I have two separate issues:

- Designated beneficiary is under age 18, would the distribution be paid directly to him or to his legal guardian?

- Designated beneficiary is citizen of the UK, would the normal procedures to doing a non-spouse beneficiary remain the same?

Please advise!

Thanks!

Per section 1.401(a)(17)-1(b)(3)(iii)(A) of the Treasury regulations, "if compensation for a period less than 12 months is used for a plan year, then the otherwise applicable annual compensation limit is reduced in the same proportion as the reduction in the 12-month period." However, section 1.401(a)(17)-1(b)(3)(iii)(B) goes on to indicate that "a plan is not treated as using compensation for less than 12 months for a plan year merely because the plan formula provides that the allocation or accrual for each employee is based on compensation for the portion of the plan year during which the employee is a participant in the plan." We do not have a short plan year, since the plan has been frozen rather than terminated, so I guess that the question here is what is meant by the term "participant." Technically, still a participant until benefits are distributed, the individual is not a participant for accrual purposes, so I'm in a bit of a quandary on this one.

Does anyone have any thoughts on whether the 401(a)(17) limit is pro rated with regard to compensation that is disregarded after the effective date of a DB plan freeze?

We have been receiving a lot of Deposit Verifications from Mortgage companies regarding participant assets and loans in their company 401(k) Plan. Have anyone else received these requests? How are they being handled?

I've recieved notification in my Nov 1 Summary Plan Description that that effective January 1, 2008 - a new set of individual participant fees will be enacted for transactions that heretofore had been charged to the plan's general fund. The excerpt follows:

Effective January 1, 2008: Your account may be charged directly for certain

administrative expenses associated with issuing paper statements, distributing stock,

recordkeeping fees, Withdrawal fees, Distribution fees, dividend pass-thru fees, loan

fees, QDRO processing fees and some communication and other plan administration

expenses, instead of being paid by the trust or investment funds.

Attempting to be an informed plan participant - I contacted the Plan Administrator - Fidelity - and asked for a schedule of fees. I was told that although it was reasonable to request a more detailed description of the activities and associated fees that will be in effect Jan 01 - my plan sponsor (AT&T) had failed to provide it - and as such - the info was unavailable...

Since this change doesn't take effect until Jan 01, is the information not required to be made available until after the date upon which the change takes effect? (This is Fidelity's position.) My decision to conduct certain transactions would probably be predicated by the cost - if I had that information available.

Cheers,

Bjorn

I am wondering if anyone can direct me to a place where I can review the regulations governing QDRO's from 1985. I have searched this site and also googled. There was only one hit here, but hundreds of thousands on google. I'm hoping someone here can streamline my search. I am specifically looking to discover if there was any language at the time concerning separate versus shared interests in a defined benefit pension.

Thanks very much.

I think I've stumbled into a problem here. I've done quite a bit of research, but am not finding guidance exactly on point. So, let me post here. I appreciate any help anyone out there can give.

Here are the facts as I understand them:

1) NQDC Plan set up in '03 (prior to 409A). It has not yet been amended to comply with 409A, although I don't see many provisons that will be problematic.

2) Contributions were made during 2005 (post-409A). On these contribution elections, payment ("entitlement date") was set at "normal retirement" defined in the document to be age 65.

3) Distributions were taken during 2007 by 2 of the 5 participants (none were yet 65, and none are retired). One of the participants completely liquidated their account. The other set up payments over 4 years. Neither of these payment dates or amounts were set at the time the contributions were made, and are not otherwise available under the terms of the Plan Document.

My questions are:

A) First, regarding the distributions:

1) What are the taxes / penalties due on these distributions?

2) are there wider consequences?

3) what is the best course of action?

B) Regarding the Contributions:

1) for the three participants who have not taken distributions, but who made contribtuions post-1/1/05, what is the best course of action?

2) for the two participants who have taken distributions, are there further ramifications?

Again, I appreciate any input. Thank you.

I AM A TPA. I WOULD LIKE TO FIND AN ONLINE ADMINISTRATION (RECORDKEEPING) SYSTEM FOR 401(K). DO YOU KNOW OF ANY?

Does anyone have a spreadsheet or similar type app that will determine if two (or more) companies are in controlled group situations? Something where you plug in the different ownerships for different companies and the program will tell which co's are in a controlled group.

