We have a plan that was terminated at the end of 2007, and a number of annuity contracts were purchased at that time for the distribution of plan benefits. The annuity starting dates of these contracts have not yet passed and benefit payments have not begun. Accordingly, are these contracts subject to the new QOSA requirements of I.R.C. 417 (75% J&S optional form), which are applicable to distributions from a plan that is subject to I.R.C. 401(a)(11) with annuity starting dates in plan years beginning after December 31, 2007? Is the plan (although long since terminated) responsible for amending the contracts to offer the QOSA option?

Client's 401(k) excludes bonuses from the definition of compensation, and because the usually HCEs get larger (percentage-wise) bonuses than NHCEs, there is not a problem with a discriminatory definition of compensation. However, a couple of years ago, because of a downturn in business, the client did not pay bonuses to the HCEs, but paid the NHCEs as usual. So it looks like the definition of compensation for this year is discriminatory because now "compensation" for HCEs = total compensation, whereas "compensation" for NHCEs is less than 100% of total comp. The client does not match or otherwise make nonelective contributions.

Has anyone come across this type of situation? Any ideas of how to correct it?

In preparing the Section 402(k) compensation of non-employee directors, is it necessary to include disclosure of directors who departed in the previous fiscal year? How about directors who departed after the end of the fiscal year but before the date of the proxy statement?

The reg and instructions don't seem to address this.

We recently established an ERISA 403B plan. We also have a 401-K plan. My question is this: Do contributions to the 403b by HCE need to be considered in 401K ADP/ACP testing? We have HCE's contributing to both plans, receiving a company match in the 401K up to the company limit for match and then contributing additional pretax contributions to the 403b to reach their annual limits of $16,500 plus $5,500 catch-up if eligible.

We have an employer who has indicated that they will pay us "net 120." This is an ERISA plan, can they do this if participant contributions are used to pay for the benefit? Or would this be in violation of ERISA/fiduciary duties?

This may seem like a silly question, but we have a differing opinion here in our office. If a DC plan is on a Hancock (example) platform, where part's get statements and instant access to their accounts; our firm is calculating er contributions (annually or quarterly, as case may be); are we to also provide a year end accrual-based report?? I have several new clients that fit this description, and some in our office wish to prepare this report (thus combining the at-market value PLUS accruals), and some say they have access to cash-basis reporting all the time, why should we charge the client more? We do all the testing and calculating of contributions.

Thanks!!

We recently established an ERISA 403B plan. We also have a 401-K plan. My question is this: Do contributions to the 403b by HCE need to be considered in 401K ADP/ACP testing? We have HCE's contributing to both plans, receiving a company match in the 401K up to the company limit for match and then contributing additional pretax contributions to the 403b to reach their annual limits of $16,500 plus $5,500 catch-up if eligible.

I am confused: New rules for 2008 returns say that they are taxed in year distributed.

2008 1099R instructions p. 5 talk about excess aggregate (for example) contributions say taxed when contribution is made.

Page 4 of the 1099R 2008 instructions say corrective distributions are taxed in year made.

What am I missing? HELP!!

Thanks!

Can someone shed some light on how to calculate an EBAR for a participant over the Age of 65?

I am using a On Line Software Program called "Pensions On Line" and I do not think it is calculating it correctly for this participant who is over age 50.

I seem to have gotten myself into a bit of a mess. During open enrollment last fall, I enrolled in my company's new HDHP with an HSA, the first time I'd enrolled in an HSA. Reading through all of the literature they provided, it stated that an individual could not enroll in an HSA AND a general-use FSA. It did not say anything about a spouse not being able to contribute to an FSA. Maybe I should have intuited it, but I didn't. My husband enrolled in his company's PPO with an FSA. In conversation with a colleague last week, I heard for the first time that I could not have an HSA while my spouse has an FSA. (This wasn't mentioned in any of the enrollment materials or webinars or WBTs I read/attended/completed, which is a bit beside the point but really infuriates me.)

My contributions to the HSA are $3000 for the year, the individual max; my husband's to his FSA are $1200. We did this to cover expenses for both of us, since my HSA can't be used for his expenses since he's not on my plan. Had I known we couldn't have both, I would have opted out of the HSA and funded his FSA up to around $3000 total.

So now I'm not sure what to do. A tax person I know says to call my HR Dept and have them back me out of the HSA, since technically they should not have allowed me to enroll. I'm sure they'll do that in the interest of saving their own skin. What's giving me anxiety (and I'm having a lot of it right now) is that doing so will leave us with only $1200 in the FSA, which doesn't even touch my $1500 deductible, and I'm sure my husband's employer won't let him increase his contributions since it's well past open enrollment. All of this meaning that if I back out of the HSA I need to avoid going to the dr at all costs or be stuck with a hefty bill to foot out-of-pocket.

