We have begun offering retired employees the option to continue the with the same group health insurance they had as active employees under a pre-65 retiree health insurance plan. Can this be reported as one plan on the 5500 or does it have to be identified as two separate plans? If so, how do we identify the retiree plan? Thanks for any guidance.

I have a client who is a partnership with a small wrinkle, one of the partners only takes W-2 income, no K-1. The other 4 partners do take K-1.

Is the one partner (who owns 30% of the partnership by the way), considered to be NOT Self Employed as he has no earned income to be reported?

Thanks for any guidance!

A participant who was zero percent vested in an employer match terminated and was paid out of a 401(k) plan. The match portion was forfeited. He has since rehired in the same plan year. Can he have his match restated?

I received a note form John Hancock reminding me that one of my plans has 16 Participants who have never filled out enrollment forms. Obviously they are not deferring, they are just getting the non elective contributions.

They have not chosen investments so they are in the default investment. They have not chosen beneficiaries so the document will control that

Some of these people have been given enrollment packets several times and they never fill them out.

Is there any legal requirement for how often we need to remind them to enroll?

If no legal requirement, what do other firms do as a standard kind of practice?

I understand that there is a "grace period" when you can ignore the merger for coverage.

Would that also apply for the definition of Highly Compensated and Key Employees?

Thanks for any opinions

I have a now-liquidated terminated DB plan that reverted about $40,000 to the employer. A final SFAS 87/88/158 report is now being requested of me and I am looking for some guidance on reflecting the revesion in the SFAS work.

Anyone know of any links here or on the web that might be of help? Or have any quickie comments?

Thanks.

Is it permissable to use a modified compensation definition for this test? Can I reduce compensation for 125 & 401(k) deferrals?

My client, the plan sponsor, misunderstood the plan audit requirements and did not obtain an audit. The DOL caught them.

We sent a statement of reasonable cause taking some of the blame and laying some on the TPA for failing to inform us that we had gone over the 120 participant limit.

Now the DOL has rejected our statement and demands the $75k. (Let me add that we have still not filed the completed Form 5500 because the auditor cannot get the records it needs to finish the audit. My client cannot find them and the former TPAs are not particularly responsive. Penalties continue to accrue.)

My question is this: Is there any point in appealing this decision to the Office of Administrative Law Judges?

I have no experience with this process.

I understand the plan sponsor's obligation to know the rules and the reporting requirements, but I am very sympathetic to the argument that the TPA, which knows the rules and how many participants the plan has, should do a better job of alerting its clients when the audit requirement is first triggered. I know that in the boilerplate sent to clients, notice on the audit is provided, but that seems woefully inadequate to me, given the penalties that accrue from the failure to file the audit.

Any help would be greatly appreciated.

It has been proposed that the 'correct' or 'most accurate' method of calculating the current value of a QDRO in a daily val, self-directed plan is to find the actual shares as of the date of division, and apply dividends paid on the 'divided' shares from the date of division to current date to get the current number of shares, and then determine the value based on the current share values.

This method is EXTREMELY time consuming, and of course subject to human error. It may be 'perfect', but is it the only 'correct' way?

If it were a pooled, balance forward plan, one would apply the earnings rate only from date of division to current date. There would not be another way to determine the current value.

If the application of earnings rate is 'correct' in the balance forward environment, would it not also be correct in the daily val environment? That is, from the date of division to current, determine the earnings rate of the individual account, apply that earnings rate to the divided account to determine the current value of the QDRO.

What is your opinion on the acceptability, accuracy, and defensibility of the earnings rate method?

Participant wants to pay $25,000 on a $37,000 loan. The loan is current. Can the payment be applied to P & I as provided by the amort schedule? I seem to remember something somewhere that stated interest cannot be prepaid. However, in researching this, I could find nothing to support this statement.

Don't do very much with cash balance plans, so a little curious about some of the proposals that I see across my desk. Have a proposal in hand that is showing seriously high cash balance additions for a group, and want some thoughts.

Participant Age 39, NRA to be 65 (not sure why they didn't go with 62), salary of $230,000, interest accumulation rate of 6%.

They are showing a first year annual credit of $170,000 for the participant. Now if I value 1/10th of the dollar limit using the 2008 417/415 Applicable Mortality Table at 5.5% (with no pre-retirement mortality), I get a current present value of around $52,800, which seems to be a little bit of a discrepancy compared to a $170,000 allocation.

