My clients consist of 2 related entities. One entity is a 501©(3) organization, which maintains a 403(b) plan. The other is a for-profit entity, which maintains a 401(k) plan. The plans are identical and provide for elective deferrals, matching contributions and employer nonelective contributions.

Under Reg. Sec. 1.410(b)-6g, I can exclude the employees of the 501©(3) organization in the coverage testing for the elective deferral and matching contribution components of the 401(k) plan.

My question is: can I exclude the employees of the 501©(3) organization when I perform coverage testing of the employer nonelective contribution in the 401(k) plan as well?

My wife and I both work for the same company and we have a HDHP with HSA as our option. Our employer is offering an HSA contribution of $400 for individuals and $800 for all other coverages (ee + spouse, ee + kids, family.) I am thinking that it's in our best interest to split the plan where I will cover the kids ($800 ER contribution) and she will get her own coverage ($400) contribution. The contribution we have to pay is actually cheaper that way as well - rather than me covering the family.

I have a few questions about this approach:

1.) If we each decided to contribute to our own HSA's, would we be able to contribute the maximum for both of us? In other words, could she put away the Max individual contribution while I put away the max family contribution?

2.) I understand that our out of pocket max could be much higher in this approach if we both have significant medical costs but are there any other downsides to this approach.

I appreciate your thoughts.

At the office, a few of us have said at different times that once a plan terminates the AFTAP requirements no longer apply and the ability to pay out lump sums is not restricted by funding status. However, when pressed, none of us can find a cite for that opinion and only talk about informal guidance we heard somewhere.

Does anyone have a cite for this view, or against it?

A daughter was named sole beneficiary on one of her father's IRA's and she wishes to divide the IRA equally among her 6 siblings and herself. She wants to do this without incurring a tax liability to herself in the process. Does anyone know how this can be accomplished? I am not very familiar with IRA situations such as this one and am not having any luck with my research.

Thanks so much!

Sandy

I am suffering from a severe mental block with the impending changes toward 403(b) Plans. Any assistance would be greatly appreciated.

1) A Not-For-Profit has a deferral only 403(b) Plan. (There is no employer contribution.) Employer allows people to use any "TSA Product" or "Custodial Account" for deposit of deferrals. Is this Plan considered to be exempt from ERISA and the 5500 Filing; meaning, the only concern would be to get a plan document? Would this Plan need to file any form of 5500?

2) A Not-For-Profit has a deferral only 403(b) Plan. There is no employer contribution. Employer does require that people only use the Annuity or Custodial Account of a specific vendor. Is this Plan considered to be exempt from ERISA and 5500 Filing, or does this Plan now need to file a complete 5500 with Schedule I or Schedule H as would a 401(k)?

3) A Not-For-Profit has deferrals and employer contribution under their 403(b). Employer requires people use only the Annuity or Custodial Account of a specific vendor. Starting in 2009 must this Plan file a complete 5500 with Schedule I or Schedule H, as would a 401(k)?

I am having problems determining what causes a 403(b) to file a 5500, and what the "form" of filing that would be. Again, thanks.

Does a cafeteria plan that offers only two choices (dental coverage, vision coverage) qualify as a premium only plan? I'm trying to fit within the premium only plan safe harbor for nondiscrimination testing.

In the proposed regs, premium only plan is defined as a "cafeteria plan that offers as its sole benefit an election between cash . . . and payment of the employee share of the employer-provided accident and health insurance premium (excludible from the employee's gross income under section 106)."

I have a situation where an employee wrote a check as an attempted contribution to his 401(k) plan. Only salary deferrals are allowed as contributions, thus he can't contribute this money. The employer cashed the check but did not contribute it to his 401(k) account. They finally realized they had the money a few months later and are returning it to him plus interest. My question is: is this interest taxable compensation to the employee (now former employee), does the employer have to withhold on the interest for FICA, Federal Inc. tax, local tax etc?

Thanks

-C

I have someone who signed up for our HSA plan in 2007 and switched to 1 of our non-HSA plans for 2008

He is withdrawing any copays, deductible , etc.. out of HSA for 2008 medical expenses

I am assuming that is ok but just wanted to check that he didn't need to be enrolled in a high-deductible health plan for 2008

Can someone refer to me to some good resources on HSA's/HRA's/limited FSA's

thanks

My employer contributes 1250 to HSA for 2009. The amount is contributed on 1/1/2009.

Say I terminate employment on 1/15/2009.

Will I have excess contributions subject to excise tax?

Will my employer get some of that money back?

