We are looking at a client that is just not a great candidate for a retirement plan from a tax savings persepctive. I've never paid much attention to the triple stack match, but this client may be a candidate.

2 owners in the mid 30s, making approximately $150,000 each.

50+ employees the majority of which are in their 20s making $9-$12 an hour.

Currently they have a Simple plan with the 2 owners and 6 employees participating.

The best cross tested design I could get was like 38% of the contribution to the owners. If I add any deferrals to the owners I bomb the average benefits test. So any type of cross testing is out. It's just not beneficial enough.

With cross testing only providing 38% to the owners, an integrated formula isn't better.

Since only a few employees are participating in the Simple plan, I figured trying to max out the match portion of the plan in such a way where we don't have to do any discrimination testing is going to work best. Since the employees typically make $10 an hour I am assuming that participation won't increase dramatically even when implementing a monstrous match.

Any thoughts, any concerns about the triple stacked match plan, any other ideas?

Under ERISA Section 104(b)(1):

With all of the amendments required since GUST, such as 401(a)(9), 401(a)(31(B), Final 401(k)/401(m) regs, I think it looks like a fully revised SPD should be given out now.

If that's correct and the plan was restated for GUST in 2002 (and the SPD was provided in 2002), assuming the plan year is calendar year, would you interpret that to mean a revised SPD must be provided by 12/31/2007? Or some other date? Please comment.

On edit, I've added: Would anyone like to see this can be changed to align with the 6-year restatement cycle to be 6 or 7 years instead of 5?

Are there any mandatory withholding requirements on Designated Roth Accounts? If so, where would I find them?

The IRS published guidance earlier this month addressing the election requirements for employees that annualize partial-year compensation...significantly teachers.

The guidance suggests that any time an employee can annualize partial-year compensation, an election is required. Doesn't this ignore the short-term deferral rule? Compensation is not deferred compensation subject to 409A if it is paid by the 15th day of the third month following the later of the last day of the employee's taxable year or the employer's taxable year.

I understand a lot of schools have fiscal years that may coincide with the school year or close thereto. If a school district has a fiscal year of August 1 to July 31, wouldn't all the teacher's compensation paid from September of Year 1 through May of Year 2 be a STD if it were paid by October 15, Year 2--the date that is 2.5 months from the last day of the school's fiscal year? In this case, no election would be necessary. Am I overlooking something obvious? It just seems odd the IRS would publish this guidance and not reference the possibility of the STD rule (which is perhaps why I am questioning what I could be missing).

What is the fix for when it is discovered that since plan inception, the 2 owners/HCEs used FBO accounts to direct their plan assets, but kept all NHCE dollars in a trustee-directed investment? Should we determine the historical rate of return for the 2 NHCEs, compare that to the return on the NHCE investments, and fund the difference?

Thanks

Does anyone have any suggestions for reliable/user friendly software that can be used by a company with approximately 200 employees? Thanks.

I believe you have 90 days after your initial contribution to opt out of auto emrollment. We have a participant who has made $200 in deferrals. She is now electing to opt of the auto enrollment and requesting a payout. Her account value is now $190. What will her 1009r code for this withdrawal be? Would it be a code 8. Conversely, if her account balance is now at $210, would she have $10 worth of gains and have a differnet distribution code?

Thanks.

Does anyone have a prototype SEP document that can be limited to the adopting employer and not cover all EEs of the controlled group?

An acquired company happily sponsored a model SEP. The employees like their individual accounts. The new parent would prefer not to upset the new employees but has other employees who will not participate and the parent may wish to sponsor other retirement plans in the future.

I know a 5305 model SEP won't work. Is there a prototype available that would? Or would it be necessary to individually draft a plan or amend a prototype and submit as an individually drafted plan?

Thanks!

Does the DOL employee contribution deposit deadlines (earlier of ASAP/15th bus day) ever apply to ER contributions? For example, if the plan document calls for a safe harbor match contribution to be calculated on a payroll basis, but the ER does not deposit the s/h money each payroll, is there a violation?

Thanks

I have posted on here a few times since my brothers death.

So far I have had two different attorneys that tell me different things.

I am tired of paying out money from my brothers estate account

to find that these attorneys don't know what they are talking about or they are not answering anything.

The attorney I recently gave a check to said that since my brothers second wife waived any rights to his 401K that what ever was signed last carried the most weight if we had to go to court.

My brother didn't have any other survivors but me. He was divorced three times and didn't have any children.

Both the second and third wife waived any rights to his 401K and this is written very specific in the divorce decree.

He lived in Ga. He had been with this company for almost 25 years.

I know he thought he had made all the changes to make me his beneficary.

The second wife does not have any idea that she is listed. I don't know where she is.

