The description of asset smoothing in the proposed 430 regs seems to mimic Approval 11 of Rev.Proc. 2000-40 (i.e. average value without phase-in).

H.R. 7327 (WRERA) seems to amend the proposed reg by introducing expected earnings into the mix using a rate no greater than the applicable segment 3 rate.

Algebraically do we end up with one of the smoothing methods in 2000-40 or is it new and to be described in forthcoming guidance ?

A client is looking to start a Non Qualified Deferred Compensation Plan for 2009

They would like to give their key executives a 10% bonus on all compensation on excess of the IRS Section 401(a)(17) limit.

For example, a executive makes $500,000 in 2009. His company contribution would be $25,500 (10% * (500,000 - 245,000)).

Would this be considered a Top Hat Plan or Excess Benefit Plan or neither?

Any help you can give me would be greatly appreciated.

ALEX

I know this basic issue has been covered in another topic, where there seemed to be a consensus that different lengths of installment payments woudl be different times and forms of payment. I think that was based on the following language in the preamble

For this purpose, a series of installment payments over a predetermined period and a series of installment payments over a shorter or longer period, or a series of installment payments over the same predetermined period but with a different commencement date, are different times and forms of

payment.

What if you had a five year employment contract which stated that if an employee was terminated without cause he woudl be paid his/her base salary on a monthly basis for the remaining term of the contract. Do you have different "lengths" for the installments based on when the employee is terminated and therefore different "forms" based on the same event--separation from service?

Can a foreign employer adopt a cafeteria plan for its US employees? I know that any employer with employees subject to US income taxes can sponsor a cafeteria plan for its employees, but I don't know if this includes an employer that may be overseas or resides in Canada. Thanks so much for your help!

I already know the answer: Read the document, but I have to ask anyways:

Is a plan required to execute automatic distributions? That is, if the plan contains language saying amounts under $1,000 can be distributed without consent via cash distribution, does that mean the plan sponsor has to force people out? Our, for this example, the sponsor does not want to deal with automatic rollovers for amounts between $1,000 - $5,000, but the document contains that language. Is the sponsor required to make auto rollovers?

Thanks

If a non-key is still employed but receiving a RMD, can she change her mind and elect to stop the RMD's, again, while she is still employed?

Thanks

ER wants to make 5% of pay contribution to ERISA 403b plan for all eligible EEs.

ER also provides group health coverage to EEs per stricter eligibility requirements and do not have other group health coverage (such as through spouse).

ER would like to provide another 10% of pay contribution to ERISA 403b plan for those NHCEs that are eligible for the ER's group health coverage but for the fact they are covered under other group health coverage.

No EE would have a choice of extra pay (or any other taxable benefit) in lieu of the 5% or 10% contributions.

Problems?

I have a client who has a requirement that the participant must be employed on the last day of the plan year in order to share in the year's contribution allocation. The plan is also written that distributions cannot be made until following the end of the plan year. I have a participant who is trying to find a loophole and work on Dec. 31 and then quit that same day to be able to both receive a 2008 contribution as well as receive their money a week later in January. Is it possible to both be employed and terminated on the same day to get the benefits of both? My office keeps going back and forth on the subject and I cannot find any clear answers in my research.

Hi to all! I am a TPA and my scope of knowledge is limited to Qualified DC plans. I have several very small-employer clients who only have a plan open to allow for salary deferrals. With the re-write of the documents, I'm considering making a suggestion that they do something (??) to alleviate my annual fees along with the document fee. This is a weeding-out process for me, too, which I think is important to do every so often.

What kind(s) of retirement plan are available for these types of employers? There is one owner, but he/she doesn't defer. Well, doesn't defer enough to come close to failing ADP tests. There is actually one owner who doesn't defer at all! These plans are open to allow the few employees to be able to defer. (Mind you, their intent in the beginning, I think, was to do more ER contributions as well as owner-deferrals, too.)

Looks like the SIMPLE and SEP plans have a required ER contribution. Is there anything where an employee can put in money and have the "option" for the employer down the road?