What am I missing; seems that this type of credit is way beyond the 415 limits to me.

here is the challenge (and its free) for bragging rights amongst us :

http://games.espn.go.com/frontpage/games

there is college pick em - each week 10 games are listed, and you rank the teams (ten through 1) based on your confidence.

they already have the first 10 games up and ready to be picked.

soon they will have pigskin pick em (with or without the spread (you can do both)) just pick the winners

and

eliminator - pick one team to win each week. but you can only pick a team once.

if there is an interest, it is easy to set up a group just amongst the pension folks to see who is the best (without an actuarial adjustment of course).

I remember someone advocating the facts and circumstances position to eliminate the hassles of the deferral suspension period. I am considering changing the 16 plans I have with hardship to F & C when I restate for EGTTRA.

I started with safe harbor provisions with prototype documents years ago and have never used F & C provisions. I have heard that the burden of proof and the employer's liability are greater with F & C. Can anyone shed any light on how much greater or how you handle it?

If there is no employer stock in the Plan, does anyone know of any problems with the document allowing distributions in cash or property?

This is a question about determining the earned income of a partner. The partnership has determined that the partners do not actively participate. They meet from time to time as a board to discuss and decide issues that have come up in the partnership's business. The partnership reports on K-1's the income to its owners as passive, not subject to self-employment tax.

One of the partners reports on his 1040 that he materially participates in the business of the partnership for the year and pays self-employment tax, so that he could accrue a plan benefit. The other partners report the K-1 income as passive on their 1040s and do not pay self-employment tax.

The partnership does not take into account as plan compensation what it reported to any of the partners on the K-1's as passive income.

The partner that claimed material participation and paid self-employment tax wants his income to be earned income under 401© and considered as plan compensation so that he can accrue plan benefits. He points to some proposed regs that show as an example that attending regular business meetings of the partnership meets the de minimis activity level required.

The other partners are concerned that if the plan were to accommodate him, it would call into question their treatment of the K-1 amounts as passive income and trigger self-employment tax for those other partners. Some of them spent more time attending to the partnership's business (i.e., attended more of the management meetings) than did the partner that chose to pay self-employment tax.

The partner that paid the self-employment tax insists that if he is not allowed to accrue a plan benefit, he will file amended returns to claim a refund of the self-employment tax and that could be what triggers an audit of the partnership and the partners on that issue.

As the plan administrator, the partnership must decide if the partners' earnings are "with respect to a trade or business in which personal services of the taxpayer are a material income-producing factor". IRC 401©(2)(A)(i).

What should the partnership, which is controlled by the 'passive' partners, do?

For purposes of the hardship safe harbor, would tuition and related fees for masseuse school count?

Hello, I am 31 years of age. I currently contribute 10% of my pre-tax salary into my company's 401K. This does not meet the $15,500 year max allowed by law. I have additional monthly funds to invest, and thought that instead of increasing the 10% 401K contribution, I would start up a Roth IRA. I would contribute $300-$500 monthly.

First, is this a good idea, or should I increase the 401K? Second, if Roth is the way to go, then I admit, I'm a little clueless as to where and how to get this going. I'm not really interested in paying a finacial advisor. I'd rather manage/learn this process myself.

Thanks.

Are you allowed to discriminate against HCEs and not give any of them a SHM? Are you allowed to discriminate against some but not all of the HCEs if you can divide them into reasonable classifications? Can you give the SHM to Keys but not other HCEs (as well as NHCEs)? Thanks.

We have a client who has a plan year beginning 12/1.

They have a paydate in December that they are considering a December payroll, however the dates the employees work for that December 1st paycheck are prior to the beginning of the plan year, so for the employee that worked 11/15 to 11/30 - since the check is issued in December, the employer wants to take the first payroll deduction out of that 11/15-11/30 time period that the employees worked instead of the 12/1 - 12/15 dates.

It seems all wrong to me to allow payroll deductions for a period that is clearly out of the plan year to be applied to the current plan year's cycle...

Any thoughts on this or cites you can provide will be GREATLY appreciated!

Is this a required disclosure when preparing an annual actuary report, if not, is it required in order for auditors to make a clean opinion on financial statements relating to a DB plan?