Hi,

I was wondering about the advantages and disadvantages of 401(k) brokers who don't have Series 6 and 63 licenses. In my state, fixed annuity 401(k)s can be sold with just a Life license. Is there some tangible advantage to having a broker who has Series 6 and 63 licensing, and of variable annuity products in general?

Thanks!

a 10 participant plan has a 6 month age 21 eligibility. It miserably fails the ADP n ACP. So we utilize the statutory minimum age/service conditions and it still fails. When calculating QNEC's, do the excluded participants under the statutory conditions receive a qualified non elective contribution?

1/1/2008 Results

FT = 10,000,000

AVA = 9,500,000

FSCB = 1,000,000

Funded Ratio = 95%, so exempt from restrictions in 2008.

AFTAP = 85%

If I do not certify a 2009 AFTAP by 4/1/2009 is my presumed 2009 AFTAP at that point equal to 85% or 75%?

I've been handling benefits for a long time and I've never heard of this but understand it is becoming more commonplace practice among dental carriers. When dependent kids are having their wisdom teeth extracted, dental carriers are now mandating that the claim is first filed with the medical carrier before they will consider it for payment? They want it to be paid first under the medical plan if applicable, or get denied for no coverage. I've come across 2 carriers -- DeltaDental and Humana -- that are now requiring this.

I have generally thought of the AFTAP as a "cash basis" calculation. Current liabilities vs. current assets.

We have a sponsor that failed to make their 2007 required minimum contribution, due 9/15/2008. The plan now has an unpaid minimum required contribution (prior accumulated funding deficiency). Sponsor has no intention of making the contribution.

Does this effect the current AFTAP certification?

Any input is appreciated.

A plan participant died in 2002 at age of about 35. Unmarried, no kids, no will, no beneficiary designation, nothing - about all he had was his retirement account and a beat up old truck. Since there was essentially nothing there, the family never formally went through probate or took any legal action.

He was taken care of in the end by his brother and sister-in-law, who would like to get his money. The owner of company (plan sponsor) feels very strongly that he would like to get the participant's money to the family. As of yesterday, his total account balance was $382.54.

Can they write a check to the participant and let the family do what they want with it? How about writing the check to the "Estate of..."? Any othee suggestions?

I have generally thought of the AFTAP as a "cash basis" calculation. Current liabilities vs. current assets.

We have a sponsor that failed to make their 2007 required minimum contribution, due 9/15/2008. The plan now has an unpaid minimum required contribution (prior accumulated funding deficiency). Sponsor has no intention of making the contribution.

Does this effect the current AFTAP certification?

Any input is appreciated.

I'm doing a VCP submission for two plans sponsored by the same employer. Can I prepare one checklist and one Appendix D or do I have to prepare separate submissions?

I am looking for the effective date of PPA Section 302© with respect to Coll. Bargained Plans. The text of the statute indicates that the amendments shall apply to plan years beginning after December 31, 2007. Is this also the effective date for coll. barg. plans?

Plan sponsor wants to amend plans to change existing cashout provision from voluntary to involuntary for 1K to 4.99K.

About 85 people would be cashed out and there would be trouble locating people and trouble getting signatures.

Is this viable? All of our other clients adopted the voluntary rule so I have not been through large scale forced cashouts. This client needs to get below 500 to avoid at risk status.

Is it common for financial institutions to accept the non-signature IRAs for non-cooperative participants? How are they set up and how are fiduciary or investment decisions handled?

What have others experienced?

Has anyone began filing electronically for their clients yet? If so, not trying to reinvent the wheel. What's your process? Do you send off and they sign and file, how do you know that they filed it, or do you file for them and electronically file after they review? I'm looking for specifics as far as who does what and when?

Thanks for any direction.

I am little bit confused with actuarial increase in late retirement,

suppose normal retirement is 65 & a employee retires at 67

then as per my logic,

with no pre-retirement mortality : actuarial increase should be (1+i)^2. (since employee's actual retirement is at 67)

with pre-retirement mortality : actuarial increase should be D65/D67

am i right? please guide me.

Thanks

We were asked today what happens if a company has had a number of involuntary terminations, sends the notices correctly to those affected, and then has to shut down completely? The group plan would then be gone.

I thought that there would be no COBRA at that point. But the person who asked me told me that Ceridian said the carriers would have to continue those plans as if the employer were still in business. I haven't seen anything about that in anything I have read.

