Dumb question, I am reviewing the filing instructions for the 5330. I might have missed it, but I don't see who the check is made payable to?

IRS? DOT?

Any idea...

What is the UVB valuation date for the PBGC premium filing for a calendar year plan?

For a BOY val is it 12/31/2007 or 1/1/2008? I'm thinking 1/1/2008.

Is it 12/31/2008 for an EOY val?

For an EOY val, are the liabilities calculated as of 12/31/2008 but using the BOY accrued benefit?

Also, I assume that the market value of assets is as of 12/31/2008 (for EOY val). So if no 2008 contributions are deposited during 2008 then it would be using the 12/31/2008 MV only (#2a of Schedule SB).

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What a frustrated old actuary does when he's not certifying AFTAPs

What_Good_Is_Probability..pdf

One client had a plan loan with a balance of about 30k (after making some payments) and then discontinued paying off the loan. It was actually 15k for husband and 15k for wife.

The client than took an additional $60k for a total of 90k for the two participants, split 50/50.

The client did not pay anything on the 2nd loan.

As far as the rules go, I see these as deemed distributions subject to income tax and since under 59 1/2 the 10% penalty.

I can simply break the bad news to the client as it is.

Does anyone respond to a situation like the one above in any other creative way?

Finally, a separate client (one participant plan) took out 55k and defaulted on that loan immediately.

In this case it seems that we treat the 50k as a deemed distribution and since the remaining 5k is above the 50k limit it would be addressed as a prohibited transaction.

Since the employee has not reached the plan's NRA I don't see the extra 5k as a retirement type taxable distribution.

How have others addressed this type of situation in practice?

Thanks.

Member is eligible for benefits under a collectively-bargained, multiemployer health plan. Member's eligibility relates to work performed as an employee for an employer contributing to the plan via CBA. Member also formed an LLC, of which he is the single member and single employee, which is also an employer obligated to pay into that plan via CBA. However, the LLC did not make contributions for certain hours worked by the Member for the LLC. Thus. the LLC owes delinquent contributions.

Assuming that the Member could be held personally liable for the delinquent contributions under either an alter ego theory or a fiduciary liability theory, we are left with the situation where Member is owed benefits by the health plan, but also owes the health plan for delinquent contributions for hours worked for the LLC.

Can the health plan setoff the delinquent contributions personally owed to the plan by Member against benefits owed under that plan to the Member? If so, must the plan get a judgment of personal liability and the amount owed first to avoid creating liability for the plan? None of the plan documents address this unique issue of a single individual functioning as an employee in some cases and the employer in another.

Any guidance on this issue is much appreciated.

JHG

Rev. Proc. 2008-50 provides a useful Appendix B , Section 3 to help us calculate earnings in the case of corrections. However, that section does not refer to losses, which must be taken into account for some, but not all corrections. Do you think it is appropriate to simply "read into" the language that any losses are to be calculated the same way. For example, if you choose the method that calls for using highest investment return among various funds, you would use the "least loss" where there is a negative return for all funds? On second thought, it is unlikely that the money market fund would actually be in a negative position, so I suppose that fund would be the rate of return to use in calculating earnings/losses to be applied to the contribution. Does this make sense?

I have a plan that based on the 12/31/2008 determination date, is top heavy for 2009.

This is a straight profit sharing only plan, no 401(k) provision built into their document.

However, we are looking at adding a 401(k) and basic safe harbor match provisions as of 6/1/2009.

How does this 2009 year work if they are deemed to be top heavy, yet also added a bsaic safe harbor match?

At the end of 2009, would we just have to look at what each person received as far as a safe harbor goes, and make-up any differences to get to the 3% top heavy?

Would the 3% only be due on compensation from 1/1/2009 - 5/31/2009?

Thanks in advance.

I could use some opinions here. I am surprised this has never happened before. I have a 401k Plan that failed the ADP test. They are not interested in doing a QNEC and are not a safe-harbor. The two HCEs who need to have funds returned have terminated.

What process do you use to alert them of this? How is my client (the Plan) protected if the HCEs ignore the instructions?

I can argue that if the HCEs took a direct distribution and were taxed on it, the end result is the same and I need do nothing further. Do you agree with that statement?

But, like most HCEs, they rolled the funds over to an IRA. What do I do now?

Finally, should I institute a rule that I will NEVER distribute HCE balances until after year-end testing? That could be a year or more later (if the termination was in January). Is that even allowed? Even if the Plan is an SH or SHM, the client could stop the SH mid-year and be subject to testing. So the only real time I could distribute is if it is someone over age 50 who deferred up to the catch-up limit.

What do you all think? Thanks in advance.

Is there any way to get around Hipaa requirements with a low contribution ($100 per year) HRA? Is there a "petty cash" waiver similar to the $500 flex credit FSA situation?

I'm thinking not, but hoping so.

I researched a few other posts and understand that gap period earnings are no longer required. But could anyone clarify the following:

1) Is it required that Gap earnings be eliminated, or is it optional?

