Does anyone know whether the automatic enrollment notice must be provided to (1) every participant in the CODA that includes the automatic enrollment feature or (2) only those participants in the CODA who have not already made an election or opted out?

The IRS model notice suggests that the notice must be provided to (1). Is that right?

How are other practitioners approaching this issue?

Thanks in advance for your help!

You have a plan the allows multiple loans with a maximum of 50,000 or 1/2 of the participant's vested benefit. Minimum loan of $1,000.

Participant has a total account balance of 10,000 (including a loan outstanding). Participant takes out a loan for $3,000 two years ago for 5 years. The outstanding balance left on the loan is $2,000. If the participant has a total account balance of $10,000 (which includes the $2,000 loan), how much can he take out in a loan? Is it $3,000 (1/2 of 10,000 minus the $2,000 loan already outstanding), or is it $2,000 (1/2 of $8,000 minus the $2,000 already outstanding?

Thank you for your help

Have an IDP cycle A filer that is due 1/9/08. Obviously missed the the 1/31/2007 deadline. My question is, do I need to include the 2005 cumulative list or the 2006 cumulative list? If filed timely it states the 2005 list but seems to be silent on the 2008 filing deadline.

I am trying to help a client determine if they can offer purchasing PTO as a benefit under the cafeteria plan if they don't offer this benefit to both divisions of their company. Again, they only want to offer purchasing PTO as a benefit for one division. It is important to note that there is only 1 HCE/KEY employee in the division that they want to offer this benefit to and he will not be using the "purchased PTO".

From what I can see there are really three tests a cafe plan needs to satisfy: (1) concentration test; (2) nondiscrimination test; and (3) eligibility test. There should be no issue with test (1) or (2) because there will be no HCE or Key employees utilizing this benefit. I'm just not sure how the eligibility test fits in.

Can anyone shed some light on the eligibility test or any other tests I should be concerned with?

Employee currently age 64 is considering retiring in 2008 at age 65. She made over 100k in 2004 and 2005 but did not in 2006 and likely not in 2007 either. Plan is under funded and I'm trying to determine if she's a Restricted Employee for lump sum purposes. I see that Former HCE are part of the Restricted Employee def'n but I'm not totally sure she is a Former HCE as the def'n appears a bit more unique than simply being over the 100k threshold in past years. I've inserted a CCH blurb that I'm struggling to interpret correctly.

Given the above facts, and the attached blurb, does she appear to be a Former HCE in both 2007 and 2008 ?

Strategy wise, I'm trying to determine whether she could retire a few months earlier than planned say in 2007 (Plan allows for an ERA after 55 & 10 YOS) and if there is NOT a separation year before her pay out, could she get a lump sum before 12/31/07 (i.e., maybe she's not a Former HCE until 2008 after her separation year). Employer wants her to get a lump sum too so any strategy that might help her not be a Former HCE they would support if it can be done. There are only a few HCEs so a top-25 election doesn't help.

Thanks for any help. Opinions welcomed.

Former_Highly_Comp_EE.pdf

An employer has a 401(k) plan - they have had an inordinate amount of employees sign a one time irrevocable waiver out of the plan prior their initial eligibility. Don't know why and I think something is fishy but that is the employer's issue.

My issue is the plan is not passing coverage of the 401(k) portion of the plan. So now I have to utlize corrective measures - i.e. an 11(g) amendment.

My question is - I assume that I CANNOT add back employees who have signed the waiver and give them a QNEC to increase the NHC coverage group benefitting under the plan (i.e. pass ratio percent test)?

I assume I am going to have to give a QNEC to the NHC who are not excluded and get the plan to pass the ABT.

Any thoughts would be appreciated.

Do the QDIA regs apply to governmental plans? Thanks.

The Washington Post carried a news story about James LaRue who claims his employer failed to implement investment changes he requested and subsequently lost $150,000 as a result of the employer's failure to act:

http://www.washingtonpost.com/wp-dyn/conte...7112500356.html

I read the article and persused the plaintiff's brief and nowhere do I find any discussion pertaining to how Mr. LaRue requested investment changes and whether or not such requests were in accordance with the Plan docuement. It almost sounds as if he simply verbally asked someone to make changes and they didn't.

