Employer is changing insurance companies. Premiums might be about the same or lower. However, the deductible will be much higher (there was no deductible previously).

My understanding is that this is a valid change of election event for the premium, but not for any medical FSA's. Is that correct or may a participant also change their medical FSA's to cover the increased deductible?

Regarding 1 participant plans that file form 5500ez.

Say the plan has less than 250k a 5500ez is not required.

My understanding is that it is not required to provide the client with a Schedule B.

I have some clients that do not want the Sch B since they do not want to pay for it.

We charge $300 for the B. Valuation charged separately.

Any comments on how others handle this type of situation?

Thanks

Non-public company has an ISO (is going public if this is relevent). Is there a requirement that the Company provides participants a formal Statement of their Options at least annually? Currently, the Company provides participants an Excel summary of their ISO's - only if a participant/grantee asks for one.

If so, could you also point to the source?

Thanks,

Eric

Under the 401(k) plan, key employees averaged deferrals of 4%. The plan was determined to be top heavy and a 3% minimum contribution must be made on behalf of non-keys. But what if key employees had an average of 2% returned to them due to a failure of the ADP test? Would the required contribution only be 2%? I don't believe the regulations address this directly.

My guess is that the entire 4% counts in determining the amount of the minimum contribution. Do you agree/disagree? As you can tell, this employer is strapped and looking for some relief. Thank you!

Can a defined benefit plan use its own plan assets to pay expenses related to self-correcting a plan document problem? The fees would go to an actuary who had to correct a formula that was calculated wrong by a law firm. Any guidance would be helpful.

Thanks

I'm not a DB heavyweight, so I'm hoping some of you will weigh in on this one . . .

Must the 415 limitation be actuarially reduced based on the form of distribution? Is the answer the same if the form of benefit is a 50 J&S?

If it is not required that there be an actuarial 415 reduction for a J&S, is there any circumstance where the 415 limitation can/will be actuarially reduced for a 50% J&S form of payment?

We paid a couple lump sums from our DB pension plan during early 2008. Our auditor is calling these annuity purchases. If they are annuity puchases then we can add them to the fraction that makes up the ATFAP, no? Please sort out the confusion.

I guess the question is: Do lump sums get added to both the numerator and denominator of the fraction?

Single owner plan. Zero 2008 Schedule C. Large past compensation causes $140k 2008 minimum required contribution.

I know that the MRC can be made without excise tax, but I can't remember what the max contribution can be made without Excise tax.

I think the client is confused because he wants to make the 2008 maximum contribution as calculated by PPA. I'm not sure of the benefit of making a larger than needed non-deductible contribution.

directly to our clients with instructions for them to attach it to form 5500. This is new (or rather old -- if you've been in the business a few years and remember when the IRS would send back a stamped copy of the 5558.). The 5558 form still says the extension is automatically approved.

Anyone else getting these or no anything about this seeming policy change?

Thanks

Owner (partnership) was contributing each payroll to her 401(k) deferrals. At the end of the year her contribuiton was $20,500.00

She just got her taxes done and the accountant says she over contributed and needs to get the money out of the plan. Her compensation ended up being only $1,000. I dont know why the accountant didnt use the deferrals as part of a deduction on her taxes.

Would you count this as an excess contribution and she has until 4/15/09 to get the money out?

An existing calendar year Profit Sharing Plan added a 401(k) provision and SHNEC 3% effective at 3/1/2008.

Client has provided compensation from 1/1/2008 - 12/31/2008 for the Profit Sharing contribution allocation.

Client has also provided compensation from 3/1/2008-12/31/2008 for the SHNEC 3% allocation.

Do we need to pro-rate the 2008 $230,000 comp limit for the SHNEC 3% calculation?

One owner earned $198,000 from 3/1 to 12/31/2008. If the $230,000 limit is pro-rated over 10 months, the owner would be capped at $191,667 for the 3% SHNEC calculation. Do you agree?

Thanks for your help!

An existing calendar year Profit Sharing Plan added a 401(k) provision and SHNEC 3% effective at 3/1/2008.

Client has provided compensation from 1/1/2008 - 12/31/2008 for the Profit Sharing contribution allocation.

Client has also provided compensation from 3/1/2008-12/31/2008 for the SHNEC 3% allocation.

Do we need to pro-rate the 2008 $230,000 comp limit for the SHNEC 3% calculation?

