We recently took over a case that incorrectly allocated the profit sharing contribution to member accounts. While the total amount is fine, there are small errors given a misapplication of the Plan's allocation formula. (The errors are small $100 here, $50 there, $25 there....) In addition, members have separate, individual investment accounts; meaning a "physical move" is needed to correct the errors.

I believe that since the errors are "small" in dollar terms, SCP can be used under EPCRS. The question is, how soon do physical transfers need to be made. The Client would like to make adjustments within the next year's deposit of profit sharing, that will be for 2008 but will actually be deposited in early 2009. The Plan uses the calendar year and the errors were in deposits made in 2008 for 2007.

Does anyone have any insights on the process of an unagreed 5500 retirement plan cases?

Is it common for a multiemployer pension fund to have a written procedure for determining a discounted single sum payment an employer can make to fully pay its withdrawal liability? Would it involve discounting quarterly payments at a higher interest rate? Are you familiar with multiemployer funds that negotiate discounted lump sum payments on an ad hoc basis?

Is it a notice violation if my notice states a method of election which can not actually be used?(i.e, the form states that continuents can "elect by net," however, access to the eclect b net system is via intranet only and, therefore not available to terminated empliyees.)

I have a church that wants to punt and just offer a SIMPLE plan. That's allowed right? As I read the rules for SIMPLE Plans, it seems so.

Thanks,

Fender

www.401ktest.com

We need to make a distribution to an estate (AP did not designate a beneficiary) and the representative of the estate wants to roll it into an Inherited IRA, but I'm not sure this can be done?

- 402©(11) provides that an inherited IRA can be established on behalf of an individual who is a designated ben under 401(a)(9)(E)

- regs under 401(a)(9) - 1.401(a)(9)-4, Q&A 3 provide that only individuals can be a designated beneficiary - estates cannot...

Am I missing something?

I have a plan that disregards commissions as compensation for plan purposes.

There is one person who has satisfied the eligibility requirements and continues to earn service under the plan, but gets paid 100% on commission.

Is he in the ADP test with a zero salary? Or not in ADP test at all?

401(k) Plan utilizes a popular Retirement Plan Service Provider. Retirement Plan Service Provider is a subsidiary of Big Time Insurer. Big Time Insurer isn't doing too well and may file for Bankruptcy (though financial analysts seem to think Big Time Insurer is too big to fail - a la Bearn Stearns).

Should participants in Plan be worried?

Could Big Time Insurer's bankruptcy have any effect on Plan participants' accounts?

Should Plan Fiduciaries think about changing providers?

A 162 bonus arrangement is an arrangement where the executive owns a life insurance policy and the company pays the premium. The premium is treated as compensation under section 162.

Once an executive is retirement eligible, the plan mandates that the company will need to continue premiums until certain funding guidelines are satsified. Does this arrangement fall under 409A?

Argument that says 409A does not apply

This is a life insurance arrangement which is exempt from 409A

Argument that says 409A does apply

The executive has a legally binding right to post-separation compensation (the life insurance premiums). The exemption for death benefit plans doesn't apply because the policy has cash value.

Can an Employer change the amount of its contribution for the year after the fact?

It is a not-for-profit organization with a 401(k) plan. The employer put in a 22% contribution and wants to reduce it to 15% of payroll.

Their year ended June 30, 2008.

Can the excess be applied to the next year or can it be withdrawn from the plan?

I have a client who opened a SEP account in May of this year. There have been 4 contributions made of $1,000 each. He has been informed by his CPA that he should have a 401k instead. I am trying to find out if we can set up a 401k, then have the 4 contributions moved to the 401k and reclassified as 401k contributions instead of SEP contributions. He did use the IRS model 5305-SEP to set it up.

Is there a way to make after tax contributions (not Roth contributions, but the old, "employee voluntary" kind) into a safe harbor for the ACP test?

A broker called with a not-for-profit where the PS allocation is set pretty low. They're down to one active participant now (from 3), so she wants me to add an after tax provision to the plan so the director can put away the max out of her pocket and then roll it to a Roth IRA when she retires after 2009.

At the moment, this sounds OK (based on my limited following of IRA rules), but there are other employees, and I foresee the day when one becomes eligible and doesn't put in any after tax money. Massive ACP failure - I'd have to refund the entire year's contribution for the director.

