I have a client who's certain he heard that the 2008 3% safe harbor non elective contribution does not need to be made in an effort to provide relief to employers. All my research indicates that it must be made and there's no relief available. He's wants me to prove my position. Any help would be appreciated. Thanx.

As briefly as I can, I have left a large bank that had HDHP and a HSA. The new company has terrible family coverage, but excellent individual coverage. Therefore, I am covered by the company insurance (Blue Cross Blue Shield) and have money take out of my check and put into a company sponsored FSA.

My wife and kids are under a privately purchased HDHP plan. My question is this. The HSA is still open, but has a zero balance, but is in my name.

Can I open an HSA in her name (since she has the HDHP) and contribute to it (she doesn't work) and keep my FSA open and use it?

Even more important, can I transfer any remaining balance in the FSA at year end to the HSA and simply not do the FSA next year.

My issue is that I think I will have a balance in the FSA and like the employer deducted contribution route better than contributing with after tax dollars.

Any help would be greatly appreciated

I have an employer with a MPP with a 1 year eligibility and a 401(k) with a 6 month eligibility. What is the easiest way to get all of the employees and all of their census and payroll data into both plans every year.

In the past, I have imported the payroll and census info into the 401(k) and then used a DER to export from one Plan and import it into another. Is there an easier way yet?

Can anyone provide a link to IRS, DOL, PBGC email addresses? I'm attempting to find the email address of Nancy Martin at the PBGC.

Thank you,

andy t. a.

We currently use the Relius VRU for our DV platform. Relius won't sell you a VRU box. They direct you to a vendor that sells the sound card that is compatible with their system. There's only ONE vendor and they no longer sell the card.

Does anyone use the VRU and if so, do you have a backup for it? Do you get your sound card from someone other than the only Relius "preferred" vendor?

Relius had the gall to tell us they no longer support it since people are phasing it out and most TPA's don't use it.

It seems that in the 401(k) market, the terms "co-fiduciary" and "fiduciary" are thrown around quite frequently. Whether it is a broker/dealer or another entiity purporting to assume a co-fiduciary or fiduciary role for a plan sponsor, it seems to be a growing trend. The most common co-fiduciary "plan" is the one where an insurance company agrees to indemnify a plan sponsor for damages that occur from a breach of fiduciary duties based on the investment options provided. However, it appears that there are many caveats by which this can blow up in the face of an unsuspecting plan sponsor (e.g. only applies to a select number of proprietary funds as well as other exceptions). Does the term "co-fiduciary" even mean anything in the 401(k) market when an agent or representative uses the term? Does it have to be in writing? Or can ERISA § 3(21)(A)-(B) (29 U.S.C. § 1002(21)(A)-(B)) be interpreted to include a broker/dealer or entity to have assumed a fiduciary or co-fiduciary role by their actions alone as long as the actions fall within the parameters established under subsection (A) and are not precluded by subsection (B)?

As far as I can see, it seems like for an entitity to assume a fiduciary or co-fiduciary role, that it must be in writing per ERISA § 3(38)© (29 U.S.C. § 1002(38)©). Section (38)(B) also lists Registered Investment Advisers, Banks, and Insurance Companies as the entities capable of becoming an "Investment Manager." I would think that plan sponsors should be wary of hearing an agent or representative using either the "fiduciary" or "co-fiduciary" term and promptly ask whether this claim is in writing and what exactly the entity is suggesting it is assuming that responsibility for. Since ERISA 405 (29 U.S.C. § 1105) details the liability for breach of fiduciary duties by a co-fiduciary and that personal liability may ensue via ERISA § 409(a) (29 U.S.C. § 1109(a)), I would think it would be prudent for a plan sponsor to make such inquiries.

So am I on track with my thought process on the concepts outlined above? Does any "co-fiduciary" claim need to be in writing and absent such writing, it would amount to just puffery? Anyhow, these "terms of art" seem to be frequently mentioned, but are not often fulfilled within the 401(k) market and I was hoping to get some feedback on the topic. Thanks!

Plan was amended to be safe harbor effective 1-1-09. Plan had reallocated forfeitures but was changed to reduce when amended for safe harbor. Only employer contributions made are those used to satisfy safe harbor.

The Plan does have some forfeitures (on old non-safe harbor $) that need reallocating for the plan year ending 12-31-08. The plan otherwise would have been top heavy for the 2009 plan year based on the 12-31-08 determination date.

Question - since the plan is safe harbor for 2009 will it be exempt from top heavy for the 2009 plan year if forfeitures are reallocated in 2009 for the 12-31-08 plan year end? It would seem to be the same as if a PS contribution were made early 2009 for the 2008 plan year - the plan would be exempt from t-h in that situation, wouldn't it.

It's the plan year for which they are allocated and not in which they are allocated that would affect top heavy exemption?

Client has a Safe Harbor 3% non-elective (not a "maybe") provision. Due to the economy, they want to cease all Employer contributions. Could they:

1. Terminate the Plan (Plan A) during 2009 and contribute only up to the termination date?

2. Adopt a new 401(k) Plan (Plan B) without Safe Harbor provisions?

3. Instead of distributing from Plan A, there will be a Plan to Plan transfer from Plan A to Plan B. Can this be accomplished?