Can an ESOP hold an interest in the sponsor which is an LLC taxed as a partnership?

A cash balance plan defines the Interest Credit as the rate determined under Code section 417(e)(3). It has always been the plan's intent that the rate be the 30-year Treasury but the language was drafted by reference to Code section 417(e)(3). Now that the 417(e)(3) rate will change effective 1/1/2008 to a segmented rate, would a pre-1/1/2008 amendment changing the Interest Credit definition under the plan to the 30-year Treasury be a cutback? Would the relief provided by Notice 2007-6, while not directly on point, be applicable since the amendment is being made as a result of the change made under PPA section 701, and therefore the requirements of PPA Section 1107 are met?

I have a Safe Harbor 401(k) /New Comparability Plan with Matching Contributions.

The Safe Harbor Matching formula is 100% on the first 3% deferred and 50% on the next 2% deferred. Therefore, the match is 100% on the first 4% deferred.

Can the 4% Safe Harbor Match be included to satisty the New Comp gateway requirement of 5%? Therefore, I only have to give the HNCE a 1% New Comp Contributuion to satisfy the (4 + 1) 5% Gateway test?

We are setting up our 1099-R forms and are trying to figure out how to report the $3000 PSO tax deductible insurance premiums. According to information that I am looking at, there is no special reporting for qualified payments of health insurance premiums. Therefore, any premium payments should be included in the gross distribution reported in Box 1 and in the Taxable Amount reported in Box 2a. It is up to the retirees to claim any eligible exclusion on their 1040. We think that this will be too confusing for retirees and they will not know to claim the exclusion. We are trying to make things easier for our retirees by sending two 1099s. The second would include their insurance premiums. I am curious as to what other public pension plans are doing in regards to 1099 reporting of PSO insurance premiums.

Our small company currently offers no benefits to employees. During the interim period before we create a plan for everyone, can we offer to reimburse medical expenses / insurance for one exec?

A 401(k) plan covers both collectively bargained and non-collectively bargained employees. The plan sponsor has elected to operate the plan as a safe harbor plan in 2008 with a basic match, however, collectively bargained employees will be excluded from the SH match. There are no other employer contributions. The SH notice specifically states that all employees except collectively bargained employees will receive the match. Does the notice need to go to the collectively bargained employees who are eligible to participate in the plan, but not in the Safe Harbor? The portion of the regs discussing the notice requirement only mentions "eligible employees". Does that mean eligible to participate in the Plan, or eligible for the safe harbor contribution? Any insight is appreciated.

Hello,

Is an employer allowed to continue COBRA coverage past the 36 months maximum? (The former employee is listed as active on the group health plan. The former employee pays the monthly premium to the employer, who in turn pays the health carrier). I can't seem to find anything in the manuals that says "COBRA coverage must be terminated at the end of the 36 months".

I'm pretty sure this is yes... but is the mortality table used to calculated the maximum 415 lump sums for 2008 plan years the same as the 2008 Applicable Mortality Table?

We have a number of clients who would like to offer HDHP and HSAs through their premium only cafeteria plans. With respect to amending the cafeteria plan document, what is required? I reviewed some websites that refer to the HSA module of the POP plan???? Thanks.

Can anyone help me obtain a Health Reimbursement Arrangement (HRA) sample plan for inclusion in CCH’s Employee Benefits Management Reporter? CCH publishes various types of sample plans in Volume 3 of this product, but they do not have a sample HRA plan.

If you have a sample plan (or can obtain one) that CCH can publish, they can include copyright or other introductory language as you see fit.

Please let me know if you need additional information or would like to discuss this further via phone. My telephone number is (317)-254-0385).

Thanks, Gary.

I know how to exclude all HCEs from receiving the SH contribution. I know how to exclude a "class" of employees from participation, but here's the question. Is it permissable to allow an HCE (the owner) to make deferrals but not receive the 3% sh? We don't want to exclude all HCEs because there are other nonowner hces.

Does mandatory income tax withholding apply when a total distribution amount that's less than $1,000 (but more than $200) from a profit sharing plan is made due to a participant's death? Also, can the beneficiary roll over the amount (directly or otherwise) to an IRA, even if the document doesn't specify so? All help is greatly appreciated.