My client tells me he has friends funding long term healthcare premiums through their DB plans. Doesn't seem to be feasible to me. Any comments?

Thank you.

Specifically to a John Hancock product.

Where is everyone posting the AIC fees coming from plan assets on the Schedule I? or should I say what is the argument for the correct line.

After pulling down data from Larkspur the reporting is varied but most are reporting the charges on line 2c of the schedule I and not in 2h.

I re-read some of the 5500 preparers manual for this and I still think it is under line 2h.

In Notice 2007-62, the IRS announced its intention to issue regulations under 457. I don't recall seeing any regulations. Are they out yet? Thanks.

In the past, when I have done plan terminations for the final year of a plan, I have applied amendments made during the plan year (but after the valuation date) to change the benefit formula to 0%. Therefore I was only funding for the benefits accrued to the end of the year, which lowered the minimum contribution.

However, this plan, of a sole proprietor, does not have an amendment decreasing the benefit formula to 0%. There is only an email, on 12/4/07, stating that the plan will be terminated 12/31/07.

Can the plan funding be based on the fact that the plan will terminate during the plan year, with the projected benefit being the benefit accrued at year end?

The plan will be underfunded, but if minimum funding requirements can be met in the last year, distributions to the sole participant can be made to the extent funded, since the plan is not PBGC covered.

What legal requirements would arise if an employer requires an employee to provide proof of medical coverage from another group source when the employee is declining the company's health plan. My company is considering defaulting all employees who decline coverage in an employee only benefit plan. The employee only contribution would be deducted from the employee's paycheck if no documentation of another group plan is presented to HR by the end of the open enrollment period.

We have discovered that our clients 5500s were filed with the correct EIN number through 2004. When the plan was transitioned to our services, we received an incorrect EIN from the sponsor and the 2005-2007 Form 5500's were filed with this incorrect number. Unfortunately, we did not compare the number from the prior filings with the one the sponsor provided.

The sponsor recently received a letter indicating that the 2005 5500 was never filed. We then discovered the error on the EIN. It has been my experience that it is a very simple mistake but causes HUGE problems. Does anyone have any sage advice on how to correct this and communicate with the EBSA so that they will understand that the filing was timely but just with the wrong EIN? Amended returns have not worked for us in the past since they do not have an original filing under the correct EIN number to compare them to. Generally, a letter submitted with the amended return are not understood or are not read. Any help would be appreciated.

I have a 401(k) plan with a new comp formula for the ER non-elective. When running the nondiscrimination testing on Relius, the plan is passing ABT and Gateway. The plan is failing the ratio percentage test. If I run the test and check the rate banding box on relius then it passes. Has anyone used this as an option to get the plan to pass? If it can be used, can you explain what it does? I tried the stat. exlcusion and impute disparity options, but the plan still wouldn't pass.

VCP is complete, compliance statement is signed, and employer has made an additional contribution to the plan as required.

Participants are now starting to ask questions along the lines of: what is this extra money doing in my account?

Can anyone tell me of a short simple way to inform participants of why the contribution has been made, without going into too many unnecessary details? Does anyone have a reference to a notice of this type?

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.