I do know that about 12 years ago my brother ran into a relative that told him she was remarried.

I am not sure where she lives.

I am the adminstrator of his estate, and I wrote to the company and to Fidelity for the summary plan beneifit. Maybe I worded that incorrect but if it is suppose the be beneifit plan summary it is the what ever people talk about here.

The first attorney received a copy of it, and he also talked to the company attorney and was told that the second wife is the one listed as the beneficary on his 401K.

I have talked to his third wife and she said that he had told her that she was beneficiary when they were married.

There is not anything in this for her but he must have thought he had done all the correct paper work because he told me when he first got married to the third wife that he had to make her the beneificary.

This was something that he just mentioned to me I never ask.

After there divorce from the third wife he mentioned that he had to take it to work as proof that they were divorced to get her off as his beneficary. He did take it to work because his employee number is on one copy and I have papers that showed where she was removed from his life insurance and his health insurance.

Some how he didn't know that the second wife was still listed.

After I got a copy of the divorce decree from the county it was recorded in and Faxed it to the second attorney. I had not bothered this attorney at all for 6 months but after that fax I started sending him emails to ask if he had sent it to the company attorney.

I thought that the divorce decree with the waiver to the 401K would get something going.

I would never hear anything back. I would ask just a simple question and he never replied.

He had been saying that if the second wife made a claim for the 401K we would file a suit and then a injunction against the company to keep them from releasing the funds.

I would ask how we were to know if any claim was made. I would never get a reply.

AFter going to the second attorney he talked like he was going to go aggressively after the company and fidelity and he wrote the probate judge about getting it into probate.

I had wondered about the authority the probate judge would have over something like a ERISA benefit.

Well she wrote back that she didn't have the authority just like I suspected.

Then this second attorney wrote me that he needed my permission to find a attorney in GA. I called and I also told him of some attorneys that I was given by someone I knew in GA.

That was over a month ago. Last week I called his office and he never returned my call. Today I talked to him for three minutes and he was changing his story from what he told me in his office. I ask if he thought that this was still in our favor and his reply was he had to wait until the attorney from Ga informed him.

Well first off he had been very sure it was in our favor and now he is not sure until someone in Ga tells him.

Could he look in some law book on the GA laws?

I am being taken to the cleaners by these people that say they are attorneys.

I also got to see the benefit plan summary before I took it to him.

The way it read to me and my husband if there had not been any claim made by the one listed as the beneficiary after a year then the estate would be the beneficiary.

There was only a few paragraphs on beneficiaries in this stack of papers that was a couple of inches thick.

I wrote down for this third attorney the pages that I found things

listed on benificiaries and he read some of it in his office that day.

He never got to the page that stated that the beneficiary would be sent a letter one time this letter stated that they needed more information about them and that they may be entitled to some benefit.

This went to my brothers house and was forwarded to me through the mail.

But after a year according to what we read then the estate was the beneficiary.

The first attorney didn't read any of the plan he told me.

So after spending almost 5K in attorney fees I need to know how to find someone that is familiar with ERISA.

I would like to ask this last attorney for a partial refund.

He has not done anything but send one letter to the probate judge and then tell me some incorrect information on the law.

Please give me some advice. I need a ERISA attorney and does this sound like I have any ground in receiving my brother s 401K?

Can these attorneys give me wrong information and that be ok with the legal system? I did not sign anything with the last attorney I just gave him a 3K check.

So far I had one appt with him and about three calls plus the letter to probate judge and then he sent that same letter to me.

And he send two of the same letters to the company and fidelity.

He gave me the wrong information and made it sound like it would be easy.

I have done searches for ERISA attorneys and it looks like they mostly work for the companies and not the little people or the individual.

Thanks ,

dulan

Can a limited purpose FSA and a regular FSA be reported on the same 5500?

The IRS requires assets of a plan to be distributed as soon as administratively feasible after a terminating amendment is adopted. As I undertand things, the IRS will give an employer one year to distribute assets that are more difficult to liquidate (e.g., real estate, partnerships etc...). Is this an unspoken rule or is there actually legal authority out there?

Other than the incidental benefit rule, and perhaps plan document language, is there anything to prevent a 401(k) plan from allowing participants to set aside dollars on a pre-tax basis to purchase long-term care insurance?

Looking at the IRS proposed regulations that were just issued, they say that the payment of accident or health insurance premiums from a qualified plan constitutes a taxable distribution. Considering the distributable events relating to elective deferrals, I would assume that any LTC premium payments attributable to deferrals could not happen until a person retired or terminated employment. Could it be considered a hardship (i.e., payment of deductible medical expenses)?

Although LTC cannot be offered through a cafeteria plan, would it be possible to funnel dollars from a cafeteria plan to a 401(k) plan, and then use them to pay LTC premiums from the 401(k) plan?