4. Are they violating any participant rights by not allowing distributions from the terminated plan?

5. Would Plan A be subject to an ADP Test for 2009? If so, would aggregation with Plan B be required?

this is a first year CB Plan... I'm allocating 90k to the hypothetical accounts. Pre-ppa, you could match the 412 contribution with the hypothetical allocation... Now I with ppa, i'm coming up with a contribution of 66k.

Anyone know around this problem? am I doing something wrong?

Has anybody handled as situation like this:

An employee elected to defer $500 from their paycheck. The company deducted $1000 instead and contributed it to the plan. Eventually the mistake was discovered. The excess amount ($500) should be returned to the employee, with earnings. This technically is not an "excess deferral" but is it treated like one? Would the correction method be the excess deferral correction method from EPCRS?

Additionally, what if, instead of earnings on the amount, there were losses. What amount is distributed to the employee, the $500, or the $300 its now worth b/c of the losses the plan took?

Thanks in advance

CL

I have a plan which gave timely notices that they would contribute the 3% NEC for Safe harbor for 2009. The HCEs have decided that they want to be excluded from getting the safe harbor contribution in 2009. The NHCEs will still be getting this. Can I amend the plan and exclude the HCEs for 2009 or do they have to get the contribution this year and wait until next year (2010) to be excluded? I know we cannot stop the safe harbor contributions, but was wondering about this since it does not discriminate against NHCE.

Has anyone heard of a "Foreign Miscellaneous Government Entity"?

I have a prospective client claiming this as their organization type and state they have an Federal EIN.

Can an entity of this type sponsor a qualified plan?

Thanks in advance.

Hey - for some of you investment law savvy types:

If someone HAD actually received a distribution or distributions from Madoff's fund during the last (x) years, is there any possible recovery by the receiver? In other words, you cashed out and received 20 million. But that 20 million (or some of it) is based upon fraud or theft of funds from other investors - can the receiver sue you to recover all or a portion of these funds? If so, perhaps a client ought to at least be able to recover the amount of the investment, but just get whacked for the gain or a portion of the gain?

I know NOTHING about these issues, so I'm probably not even asking the right questions...

Medical:

If a group Health Insurance plan allows employees to deduct pretax premiums from their paycheck, does this automatically change it from a welfare plan to a cafeteria plan? Participant eligibility will continue to be based on the section 152 dependent rules.

ERISA Advisory Opinion 2000-10A (July 27, 2000) [http://www.dol.gov/ebsa/regs/AOs/ao2000-10a.html] was about whether an IRA's investment in a partnership managed by Madoff might be a prohibited transaction.

One wonders whether the investor went through with it?

If an EE makes an error in specifying the amount elected, when do such errors become permanent? In this case, an employee has realized from the first paycheck that the election is $50 per pay period too large. The claim is that the ee filled out two enrollment forms but sent in the wrong one.

Help. Feel like I should know the answer to this but not sure. We have a flex plan that is set to receive the first 2009 salary deferral contribution with the January 15, 2009 payroll. If a person is terminated prior to January 15th such that they receive some pay for 2009 but not a full pay period check, should the set dollar deferral to the health fsa be made from the partial paycheck the same as normal, should it be adjusted pro rata or should it be canceled altogether?

This becomes much bigger issue because if no amounts go into the flex account, presumably the employee would not have a positive account balance for 2009 and I guess arguably would not have to be provided COBRA. Employer here is worried that terminated employee would elect COBRA if offered so that they could take advantage of full year's reimbursement amount with just one month's COBRA deferral.

Even if no portion of the partial paycheck would go to the flex plan account (or wouldn't have anything in the account at the time of termination), I worry about not providing the individual COBRA rights in this case. Although the Plan speaks in terms of only offering COBRA if the individual has a positive account balance at the time of termination, the participant here would not have overspent their account--their account balance would simply be zero--no amounts in / no amounts spent. Would appreciate any insight or tips on how have others dealt with this issue. Thanks.

A TPA I do some work for wants to put an annuity contract in a new DB plan for the owner. There are other participants in the plan but I was told that the only contract would have the owners name on it but payable to the plan, therefore it's okay that the other participants do not have annuity contracts in their name.

Does this sound reasonable and more importantly is it allowable?

I don't have any experience with annuity contracts but I always thought they were a ripoff due to fees and expenses and withdrawal penalties. For example, what happens if the plan terminates in five years, what is that contract worth? How do you value it annually if you know the plan will likely shut down before the end of the contract and there are significant withdrawal penalties? Can the contract be rolled over?

I would like to hear others experiences with annuity contracts. Obviously I don't have to take the case but I don't want to overreact just because it's something different.

Hello. My company was recently sold, and now employees have the choice between receiving a lump sum distribution from ESOP, or rolling over into 401K. I have chosen to take the payment and have been advised that they will withhold 20% for federal taxes. I was also told that there will be a 10% early withdrawal penalty, which I will be responsible for paying when I file my taxes the following year. However, I am not sure how state taxes, and FICA are handled. Will I also be responsible for these? Plus, it is my understanding that this distribution will be added to my income and taxed as such, is this true? If that is the caase, would it be possible to responsible for more than the 20% federal, because I know I would be in a higher tax bracket. This is all really confusing...any help would be GREATLY appreciated!!! Thank you for your time.

I can't find it ANYWHERE now, but I swear, I thought I'd seen that the IRS had recently revised the address to which Cycle C submissions should be mailed.

Anyone else know about this, or am I officially crazy?

Thanks!