Please disregard.

Have a great day.

A 401(k) with Safe Harbor had 2 participants become eligible in November 2006. The plan contributes the safe harbor at the same time as deferrals. The two participants chose not to defer and were overlooked for the safe harbor contribution. How should we fix this?

Also, what compensation would be used to base the safe harbor contribution on? Would they receive 3% for all comp in 2006 or only the comp after eligibility?

Our firm is not involved with 412(i) plans, but we were asked if we knew anyone who could review a 412(i) plan document.

If you know of any 412(i) plan document attorneys, please let me know.

-Thanks!

Not sure if anyone has heard about this bill recently proposed, but it seems to make sense to me. A postponement of the funding rules effective date from 2008 to 2009 sure seems in order given the state of guidance available.

Plan Advisor on HR 3868

I wrote my congressman; might not be a bad thing to do by other members of the board (what's that old saying about you can't complain if you don't speak up).

We have heard that a 204(h) notice may be required to be distributed by November 16th to notify employees of the reduction in lump sum values that will occur effective 1-1-08 as a result of implementation of the new 417(e) interest and mortality rates under the PPA.

Anybody heard otherwise?

When does a distribution form a governmental 457 not require 20% withholding? Does the age of the participant have anything to do with it? For example, is a participant that is older than 59 1/2 subject to the 20% withholding requirement? Or is that still considered an "eligible rollover distribution."

Thank-you.

Does anyone have working knowledge or documentation on whether or not an EE may contribute to a MERP?

I have been writing a number of bridge plans, using a HDHP and traditional HRA. However, clients have inquired as to whether or not they can have the EE contribute (particularly for anything above an EE enrollment) to reduce the liability. I have seen some vague reference to this on the internet and was looking for better evidence.

Shortly prior to end of 2006 Employer segregated out terminated participant's accounts and proposed to pay them out. 1099-R was issued, however, admin personnel never sent check. Thus, account balance stayed in segregated account until recent plan internal audit (not IRS). Off the top of my head appears that reasonable correction would be to issue corrected 1099-R's (if possible) and distribute out acct balances plus the higher of rate of return for period in question or IRS underpayment rate under §6621. There are also the distribution forms issues as well. Any suggestions appreciated. Thanks.

Any of you ASPPA D.C. conference attendees have any good insights or anything new on the AFTAP certification for 2008 distributions. I've read the ASPPA asap notice sent out a few weeks ago and a few other articles, but still would appreciate hearing anything anyone found notable or particularly interesting at the conference. Any particular session especially helpful for those of us relegated to buying the conference CDs when they're available ?

A 401(k) plan participant has been receiving RMDs since s/he turned age 70 1/2 (having previously retired). This year, he decides to purchase an annuity contract with his remaining account balance with payments to begin as of 1/1/2008. He has not as yet received his RMD from the DC plan for 2007. Question: is he required to receive his 2007 RMD before the balance can be applied to purchase the annuity contract?

For a 9/30 year end, an HCE has to take a refund to pass ADP. They had put in the 402g limit for the year between 1/1 and 9/30. Can they re-deposit their refund for the next (10/1 - 12/31) quarter? If so, their W-2 would show an amount in excess of the limit, and they would receive a 1099-R in the amount of the excess, correct?

A not for profit company is all HCE's and wants to establish a Flexible Spending Account program. I know that the HCEs and Key employees have to pass tests so the plan does not discriminate. But can the plan consist of all HCEs?

Situation: Before 2004, ER issued 30 shares of discounted, restricted stock to EE subject to a repurchase per formulaic price. No additional shares were granted after that. Repurchase is triggered by the EE's death or the ER giving notice to the EE after the termination of employment, which the ER could delay doing. Payout is withing 90 days of either repurchase event. Once the ER gives notice to repurchase, the EE can per original grant provisions postpone the repurchase of the 30 shares by 6 months for every 12 months worked after grant of restricted stock. Employment ended in mid-2006; ER chose to and gave notice in 2006; but before payout during the 90 days occurred--and yet in 2006--EE exercised right to defer the repurchase on the 30 shares per the 6-months-for-every-12-months provision. This extends payment to 2009.

No material (or other) modifications have been made to the arrangement, either before or after October 3, 2004.

This looks to me to be discounted stock appreciation rights.

Q1: Does appreciation in the value of the 30 shares of stock after 2004 count as compensation earned and vested after 2004, which would then be subject to 409A?

Q2: Does 409A apply regardless of the dates because it is discounted stock rights?

Q3: Does the ER choosing to give notice of repurchase in 2006 rather than in a later year constitute an exercise that makes payment an impermissible one subject to 409A taxes?

Q4: Does the EE exercising the right to defer after a post-employment notice from the ER, and the repurchase price otherwise became payable in 2006, trigger application of 409A to the arrangement either at that time or back to 1/1/2005?

deleted - discussed in separate topic.

ER sponsors fully insured plan for acquired division's employees and self-insured plans for all other employees.

Fully insured plan year ends July 31. Self insured plan year ends December 31.

Can employees in fully insured plan switch to and enroll in self-insured plan effective August 1 in connection with open enrollment in fully insured plan?

Thanks!

Shortly prior to end of 2006 Employer segregated out terminated participant's accounts and proposed to pay them out. 1099-R was issued, however, admin personnel never sent check. Thus, account balance stayed in segregated account until recent plan internal audit (not IRS). Off the top of my head appears that reasonable correction would be to issue corrected 1099-R's (if possible) and distribute out acct balances plus the higher of rate of return for period in question or IRS underpayment rate under §6621. There are also the distribution forms issues as well. Any suggestions appreciated. Thanks.

Employer is withdrawing from multiemployer plan. WL to be paid over 20 years. If employer pays WL, let's say, as a lump sum,

1) how will the payment be treated for tax purposes? (Difference between book and tax???)

2) Will the payment based on the 20-yr amortization be deductible each year for 20 years or can deductions be accelerated?

3) Can liabilities be recorded on a net of tax basis?

I have a doctor aged 72 with his own practice that needs to take an RMD from his Profit Sharing plan this year. His broker told him he could take this RMD and send it directly to charity.

My question is does this IRA Charitable Rollover apply to Profit Sharing Plans, or only to IRA's? If it applies to Profit Sharing Plans, how is the 1099-R coded? Thanks.

Is a Wellness Program that offers cash incentives for such activities as completing a wellness assessment, viewing on-line seminars, etc. a "group health plan" subject to COBRA? What if the Wellness Program also has a disease management piece in that it reaches out to employees who have certain diseases (asthma, diabetes, etc.) to give them advice and coaching to manage their disease? Any thoughts would be appreciated!!

We have a 457(f) plan that pays benefits in a lump sum within 2-1/2 months following the end of the plan year in which the participant completes 10 years of service. We meet the STD there. The problem is that the plan allows the participant to extend the distribution date for 5 years beyond the otherwise applicable distribution date. We still have a SRF for purposes of 457(f), so no income inclusion. My understanding is that the SRF would be shot for purposes of 409A and now we have to make this payment comply with 409A. Does that sound right? Need more info?