ERISA Mash

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How do you handle this in operation. The plan terminates in December and pays out balances ASAP. The ADP test is run after all this and plan fails so distributions are required. Well, distributions have already been made and 1099R issued. Seems to me the 1099R has to reflect that a portion of that distribuiton is not eligible for rollover because ADP test failed? This makes for very unhappy HCEs. Suggestions? What am I missing?

Hello,

I was hoping someone could help with some guidance on the following scenario - our TPA is not sure & I am at wit's end trying to find an answer to this. Any help is greatly appreciated:

Company A purchased 80% of the stock of Company B on 01/01/07. Both A and B maintained separate 401(k) plans after the purchase. Effective 8/01/08 the employees of B became employees of A, and Company B is dissolved. The plan is to transfer the plan assets of Company B to Company A's plan before the end of ‘08. The former Company B employees are allowed to make elective contributions to Company A's Plan beginning 8/01/08. The question is: If Company A does a discretionary match for ’08, does it have to match the former Company B employees wages for the entire year or just for the period of time they were employed by Company A and were allowed to contribute to Company A's plan? There was no match for the Company B employees made on their old plan for 07.

My firm represents an employer that recently received a withdrawal liability assessement from the Central States Pension Fund, and we're trying to locate an actuary to review the calculation, to see if there are any issues. We already approached one of the big actuarial firms, but they declined (too politically sensitive apparently, in that they represent other Teamsters funds). Any recommendations? Preferrably someone in DC or LA, but I'll take what I can get. Thanks!

When is the last day by which a plan must be amended when, by virtue of an acquisition, the plan has employees of an acquired company participating in the acquiring co.'s plan, BUT the acquiring company neglected to amend the plan to actually permit the employees of the acquired company to participate.

In this case, the company was acquired 3rd quarter 2007, the employees of the acquired company began to immediately participate in the acquiring co.'s plan.

The acquiring co. has realized that it did not amend its plan to allow for this participation. 14 months have gone by.

Does the acquiring company have until the end of the plan year of the PY (this is a calendar year plan) following the acquisition, etc. etc.? If so, the amendment will be timely.

Or, if the acquiring co. missed the boat on a timely amending, may the acquiring company adopt a retroactive amendment to cover these mostly NHCEs?

Thank you

A company wants to allow Union Employees to join the plan and make 401(k) contributions. but does not want them to be eligibile for the Employer Match.

I know this is allowed, but what rules and testing have to be passed in order to allow this?

Any guidance is greatly appreciated.

ALEX

I am looking for a little guidance.

We have 2 plans: Hourly vs Salary. 2 Different matching Formulas. The salary group (with most of the HCEs) receives a more generous match. Due to coverage issues, the plans were merged together on 4/1/08 at which time, the Salary plan's match was decreased to the level of the hourly plan. So from 4/1-12/31/08, they are all on the same formula. Do I need to worry about BRF for the time period 1/1-3/31? If so, they would fail BRF. How do you correct it? Is it as simple as giving a more generous match to enough Hourly NHCEs in order to obtain a passing ratio? If so how do you select which NHCEs receive the additional match?

Any help would be greatly appreciated!

Prospect is an S-corp that has never taken W-2 in the past. She intends to take W-2 for the first time in 2008. If a new plan is set up for her, and I run it as an end of year valuation to account for the salary she takes in 2008, will I have a funding target that can be used to maximize her deduction?

She has the past service to give her a benefit, but as of the beginning of the year, her average salary was $0?

Any thoughts would be greatly appreciated.

Thanks!

Under PPA, once a new plan has been designed, there doesn't appear to be any first year funding flexibility, other than that caused by the timimg of contributions.

If using a BOY valuation date, the FT is $0 (415 $ limit, with no YOP). So, the cushion amount is $0.

So, the maximum contribution is equal to the minimum contribution (TNC), as adjusted for date of payment.

Comments, please!

For example, would it help to switch to EOY valuations?

Under PPA, once a new plan has been designed, there doesn't appear to be any first year funding flexibility, other than that caused by the timimg of contributions.

If using a BOY valuation date, the FT is $0 (415 $ limit, with no YOP). So, the cushion amount is $0.

So, the maximum contribution is equal to the minimum contribution (TNC), as adjusted for date of payment.

Comments, please!

For example, would it help to switch to EOY valuations?

I need clarification on this. Partners can make elective deferrals on draws during the year (guaranteed payment or not a guaranteed payment)? If the partners decide to terminate the plan on let's say 11/1 would the partner then have no income for plan purposes since his income is determined on 12/31?