401(k) Plan terminated on 6/30/07.

A participant took his balance (payable to him) 12/10/07 - 1099 issued by asset company.

This participant also had an outstanding loan - a 1099 has not been issued. Is it too late to issue a 1099 for 2007 (provided the participant hasn't completed his taxes yet)? If it is too late will there be a problem if the 2007 Form 5500 says it's a final return but a 1099 is issued in 2008?

Thx

Here is the scenario. Owner's son terminated before end of the plan year because of "medical disability". That is the client's term not mine. Anyhow, they made payments during the first 2 weeks or so of the next year that they are saying was for disability. Does this count as 415 compensation for the next plan year (the year the amount was paid but is the year after termination). I am still trying to fully understand the new 415 regulations. Thank you.

Anyone have a good sample notice about terminating a safe harbor match mid-year? i.e., it needs to explain consequences of the change, information on how to change deferral elections, etc.

Participant (P) and Alternate Payee (AP) have gone through a bitter divorce. She was awarded a separate interest in a DB plan along with hefty spousal support. The QDRO is drafted to require AP to begin receiving payments no later than the date P actually retires.

P is sick of paying "outrageous" child support and is advised by counsel to retire since the payments from the Plan to AP will reduce P's spousal support obligation.

Plan contacts AP and sends her election forms. AP tells Plan to pound sand and that she won't sign anything. P and AP are both going back to court over this issue, but how should the Plan respond? I would assume that she will be entitled to the benefit payments (without interest) at a later date, but I'm not certain of this.

Input is appreciated.

We have a calendar year plan and our actuary certified last week that our 2007 AFTAP is 70% after having to forfeit a portion of our funding standard credit balance. It would have beeen 67.2% without using some of the credit balance. He used values from the 1/1/07 actuarial valuation report to make this calculation and says he won't be able to calculate the 2008 AFTAP until this summer.

I'm thinking I may be able to make a rough estimate of the 2008 AFTAP myself because included in the materials that came with the 2007 actuarial report was a benefit payout projection for the next 75 years and I know what is the value of assets as of 1/1/08. I think I should really be working with an updated benefit payout projection, but is the following a valid approach?:

1. Select the 3 segment rates. [Can someone tell me what are the 3 rates?]

2. Discount to 1/1/08 the expected payouts in year 1 thru 5 (2008 thru 2012) using the rate for segment 1.

3. Discount the expected payouts in year 6 thru 20 (2013 thru 2027) back to year 5 using the segment 2 rate and then discount that result for 5 years using the segment 1 rate. [Or do I use the segment 2 rate for all 20 years?]

4. Similar approach for years 2028 to the end of 74 years.

5. We didn't use all of the credit balance so can I use what's left for the 2008 calculation if neeed?

Is this approach too 'simple' to be valid as a rough estimate?

The attached letter was submitted to the IRS regarding their 12-28-2007 proposed regulation on "Measurement of Assets and Liaiblities for Pension Funding Purposes."

LW032808a_Comments_to_IRS_on_12_28_2008_Proposed_Regulations.pdf

If an employer has two plans (such as a money purchase plan and a profit-sharing plan), how do the 415 limits, the limits on deductions, the 417 limits, and so forth apply? I know the usual limits on annual additions usually amount to 100% of compensation and approximately $42,000 (annually adjusted limit, of course), but I had not given much thought about how this applies if an employer has more than one plan.

If a plan does not timely amend for GUST, EGGTRA, 401(a)(9) or 401(a)(31), what penalties or options follow? Is a self-correction or voluntary correction program possible?

How long have they done this?

I would be interested in knowing if any plan sponsors have added Exchange Traded Funds (ETFs) to their 401(k) family of funds. Ours is the typical 401(k) Plan with an array of equity and bond funds available for participant choosing. However, in this volatile investment time period a number of participants have expressed a desire to see ETFs as an investment option under our plan. Any thoughts (good or bad) on these types of funds and how they may or may not be suited for a 401(k) Plan would be appreciated. I am particularly interested in learing from other's experience from a fiduciary perspective. Thanks

Can someone explain what the difference is between the 4/1/2008 cert and the one due 10/1/2008? I think I understand that the one due 4/1/2008 is preliminary, basically for 08 based on 2007 numbers. I'm using the sample letter and cert that Jim Holland gave in his webcast. Does anyone have an example of one they are using for the certs due 10/1/2008? I assume that if we have all of the 2007 data and the client has made the 2007 cont, we can go ahead and certify 2008 now and only have to do 1, is that correct? Also, we can definitely use the credit balance, correct?

By the way, who the heck thought of these dates they were due by, 10/1/08, like we're not doing anything else at that time.