I don't think the ACP safe harbor applies here because that's for a company match, not voluntary contributions, right? Is there any way this can be considered safe harbor? Otherwise, it's an interesting idea for a very very limited situation that would have to be monitored very very closely.

In a 401(k) - PS, an employee has fraudulently withdrawn about 70% out of the plan's account.

The owner is the only participant having an account balance.

How does the plan account for this fraud?

What are the options availabe with the owner?

We are taking over a p/s 401k that had a 4 1/2 contribution formula for 2005-07 that was never made.

In addition the 5500 for the 3 years in question showed those contributions as BEING made.

What do we do.VCRP and have employer contribute monies with interest asap.?

what about incorrect 5500s?

thanks

We have a hospital client who was just asked by the PBGC to provide a LONG of documentation (val reports, plan docs, assets, demographic information etc.) as part of the PBGC's monitoring of health care organizations that sponsor DB plans.

Have you gotten a similar request and can you give me any info on the process. They have given about a 3 week time frame.

Thanks,

jjren

An employment agreement provides for the payment of deferred comp, the payment terms of which would be compliant with Section 409A if triggered by a compliant change in control event. The agreement lists several change in control events, including a Section 409A compliant change in ownership provision, a Section 409A compliant change of effective control provision and a Section 409A compliant change of a substantial portion of the assets provision.

The agreement also contains a provision defining a complete liquidation of the company, or approval by the shareholders of a plan for liquidation as a change in control event. This seems to be too broad for a Section 409A compliant change in control, any thoughts?

Company owned 7 life insurance policies on the life of a shareholder. The purpose of the insurance was to fund the company's repurchase obligation of shareholder's stock upon shareholder's death. Shareholder died, and, of the 7 company owned policies on his life, only 3 (non group term) policies named the company as beneficiary. Shareholder had designated his family members as beneficiaries of the remaining 4 (group term) policies. According to surviving shareholders, the intent was that company be named as beneficiary of all 7 policies.

Attorney for insurance carrier of group term policies responded that "it is against ERISA" for company to be named as beneficiary of group term policies on the life of an employee.

Anyone familiar with such a prohibition?

This is a re-post and any help would be appreciated.

A small employer recently terminated their group plan. There were four people on the plan. Those people decided to move to individual coverage. Under Hipaa, individual coverage is guaranteed issue with no pre-existing conditions clauses If:

* You do not currently have health insurance.

* You had coverage for at least 18 months before you applied, most recently from an employer-based plan.

* You didn't lose your previous health plan because of fraud or nonpayment.

* You've accepted and used up any extension of health benefits from your previous plan through COBRA or a state program.

* You aren't eligible for any employer-based health insurance, Medicare or Medicaid.

* You're requesting the coverage within 63 days of losing your old coverage.

according to this site - http://www.revolutionhealth.com/insurance/...insurance/hipaa

One person was denied coverage. She applied to independence blue cross as they are the designated hipaa insurer for the philadelphia area. The rep she spoke with on the phone said she is not eligible for the guaranteed hipaa individual insurance since she did not enroll & exhaust her COBRA.

The problem here is that:

1 - an employer with less than 20 employees cannot offer COBRA (an employer can offer COBRA if they want to but insurance carriers are not required to cover claims)

2 - There is no group plan in place anymore to offer COBRA.

We tried to explain this to the blue cross rep but she went into recorder mode and recited that in order to be eligible for the hipaa insurance, COBRA must be exhausted. There's something fishy here. Any help or documentation would be greatly appreciated.

Thank you

IDP on Cycle E. In 2005, two other plans merged into this one. The surviving plan #1 is Cycle E. One of the plans #2, which merged into it would have been Cycle D. Plan #2 did receive a LOD in 2003 which covered everything but EGTRRA. Plan #3 was also cycle E.

Am I still on Cycle E for my restatement, or does plan #2 force me into cycle D?

Sorry for the lame questions, documents just aren't my thing.

Cash Balance Plan is frozen 1/1/07 and terminated 12/31/07. They did not fully fund the 2006 contribution - and are paying the excess tax on the contribution. They also owe a little contribution in 2007 - which isnt funded yet. They want to pay out employees. Can they pay out the employees owed - by reducing the owners payouts? I didnt know if you could do that for a cash balance plan? There isnt anything in the Corbel document that allows for that. They are not PBGC covered.

Thanks