Thanks for any input.

Same owner as my other question wants to switch from the 3% of comp to the match method. Do we need an amendment to change or is it acceptable to do either?

Jimmy

An owner wants to go back to 2007 plan year and include HCEs in the receipt of the 3% of comp allocation. At the time only the NHCEs received an allocation. Is it possible to do this? Someone said the funds had to be deposited within 12 months of the plan year end? (didn't seem right to me though)

I sure appreciate any help.

Jimmy

The Flower Magnate Luther Burbank Washington Grumps grew up as the youngest child of depression parents. He doesn't trust the stock market or for that matter Banks. He has purchased Poppy's, Inc. which has a somewhat mature population but underfunded DB plan for its 499 participants. LB (as his friends call him) wants to continue the Plan and will manage his workforce so the Plan never covers 500 participants because the word "at-risk" annoys him. He only wants to invest in the surest of financial instruments which he believes are money markets and treasuries and he doesn't care what the pundits profess, he "ain't changing his mind -- ever." He will contribute the minimum amount the law allows and doesn't care particiular what the Plan costs as he must protect his little flowers at all cost. The Plan assets long-term yield projections would fall short of the segment rates. In short, basing contributions upon the segments rates should push far too much funding into the future and will do anything but protect all those little poppies.

What are the consequences of failing to make a distribution of pre-409A deferred compensation? It appears that the distribution should have been made in 2007. Would this failure be considered to be a subsequent deferral and thus a material modification which would then subject the benefit to 409A?

Plan's (custodial account) current vendor will no longer be administering/accepting 403(b) contributions starting 1/1/09 and the plan will not be set up with the new company until 2/1/09. What options would this plan have? Do they have to suspend deferrals until the new account is set up or can they hold the deferrals in some sort of cash mangement account and deposit into new account as soon as it is set up? Will the fact that there is no custodial account to deposit the assets into count towards making the deposit as soon as administrativly feasable?

Thanks

Client currently has a 125 Plan with Premium Conversion, Dependent Care and Medical FSA. One of the medical plans they offer is an HDHP. Employees who elect the HDHP are not eligible to participate in the Medical FSA.

Client wants to add a Limited-Use FSA for dental expenses only, that will be funded solely by Employer contributions ($300/yr for single, $500/yr for family). All employees would be eligible for this FSA, even those who are covered under the HDHP. In addition, they want to include the HSA contributions (both the employer and the employee contribute to the HSA) in the 125 Plan.

Questions:

1. Can the plan have two Medical FSAs – one full use with restricted eligibility funded solely by employee contributions, and one restricted use without restricted eligibility funded solely by employer contributions?

2. Can the employer sponsor two separate 125 Plans – in which case we could separate out the full use Medical FSA as a stand alone plan (I assume the Limited-Use FSA could not be a stand alone since it would be fully funded by the employer and therefore not provide an option between cash and benefits)?

3. Would it be better to have a Limited-Use HRA, instead of the Limited-Use FSA? If so, why?

4. Are there any problems/issues I need to be aware of?

Any help or suggestions will be GREATLY appreciated.

Defined benefit plan frozen 2005. employer let go of over 100 people over the past few years.

Actuary calculating new termination. Current salary would fall under the highly compensated. However, at the time of the freeze, this participant was no where near the HC level. recently paid out a participant who originally fell under the HC restriction, salary at 130. another at 125 another at 118k. Current person falling under the restrictions comp was only at 80 at the time the plan was frozen.

Actuary thinks should fall under restriction and ERISA attorney does not.

Plan is currently funded at 90.3%

Who is correct here?

just when you thought you knew the rules. wow, a novel idea in 1949.

Evolution of the rules of basketball

1895: The free throw line was officially placed 15 feet (4.6 m) from the basket. Before this, many gyms had the line 20 feet (6.1 m) from the basket.

1896: A field goal or basket was changed from counting as three points to two points. Free throws were changed from three points to one point.