Do I have any other options? Would it work if I use ONLY HSA funds to cover my deductible-applicable expenses, and not use the FSA funds for anything for me (which I wasn't planning on anyway)? What if I claim the HSA contributions as taxable income on my 2009 taxes?

I feel like an absolute idiot, especially since I did all of the research I could with what was made available to me, but that apparently wasn't enough. And, quite frankly, I'm scared to death, both of breaking the law and being stuck in a really nasty situation with a lack of health care funds - I'm absolutely sick about this. Any and all suggestions would be appreciated.

Have a small DB plan with a minimum contribution of $41K and a prior year carry-over balance of $61k.

I think the employer can elect to reduce the minimum required contribution by the carryover balance. I think the plan must be more than 80% funded for the prior year after subtracting any pre-funded balance. However, just the pre-funded balance and not the carry-over balance must be subtracted. Correct?

We get roughly every quarter tax discs from CCH. Anyway, rather than

throw out obsolete ones, I take them home to try to use them. Well, I

keep getting this pop-up:

I have CCHIRM04 and CCHMBR02.

This message came up when I tried to use the disks on my laptop. I can

use them on my desktop. Perhaps my laptop has a more advanced version

of Windows?

Message Number: 28946

CCH CD-ROM and Online for Windows was unable to download a file. You

might not have sufficient rights to download files to the CCHWINSYS

application directory or certain files (CVLINK, CVHANDLE, etc) in

CCHWINSYS have been incorrectly set with read only attributes. If the

problem persists, call CCH Customer Support.

For the record, I did access the online help and came up with this. I

tried both sets of steps.

I also found this CCHDS9.INI reproduced below.

http://support.cch.com/answers/resultDispl...pe=5002#Goto127

http://support.cch.com/answers/resultDispl...pe=5002#Goto114

[initialization]

; If the DS9.EXE executable is located somewhere other than in the

; directory with CCHWIN.EXE, set this path ...

;

; Serverpath = C:\CCHWIN\DS9.EXE

; On a VGA screen, this should be wide enough.

Main Window =35, 62, 583, 390, 0

; To disable online (ie: CD customer only), set this = ON

; NO_ONLINE = ON

; To disable CD (ie: Online customer only), set this = ON

;NO_CD = ON

; To enable the International Link Tables button on the data-source

; load dialog, uncomment the following line:

; SwitchLink = ON

; This is the version tag, which is used to detect outdated

; CCHWIN software (to prompt the user to run CCHWIN setup)

UpgradeVersion=V3.50b

[Display]

;Set to NO if you cannot see certain formatting

USECOLORS=yes

;Set to NO if you would rather not see italics, bold and underlining

USEFORMATTING=yes

[DataSources]

DataSource0=E:\

StartUpAutoLoad=YES

ChangeDiscAutoLoad=YES

; These are the entries normally maintained by the "Load Publications"

; dialog. You may (manually, as well) specify 1-100 here:

;

; DataSource1 = F:\

; DataSource2 = YOUR_SERVER/FORMS:\

; This option skips the "Load Publications" dialog and automatically

; loads any DataSources specified above; it can be set from the

dialog.

;

; StartupAutoLoad = ON

; ChangeDiscAutoLoad = ON

; If UseImports==ON, and ImportFile={valid path} then the values in

the

; network ini file overide local settings.

;ImportBlockFrom=$(Import_File:ImportFile), IMPORT_OVERRIDE

[PRINT]

SKIPHPTEST=YES

[DS9]

; This copies down sections of the CD to your hard-disk to

; dramatically improve load-times.

[CCH_BUFFERS]

;

; Buffer sizes are given in K

; Defaults are 1000 and 500.

;

DISK =1000

WINDOWS =500

;The deleteswapfile=on option will delete the swap file of each

; user upon exit of CCHWIN. If the swap file is stored on a network

;drive this option will reduce the amount of hard disk space used by

; CCHWIN.

;DeleteSwapFile = on

[CCH_PATHS]

SYSPATH=C:\CCHWIN\SYS

TMPPATH=C:\Users\Ed\AppData\Local\Temp

CCHWinPath=C:\CCHWIN\cchwin.exe

USERBASEPATH=C:\CCHWIN

;----------------------------------------------------------

; You may wish to provide these paths ...

; Path to the system files:

;

; SYSPATH = C:\CCHWIN\SYS

; Used for writing out the log files, and for the spillfile.

