A 501©(3) client wishes to implement a Safe Harbor Match in their 403(b) program. However, they also wish to exclude an identifiable class of non-highly compensated employees from receiving the match.

Can they do this?

If not, can they set up a second 403(b) plan just for those employees?

Thank you.

We have an employee going on disability leave in late December who has also elected the Flex Spending Account for 2009. We will not be able to deduct any of the pretax contributions since their will not be a paycheck in 2009 (while the employee is on leave). Should the employee pay us with after tax dollars (check) so they can access the entire annual election for 2009? They probably will return to work in March.

A small non-pbgc db plan terminated December 31, 2007

The plan sponsor initially did not want to get a D letter but we finally convinced them to.

If the submission is done now, we may not get the letter for up to eight months and they would prefer not to pay benefits until they receive the favorable letter.

1) If benefits are not paid until after 12/31/2008, are they in danger of the plan not being considered terminated because more than a year has gone by?

2) Since the plan terminated in 2007, PPA segment rates are not used for 417(e) purposes. Instead, the old stability period, look back month and 30 year treasury rate is used. What would happen if we drifted well into 2009 before benefits were paid? I guess the 30 year treasury rates will still be published.

Plan terminations; what do you have to do? Other than accelerated vesting and amending the plan?

When you terminate a retirement plan, other than accelerated vesting and amendment of the plan, what other requirements occur?

Any comments regarding appropriateness and completeness of the contemplated form would be appreciated.

Election_to_Apply_FSCOB.pdf

http://www.irs.gov/pub/irs-tege/epnf_021605.pdf

Notice 2005-5 provided that plans with mandatory distributions must be amended to include the automatic rollover provisions by the end of the first plan year ending on or after March 28, 2005.

This refers to amendment process for 401(a)(31).

Amending a plan for EGTRRA, GUST, 401(a)(9) and 401(a)(31); what circumstances allow one to go beyond the usual due dates for execution and what serve as the required execution dates?

Did Datair write an article regarding this?

Forgive my innocence (I prefer that word to ignorance). I didn't find a specific previous post addressing this question.

I can't see any reason why an age 59 1/2 employee couldn't take a 403(b) distribution in the form of a rollover to the same employer's 401(k) (assuming 401(k) eligibility assuming the 401(k) accepts rollovers, and assuming only 'eligible' amounts are rolled over). But I'm new to 403(b)s.

Am I missing something?

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?

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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.