With Minnesota recently enacting their law to tax nonresidents on MN-earned NQDC money paid out in less than 10 years, is anybody hearing whether this is an isolated incident or whether this is a trend? I haven't heard of any new states looking at this, but maybe someone in this group has.

Anyone have a good source tax source by state?

Does anyone have a template questionnaire with a list of questions we can ask references given by a consulting firm.

We are looking to hire a consulting firm who would help us assess the return on investment to outsource benefits vs keeping in-house as is with Oracle. This outsourcing proposal would include impact to staffing, systems, payroll, HR, call center, eligibility files to vendors, billing, etc...

Things we would want references input on would be thoroughness of consultant 's results, easily understood & presented well. If consultant's recommendation was implemented, was it valid?

If anyone has gone through the pros & cons of outsourcing benefits or keeping in-house and has worked with an outside firm to help access the pros & cons, the reference questionairre template would be helpful

Thanks in Advance

Lexy

Does anyone know of any "model" or "sample" AFTAP actuarial certifications that have been published?

Thanks.

Does anyone know where the factors for figuring out required minimum distributions would be? Also, does anyone have an Excel file set up to figure out required minimum distributions?

What is the retention for pension files?

A participant took out a loan in 2007, and subsequently was terminatated and defaulted on his loan.

He did not request a distribution from the Plan yet.

How do I reflect this on the 2007 5500?

Is the current outstanding loan balance counted in the Plan Assets?

I think the first 3 months of 2008 was a grace period where lump sum distributions could still occur despite AFTAP %. Then 4/1/08 for calendar year it depended on the 2007 AFTAP (using 2006 as proxy for EOY plans).

If a participant terminated say 2/15/08 but did NOT receive a lump sum by 4/1/08 are they now restricted from getting a lump sum (AFTAP is only 75%) until later AFTAP is higher ?

I'm thinking yes they are stuck with 50% for now, but participant has attorney arguing that since they terminated before the 4/1/08 restricted date they should be able to get a lump sum.

Thoughts ?

I have a plan that wants to institute automatic enrollment as of 1/1/2009. They only want it to apply to participants who first become eligible for the plan on or after 1/1/2009.

I believe that such a provision would cause the plan to not be considered an "Eligible" Automatic Contribution Arrangement (EACA) and therefore the plan would not be allowed to offer permissible withdrawls within 90 days for new automatically enrolled participants.

Am I correct in my assumption that an EACA can only exclude those participants who have made affirmative elections as to a contribution percentage (including 0%)? If so, am I correct in saying that a QACA could be limited only to new participants but it would then no longer be an EACA and would therefore not be able to allow the permissible withdrawls described above?

Is there some sort of registration or licensing processes to become a "QPAM" or do you simply qualify as such if you meet the criteria?

DB/DC combined for 401(a)(4). Top Heavy 5% provided in the DC plan. Under 1.401(a)(4)-9(b)(2)(v)(D)(1), the Gateway is 5% of compensation, provided the "HCE rate" does not exceed 25% of compensation.

The "HCE Rate" appears to be defined in that same paragraph as "the aggregate normal allocation rate of the HCE with the highest such rate". Then (E) tells us the aggregate normal allocation rate is determined in (b)(2)(ii) without permitted disparity.

In (b)(2)(ii), the aggregate normal allocation rates are determined for DC in 2©(2) and for DB in 8©(2), and then added together. In 2©(2), the DC portion appears to include all employer contributions and forfeitures, divided by compensation (or average compensation if using that for this test?). Does this amount then exclude employee deferrals, but include match? I assume that is the case.

Match was included in the average benefits test, but not in the rate group tests - so I just want to verify this one.

Can someone shed some light on the correct way to report Corrective distributions on the 5500?

A CPA who is auditing a Plan that I administer is insisting that I reflect the 2007 corrective distributions that were paid out in 2008 as a liability (benefits claim payable) on the 2007 Form 5500 and netting it out of EE Contributions.

Is this the correct way to do it?

Our firm sponsors four DC volume submitter plans. We timely submitted for EGTRRA advisory letters on each of these plans and have received favorable advisory letters from the IRS. When our firm submitted the plans for favorable advisory letters our firm was named "X". Just recently, there has been a change in ownership and our firm's name is now "Y". Does anyone know whether it is possible to obtain "fresh" advisory letters from the IRS with our firm's current name (and, if so, how)?

I've looked and looked, but cannot find anything on the IRS website. Thanks!

Can a DB offset plan that is not a safe harbor plan offset the actuarial equivalent benefit from the DC plan, inclusive of the 401k employee deferral account? As long as the plans pass non discrimination of course.

Thanks.

An employer wants to have the plan assets pay for a portion of the TPA's plan administration costs (about 40% of it).

Any problem with paying this from the plan as an asset management fee (a small percentage of the assets, 0.03% or 0.0003) across all plan assets, including Davis Bacon (prevailing wage contract) accounts?

Situation: ER is "plan administrator" of a self-funded health plan. The cost of coverage borne by the EEs is elected and then effected through a cafeteria plan. The ER pays monthly to a TPA the amount invoiced to cover approved claims. The ER also pays an Admin Fee, out of which the TPA pays certain expenses like the cost of PPO participation. The ER also pays the TPA a lump sum month for the cost of stop-loss coverage. Out of that, the TPA pays the insurer a net premium (no commissions component). The TPA keeps the rest--an amount not disclosed to the ER.