2) Does WRERA (enacted 12/23/08) eliminate Gap earnings on excess deferrals for plan years beginning in 2008 or 2009?

3) Does PPA eliminate Gap earnings on excess contributions/aggregate contributions for plan years beginning in 2008

4) We currently have in our final 401k/m amendment, and then as part of our 415 amendment, that gap earnings must be calc'd. Based on WRERA and PPA, does that mean we could not use Gap, and documetn that with an amendment at a later date?

Thanks for any assistance

Good Morning,

The participant elected HSA, made a $4,000 contribution early in 2009, and then as of April 1 elected to enroll in the company's PPO. Looks like a problem to me. Any suggestions? Thanks.

We use Accudraft for our document software. It mentions briefly a 90 day run-out period for submitting claims but doesn't detail it further. The EBIA manuals don't seem to discuss it either. Here is my question. Someone submits an incomplete claim on 3/31. Are we allowed to close the books at that time and forfeit his balance since he did not get a complete claim in by the deadline? Or, like with IRS filings, if they get it by the deadline but it is incomplete, there is time to correct? We can't leave our previous books open for so long. Clients want their totals. Without proper guidance I have been relying on the fact that, as long as I properly communicate this rule, we are OK. After all, the Doc says 90 days but I worry that it says to submit (not for it to be complete and accurate). Anyone have any thoughts on this issue (preferably with some guidance I can cite)? Thanks in advance.

I know there are certain circumstances where you can reclassify a discretionary contribution to something else, after the fact, but I can't remember if QNEC is one of them.

The plan makes a 4% contribution to all eligible participants, regardless if they defer or not, but unfortunately failed their ADP Test for the first time. Can a portion of the ER contribution be reclassified as a QNEC to correct for the failure?

With regards to the 2006 Funded Current Liability Percentage, should the credit balance be subtracted from the assets before dividing by the Current Liability. Reading through the regs is very confusing and it seems there is an argument for both subtracting and not subtracting. Thank you.

1. Does an employer have to elect to create a "Carryover Balance" (COB)? If so, what is the date of the election?
   
2. What is the the determining FTAP condition for an employer to use the COB to offset the quarterly contribution, Minimum required contribution (MRC) or avoid a section 436 benefit restriction?
   
3. If contributions are in excess of the MRC, can an election be made by the employer not to create a "Prefunding Balance" (PFB)? In this case does the amount of excess contributions get added to the plan assets for the beginning of the following year? Where is this to be indicated on the Schedule SB?
   

• What is the most logical situation for a BOY valuation?
  

1. Elect to use the COB to offset the quarterly required contribution.
   
2. Should an employer elect to create a PFB if contribution is > MRC?
   

If any of my questions are improperly worded let me know so I can reframe them.

Thank you,

Naveen

In 2008 I recieved a salary of $104,000. In 2005 I was relocated and recieved moving expenses and a housing allowance over 3 years. The last $2500 in 2008. The salary and allowance brought my total compensation to $106,500.

I am now considered a highly compensated employee. Is there anything I can do or am I just out of luck.

Individual A is a statutory employee of Financial Institution. A accrued benefits under the nonqualified deferred compensation (NQDC) plan. A has reported and continues to report his commission income as a Sched C to his f1040. A also has his own QRP. The Financial Institution is now paying out the NQDC.

Will the NQDC payments in 2009 count as earned income for purposes of QRP compensation purposes?

Is there a problem with setting up a SEP for 2008 (by 4/15/2009 when sole proprietor's f1040 will be filed), and then promptly set up a 401k QRP for 2009 and never fund further into the SEP?

We'd like to capture an ER contribution deduction for 2008, and then have a solo K for 2009 and later. There are no other EEs.

A plan has had a vesting schedule dating back to the 80s that is the usual 2-6 year graded, 20% increment schedule with one twist. Those with less than 2 vesting years are 1% vested. (I presume this was to have an actual cash out and thus forfeiture following termination of employment by those with less than 2 vesting years before the deemed cash out rule was adopted.)

However, the ER would now like to amend out the 1% vesting. Otherwise, the 2-6 year graded, 20% increment schedule will remain unchanged. Understandably, those currently just 1% vested cannot lose that 1% vesting. So the change will only impact those who enter the plan as participants after the date of the amendment.

My question is whether we need to go through the rigmarole of giving those with at least 3 vesting years the option to remain with the old vesting schedule rather than being subject to the new vesting rules. Either way, it makes no difference. Someone with 3 vesting years will be 40% vested both under the old and the new schedules; someone with 4 vesting years will be 60% vested under both; those with 5 vesting years will be 80% vested under both; and those with 6 or more vesting years will be 100% vested under either the new or the old vesting schedules.

We'd like to avoid the 'election' because of (a) the administrative burden, and (b) the confusion by employees being asked to elect the old or be in the new schedule--and the suspicions some will no doubt have if we explain there's no impact, but the federal pension laws require us to 'jump through this hoop'.

Is the election required in this situation where none of those that would have the right to make the election would be effected one way or the other?