5 by itselft

Groups 1&2

Groups 1&4

Group 1

Group 3

Does this make sense?

Thanks for your help!

I understand that if an employee becomes Medicare eligible prior to going on COBRA, they get full access to their COBRA rights.

I also understand that if an employee becomes Medicare eligible after going on COBRA, they lose their COBRA rights. In that event their dependants/spouse would be eligible for up to 36 months of COBRA protection.

How would these rules apply if an employee is not on a group health plan, but selects COBRA on their group dental? Even though Medicare does not have dental, would a terminated employee (who has coverage elsewhere) becoming eligible for Medicare cause that person to lose their COBRA rights regarding the dental plan.?

With 2010 peaking around the corner, has anyone read any articles on the impact on DB plans if the sun sets next year?

well, of course, maybe.

but at least I'll give it try on how to import all that ugly nasty data into the schedule D.

you have to have a file 2pagetwo.3x8 [note, its 3x8 because its a 2008 import. last year it was 3x7]

since you can't attach a file like that on benefits link I renamed it 2pagetwo.xls so you have to rename it back.

doesn't really matter where you store the file as long as you remember where you stored it.

you have to have a file that contains all that useless schedule D info.

I have included a file named schedule D. All you need do is simply edit the names and amounts in the file.

Extremely important is the far far far column AK. you have to have the 3x8 (with the tilde) for every fund you want to import.

finally, I included a powerpoint walk through with screen prints (as best as I can do)

We just took over a profit sharing plan that currently has a GUST prototype document. The client’s EIN ends in “2”. Can we restate their current GUST prototype into an EGTRRA Volume Submitter? The document provider/sponsor for the GUST prototype is different than the document provider/sponsor for the EGTRRA Volume Submitter that we use.

Did the client need to timely execute a Form 8905 in order to restate in the above manner? Your input is much appreciated.

I know, I know--I should post this on the QDRO board. I have, but the traffic on that board is very light, so I thought I would post it here too since it relates to a DB plan.

H retired and elected a 100% J&S annuity under his pension plan. H currently receives about $5,000 per month. H is divorcing W, but wants to provide for her as much as possible, and is willing to provide that, upon his death, W will remain as the beneficiary (based on age, current health and genes, it is more likely that H will die first). Basically, the intent is for each party to receive $2,500 for the rest of H's life, and then upon his death, W will receive $5,000 for the rest of her life.

H's attorney has drafted a proposed QDRO as a separate interest QDRO, giving each party 50% of the present value of the accrued benefit as of the date of divorce, with W to receive a life annuity (or any other optional form under the plan other than a J&S with a future spouse). The QDRO says that "W will be treated as the surviving spouse of H solely to the extent necessary to provide W with a death benefit under the provisions of this Order, and to the same extent any future spouse of H shall not be treated as a spouse of H for such purposes. This provision shall have no effect after W has been paid the amount of plan benefits due to her pursuant to this Order. The death benefit payable to W under the terms of the Plan shall be calculated based on the accrued benefit of H awarded to W in this Order."

The quoted language seems a bit unclear and I'm not sure it clearly states the parties' intent. In any event, wouldn't it be better to do this as a shared interest QDRO, giving each party 50% of the current distribution and provide that W will be treated as H's surviving spouse for all purposes? Not only would it accomplish the intent described above, but it would also allow H to recoup 50% of the benefit in the event that W were to die first, rather than having W's interest go away at her death.

Any thoughts?