Has anyone heard of a "Foreign Miscellaneous Government Entity"?

I have a prospective client claiming this as their organization type and state they have an Federal EIN.

Can an entity of this type sponsor a qualified plan?

Thanks in advance.

Hey - for some of you investment law savvy types:

If someone HAD actually received a distribution or distributions from Madoff's fund during the last (x) years, is there any possible recovery by the receiver? In other words, you cashed out and received 20 million. But that 20 million (or some of it) is based upon fraud or theft of funds from other investors - can the receiver sue you to recover all or a portion of these funds? If so, perhaps a client ought to at least be able to recover the amount of the investment, but just get whacked for the gain or a portion of the gain?

I know NOTHING about these issues, so I'm probably not even asking the right questions...

Medical:

If a group Health Insurance plan allows employees to deduct pretax premiums from their paycheck, does this automatically change it from a welfare plan to a cafeteria plan? Participant eligibility will continue to be based on the section 152 dependent rules.

ERISA Advisory Opinion 2000-10A (July 27, 2000) [http://www.dol.gov/ebsa/regs/AOs/ao2000-10a.html] was about whether an IRA's investment in a partnership managed by Madoff might be a prohibited transaction.

One wonders whether the investor went through with it?

If an EE makes an error in specifying the amount elected, when do such errors become permanent? In this case, an employee has realized from the first paycheck that the election is $50 per pay period too large. The claim is that the ee filled out two enrollment forms but sent in the wrong one.

Help. Feel like I should know the answer to this but not sure. We have a flex plan that is set to receive the first 2009 salary deferral contribution with the January 15, 2009 payroll. If a person is terminated prior to January 15th such that they receive some pay for 2009 but not a full pay period check, should the set dollar deferral to the health fsa be made from the partial paycheck the same as normal, should it be adjusted pro rata or should it be canceled altogether?

This becomes much bigger issue because if no amounts go into the flex account, presumably the employee would not have a positive account balance for 2009 and I guess arguably would not have to be provided COBRA. Employer here is worried that terminated employee would elect COBRA if offered so that they could take advantage of full year's reimbursement amount with just one month's COBRA deferral.

Even if no portion of the partial paycheck would go to the flex plan account (or wouldn't have anything in the account at the time of termination), I worry about not providing the individual COBRA rights in this case. Although the Plan speaks in terms of only offering COBRA if the individual has a positive account balance at the time of termination, the participant here would not have overspent their account--their account balance would simply be zero--no amounts in / no amounts spent. Would appreciate any insight or tips on how have others dealt with this issue. Thanks.

A TPA I do some work for wants to put an annuity contract in a new DB plan for the owner. There are other participants in the plan but I was told that the only contract would have the owners name on it but payable to the plan, therefore it's okay that the other participants do not have annuity contracts in their name.

Does this sound reasonable and more importantly is it allowable?

I don't have any experience with annuity contracts but I always thought they were a ripoff due to fees and expenses and withdrawal penalties. For example, what happens if the plan terminates in five years, what is that contract worth? How do you value it annually if you know the plan will likely shut down before the end of the contract and there are significant withdrawal penalties? Can the contract be rolled over?

I would like to hear others experiences with annuity contracts. Obviously I don't have to take the case but I don't want to overreact just because it's something different.

Hello. My company was recently sold, and now employees have the choice between receiving a lump sum distribution from ESOP, or rolling over into 401K. I have chosen to take the payment and have been advised that they will withhold 20% for federal taxes. I was also told that there will be a 10% early withdrawal penalty, which I will be responsible for paying when I file my taxes the following year. However, I am not sure how state taxes, and FICA are handled. Will I also be responsible for these? Plus, it is my understanding that this distribution will be added to my income and taxed as such, is this true? If that is the caase, would it be possible to responsible for more than the 20% federal, because I know I would be in a higher tax bracket. This is all really confusing...any help would be GREATLY appreciated!!! Thank you for your time.

I can't find it ANYWHERE now, but I swear, I thought I'd seen that the IRS had recently revised the address to which Cycle C submissions should be mailed.

Anyone else know about this, or am I officially crazy?

Thanks!

