The IRS has published draft LRMs for 403(b) plans on its website. Here's the URL:

http://www.irs.gov/retirement/article/0,,id=97182,00.html

Apparently the LRMs were included in Announcement 2009-34, but I couldn't find that on the IRS site.

My very small company does not offer HSA or FSA. Is it possible for me to participate in a HSA/FSA as an individual? How would I go about it? Thanks!

Does anyone know a state's rights with respect to garnishing a participant's benefits in a church pension plan? Before people start weighing in, keep in mind that ERISA's anti-alienation provision is not applicable to this plan. I also understand that the federal government can often get at pension benefits once they become payable. The issue here is that this is a church plan (so, essentially, just a spendthrift trust subject to state law) and it is the state, not the federal government, trying to garnish pension benefits to recoup interest on student loan payments (through the state's guaranteed federal loan program) and child support. The state in question is Oklahoma, if that makes a difference.

EDIT: typo

I was always under the impression (and verified by a number of actuaries) that COLAs cannot be amended out of a plan for benefits that have already been accrued. I have a plan with a COLA that is terminating and they are purchasing annuities. The carrier said they have an attorney that said that this plan amendment would be permitted. Does anybody out there have experience with this?

Does anybody know where I can find a concise and current "checklist" for retirement plan and H&W plan SPDs? I have the regulations, but would like to work from something more user friendly.

Assume an employee is entitled to 18 months of COBRA upon retirement at age 60, and that the empolyee's spouce and child (both previously dependents in the health plan before the employee's retirement) are also entitled to Cobra. A few questions:

(1) Are the spouce & child entitled to 18 or 36 months of COBRA ... I seem to recall that it might be 36?

(2) Am I correct that the employee is only entitled to 18 months of COBRA?

(3) Now the tough question ..... Assume the employer has a roughly 50% subsidized (but frozen $ subsidy) retiree health plan which can be taken in lieu of Cobra, but that the retiring employee does NOT (per the Retiree health Plan Documents) have the option to FIRST take Cobra and THEN switch to the subsidized Retiree Health plan. Also assume that the retiree decides to go with the Retiree healh plan (because he needs health coverage to age 65 .... longer than can be provided via Cobra). Then suppose that (say) 6 months after he retires (having entered the Retiree health plan) that the employer unilaterally ENDS the RETIREE health plan (but not the health care plan for those still employed). Must the employer offer the retiree and his dependents Cobra at that time ..... keeping in mind that he has only had 6 moths of post-retirement health coverage so far, far shorter than that he could have taken under Cobra? If the ENDING of a retiree health plan does NOT trigger eligibility for Cobra (especially when the ending of the plan is shortly after retirement), it appears that this could be a way for unscrupulous employers to skirt their Cobra obligation.

If there is no legal obligation of the employer to offer Cobra in this situation, is anyone aware of litigation, regulations, etc. addressing this situation ?

Thanks.

I have a client in the construction industry with an ESOP. The client would like to participate in a union health plan, but is concerned that this participation would violate the ESOP rules. Is anyone aware of any guidance on this subject? The client currently provides its own health plan to its employees. Any help would be appreciated.

In 2008 we went from a 12/31/08 EOY plan to a 1/1/08 BOY plan. How do you reflect this on the 5500 schedule I for assets and balances (small plan)?

Do you still use the 12/31/08 ending asset value on the 5500 - even though the valuation was based on asset values as of 1/1/08?

If you use 1/1/08 balances - you wouldnt have anything for earnings on the first year of BOY - since the 2007 5500 reflecting balances as of 12/31/07, correct?

Thanks

How do you (TPAs out there) tell your client to pay their 945 withholding??

The "Same Day Fed Wire" is too complicated for any of our clients to understand and figure out;

the payroll companies are not submitting the 945 payments;

the 8109-B's are penalized (according to rumor) although I've never heard of an actual penalty;

and the EFTPS takes 2 weeks+ for the client to set up (by then they've forgotten about it)...

I am just curious how you guys out there do this. We need to give our clients an answer that is un-complicated and concise. THANKS!

A child has been making the required withdrawals from the deceased parents' IRA accounts (inherited accounts). Based on the rules for 2009 that minimum required distributions are not required - would this fall into that category? The deceased parents never had attained the age of 70.5. Any guidance is greatly appreciated.