I don't think they are talking about conversion, but I welcome any comments you have. Thank you.

Best wishes to all you math fans on this "square root" day.

We won't celebrate another for over seven years.

Hypothetical situation; a business has a calendar plan year, and a last day requirement. However, in fact, the business closes during the winter (or the spring-the whims of tourists can work both way). Has the taxpayer/plan sponsor gamed the system?

Eligibility Requirements of age 21 and 2 years of service...requires dual entry dates?

Plan A is merging into Plan B.Plan A allows for and has outstanding loans, Plan B does not allow for loans.

Since Plan B does not have a loan policy, I would say that they should adopt a loan policy with the same provisions as Plan A that does not allow for new loans. I think it would be a mistake to not have a loan policy for Plan B and try to rely just on the loan agreement. Does this make sense?

If plan sponsor changes name or type of entity they operate under from s corp to llc for ex;is amendment needed?

A company decides to start a HSA plan January 1, 2009. They give all of their employees a one time $1500 contribution. The employees can make contributions via salary reduction. Employee 1, age 45, will leave the job next friday. Employee 2, almost age 65, will terminate employment April, 24 2009. Employee 1 has contributed $100 each month since January and has used $700 from the HSA on qualified medical expenses, however, $200 was reimbursed to her do to an initial visit to the doctor. Employee 2 has not contributed any money to the HSA plan.

Some thoughts:

1)Both employees fail to meet the testing period from December 08-December 09' since they are leaving within a month or so. Therefore, i know Part III of Form 8889 applies.

2)How will I go about calculating what amount is part of income, going on the assumption that the employer contribution is considered an excess employer contribution under the above circumstances. I have read the instructions on Form 8889, looked at the Line 3 limitation, Employer contribution worksheet, and Line 19 and unsure what the correct amount is. If the employees withdraw the excess employer contributions before the filing date, then will line 22 need to be checked/filled out on Form 8889?

Thanks!

An ER (client) is being pitched a plan that specifies age-weighted HRA accruals into a retiree VEBA. The ER would establish and then fund into a VEBA pursuant to HRA accruals, as permitted by a couple of IRS pronouncements from the 2005-2006 era. These ER contributions (i.e., the HRA accruals) would be separately credited under the VEBA to the benefit of EEs individually. The age-weighting gives each employee an 'equivalent' amount of retiree health benefits for each month of covered service. Of course, the small ER's motivation here is to skew tax-free benefits in favor of the owner/employee and spouse/employee, as they are the two oldest EEs (ER is a C corporation).

To the extent that the EE and spouse do not use up the credits under the VEBA by the time both have died, the remainder would be re-allocated to the credit of other VEBA members.

The ER is not satisfied with what authority I've found suggesting that HRA accruals may not be age-weighted.

IRC § 105(h)(4) provides that--

A self-insured medical reimbursement plan does not meet the requirements of subparagraph (B) of paragraph (2) unless all benefits provided for participants who are highly compensated individuals are provided for all other participants.

Treas Reg § 1.105-11©(3)(i) seems to prevent age from being taken into account in a defined benefit HRA, at least for DB health reimbursements:

any maximum limit attributable to employer contributions must be uniform for all participants and for all dependents of employees who are participants and may not be modified by reason of a participant's age or years of service.

As an aside, the next sentence of Treas Reg § 1.105-11©(3)(i) prevents benefits being made in proportion to employee compensation if the plan covers highly compensated individuals:

In addition, if a plan covers employees who are highly compensated individuals, and the type or the amount of benefits subject to reimbursement under the plan are in proportion to employee compensation, the plan discriminates as to benefits.

Treas Reg § 1.105-11©(3)(iii) is as close as I've come in my research to specifically prohibiting age-weighting of the defined contribution HRA accruals into a retiree VEBA. The benefits for retirees are only excludable from taxable income if

the type, and the dollar limitations, of benefits provided retired employees who were highly compensated individuals are the same for all other retired participants.

I've opined that the owner would be better off avoiding this plan, or to redesign it as a defined benefit or if to be a defined contribution, without the age-weighting of HRA accruals into the retiree VEBA fund. The ER is not satisfied, certain that it can be done unless the IRS has specifically ruled that HRA accruals cannot be age weighted. Does anyone know of other authority bearing on the issue of whether HRA accruals into the retiree VEBA could be age-weighted?

I've suggested a PLR application might be useful, but is hesitant because of the cost.