In Section 15.05 of Revenue Procedure 2005-16, the IRS permits VS practitioners, in certain circumstances, to amend a client's document on the client's behalf. In Announcement 2005-37, the IRS laid out a pretty clear procedure that VS practitioners must follow in order to do so.

Does anyone know whether the IRS has updated or changed the procedure it laid out in Announcement 2005-37?

I've heard of a number of VS practitioners who have amended their client's documents on their client's behalf in ways which ignore or only partially satisfy the procedure described in Announcement 2005-37 based, apparently, on "informal" guidance from the IRS that they (the IRS) wouldn't enforce the procedures in Announcement 2005-37 for certain amendments, e.g., 415 final regs and definition of NRA. Has anyone else heard that? If so, where and from who?

As trust and confidence breaking as 2008 has been, there are far worse years to forget. In fact, as I accentuate the positive and eliminate the negative, relatively speaking 2008 was a pretty darn good year -- both worldwide and personally.

My wishes that your 2009 be at least as good as 2008 and no worse. If these wishes are fulfilled, you will have a great year.

Happy New Year,

andy t. a.

My understanding is that when a health plan is amended to exclude a class of employees that was not previously excluded, a resulting loss of coverage is not a qualifying event. Can anyone confirm that? I guess my follow up question woiuld be is there any notice requirements for this type of amendment?

Thanks for any assistance.

Here we are 12/30/2008. In mid-November 2008 our 401(k) client distributed a notice indicating that the plan would be a safe harbor plan (with a 3% nonelective contribution) for 2009. It was not a "wait and see" notice. Now they have changed their mind and don't want the plan to be safe harbor for 2009.

What are our options? Can the plan still be amended once a non-"maybe" notice has been given out?

Some quick thoughts would be appreciated!!

A plan with about 20 participants is invested in real estate among other things. The value of the real estate is very low right now and will probably remain illiquid for some time. The owner, who is the trustee directing investments, feels badly about the value of the real estate and wants to push everyone out of the real estate investment into self directed 404© compliant accounts. The owner/HCE would be the only participant invested in the real estate. Seems like this would be discriminatory. Any thoughts?

Under the Bond Rules, there is a requirement to have a bond if "any benefits under the plan are provided or underwritten by an insurance carrier or service or other organization"

For a self-funded health plan with stop loss (reinsurance) insurance for aggregate or individual maximums, does the above statement mean that this type of plan would need to have a bond? The benefit funds are mixed with the general assets of the employer (not separated by bank accounts, no trust, etc). The employees do have medical premiums deducted from their paychecks and those funds, I think, are commingled with general assets.

Hi, everyone! Long time lurker, first time poster.

When completeing Form 5330, do I fill out both sections A & C+D? If I do, do I use the same EIN in B & E? (The emplyer os the plan sponsor, in this case).

Thanks!

A client walked into my office the other day (sounds like the start of a joke) and told me her story. She and her husband run a small business with employees. He managed the plan. In early 2008 their broker (and tpa) essentially told them to take a walk because they were too small for her to manage. They went to Paychecks. The husband passed away shortly thereafter and now they have had a fire and there are no records left. They are in the process of firing Paychecks. She has no idea when the plan was effective, what teh provisions were or anything else. On the plus side the only money in the plan is salary deferrals.

I am trying all avenues to try to get copies of things like plan documents and 5500's. We don't have contact information on the prior broker as the husband was the person who contacted him/her and we can't find records. I'm hopeful that we might get SOMETHING from the accountants office. I beleive I've been told that there is a website where I can look at the prior 5500's or I can contact the DOL and request (on the clients letterhead) copies. A few questions.

Presuming that the plan document was never filed with the IRS, I was thinking of restating the document (as best as possible) and submitting it to the IRS explaining that what documents I lack and why. Agree/disagree?

Has anyone used the website where you can get 5500's on line -- is that free erisa? And is it really free?

Any other thoughts or warnings?

Thanks to all and a Happy New Year.

