It would seem since this is a money issue, i.e. money is being moved from one provider to another, that the financial company who is taking over the assets would provide the notice to the plan sponsor. Is this usually the case?

I'd like to get an idea of what software others are using to track clients and administration tasks. Over the past 5 years of so, we've looked at the major pension software vendors and saw nothing that met our requirements.

In addition to tracking client contact information, we were looking for a system that can do the following as a minimum:

- Create or identify tasks associated with plan administration (e.g. ADP/ACP Testing, Data Requests, 5500 Due Dates, etc.)

- Assign plan administration tasks to individual employees of the TPA firm

- Track due dates for tasks assigned to each employee of the TPA firm

- Create management reports based on the above minimum criteria

Currently, we're using spreadsheets, but we have various issues with this method due to the number of plans we currently provide services for.

I appreciate any ideas or recommendations. We've already looked at offerings from Sungard, Datair and EBG.

How does incurred vs. reimbursement work within the context of the IRS?

For example, an employee completes a course in fall 2007. Employer reimbursement of $5,000 is made in early 2008 after paperwork has been submitted.

Employee takes another course in spring 2008. Employer is willing to reimburse another $5,000 for 2008 course, but is non-taxable?

IRS regs not clear. I know $5,250 is non-taxable per calendar year. But does the first reimbursement made in 2008 for the 2007 course count as a 2007 calendar year reimbursement?

Thanks for any guidance.

We are performing a coverage test using Datair Windows.

The plan we are testing has immediate eligibility for deferrals and 1000 hours in 12 months with semi-annual entry dates for the match.

The coverage test for the match contribution is pulling in all participants.

Datair is stating the test is correct because if the plan prescribes two or more different sets of minimum age and service eligibility requirements (for different sources), the excludable employees are only those who fail to satisfy all sets of age and service requirement (i.e., the lowest of the eligibility requirements must be used for all sources).

Am I missing something is this correct? I thought the sources could be disaggregated and tested separately using the eligibility requirement for the source?

A small college has sponsored a 403(b) plan for many years. The ER contribution was quite generous a few years back, but they have since amended the plan to reduce the employer's contribution percentage. When they did that amendment, they grandfathered everyone at the higher contribution percentage who were hired prior to X date. A few of those grandfathered employees are still working at the college. One of them is an HCE. There is another HCE getting the lower ER contribution.

Does the fact that one HCE (out of 35 participants) gets that higher grandfathered contribution amount blow everything up?

Hello! A plan failed ACP testing, the HCE got a corrective refund. After the refund was received, we discovered they were tested using incorrect Match, after correcting the Match & retesting, they pass ACP testing. I realize the participant will need to give the $180 back to the plan, but any advice on how this affects his personal tax return since he reported it as income?

Thank you!!

Has anyone ever seen any credible data on pension administrator pay levels vs experience or case load. Any data on what the standard case load for an administrtor in a small TPA firm? I was looking for something other then the ASPPA survey which gives such W I D E ranges for everything.

Thanks

Plan satisfies ADP/ACP safe harbor contribution requirement by using the basic matching method. The plan also permits a discretionary match and if made will be restricted so that the ACP safe harbor will apply.

Can the discretionary Match that satisfies ACP be withdrawn due to hardship?

I see where employer contributions used to satisfy ADP can't be withdrawn due to hardship and QNECs and QMACs, but not the ACP safe harbor contributions. Would they be considered QMACs and therefore prohibited from w/d due to hardship?

When I restate for EGTRRA, I was considering excluding HCE's from SHNEC and giving them a discretionary non elective. This would allow the owners to skip their 3% in bad years.

Am I right in thinking this would eliminate the Top Heavy Exemption? If this is correct, I would not be able to exclude comp prior to entry for the 3% SHNEC., in years the Plan is Top Heavy.

Can an individual be both an employee and a consultant for the same company? I tend to think yes but now I am second-guessing myself. Any help would be appreciated.

Cramming at the last minute for C-3 tomorrow...This is actually a sample question from the C-3 study guide, but since there hasn't been a post in the C-3 board since 2005, I thought I might get a better response here...The question does involve a QDRO, but my concern doesn't involve the QDRO piece of it.

Question:

"Participant A's interest in the plan as of December 31, 2001, is $800,000. The administrator received a QDRO that awards 25% of Participant A's interest in the plan as of December 31, 2001, to Participant A's child. Participant A's interest in the plan consists of $700,000 attributable to employer contributions and $100,000 attributable to after tax contributions. Participant A's child elects to receive a cash distribution of $200,000. How much must Participant A include in income?"