Under the PPA, once a plan has been certified as "endangered," and before a funding plan has been adopted, the plan may not accept a collective bargaining agreement that provides for lower contributions, suspended contributions or exclusion of certain employees. Does this mean that an employer and union may not agree during the adoption period to withdraw from the plan entirely?

Over the last couple of months I have been working on putting together a package of home benefits to offer to small to midsized companies in NJ as a voluntary benefit for there employees.

This package allows these companies to offer a valuable benefit to their staff that provides convenient access to bundled savings on home financing and other home related services, at no cost to their company. My package helps reward and retain their people by providing a benefit that streamlines buying, selling and financing one of their most valuable assets…real estate. As well as discounts on home inspections, insurance and other home related services.

Before I go knocking on the doors of HR benefit managers, I thought I would get some feedback from people in the industry. Anyone have any thoughts or concerns for me?

Thanks for any feedback.

FSA participant wanted to know, if she dies, what happens to her FSA balance. She has no spouse or children, no blood relatives, and intends to appoint someone executor of her estate or beneficiary. She wants this elected person to be able to get reimbursement for expenses incurred prior to her death. The kicker is that she wants us (the tpa) to come up with a Beneficiary form (of sorts) that will insure reimbursement of the FSA balance. I would think that the Plan Administrator (her employer) would have to include some sort of exact blurb in the plan doc. Or, maybe this would be something her Attorney would have to handle through her estate or will provisions. Hope this all made sense and that someone can give me some ammo for this dilemman so this gal can rest easy that her pittance will not be forfeited. Aarghh! Thank you so much!

At the last ASPPA meeting several folks referenced an email that was written very much like a real IRS ruling and it pertained to the definition of death, I think.

Could someone post that here, please?

thanks

Okay. First time I've run into this situation. Have a plan with top paid group election. 20% calculation comes to 4 HCEs.

Have the following comps:

200K

170K

155K

150K

150K

150K

150K

My question: The 150k is the 4th "position," but how do I choose which $150k gets chosen? Or do I take them all?

One of our clients was spun off and acquired by a new parent company on 9/1/2007. Of course they were owned by the prior parent company for the majority of the year (1/1/2007 - 9/1/2007) but are now a new entity.

What are the testing reqruirements/responsibities under these circumstances?

Thank you in advance.

Mike

Individually designed plan is a Cycle B filer. Determination letter app is not filed by 1/31/08. It looks like this must be corrected through EPCRS. Presuming the VCP application is submitted by 1/31/09, this filing subject to either: (1) the compliance fee for non-amenders of 50% of the regular VCP fee; or (2) the compliance fee for a failure to adopt an interim amendment of $375. I am tempted to say that this is an interim amendment failure, but am concerned as to how the EGTRRA remedial amendment period factors in. Any thoughts? I wish there was a straightforward explanation of how to correct in Rev. Proc. 2007-44!

I have a client who has created an ERISA Severance Plan that is a Pension Plan. The Severance Plan is a voluntary retirement arrangement that has recently been offered to employees who are age 60 with one year of service. The client acknowledges and accepts that this is a pension rather than a welfare plan and that additional steps will be necessary to comply with ERISA. The program itself is short-term in nature and no additional voluntary retirement window is anticipated in the next few years. I have the following questions regarding the arrangement:

(1) A trust is required for the assets. Who can administer the Trust? Can I arrange for a bank or a financial advisor to administer the Trust?

(2) How long does the plan have to remain in existence? A former attorney told this client that the plan would have to remain in place for 5 years, but I can't find a legal requirement for this time period.

(3) Form 5500s and SARs are required, as well as a plan document, trust document and SPD/SMM. Are there any other requirements that I am missing?

(4) When must the plan documentation be completed? The former attorney told the client that all documents had to be "filed" within 100 days following the announcement of the voluntary retirement arrangement. I cannot find any 100 day requirement. I think they are referring to the 90 day / 120 day requirement for the provision of SPDs to participants. As for filing, the only documents to be filed would be the Form 5500. Am I missing something?

(5) Participation requirements - my client extended the voluntary retirement arrangement to all employees age 60 or above with one of service, but excluded a few job titles. There does not appear to be any discrimination with respect to highly compensated employees. Is this my only concern?

The legal guidance always stresses that a severance arrangement should not be structured as a pension plan due to the burdensome requirements. I just want to make sure that I am covering all of the bases.

We have a client that maintains a health reimbursement arrangement. The employer contribution is made to the account on the last day of the month. Two employees have terminated employment and have elected COBRA. How does this work with respect to the 18 month period – can the employer extend coverage until the last day of the 18th month?

When an employee terminates on 2/16/08 and elects COBRA – continuation coverage will run through 8/16/09. However, the premium for the final month is due 8/1/09 and the employer contribution will not be made until 8/31/09. Is it permissible for the employer to extend for all employees continuation coverage through the end of the 18th month? Or is it possible to pro-rate the premium for the 18th month?