Does anyone have any background information on the entire transaction?

Do the QDIA final regulations apply to governmental plans? Thanks!

Employer has a cafeteria plan that provides each employee the option to choose up to $10,000 in benefits under the plan. The plan has both a FSA and DCAP arrangement.

There are employees who have no dependents and thus choose up to $10k in FSA benefits through payroll deduction. Those using daycare usually split the participation between the two components- $5k to each- through payroll deduction.

Our new HR person is telling us that this is discriminatory since some employees cannot elect to receive more than $5k in the FSA. I countered that this is not true, rather they could receive up to $10k if they chose not to participate in the DCAP.

Is this discriminatory? No key employees participate in the plan.

Has anyone seen any definitive IRS guidance on Federal income tax withholding to be made next year in the case of a participant who makes a direct rollover from a qualified plan to a Roth IRA? It seems under Code Section 3405© that it would be necessary to withhold at a mandatory rate of 20% because this would constitute an eligible rollover distribution that is not being rolled over to an eligible retirement plan. Can anyone help?

Can a 501©(9) transfer transfer assets to another 501©(9) trust? For instance, can a SUB Fund transfer assets to an HRA account or a H/W Plan?

I have looked at GCM 39052 which seems to state that this can be done and does not violate the inurement rules. If my conclusion is incorrect or if you know of any other sources for this question, please let me know.

As a TPA we operate mass transit and parking accounts on a 12-month period that usually coincides with the clients Section 125 plan year, for simplicity sake. We allow employees to make monthly elections (prospectively). Since there is technically no plan year for a Transportation plan, we have for administration purposes followed a rule that if an employee does not make an election in new plan year, the prior months election is not assumed to roll, and any funds from the prior year are forfeited. Even if the participant makes a future month election, the intermittent month (where an election was not made) causes the forfeiture. The regulations are not very clear in this area, most of the discussion addresses termination (as an example) but not breaks in coverage as it relates to forfeitures. We looked to the "green book" for some form of guidance and that is even a little vague. Should we approach it differently and view funds being forfeited only if the person terminates? Should we assume the election rolls from month to month, including plan year to plan year until a new election is made? What about intermittent elections? HELP???

Is a prohibited allocation in an ESOP considered a prohibited transaction for form 5500 purposes?

Any assistance would be greatly appreciated.

Thanks.

I have a client that is terminating its VEBA. IRS Notice 2002-45 indicates that there are ordering rules relative to HRAs and FSAs.

Does anyone have a site relative to whether or not a VEBA has to be exhausted prior to reimbursement from an FSA?

Thanks.

Has anyone seen a pro forma format that illustrates the content to be included in the 2007 AFTAP? Is there specific wording that has been proposed or at least discussed?

Does anyone know where I can find court cases detailing fines of COBRA violations? By state and as recent as possible...

We administer a DB and PSP where a participant in both plans died earlier this year.

He was still working at the time of death and therefore had not begun receiving benefits from either plan. however, he was over age 70 1/2 and had begun RMD's a few years ago and had not taken the 2007 RMD by the time he died. The surviving spouse is 51% primary beneficiary to his pension benefit and his three children are together the remaining 49% beneficiaries. In the PSP the surviving spouse is 100% primary beneficiary.

Our understanding is that the beneficiaries in both plans will be required to receive the RMD's as they would have been calculated had the participant lived (i.e. the same way they were determined in the past). This because he did not receive his 2007 RMD before he died. Now next year the RMD would be calculated based on the oldest beneficiaries life in the DB and the life of the surviving spouse in the PSP.

Does anyone disagree with this?

For those of you out there trying to figure out how to access older DOS programs:

Microsoft Virtual PC 2007

I had to figure out how to get an older pension valuation system up and running to access an old database. The system would not run on XP, forget about Vista. Here is your solution (you will need to rummage around for an old Windows 98 disk). This worked perfectly, and the program is FREE.

I have a couple of calendar year plans with a NRA less than 62, but not less than 55. Based on reading Notice 2007-62 it looks like I can safely continue to use that NRA for the 2007 and 2008 valuations. Is that correct?