A large multiemployer defined benefit plan recently discovered that a contributing employer was making contributions to the plan on an after-tax basis. The plan does not allow for after-tax contributions. Obviously, because the plan document does not allow for after-tax contributions, the contributions must be refunded to the employer. The problem here, however, is that the employer had been making after-tax contributions to the plan for over 8 years before the plan's auditor figured out what was happening. Additionally, the language in the collective bargaining agreement could be read to require that the employer make only after-tax contributions to the plan. As such, if the contributions are refunded, the plan may not have any recourse against the employer under the CBA to collect the contributions and the employeees will not have accrued any benefits under the plan. Does anyone have any ideas on how he plan can resolve this situation without the employees losing the benefits they thought they had accrued? Any help would be appreciated.

We area large employer who utilizes Merrill Lynch as our plan's recordkeeper. We just implemented a participant loan program, and the recordkeeper is telling us they are unable to post anything but the full repayment amount or a multiple of it. They are also unable to post a negative loan repayment.

Has anyone run into this situation with a recordkeeper? Fidelity was the recordkeeper at my last employer, and they posted any partial loan repayment to principal. Not being able to post a negative loan repayment doesn't make sense to me, as someone's entire paycheck may be reversed (an overpayment of wages for example) and I feel the negative loan repayment should be posted to their account and added back to the loan balance.

I see this as a shortcoming of their RK system - can others shed some light on their experience or what is allowed by regs?

Thanks!

My thinking is NO, they don't

We received a post form our forms software provider stating that we MUST sign form 945 as a paid preparer and get a tax identification number if we do not want to disclose our SSN. This is news to me -- but maybe I've been paying so much attention to DB issues under PPA that this passed me by. No instructions are available for the 2008 945 form yet.

Any thoughts?

I'm looking to break into the business as an owner and acquire a small practice. Any ideas?

I recently discovered that a HCE made a deferral for 2006, but he never received compensation for that year.

This is a self employeed individual.

Since the HCE had no income, he cannot have any deferrals. The contribution could not have been a deferral, since there was no income to defer from.

What would be the correction method to get the contribuion out of the participants account?

Our STD plan has a 6 month wait for new hires. However, it doesn't address any special eligibility for rehires and recognizing prior service. What do plans typically provide in this case? Do you recognize prior service if the break-in-service is not longer than 6 months/1 year/2years?

Thanks for your thoughts.

we have a small number of balance forward plans for which we prepare the 1096, 1099-R and 945 forms.

For those clients who receive a 945 form, I like to include a copy of the instructions for the form. However this year I can't seem to find any. On the IRS website, the form is there but no instructions.

Relius Goverment forms doesn't have the 945 form/instructions available yet.

I know the filings are pretty straightforward, but does anyone have a copy of '08 instructions? I like to verify the mailing address each year...many years ago I had a colleague who sent all her client letters with the previous year's filing address which unfortunately was changed!!!

We have a guy who enrolled in only Part A of Medicare in February 2008. He is going to retire 1/1/09. His wife will lose coverage when he retires. Is she entitled to 18 months, 36 months, or the 36 months minus the number of months he was Medicare eligible prior to retirement?

Thank you.

Our STD plan has a 6 month wait for new hires. However, it doesn't address any special eligibility for rehires and recognizing prior service. What do plans typically provide in this case? Do you recongnize prior service if the break-in-service is not longer than 6 months/1 year/2years?

Thanks for your thoughts.

Deferred Compensation plan put in place in 1995 provides that all salary deferrals are 100% vested at all times and eligible for distribution in lump sum or installments "as of January 1 of the year(s) specified in the Participant's applicable Participant Enrollment Form."

Some participants designated payment dates in this fashion; most did not.

For this latter group, is the "grandfathered amount" - the amount that is earned and vested as of December 31, 2004 - all salary deferrals as of December 31, 2004, plus earnings thereon? Or can it be said that, in the absence of a specified distribution date, distribution is impliedly conditioned upon employment until the first to occur of death, disability, or separation from service?

Any and all comments appreciated.

Company issued the "maybe" safe harbor notices every year since 2003 and always funded the 3% safe harbor nonelective contribution by year end. But but they failed to amend 401(k) plan to state they were making a 3% nonelective contribution and never sent employees a supplemental notice. Do you agree the employer cannot self-correct and must correct via VCP-approved retroactive amendment?