In a 401(k) - PS, an employee has fraudulently withdrawn about 70% out of the plan's account.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

We do the audit of a 401k plan and notified them in 2006 that several participants made deferrals over the 15% plan limit in 2003 and 2004. Three of the participants terminated and rolled their distributions to IRAs. Unfortunately, our advice was never taken and these excess deferrals are still in the 401k for the active participants and presumably in IRAs for those that terminated. They are not de minimis amounts. I explained to the client that we should really take the plan and correct under VCP since it happened for 2 years and has not been corrected but they really don't want to. I told them that I would calculate the amounts that should have been distributed plus earnings for the affected participants. We can refund the deferrals plus earnings from the 4o1k for the active participants, but do we have to tell them they need to amend their 2003 and 2004 returns, or can we have them show the total excess for 2008 on a 1099-R from the plan? Any thoughts? Secondly, for those terminated participants amounts, does the plan issue a 1099-R for 2003 and 2004 or for 2008 to show the excess and then we also notify them that those amounts were not eligible for rollover so they would be subject to the 6% excise tax on the ineligible rollover amount? Really wish we hadn't been so thorough when we did the audit in 2006 for the first time!

I need some help understanding the proposed IRS regulations from August 6, 2007 regarding individual insurance premiums. In our cafeteria plan, we have a premium payment account for group insurance, medical reimbursement account, health savings account, and dependent care account. An employee obtained an individual health insurance policy in her name outside the company's group plan. Is it possible for the employee to pay for the individual premiums with pre-tax dollars through the cafeteria plan? Would we need to set up a separate premium payment type account for individual insurance premiums to do this, or is this even possible? I'm so confused...!

Regulation 403(b)-(3)(b)(3)ii provides for allocating of certain plan responsibilites. This seems to be to remove ERISA responsiblities from the employer. Other articles nominate the TPA for these tasks. What responsibilites, legal, ERISA or otherwise are assumed by assuming on these tasks?

What are the options if a small group (4 employees on the health plan) canceled our policy to move to individual insurance, but one of the members was denied coverage? The group policy is set to expire on 9/1

Everyone else is covered. I thought insurers were required to insure since they've been on a group plan and that plan wasn't terminated for fraud or default payment. Any ideas how to proceed and get coverage before 9/1?

I've been reviewing Rev Proc 2008-50 to see if the correction for employees permitted to defer before meeting the plan's eligibility requirements and entry has been changed. I don't see that situation mentioned at all. If I've missed it, I'd love a reference to where it's hiding.

If it truly isn't there, does that mean that we continue to use the direction from 2006-27? Section 2.01 says that 2008-50 supersedes 2006-27, which leads me to believe that if it is gone, it no longer applies. That begs the question: How do you fix this now?

We have a Salary and Hourly plan. The hourly plan has non union employees. As one would think, there are coverage issues since the hourly plan does not have any HCEs in it. The plans do pass coverage using Average Benefits Testing in 2005 and are tested separately for ADP/ACP purposes. They are relying on those results for 2006 and 2007. My question is the Salary plan allows for aftertax contributions and the hourly plan does not. Both plans allow for match. Do I need to worry about the fact that the hourly people can not make after tax deductions?

This may be a ridiculous question.

Is there any reason you would file more than one Schedule R for a Form 5500?

This plan is a multiple-employer profit sharing plan. I see that the instructions say: "Multiple-employer plan filers should complete one Schedule R to report satisfaction with the coverage rules by all of the employers that participate in the plan." So far so good.

However, the person who completed the 5500 for this plan in the previous year filed a separate Schedule R for each of the employers. Is this necessary?

A client of mine has received a notice from the DOL of the need for an "Accountant's Opinion". The plan is tiny with only about 20 participants, but there are over 100 eligible employees.

Unfortunately, I was not aware of the need for an Accountant's Opinion, and the TPA never mentioned the subject when the plan was set up.

So what I'm wondering is: can the company's accountant act as the IQPA, or does it need to come from someone with no other association with the business? Also, what is the typical cost? This plan only has $30K or thereabouts in it. There are less than 10 active participants. The plan is basically an afterthought that the company owner has in place just in case employees want to use it (it's a staffing company, so employee turnover is very high).

I'd appreciate any guidance anyone has on the subject.

Sole proprietor designates a non spouse beneficiary of a db plan and spouse consents. That refers to the death benefit.

Can spouse also waive rights to the retirement plan benefits in advance? Or does that waiver have to be done within 60 days (or some similar timeframe) of either retirement or plan termination?

If I take a distribution before 59 1/2 and repay it within 60 days, there is no penalty. How is the transaction handled when I pay it back so it isn't considered a contribution for the year? Does the broker simply show it repaid and not reported to IRS?

Company X and Company Y decide to combine under a new Holding Company. Holding Company acquires both Company X and Company Y via a share exchange. After the acquisition, Company X shareholders hold 70% of Holding Company and Company Y shareholders hold 30% of Holding Company.

Company X executives vest in certain benefits upon a CIC as defined under 409A. Has Company X experienced a CIC under 409A?

Given the stock attribution rules of 318(a), I am inclined to say no, but was looking for some feedback.

A terminated non-owner participant wants to purchase real estate in his self-directed 401(k)/PSP. The trustee is fine with this, as he himself has real estate as one of his investments, but wants to know if all the same rules regarding real estate investments apply to a non-fiduciary.

Also, does the participant's real estate investment need to be offered to all plan participants - or is the option of finding their own enough?

Are there any other special things to consider?

TIA!!