If a defined benefit provides only a single life annuity (for unmarried participants) and a QJSA (for married participants) as possible forms of payment, along with a lump sum mandatory cash-out for benefits with a present value not in excess of $5,000, is there any need for the complicated 415(b)(2)(B)/415(b)(2)(E) language regarding benefits paid in a form subject to 417(e)(3)? Although, conceivably, a $5,000 cash-out could exceed the participant's high-three compensation, when converted to a single annuity form, that appears unlikely, but I haven't found any affirmative IRS comments allowing the 415(b)(2)(B) language to be omitted where the only possibility for a lump sum payment is a mandatory cash-out.

Thanks.

If an employer and the union agree to limit participation and contributions to current employees, excluding new employees from a multiemployer plan, would that agreement trigger partial withdrawal liability? The employer would continue to contribute for current employees at all of its locations.

If this is a partial withdrawal, how would the liability amount be calculated? Based on my rudimentary understanding of the math involved, it looks as if it would be negligible.

I have always been under the impression that every trust of a qualified plan needs its own EIN for deposits and distributions. Now I am not so sure. My experience is that after several years of inactivity, a trust EIN is no longer valid. What are your opinions?

In my EBIA manual, it tells me what I should include in the plan document. However, is it that general that I can simply follw those instructions and generate a plan document without any sort of template? Are there more detailed instructions/templates/examples for plan documents out there?

If the employer contributes to an employee's DCAP, can the employee elect the full $5000 out of their own check and then add the employer's contribution on top of that?

Similarly, if the employer limits the MFSA election to say, $3000, and also contributes to an employee's MFSA election, can the $3000 limit be exceeded by the total election?

I would like to file a buch of delinquent 5500's (small plans 1997 - 2007) ... but the 5500C/R series was discontinued many years ago.

I would like to file all of them using the most current version of Form 5500, even though years 1997, 1998, 1999 were originally required to be filed on a Form 5500C/R.

I heard a rumor while standing in line at Wal-Mart that the IRS now allows old delinquent years to be filed on the most recent current version of Form 5500 (rather than 5500C/R) if those old years are filed under the DFVCP program.

Since I have had bad luck from acting on rumors in the past, I thought someone at BenefitsLink might know if the rumor is fact or fiction.

Thanks

a small safe harbor 401k just received its new restated doc. plan has basic matching safe harbor formula with a discretionary pro rata profit sharing option. The odd thing about the adoption agreement is that in it they also have the New Comparability Gateway option checked stating the plan will satisfy the minimim allocation method identified as follows: reallocate preliminary contributions or hypothetical contributions paid to HCE's to NHCEs so that the allocation to each NHCE equals the lesser of the amount described in 2 of the other options.

Well this is not a New Comparability plan, so is there any reason that would be checked?

Additionally, this is a participant directed plan, yet it is NOT intended to comply with ERISA 404©. What problems could occur by not complying with 404©?

This is a paychex volume submitter plan with a corporate trustee

What options does a client have if they missed their 60day window to rollback excess RMD funds back to their IRA? The Client is 73 and took an in-kind distribution to their Trust account.

My clearing house said they are out of luck and with a letter the IRS should grant them an exception.

Any help would be great.

Here is the rule

The client may roll the same shares back in the account that they took as a distribution; however they must be very careful in doing this. Share prices change daily (depending on the security) and the anticipated amount returned to the account could be more or less than necessary (creating a more complex accounting problem). While Fidelity will honor this request, you need to strongly encourage the client to consult a tax advisor before making the request to ensure the client is aware of any tax implications. Also, in this case, the distribution took place on 10/30/08, more than 60 days ago. This could raise a red flag at the IRS since the 1099-R for 2008 will show the full distribution and the off-setting 5498 will not show the rollover until 2009.

I have read that, effective after 12/31/2009, non-spouse rollovers are required to be made available from qualified plans (rather than just permitted to be made available), but I cannot find that PPA '06 technical correction provision in WRERA '08. Does anyone know where that particular provision resides in the new Act?

Being laid off is not considered a distributable event, correct? How do determine if someone who is "laid off" actually has a "severance from employment" so they can take a distribution from their 401(k) plan? The document does not reference the term laid off.

I have a client who has a broker (a friend of the owner, surprise surprise) that is steering them towards a particular TPA, and the CFO has the feeling this is motivated by selling of a product. She wants to understand what is going on and what value the broker is adding. They have a small employee population (less than 50).

I am not familiar with the role of a broker in 401(k) set-up and administration. Can somebody provide some general info. on the broker's role and how the broker and TPA are compensated? (and the issues to be concerned with)

Thanks!