Say a taxpayer has a plan year that ends on August 31, 2005. What serves as the latest date to amend for 401(a)(31)(B)?

http://www.irs.gov/irb/2005-51_IRB/ar12.html

Latest of (1) December 31, 2005, (2) the end of the plan year that contains March 28, 2005, or (3) the tax filing deadline for the employer’s tax year containing March 28, 2005.

That seemds to indicate that December 31, 2005 would serve as the latest possible day to amend the plan, as the play year containing March 28, 2005 ends on August 31, 2005; meanwhile, the tax deadline would fall on November 15, 2005.

Do I understand this properly?

Plans must be aggregated for top heavy testing if at least one key EE participates in both plans. But what does participate really mean? Does a KEY EE have to BENEFIT under the plan during the year or just have a balance in the plan. Sal Tripodi's book seems to say a KEY EE only need have a balance in the plan for the plan to be aggregated with another plan covering a KEY EE. So, a frozen plan in which a key EE has a balance would still be aggregated with an active plan that covers other KEY EEs and non-KEY. I guess this makes sense- I just want to be sure.

thanks!

I have an interesting dilemma...I have a participant in a Cafeteria Plan who is employed in the U.S.A; however, resides in the Domincan Republic (DR). Can he be reimbursed for medical expenses he incurs in the DR? Also, can he be reimbursed for childcare expenses in the DR? Lastly, he provides care and support for his elderly mother-in-law; would he have the ability to run her expenses through the plan as well, assuming she is a U.S. Citizen, or does citizenship make a difference? I would appreciate any feedback.

Does Section 1.401(k)-3(g) permit the reduction or suspension of safe harbor matching contributions mid-year, if the plan document specifically states that such contribution will be determined based on the entire plan year? Or does it permit reduction or suspension of safe harbor matching contributions only when such contribution is determined and paid throughout the year (i.e. each payroll period)?

Can an Employer/Sponsor add a Dependent Care benefit to their FSA, lets say in March 1, 2009? They have some employees that have a real need for this benefit and want to add it to their plan; their plan year begins January 1 and end December 31st....

An Employer provided incorrect data and the Plan failed ADP for the 2007 plan year. Excess distributed to the HCEE. 1099 done reflecting the distribution.

Error was discovered in 2008 and using correct data the Plan re-tested and passed ADP. Employer requested and received the overpayment from the HCEE in 2009.

Is the correction method for the participant to redo 1040 for 2007 and issue a corrected 1099? Is the employer required to contribute any earnings from the time the incorrect distribution was made until the time of the repayment?

Or is a vaiable alternative just to treat the repayment as after-tax creating basis for the employee, no revising tax forms or corrected 1099? Would the employer owe any earnings in this scenario?

Has anyone come across an official blurb on the March 15th deadline for 2008 ADP/ACP refunds? Is is Friday, March 13th or Monday March 16th?

Thank you.

Is there any kind of ERISA violation for making a decision to hire only part-time employees, or to hire a specific employee as part-time, in order to prevent the individuals from being eligible for the qualified plan--or to set employees' hours such that employees do not reach the h/s threshhold in the plan and therefore are never eligible for plan participation? (ERISA Section 510 relates to interference with the rights of a participant, not an employee or a non-employee.) Assume that there is no other discrimination invovled (i.e., race, gender, ADEA, religion, etc.).

I just wanted to issue a warning to those buying new computers. I bought a new laptop at the end of 2008 and specifically checked the Relius website and literature to make sure that the 5500 program was windows vista compliant. The website indicated that the software was updated as of 11/08 for Vista.