;

; TMPPATH = C:\

; Used for FastLoad and Magnetic Help. Defaults to TMPPATH

;

; MAGSYSPATH = C:\

; Used to point to 'workstation' files. line.pro, modem.pro, and

*.dlg

; Defaults to SYSPATH. CMMethod.pro is different than in ACCESS and

does

; not use this path.

;

; WSPATH = C:\

[COMM_PARMS]

ENGINE =06p03

; Time before idle-logoff warning/disconnection

;

IDLEWARNING =5

IDLEDISCONNECT =15

; To use a communications DLL, set this path:

;

; COM_MODUL=C:\CCHWIN\CMXSYNC.DLL

; This number is not hard coded any more. However, we

; still provide our user a default number to start with.

PHONENBR=1(800)328-2427

COMNETWORK=at&t

BAUD=2400

PID=NewProject

DTE=031343123763400

fMultiConfig=TRUE

fShowEngine=TRUE

fShowATTNbr=TRUE

[Thesaurus]

thescch=<CCH Standard Thesaurus>, ON

; Set the DeleteCache = yes to delete the cached graphic files that

are

;downloaded during an online session. All cached files will be deleted

;upon exit of CCHWIN. The default is NO. Increase or decrease the

;MaxCacheSize. The default is 5 megabytes.

[Cache]

;DeleteCache = YES

;MaxCacheSize = 5000000

;Set the UseImports = on to enable the use of a shared ini file.

; Only applicable for a network install.

[CCHWINS]

;UseImports = On

FASTLOAD=on

[PUBLOCK]

; If UseImports==ON, and ImportFile={valid path} then the values in

the

; network ini file overide local settings.

;ImportBlockFrom=$(Import_File:ImportFile), IMPORT_OVERRIDE

[iD_PARMS]

USERNAME=NewUser

[sSCE]

MainLexPath=C:\CCHWIN\SYS

MainLexFiles=sysignor.tlx,sysignor.clx

HelpFile=C:\CCHWIN\SYS\ssce.hlp

[sSCE User]

UserLexPath=C:\CCHWIN

UserLexFiles=usrignor.tlx,usrsugst.tlx,usrexcld.tlx,C:\CCHWIN\SYS

\syssugst.tlx

IgnoreCappedWords=0

IgnoreAllCapsWords=0

IgnoreMixedDigits=0

IgnoreMixedCase=0

ReportDoubledWords=1

AutoCorrect=0

LastSelectedLex=usrignor.tlx

CaseSensitive=0

SuggestSplitWords=0

PhoneticSuggestions=0

TypographicalSuggestions=1

SplitContractedWords=0

SplitHyphenatedWords=1

SplitWords=0

CharSet=0

Language=1033

MatchCase=1

MinSuggestDepth=1

[COMTUBE_SOCKET]

HOSTNAME=cchwin.cch.com

PORT=6200

[TimeTrak]

fAllowClear=TRUE

[search]

AutoThesaurus=NO

SortByRelevance=NO

SearchType=Boolean

PLMatchType=all

[HPFONTS]

CCHBOLD_.TTF=TRUE

CCHCB___.TTF=TRUE

CCHCOND_.TTF=TRUE

CCHITALI.TTF=TRUE

CCHNORMA.TTF=TRUE

CCHREVER.TTF=TRUE

CCHSO___.TTF=TRUE

CCHST___.TTF=TRUE

OCRA____.TTF=TRUE

Does anyone know of any examples of plans with defective language or adoption agreements with unacceptable language where "nobody got hurt", the effect of the impact never got expressed, but the court still ruled that a sanction must get paid.

Can anyone provide information or a link to an online resource or provide information regarding the accelerated amendments due to plan termination?

Incidentally, some people seem to think that if a plan terminated on 12/31/2005, it would not have to amend for 401(a)(31) (whose RAP for plans using a mass submitter ended on 12/31/05), but of course the required effective date for 401(a)(31) would not allow of such a notion. Can anyone name some court cases supporting this?

As the TPA, we provided the blackout notice well in advance of the 30 day minimum requirement. However, there was confusion as to who was responsible for delivering the notices. One thought the other was doing it and vise versa. Well needless to say, it didn't get delivered to the participants. The blackout is to take place (starting) in a week and run for a week. What are our options to make this right? I assume if it's possible, to push the blackout back, but I don't think that will be possible. Has anyone had this happen? (It's a first for us.)

Any help would be greatly appreciated.

Thanks.