One owner earned $198,000 from 3/1 to 12/31/2008. If the $230,000 limit is pro-rated over 10 months, the owner would be capped at $191,667 for the 3% SHNEC calculation. Do you agree?

Thanks for your help!

The non-spouse beneficiary took a total distribution at the end of 2008 within the timeframes of the 5-year rule. However, the individual did not realize the he was able to take a non-spouse rollover under law, and I don't believe the TPA made this option clear to him. As I recall, QPs were requried to offer the non-spouse rollover option for PYs beginning on or after 1/1/08, despite lack of specific plan language per PPA. What can be done here, if anything?

Tough issue with significant tax ramifications for the client! Just looking for some ideas.

Thanks for any input.....

If I have a new plan.. for 2007 they filed a schedule I. For 2008 they break the threshhold of 100 participants makeing them eligible to file Schedule H. But reading about how to count participants and the IQPA audit requirement I came across this rule.. the 80-120 rule exception. It states:

Exceptions to the Audit Requirement

80 to 120 Participant Rule

If the number of participants reported in Part II, line 6, of Form 5500 is between 80 and 120 and a Form 5500 was filed in the prior year, the filer may elect to complete the current year’s Form 5500 in the same category (large or small Plan) as was filed in the previous year. For example, if the number of participants at the beginning of the Plan year is 110, and a Form 5500 was filed in the previous year as a small Plan (Schedule I was filed instead of Schedule H), the filer may elect to continue to file Schedule I and forego the audit requirement. However, if the participant count is 121, then regardless of what category of Plan was filed in the previous year, the current year’s form 5500 must include Schedule H and the Plan must be audited.

Since the audit requirement is solely dependent on the number of participants, an accurate participant count is critical. A Plan sponsor has the option of distributing participant account balances for inactive participants providing their vested account balance is $5,000 or less. Accordingly, if your participant count is such that you may be required to have the Plan audited, you may consider distributing inactive account balances under $5,000 to the participants prior to the end of the Plan year.

Does this work?

Can I file a schedule I continuously as long as I dont exceed the 120 participant number each year?

I have a deceased participant who had no beneficiary on file. We were presented with a Will done 2 days before the participant died. The will was not probated and left everythiing to the deceased girlfriend and brother. However, as is normally what we do, we printed a copy of the obituitary which listed a son and grandson as survivors. The plan states that if there is no beneficiary on file that the proceeds are paid to the children of the deceased per stirpes.

This happened last year and the son has never made any claim to the father's account balance in the plan. However, yesterday, we received two DRO's in the mail from family Court requesting payment from this account to the mothers of the son's two children (decesaed grandchildren) for unpaid child support. One child we knew about, the other we did not.

Talking with our document people, they are of the opinion that until a legitimate claim is made for the account by a beneficiary, we cannot do anything with the DRO's. The account must remain in the deceased name until a beneficiary makes a claim.

Any suggestions on what is right, Should we attempt to contact the son to request that he submit a claim or is the administrator's responsibility.

Thanks. Any advice would be greatly appreciated.

Does anyone have a link to a template with the subsidy language in there? I thought the DOL was supposed to release one?

A Wonka dollar to anyone who helps...thanks.

Is an employer required to offer COBRA to Non US Citizens working for the employer outside of the USA? If yes, can you explain why. Thank you very much.

If QRP's are protected from creditors, what happens to plan distributions?

For example, most know that O.J. Simpsons NFL Pension is protected from the damage awards from the civil suit brought by the Brown and Goldman families. But it also seems that plan distributions are also protected. Does this level of QRP distribution protection vary soley by state or is there a Federal statute? Are all distributions, even a lump sum distribution, equally protected or is it limited to dollar amounts or a percentage of the plan?

And if distributions are protected, would they remain protected indefinitely? And what about earnings on the distributions?

I Googled for this and could not find a complete answer.

Thanks

BruceM

Is a VEBA sponsored by a governmental unit exempt from filing a 5500? Having an audit by a CPA firm? filing a 990?

I just inherited a 403(b) plan that provides for ER match and profit sharing contributions. It is my understanding, since the plan has ER contributions; it is subject to Title I of ERISA. The ERISA Outline Guide states plans that are subject to Title I of ERISA cannot use the part-time exclusion. However, when I look at the document, the part-time EE exclusion was checked for all sources. Am I missing something?

Any thoughts would be greatly appreciated.