I have a Not for profit that would like to set up a nonqualified plan for an executive who has recently terminated employment with the organization. They would like to provide him with a $3,000/month joint and 100% survivor annuity. Can this be done in the 401(9)(A) or 457(f) arena?

I have a NFP that would like to provide retirement benefits for an executive who has recently terminated (a J and 100% survivor annuity of approximately $3,000) Is this possible in a 457(f) arrangement?

A TPA is trying to use a document's 4 step excess integrated allocation formula, but is confused about why a 3% contribution is allocated twice (steps 1 and 2) instead of just once before getting to the integrated part of the formula. If the 3% non-elective safe harbor contribution satisfies top heavy, why are these participants getting 6%? I've looked at Notice 98-52. Section VIII,B says that "safe harbor non-elective contributions may not be taken into account under any plan for purposes of section 401(l) (including the umputation of permitted disparity under section 1.401(a)(4)-7)."

I think that's saying that the 3% non-elective contribution must be allocated without being integrated, which is fine. But that doesn't mean that it can't be used to satisfy the top heavy contribution requirement.

Am I interpreting that section incorrectly, or is there another section in 98-52 that I'm missing? Section VIII,C specifically says that "if a plan allocates to all eligible employees a 3-percent safe harbor nonelective contribution, the plan generally would also satisfy the top-heavy minimum contribution requirement." There's no exception mentioned for integrated plans.

To determine if a PBGC plan can use the Variable Rate Premium Cap, the PBGC says it is "the aggregate number of employees ... as under section 410(b)(1) ..., without regard to section 410(b)(3),(4), and (5)..."

If I have a plan that has 10 non union employees and 30 union (with a collective bargain agreement), I would take that to mean that I have to ignore 410(b)(3), which lets me exclude union CBA, and the double negative would mean that I have to count the CBA and will have 40 ees and I am not eligible for the Cap.

Is this correct? Has anyone heard that you can exclude Union CBA to count whether you are eligible for the cap?

I am having a problem with figuring out how to correct the following: An employer has a 403(b) Plan which has a matching benefit accrual requirement of 1000 hours of service per year. Thus in order to accrue a matching benefit for the year, the employee must have worked 1000 hours or more. The plan has basicially ignored this requirement in practice and has given all employees a match, whether or not they have worked 1000 hours in the year.

The employer needs to correct this problem under EPCRS. The plan does have a written document already.

How would this be corrected?

Thanks!

Good morning. Hope everyone had a wonderful Easter weekend.

If an employee requests a hardship because of expenses for a dependent, do you require the employee to prove that the named individual is their dependent?

If so, what documentation would you request?

Thanks,

Laura

Plan's eligibility includes part time employees. Owner's young children (ages 13 & 16) are in the plan, however hurt testing because of their young ages. All employees are in their own allocation group. Is there a problem giving the children a 0% contribution, which will then enable testing to pass? Has there been any word from the IRS on this design?

To either meet minimum funding or make FAS look better;can a substantial owner sign something reducing his accrued benefit

A Plan was frozen in 2006. The 2008 AFTAP was 80%. The EA has taken the position that he will issue no AFTAP certification until the employer requests. The employer makes no such request (ever!). As of 4/1/2009, the plan is presumed to be 70% funded and the AFTAP is deemed to be 70%. Employees are notified by 4/30/2009 that lump sums are restricted to 50% as of 4/1/2009. As of 10/1/2009, the plan is deemed to be less than 60% funded since no AFTAP certification has been issued. Employees are notified by 10/31/20090 that lump sums are not available. Thereafter, employees are notified by April 30 that the lump sum option is not available.

The employer has effectively eliminated lump sums without violating 411(d)(6) even when the plan's actual AFTAP may be greater than 80%.

Apart from employee relations problems, does anyone see any legal problems in this process?

For ERISA-governed plans, DoL FAB 2003-3 (May 19, 2003) allows plans to charge an individual plan account in a DC plan for administrative expenses pertaining solely to that account. That includes charging either the EE's or the ex-spouse's account for the costs of reviewing and processing a QDRO.

Treas Reg § 1.457-10© engrafts the QDRO rules of IRC § 414(p) into the 457b plan context.

However, I am unable to find anything that would permit a 457b plan to charge the employee or ex-spouse for reviewing and processing a QDRO. As ERISA is not at play to preempt state trust law, I'm wondering if anyone has run across this issue and concluded anything other than if the charge is reasonable, state trust law permits it to be charged against and paid out of the 457b plan trust.