Answer:

$200,000

I understand that since the QDRO awards payment to the child that the distribution is included in the participant's income. BUT, I thought that there must be some kind of recovery of basis since the account contains after tax contributions. Shouldn't part of the $200,000 distribution be a return of after tax contribution, and therefore not included? Am I on the right track?

Plan permits loans (max of 2) and hardship withdrawals.

Participant has 2 loans outstanding and needs more money but doesn't fit within hardship safe harbor.

One of participant's loans has a balance of $200.

Can participant simply repay the $200 loan and take out a new loan in the larger amount he needs (subject to the limit on loan amounts)?

Or (assuming the plan permits this) can participant refinance one of his loans to add the larger amount to the current loan balance?

Is there any practical difference in these two options?

I am wondering if anyone has any secret techniques they'd care to share about the following situation.

Company A and Company B are members of a controlled group; both have group health plans. Company A mostly winds up its operations and lays off all of its employees while Company B continues humming along. After a while, Company A's group health plan ends up with a few remaining COBRA beneficiaries but no active participants, and the carrier providing the underlying insurance policy decides to cancel the policy.

Under the COBRA regs, we know that the Company A COBRA people are supposed to be picked up by Company B's plan. What if Company B's insurance carrier tells the HR people to go jump in the lake and won't take the Company A COBRA people? This exposes the group to all sorts of unpleasant liabilities (lawsuits, excise taxes, and ERISA penalties).

Short of wrapping the Company A COBRA people in bubble wrap and locking them in the closet for the duration of their COBRA periods (for their own protection, of course), what can we do to twist some arms at Company B's carrier?

I create plan documents (Benefit Summaries and Summary Plan Document/Descriptions) for a TPA. They take an inordinate amount of time (up to 40+ hours depending on complexity, # of plans, etc.) and I have three questions I'm hoping this audience can help me with.

1) I read an older post (5 years old) about whether software exists that would allow you to create a readable, accurate document in much less time than it's currently taking. Authoria was mentioned in the older post - do other options exist? Or do the majority of TPAs write their own documents (with legal help of course)?

2) How much (if anything) should we be charging for these documents? We have our own attorney review them so there is not only my time and salary to consider, but our attorney's review time.

3) If it's common practice to charge, would anyone be willing to share a ballpark figure with me? We are not currently charging for these documents and I think it could be a revenue source.

I appreciate any advice, suggestions, comments on the topic.

SScannell

Looking at Sections 1372 and 318, is an ESOP plan participant considered to be an owner of an S corporation if they don't own stock outside of the ESOP? The definition of 2% owner under Section 1372 incorporates the attribution rules under Section 318. Generally, under Section 318, you don't have attribution of ownership from a qualified plan to a qualified plan participant. However, I've found PLRs out there (albeit not directly on point) that suggest that the participant is the owner of the stock that the ESOP owns simply because he or she is the "beneficial" owner or because 318 applies. Any thoughts?

The HSA guidelines say that HSA qualified distributions can be made for dependents even though they may not be covered by the HDHP. If a parent is a qualified dependent (i.e. meets IRS guidelines and is taken as a qualified dependent on their tax return), can their expenses also qualified as an eligible HSA distribution?

Owner who is receiving no plan defined compensation and isn't actively participating in the plan wants to take out a loan. We use a Relius Prototype document and our loan rules currently state that repayment is only allowed through payroll deduction. If we change the loan rules to allow for a participant check we should be ok as long as all participants had the same option? Thanks

Under ERISA's exclusive benefit rule, plan assets may be used to defray reasonable expenses. Under the Code's exclusive benefit rule, there is no such provision for reasonable expenses. What am I missing? Are governments not using plan assets for this purpose? Seems unlikely...

Client merged money purchase plan into 401(k)/profit sharing plan on 9/1/07, the date the client changed recordkeepers. The prior recordkeeper forgot to prepare a final 5500 for the money purchase plan. Due date was 3/31.

Does anyone know of any gray area here that will give us a due date of 7/31 - same as profit sharing plan? Or is the client stuck with paying late fees?

I understand that some TPAs (who quite frankly don't understand 403(b) plans) are insisting that their clients adopt a snap-on amendment to comply with the 415 regulations? Has anyone seen one of these? What are you doing about them?