Just trying to explore some options.

If an individual is under age 50 and participates in 2 separate SIMPLE's of unrelated employers, could the employee contribute $10,500 to one SIMPLE and $5,000 to the other SIMPLE? Total employee contributions for the year come to $15,500, but that is within the 402(g) limit so it seems to be okay. Agree?

Does anyone know of an IRS cite that discusses the Service's review of the facts and circumstances surrounding a participant's separation from service to determine if he/she has retired and may beging receiving benefits? (This comes up often in the context of retire/rehire cases but I can't find a cite.)

Hi,

I'm new to this board and I have a dilemma. I was working for a small employer in California (less than 20 employees). Upon satisfaction of my 3 month company-defined waiting period, I was enrolled in a Blue Shield HMO plan, that was paid 100% by the company. If I elected to have a PPO or more comprehensive HMO plan, I had the option to have the additional premium deducted from my paycheck, however, I elected for the standard coverage to avoid additional costs. Shortly after becoming enrolled in the HMO plan, I began the process of obtaining the necessary preapprovals from my Primary Care Physician to have a major surgical procedure. I went through all the steps, and received my authorization, and surgery was scheduled for this past August 10th. On Tuesday, August 7th (3 days before the surgery, and 1 day before I was scheduled to leave on medical leave for 10 days), I heard a rumor around the office that we no longer had health coverage. Since I was planning on having a major (& expensive) procedure in the next few days, I confronted my boss. Only after asking about the rumor, was I informed that our coverage was scheduled to be cancelled THE FOLLOWING DAY! And a full 2 days prior to my scheduled surgery. Apparently, my employer stopped making the premium payments, and neglected to notify ANY of the employees of the impending cancelation of the policy. I cannot seem to locate the correct resource that would govern the employer's obligations and requirements to properly notify their employees, if there is one, however, it is not my primary concern. My employer advised me that they would "take care of it" and to continue with the surgery. I've now had the surgery, along with the required 3 night hospital stay, and was only required to pay approx $300 (possibly a copay for the hospital?) upon admittance at the hospital. Since then, I've learned that my employer did NOT "take care of it", and our policy was officially canceled as of August 9th (the day prior to my surgery). They are now saying that they are attempting to get me enrolled in a Conversion Plan with Blue Shield on a PPO plan, so there would be no need for Re-doing my Prior Authorizations. Everything I seem to read on the subject specifically mentions that you're only eligible for a Conversion Plan or to be considered "HIPAA Eligible" only if the cancelation was not due to "YOUR failure to pay plan premiums." I'm extremely concerned at this point, because the definition of "Your failure" is the difference between a $300 copay and a bill for $35,000. Since I was not personally responsible for the non-payment of the premium, do you believe I can still be eligible? Or is Non Payment of premium a reason for disqualification, regardless who the responsible debtor was? I plan on contacting the California Major Risk Medical Insurance Program tomorrow during business hours, but I'm trying to find any and all information possible ASAP. Please let me know if you have ANY advice! (Also, since I"m sure it will be suggested, the company is on the verge of bankruptcy any day now, and I have subsequently quit my position there due to pure disgust with the owners/management in this issue, so even if I were to sue the company, it would be included in a bankruptcy and I'd most likely receive nothing). Thank you for listening and your advice!

I am a 46 y/o who started a Roth IRA this year with an initial lump sum contribution of $4K. After some unwise investment choices that original investment is now worth $3,700. My question is - am I allowed to put in $300 to bring it back up to $4,000 or are my deposits strictly limited to $4000 for the year.

I have not withdrawn any of the funds and do not intend to do so anytime soon. I am simply trying to find out if I can put in additional cash to get back to my $4000 starting point before choosing other invesments within my 401k.

I appreciate any and all responses and advice. If additional info is needed please let me know.

-Dave

This might be too obvious but I am looking for a cite that talks about how the IRS will apply a facts and circumstances standard to determine if there has been a "separation from service" (or "severance from employment" pos-EGTRRA) for distribution purposes.

Does anyone know of one off the top of his/her head?

Would you generally use the Ordinary business income Line 1 Part III or the Total to Schedule K-1 which generally has deductions and shows up in Part II section N when running the ADP and the def. of comp. has no exclusions?

Employer established an agreement with one HCE that provided additional compensation each year calculated like a profit sharing allocation, but not intended to be deposited into their 401k. The purpose was to compensation the employee for the employer's decision to replace the plan's profit sharing with a straight 3% safe harbor. Safe harbor and this agreement was effective 2002.

Staff misinterpretted the agreement and has been each year contributing this additional compensation as an additional safe harbor contribution to the 401k.

Employer has approximately 300 participants

Do we have to go VCP and $5,000 submission for this?