Did anyone hear that Pres. Obama said that he will not let the PBGC go belly up? Supposedly he said that his method of protecting them was not to allow businesses to do a distress termination if the reason for the distress termination was due solely from the market losses from '08.

Did anyone else hear this?? If so can you point me to a link? Thanks.

Plan is a Safe Harbor 401(k) Plan that uses the basic match allocation.

The document provides for the safe harbor basic match to be allocated to HCE and NHCE.

Only the HCE (owners...husband and a wife) contributed deferrals in 2006, 2007 and 2008.

The have about four other rank and file employees, but none of them have deferred.

Everything I've read, says that the plan is a safe harbor plan even if there are no rank and file EEs deferring, as long as the safe harbor contributions are being made to all that defer, and the notice requirements are met in addition to all the other safe harbor requirements.

Now: The plan is terminating in 2009, and the employer cannot afford to put in the safe harbor match for 2008 (it would only go to the owners). The plan was not amended before the 2008 plan year to provide for safe harbor contributions to NHCE only.

What happens now?

Is Top Heavy now an issue because the safe harbor match cannot (won't) be funded?

ADP test must be run?

Neither of these will pass because NHCE have not been deferring for quite some time...

What is the plan had been amended before the plan year to omit the HCEs from receiving a safe harbor match? This means that HCE would defer...just not get a match. NHCE are not deferring, so they don't get a match...is the plan still a safe harbor plan?

I'm thinking that in order for the plan to keep it's safe harbor status, and to have that free pass on Top Heavy, the HCE must be allocated that safe harbor match contribution.

right?

I have a two person plan that has been in existance for about 4 years.

The employees are in their mid to late 30s with NRA of 55.

Under the pre PPA rules the minimum funding ($0 credit balance) was close to 23,000. Low due to the many years that the funding can be spread under the individual aggregate funding method.

Under post PPA the minimum funding was close to 70,000.

Due to the difference in the funding method, i.e. individual aggregate to a unit credit it is not surprising to me, but have others found such a dramatic increase from pre PPA to post PPA in some cases?

It can be a bit overwheliming to a client.

And lastly, I read in a summary of the Worker, Retiree and Employer Recovey Act of 2008 that under 415(b) the mortality table for adjustments is the 417(e)(3) table. Does this mean that instead of GAR94 the 417(e)(3) table is used for both pre age 62 early retirement adjustments and for maximum lump sums?

Thank you.

Cross-Testing, Corbel document, using Relius Software. Does the Mortality Table you use in cross-testing have to be consistent from year to year. I don't see table defined in document, so if i get a better result using a different table than last year is it ok to use the different table?

Here is the situation. S Corporation esop distributes shares and cash balances to terminated participants the year after termination. Shares must be put to the corporation and are immediately redeemed. The participant of course never actually sees the shares. If a participant elects a rollover, the entire balance of plan cash and cash from the stock sale is rolled. (Not clear yet if that is via a esop trust check and a corporate check or one corporate check.) The 1099R from the plan indicates a rollover of the cash amount. No NUA indicated. Are there any problems with rollovers being accomplished this way?

Rev. Proc. 2004-14 goes into detail about allowing the esop trust to roll shares to an IRA as long as they are immediately sold back. If so, the S election is not blown. However in the above scenario shares are not rolled so I don't think that applies. However, the answer to the above question may be that shares should be rolled and the IRA trustee be the one who exercises the immediate put. In which case 2004-14 would apply, but only to affirm that the S election is safe.

My feeling is that the employer's method above gets the participant and employer where they want to be at the end of the day. However, I'd like to be convinced that it is truly okay. Obviously there is no real problem with the rollover of the cash portion of the participant's esop account. However, the participant does for a split second "receive" the shares from the esop, then puts them to the company, "receives" cash from the sale, and rolls the cash. So is it correct for the plan to report a single cash rollover. Or should it report both the cash rollover and the share distribution. If the share distribution is reported, then NUA is invoked and when the participant sells, he could have capital gain issues, unless he rolls the proceeds (which may still be considered a distribution from a plan?) within 60 days of "receipt" of the stock. Of course there is the side issue of whether paying capital gains now and not rolling is smarter than rolling and paying regular income tax when distributed from the IRA. But I won't go there.

I've searched the forum for this issue and there is a post by Janie 6/2/03 that is very similar to my question. QDROphile noted that it is possible that cash will be delivered to the IRA as a courtesy so it looks like a direct rollover, but didn't indicate if that was okay under the code. Sorry for going on so long. I'd appreciate any help as the company will be doing 2008 distributions soon and also wants to know if there are issues with prior distributions that should be corrected.