I am not computer savvy and bought a laptop that the salesman at a computer store recommended for my needs. I was able to load all my old programs except for the Relius 5500 package. After many hours on the phone with tech support it was determined that my operating system was a 64 bit system and the 5500 software is not compatible. I was told there was no workaround and I should buy the 32 bit vista program and reinstall everything. I was led to believe by tech support that the computer store was at fault for selling me a system that is meant for "developers". I immediately did a web search and determined that most new laptops were coming with the 64 bit system installed. I sent this information to Relius over a month ago and have never heard anything back. I followed-up with them today. I also requested that they change the information on their website to specifically indicate the versions of Vista that were compatible with their programs so that people in my situation did not buy the wrong operating system. As of today, they have not changed the documentation appearing on the website.

In its original form the PPA of 2006 mandated that effective January 1, 2009 a governmental plan may NOT credit its members' fixed return accounts with more than a risk free market rate of return. This requirement was repealed in December 2008. I need the legislative language that made the requirement and the language that repealed it.

Many Thanks,

Joel L. Frank

Pension Columnist

The Chief-Civil Service Leader

277 Broadway

NYC 10007

732-536-9472

A real estate management firm manages several properties and sponsors an immediate eligibility 401k plan for its employees. Several of the managed properties have an on site-custodian that works for the building and the building owners. As these custodians are the only employees in the building the managment company provides payroll services for the building owners for these custodians. ( They are on the management co payroll but not considered ees) Are these custodians now employees of the management company and thus eligible for the plan? Any help would be appreciated.

An "irrevocable" rabbi trust is in place for a NQDC plan. What would be the ramifications of amending the trust to make it revocable? I don't believe that this would do anything to create a taxable event on the participants; if anything, it appears that there would be an even greater risk of forfeiture. I also don't see any 409A issues as there is no acceleration of distributions or suspension/termination of deferrals.

an employee claims they never authorized deferrals to be deducted from their pay. the employer cant locate the salary deferral agreement. is the employer required to take action here? can they refund the money from the plan or if not can they forfeit his account and refund the money through payroll?

We have a client with 401k safe harbor cross tested plan and a cash balance plan. All statutorily eligible employees are eligible for both plans. When we run the ABRs for the 401(a)(4) tests for the cross tested plan, do we have to look at the cash balance plan or just the cross tested dc plan?

Great buy on Ebay

http://cgi.ebay.com/2-Bks-Actuaries-Life-C...%3A1%7C294%3A50

Client called wanting to know if the former company owner who has sold the business and been hired by the new owners must meet eligibility now that he receives W-2 income. Apparently they were under the mistaken belief that because the business is a partnership, and the partners receive only K-1 income, they were not eligible for the plan.

The plan has other HCEs and has failed ADP testing for several years, requiring them to take refunds. If we add the partners to the test with zero deferrals it will likely pass. The company anticipates that the folks who got those refunds won't want to repay them to the plan and they've asked what happens in that case.

But then there is the issue of QNECs for missed deferral opportunities. Are they included in the test? Are they based on the other HCEs' deferral rates before or after the testing correction?

We anticipate that the new owners will not be happy about the company paying money to the old owner because of the old owner's error. The more I think about this, the worse it gets! Any suggestions?

A client has a distribution coming from a qualified plan which includes some after-tax contributions. I'm thinking they could roll the after-tax account directly into a Roth IRA and the earnings could be rolled directly as well but would be treated as a conversion and taxable. Or they could just roll the tax-free amount to the Roth IRA and the taxable portion to a traditional IRA along with the other taxable portion of the distribution. Any thoughts on this process?

Company currently has a 401k safe harbor with a 4% non-elective. Immediate eligibility. Questions have been asked regarding whether they can amend to make deferrals immediate, but Safe Harbor non elective only to those who have 1 year of service. Can this be done? and if so would it need to be done at the time of the Safe harbor notice ?

The DOL released model funding notices for single and multiemployer plans

DOL site - model funding notices

You may have already seen this...but just in case ...http://www.americanbenefitscouncil.org/documents/mrd_requestforguidance_council020609.pdf ://http://www.americanbenefitscouncil....ncil020609.pdf ://http://www.americanbenefitscouncil....ncil020609.pdf ...