The ER has discovered this situation, and is in the process of investigating further before it works towards recouping the undisclosed amount.

The TPA appears to have become an ERISA fiduciary by reason of not having specified in its annual renewal proposals, invoicing or elsewhere how much the TPA was keeping as a 'stop-loss placement fee'. And for the same reason, to have breached that fiduciary duty. Patelco Credit Union v Sahni, 262 F3d 897 (9th Cir 2001) and Chao v Crouse, 346 FSupp2d 975, 988 (SD Ind 2004).

Despite the billing problems, the ER is asking if it exposes itself to any fiduciary, co-fiduciary or other liaibilities by reason of continuing with the TPA if the stop-loss placement fee is returned and the ER hereafter monitors the TPA more closely. The ER has not decided if it even wants to continue with the TPA on those terms, but wants to know if that's an option.

Initially, my thoughts are that if the ER ever becomes unable to cover the cost of any health benefits promised and at that time the ER's assets have been improperly depleted by amounts collected by the TPA, the CEO, president and board of directors might be held personally liable to the employees for having caused the ER to continue using the TPA knowing of the fiduciary breaches uncovered at this time.

Any other thoughts?

First question:

I have a db pension plan that is up for coverage testing as of 12.31.2007 for the new three year cycle. It has been one year since the plan was closed (12.31.2006) to new entrants (existing participants continue to accrue pension benefits) so that there are no new entrants and I know that all members are over age 21/1. New hires go into a DC plan.

The plan is sponsored by a company within a controlled group.

How do you feel about performing the DB plan coverage test utilizing the age 21/1 statutory exclusion for the remaining members of the controlled group OR do you feel that I should not be using any exclusions in performing the test?

Second question:

The aforementioned closed pension plan offered a lump sum option on benefits accrued through 12.31.2000 with no lump sum option attached future accruals (including, of course, accruals for post 2000 new hires). I test and pass coverage each cycle for this benefits, right and feature (BRF). Since the plan has now been frozen to new entrants as of 12.31.2006, can't I use the passing 12.31.2006 coverage results forever, or must I perpetually test this BRF? If this is not the case, then if too many NHCE's retire or terminate I can fail coverage sometime down the road.

Third question:

Because of the introduction of a small stock acquisition in 2007 my coverage test result is 69%. I fail. I toyed with the idea of excluding the stock acquisition people (on the grounds of the transition rule) but felt that as long as I was required to do a real test this year I could not ignore them. Do you agree?

Fourth and last question:

How do you feel about doing the coverage test at 12.31.2006 instead of 12.31.2007? My calculations indicate that I would pass at that date. If I tested then, I would have a three year cycle that began with the 2006 plan year and could take advantage of the mergers and acquisition transition period and ignore the 2007 stock acquisition.

Thanks for the patience in reading this and thanks to all who respond.

Non-5-percent owner retires after age 701/2 and has not taken any distributions from her 401(k). She requests a direct rollover of account balance. When an amount is distributed from a plan in a rollover transaction, that amount is still treated as a distribution in determining whether the distributing plan has satisfied MRD requirements. In this situation, it is my understanding participant must first receive a MRD (reported on a 1099) and then the rollover to the IRA may occur (reported on a separate 1099).

We have discovered that TPA (who is responsible for calculating MRD's and processing and reporting all transactions) has not been processing the MRD's in situations such as the one described above for 2006 and 2007 tax years. TPA has been rolling over 100% of participants' account balances. I have been advised that this can cause excess IRA contribution issues, late MRD excise taxes, among other headaches including possible plan disqualification. TPA has suggested correcting this by now issuing "new" 1099-Rs reporting the transactions as if they had properly been processed, and then leave it up to former participants to work with IRA provider to make corrections to their IRA accounts. This sounds absurd. I know I need Tax/ERISA counsel. But has any one ever heard of such a mess and how TPA should correct?

I thought I saw this question asked before but couldn't find it.

Could a SEP that covers the staff employees in an Affiliated Service Group serve as an appropriate "plan" for purposes of receiving comparable benefits (contributions) when testing the other individual plans of the doctors under a combined permissive aggregation approach, or do the contributions have to be made to a qualified plan on the staff employees behalf ?

I understand that the 10% penalty does not apply to direct rollover to Roth and that the statutory 20% withholding does not allply. The participant rolls 100% of balance to Roth and then pays the tax due out of pocket the following year.

I have terminated participant who wants to roll 80% of balance to Roth and wants us to withhold the 20%. Told her we could not do that. She could roll the 80% to Roth and take lump sum of the 20% - with 20% of that withheld and then she could send the amount received as estimated tax payment.

Anyone have better way to do this? Participant can't afford to pay tax on rollover if 100% goes into the Roth. She understands if she rolls 100% to Roth and takes $ from Roth to pay taxes next year the amount withdrawn will be subject to 72t penalty.

Hi,

I am setting up a new POP Plan for a client. Currently they would like to offer medical HMO and Dental insurance coverage. Somewhere down the line, they would like to offer other insurance benefits (Group Term Life and Long Term Care.

My question is - can I include the 2 latter benefits in my plan document now? Or should I wait until the employer offers those benefits and then amend my Plan Document.

Thank you!