Someone is a 5% owner and has passed the age of 70.5?

This posting is for further clairifaction on life time maximum rules between two insurance companies for Ortho.

Senerico:

Product: Invisalign

Cost: $4,500 (or whatever it costs)

Dentist requires individual to pay upfront for full cost of trays even though service has not been rendered.

Dentist submits claims monthly for each tray to insurance company. The 1st insurance company lifetime max of $2,000 is met & payments are sent to individual for reimbursement (no secondary insurance).

The individual leaves their dental plan during open enrollment and switches to their spouse's dental insurance plan. The individual is still receiving trays every month. The dentist submits claims to the new ortho/dental carrier with documentation showing the amount the other insurance paid to prevent duplication of benefits. The new insurance carrier states that thier plan has a life time maxium for ortho of $1,500. Since the first insurance company paid $2,000 previously the second (or new) insurance company does not pay for a single tray. The second insurance company states the member met the lifetime maximum under that plan because of the other insurance carrier payment.

Do you think this is some kind of preexisting rule or can a dental insurance company apply prior insurance payments towards meeting their own lifetime maxium for Ortho? I don't have a copy of that SPD, but I hope to get one to help the individual. The dental plans I have worked with will coordinate benefits for remaining treatments. Maybe I have been in the dark, I am not familiar with this situation. Please advise

As part of a controlled group, a large tax-exempt parent sponsors both 401(k) and 403(b) plans. The parent has exempt as well as taxable subsidiaries. Employees of one of the taxable subs have been participating in the parents' 403(b). I still don't have data to indicate how "significant" the error is (i.e., number of employees from the sub compared to the number of total participants, etc.), but what will be the appropriate correction method and procedure?

Thanks.

Suppose you have a 401(k) plan with salary deferrals and profit sharing.

Each year the employer makes a 15% P/S contribution and it is allocated comp / comp.

This year they fail the ADP Test. The document allows them to carve the amount necessary to pass the ADP test by classifying that amount as a QNEC.

Suppose 4% of the 15% becomes a QNEC for the two NHCE's. Does that then require us to cross-test?

Does the fact that the 4% QNEC is used for ADP testing then mean only 11% is considered a "Nonelective Contribution" and then subject them to cross-testing?

If a retirement plan only has the owner as a participant, does the plan need a fidelity bond?

401(31)(a) what does this new law entail? Does it primarily affect rollovers?

For the eligibility requirements for entry into a retirement plan, if you have an eligibility period of only six months, does that mean that you have to use elapsed time for the initial eligibility period?

Employer funded plan stipulates election to add dependent during special enrollment period (i.e. mid-year following qualified event) must be submitted no later than 31 days post event - birth of dependent in this case. Employee missed deadline and appealed for exception. Employee is currently enrolled in family plan with wife and one dependent, birth of second child is qualifying event.

Can an exception be granted without inviting undue scrutiny from IRS under IRC 125? If IRS took issue with the exception, would exclusion from income be denied to all plan participants or just affected employee? I couldn't find this specifically addressed elsewhere. Thanks.

Perhaps, government actuariess need to read this and learn the error of their ways -- there was never any need to replace the Wigglesworth table so long as you can control retirement age !

This balderdash is all over the net and sounds like rediculous propaganda to encourage aging (and high-priced employees) to retire. I found no professional replies to it. Clearly, the way to beat this game is don't retire.

Anyone ever read Darrell Huff's How to Lie with Statistics?

Life_Span.pdf

Payment to a participant was to have been made under the nonqualified plan in 8 annual installments following separation from service, which occurred last August. The first annual payment was to have been made in November, 2007. (Not a public company) Due to an unintentional error, the November installment was not paid. It will be paid now, in May. Because the error was not discovered in the same taxable year (2007), we can't use Notice 2007-100 Part II to correct this without penalty. Part III suggests that we would tax the payment in 2008, and apply the 20% tax to that amount. Any other ideas about how to "correct" and report the correct amount? The dollars at issue are small; e.g., the installment is less than $5,000.