1897: Backboards were installed in most arenas.

1901: A dribbler could not shoot the ball and could dribble it only one time, using both hands.

1909: The dribbler was finally permitted to shoot. In addition, the dribble was defined as the "continuous passage of the ball," which made the double-dribble illegal.

1911: Players were now disqualified after committing their fourth personal foul. No coaching at all was allowed during the game, even during timeouts.

1914: The bottom of the net was finally cut open so the ball could fall through.

1915: The college, YMCA, and AAU rules became the same for the first time.

1921: A player was allowed to re-enter the game once. Before that, once a player left he could not return. The backboards were moved 2 feet (610 mm) in from the wall of the court. Before that they were right on the wall and players could climb the padded wall to sink baskets.

1922: Running, or "traveling," with the ball was changed from a foul to a violation. In other words, instead of the other team getting a free throw, the team in violation simply lost the ball.

1924: The player who was fouled had to shoot his own free throws. Prior to that, there was usually one player who shot all his team's free throws.

1929: The charging foul by a dribbler was called for the first time.

1931: The "held ball" could be called when a closely guarded player withheld the ball from play for five seconds. The result was a jump ball. The ball was made smaller, with the maximum circumference reduced from 32 to 31 inches (813 to 787 mm).

1933: The ten-second center or midcourt line was introduced to cut down on stalling. That meant the team with the ball had to advance it over the center line within ten seconds of taking possession.

1934: A player could now leave and re-enter the game twice.

1935: The ball was made smaller once again. The maximum circumference was reduced to between 29 1/2 and 30 1/4 inches (749 and 768 mm).

1936: The three-second rule was introduced. No offensive player could remain in the free throw lane, with or without the ball, for more than three seconds.

1938: The center jump after every basket scored was eliminated. That led to more continuous play.

1940: The backboards were moved from 2 to 4 feet (0.6 to 1.2 m) from the end line to permit more movement under the basket.

1945: Defensive goaltending was banned. Big men could no longer swat the ball away once it started downward toward the basket. Five personal fouls now disqualified a player. An extra foul was not permitted in overtime games. Unlimited substitution of players was finally introduced.

1949: Coaches were finally allowed to speak to players during a timeout.

1954: The NBA adopts the shot clock. A team must attempt a shot within 24 seconds or lose possession. The shot clock is reset when the ball contacts the rim or when the defensive team gains control of the ball.

1957: The free throw lane was increased from 6 feet to 12 feet (1.8 to 3.7 m) wide.

1958: Offensive goaltending was banned. In other words, an offensive player could not tip a team-mate's shot into the basket while the ball was directly above the rim of the basket.

1985-1986: The NCAA adopted the 45-second shot clock.

1993-1994: The NCAA shot clock time was reduced from 45 to 35 seconds.

2001-2002: The NBA reduces the number of seconds for a team to advance the ball past half-court from 10 to 8. Illegal defense was also eliminated.

I am having one of those moments so this may seem like a stupid question. Does an FSA have to satisfy both the discrimination rules of 125 and the discrimination rules of 105(h)? For example, a person could be highly compensated under the new 125 proposed regs, but not under 105(h), and vice versa.

In determing the total number of rate groups using a prototype document with the IRS LRM language in it, what is an eligible HCE or nHCE? Eligible for plan, to make deferrals or to receive a profit sharing contributions? And when is this determination made? It would make sense that it is eligible to receive a PS contribution since it is not capitalized and that this decision would be made at the end of the plan year.

If a plan that has an HCE leave before meeting the hours requriement for profit sharing contribution but is still eligible to make deferrals and get match, can they end up loosing a rate group?

Thanks for any help

I realize there are special deferral rules for performance based compensation under 409A. Would these also apply to the short-term deferral exception?

For example, assume a bonus is based on an "employment year" not the calendar year or the employer's fiscal year. Can the bonus be paid out a short time after the end of the employment year (assume, for example it runs April 1 to March 31) and still be considered a short term deferral?.