A client of mine maintains both an ESOP and a separate profit sharing & 401(k) plan. The lawyer that maintains the ESOP is informing my client that they are unable to offer a 401(k) because of the ESOP. Am I missing something? I haven't been in this business that long, but I believe you can aggregate a 401(k) and ESOP for ADP/ACP testing.

Is there a regulation that I can quote or point the lawyer towards?

The Enrolled Actuaries Report usually publishes the unrounded limits for 415 and 401(a)(17) in their winter newsletter. Does anyone know what these numbers are (generally used in FASB calculations)? Thanks in advance!

Does anyone know if the airfare expense of a spouse is deductible as a medical expense to accompany a cancer patient (who can not travel alone) to a medical hospital? I know the patient's airfare is deductible. Thank you.

A non-safe DB provides that the TH minimum will be provided in a DC plan. The DB/DC are not aggregated for 410(b)

For 401(a)(4) testing of DB, does one need to include some or all of the TH allocations into account?

I don't think so.

Just want to make sure I am not missing anything.

Basically, the 404 adds a cusion amount of 50% of the Funding Target (CL @ BOY) to the minimum required contribution.

For a new plan without past service credits, the Funding Target and the cusion amount would be zero and the minimum/maximum would be the same.

This is not in line with the current 150% of CL less Assets limit which is available to new plans.

Has this been addressed by any guidance?

I am revising a money purchase plan, and the employer wants to remove as many optional forms of benefits possible from the plan. Right now, we have 50% QJSA, 15 year annuity, lump sum, and purchase of an annuity contract as optional forms of benefits. I know that we have to keep the lump sum and the QJSA. The question is, are we required to have a single life annuity form of benefit? If so, where should I look in the regs/Code for authority.

Thanks.

Business and qualified plans are merging. New Trustee decides to move other plan's assets [a few million $$] to an investment house who happens to be a client of the business the Trustee owns, even though the new funds have much higher expenses - Trustee is trying to recipricate business relationships. Is this a prohibited transaction, or at least a Trustee liability issue, since the decision is being made to benefit her business rather than to act on behalf of the participant's best interests? No due diligence was involved in this decision. Any authority or other sites on similar issues appreciated.

The examples of permissible payment options for individual insurance premiums in Prop. Treas. Reg. Section 1.125-1(m) appears to have a typo--it gives three examples of options, ending with:

(iv) The cafeteria plan issues a check in the same manner as (iii), except that the check is payable jointly to the employee and the insurance company; or

(v) Under these circumstances, the individual health insurance policies are accident and health plans as defined in §1.106-1.

There appears to be something missing after the "or" at the end of (iv) (perhaps something along the lines of, "The cafeteria plan issues a check directly to the insurance company.")

I haven't found anything indicating an IRS acknowledgment that this is an error or a correction. Does anybody know of anything on this?

Say you have a plan with Profit Sharing contributions, forfeitures, employee deferrals, and a matching contribution. In no particular order you have 402(g) violations, 415© violations, ADP and ACP failures, and just to make life interesting, it is an off calendar year. (This has been happening for at least 5 years). These failures were all corrected timely according to the plan document.

Is there any citable authority for the order in which to make corrections?

For advance credit - consider that in addition to the above failures, there is also an operational failure which occured in each of the above years in the Profit Sharing contribution which has just been discovered. Correction of the operational failure will change and maybe eliminate most of the prior failures.

And yes, the client is being billed.

Starting up a new qualified plan in 2008 and client is undecided at this point if he wants to commit to the 3% safe harbor. However he does like the idea of automatic enrollment and he likes the idea of a 2-year vesting schedule if he does later commit to the safe harbor 3%.

Is anyone aware of anything in the current regulations that would probibit a "maybe" notice with a QACA?

A client is starting a Death Benefit Only plan. The benefit is paid by the employer if the employee dies while still working. There are no salary deferrals. Are there any filing requirements for this type of plan?

I know that if an account holder is 65+, he can use his HSA account to reimburse for health insurance premiums. What if it is the spouse's health insurance, and the spouse is under 65? Can he pay for her insurance premiums out of his HSA? Anyone else run into this question?

New Comp Plan for 2007. Two Owners & 15 HNCE's.

Owner # 1 has 2007 compensation of $20,000.

Owner # 2 has 2007 compensation of $100,000.

Can someone clear up what tests need to pass in order for a New Comparability Plan to meet all Non-Discrimination Testing requirements, specifically the Plan itself, and then each HCE Rate Group.

Can the Plan pass the Gateway test and the Ratio % test, but fail the Average Benefits Test and still pass all Non-Discrimination Testing requirements?

What about the Plan passes the Gateway Test, Ratio % test, and Average Benefits Test, but one HCE Rate Group fails the Overall Ratio Test? Is this allowed?

Thank You in advance.

Is the "need to prevent foreclosure" defined anywhere. For example, must eviction actually be threatened by the lending institution? Or is a simple, "you're two months past due" notice sufficient? Is there any published guidance anywhere?

I posted this question as a response in a different thread, but believe it will receive more attention as a separate topic.

A client is having trouble finding a bank or insurance company that will set up a deferred annuity for a missing participant in a MPP.

I have to believe this comes up frequently. Does anyone have any recommended annuity providers?

The old TPA of a Plan I am taking over badly mixed up the records when they took over a Plan a few years ago. For many people, they have some or all of the SHNEC (Safe Harbor NoneElective Contribution)money mixed in with the SHMAC (Safe Harbor Match Contribution) money.

I think it may be possible for me to straighten this out. But maybe not, I am trying to get records now. I am sure it will be a heaache.

In the future the Employer does not expect to ever put in a match, again.

I would like opinions:

What do people think about just having both types of money in the SHNEC account from now on?

Plan Sponsor currently has participants out on active military leave in Iraq. Sponsor continues to pay their salaries even though they are abroad as w-2 employees. Sponsor is implementing auto-enrollment 1/1/2008. Some of these guys do not have deferral elections. Has anyone ever run into this and decided whether or not to auto-enroll them?

Does the transition rule in Notice 2007-46 allow an employer to amend a 409A deferred compensation plan that would otherwise not pay out until 2011 to pay out all deferrals in 2007? The argument is that the employer is amending the plan to comply with 409A by taking it out of 409A by having payments qualify under the short-term deferral rule.

The regs state that termination and distribution of participant accounts prior to the effective date of the regs is permissible if the contracts are updated to comply with the final regulations. The plan I'd like to terminate has a plan document. Other than adding a provision that allows for distributions upon termination, does that document have to comply with the final regs or can we terminate "as is"?

Person is beneficiary of an inherited IRA. He dies after he has been taking RMD's. Estate is beneficiary. Can the estate continue to take distributions in same manner as he was?