Somebody is arguing that distributions on account of disabilty are tax exempt?

I don't think so but don't have anything to dispute it (without doing some digging).

Incidentally, to broaden the question, what type of disability payments are tax exempt? For example, are the disability payments from an employment (under the disability insurance) taxable?

I have a question about what Prop. Reg. 1.430(j)-1 says.

Say you have a plan where the sponsor puts in $49,800 on 4/15/2008, and then the 2008 quarterly requirement turns out to be $25,000. So, they've put in almost double.

Do you (in effect) get to credit interest on the extra $24,800 to 7/15/2008 (say the effective rate is 6%), so that you can skip the 7/15/2008 installment, or do you have to put in $200 by 7/15/2008? If you think you can skip 7/15/2008, where in 1.430(j)-1 or its preamble, for that matter, does it say you can? Thanks.

Would a plan be permitted to have immediate eligibility, but have a 6 month or 1 year wait for automatic enrollment to kick in? Would the answers differ if it were an EACA or QACA?

Thanks!

Profit Sharing Plan that has J&S provisions, so requires spousal consent on distributions over $5,000.

Active participant is requesting a Hardship Distribution and has a balance of less than $5,000. Is spousal consent required?

Thanks.

Hello everyone!

I recently read about this "rule of thumb" to use when determining how much money a particular individual should invest in stocks vs. bonds. Take the number 110 and subtract your age, this number is the % of your retirement that should be invested in stocks. I am concerned because for me, it comes out to 73% and currently I have 90% invested in stocks, (in a Target Retirement Fund). Does anyone have an opinion about this either way? I should mention that I was introduced to this concept in David Bach's book, Smart Women Finish Rich, which I found very informative. Any feedback would be greatly appreciated. Thank-you! P.S. I know David's book should be underlined, but I can't get the control to work.

Company A merges its MPPP into its P/S plan. The MPPP money is subject to the QJSA rules. Does the P/S plan have to be amended to comply with the QOSA rules?

An employee was participating is employer A's (non-Gov't tax-exempt org) 457(b) plan and terminated employment. He had elected to receive payments in 5 annual installments beginning 2010. Since then, the employee has become employed by employer B (also a non-Gov't tax-exempt) that also has a 457(b) plan for which he is eligible. Both plans allow for transfers and receipt to and from other 457(b) plans of private tax-exempt organizations.

1. If the employee transfers his account from employer A's plan to employer's B, does the elction he made of 5 annual installments effective 2010 remain in place? And if so, how can the distribution occur while still in-service?

2. If he had originally elected a lump-sum upon separation from service but elected to transfer the account prior to the distribution date, can his account be transferred to plan B and take on the features of the new plan and any new elections allowed?

I have an existing 403b plan with an Profit Sharing provision. We are amending the allocation provisions of the PS portion of the plan to become a New Comp (previously it was a straight proportion of pay PS). In running the a4 non discrimination tests, do I include the 403b deferrals in my average benefit test?

Would the answer be any different if my 403b deferrals were in a Non ERISA 403b plan?

Plan began an automatic enrollment program in 2007 at 2%. (Just a regular automatic enrollment plan , not EACA or QACA). Now, client wants to raise the automatic enrollment deferral rate to 3%, BUT ONLY for new enrollees. They do not want to up the % for prior enrollees.

May they do that?

Thank you.

Employee contributions (voluntary and mandatory) are not deemed credited to a participant's account for a particular limitation year unless the contributions are actually made to the plan no later than 30 days after the end of such limitation year (see Reg. 1.415-6(b)(7))

For a 401(a) plan what would be an example of this occuring and must this rule be automatically applied. We receive contributions thru payroll deduction. I can't believe that in the situation where aftertax contribiitons are submitted > 30 days after the payroll end date and the fiscal year has ended, that the contributions needs to be applied to the current fiscal year rather than the prior year.

Assuming this is true then what about attribution to the plan year for purposes of ACP testing?

Thanks