This firm's joint venture with UnitedHealthcare being rolled out nationwide (feature article in yesterday's USA Today) allows employers sponsoring $2,500 high single annual deductible plans to roll back same to $500 provided consumers pass four tests.

How does the fact that employer cost is insured through supplemental coverage obviate fact that it constitutes illegal discrimination based on health status?

A handful of employees have joined the ranks of the 'Working Aged' and are opting for Medicare as their primary insurance. I am being instructed that the employer will pay for the supplemental policy and that it is a deductible expense. All the references I can find say the opposite.

Could somebody please direct me to the actual rule. Either way, allowable or not, I need to be able to cite an authority rather than 'everybody says'.

Thank you,

gf

Question 1: Is it definitely required to re-adopt the EGTRRA good-faith amendment for a post-GUST plan restatement? (getting conflicting answers from different sources)

Question 2: If it is required and the re-adoption was not done at time of restatement, is it a self-correction situation or is an IRS correction filing required?

Situation: We restated a client's plan using a volume submitter plan back in 2003 for GUST. At that time the client also adopted a good-faith EGTRRA amendment, and a final RMD amendment. In 2006, the client wanted to change their elig. and a few other discretionary plan features. We restated the plan in entirety, but did not re-adopt any interim amendments.

We justified our action after reading Rev Proc 2005-66, Section 5. Also, Rev. Proc 2005-66, Section 6.03 kind of infers that if it was unintentional that we can still fix through the end of the EGTRRA RAP.

Any thoughts are appreciated.

Based on a non-random, too-small sample of 16 corporate sponsors of DB pension plans with fiscal years ending 12/31, about 1/2 used 5.75% as the end of year disclosure discount rate for their pension plans and about half used 6%. I know this is really, really hard for you actuaries, but I conclude from this that the world at large was disclosing at more or less 5.875% on 12/31/06.

Now transport yourself a couple months into the future when the disclosures as of 6/30/07 are being made public. What do you suppose the 5.875% will have moved to?

I could offer a prize to be awarded this fall to the responder who comes closest. But, nah.

How are employers/sponsors dealing with the PPA requirement to provide participants with a notice that describes the investment options available and fees if a distribution from the plan is deferred? Are they changing their 402(f) notices, adding something to the distribution form, etc? I haven't seen any firms really complying with this yet...

Can K-1 Wages be used to allocate employer contributions?

A large profit sharing plan is in the process of terminating. At the beginning of the year it still had account balances for more than 100 participants.

Is an audit still required in this instance or could there be an exception available that would enable them not to incur the expense of an audit?

I do not see that they would qualify for a waiver 2520.104-46 since that applies only to plan with fewer than 100 participants.

Thanks for the assistance

Client has a large number of employees who normally work fewer than 20 hours/week, but occasionally someone will work over 1,000 hours during a year. Under the plan, once an employee hits the 1,000 hour mark, he or she may contribute to the plan for the remainder of the year (but no contributions allowed come January 1).

Arguably this is a reasonable interpretation of the exception to the universal availability rule, but it doesn't comply with the proposed regulations, so the client is planning to change to comply with the definition in the regs (assuming the definition carries over to the final regs coming out any minute now).

The proposed regs (1.403(b)-5(b)(4)(ii)(E)) indicate that an employee falls into the fewer-than-20-hours group "if and only if" (1) in the employee's first 12-month period the employer does not expect the employee to work more than 1,000 hours, and (2) for "each plan year" afterwards the employee works fewer than 1,000 hours in the preceding year.

It is not clear to me whether an employee who hits the 1,000 hour mark will ever again be excluded under this rule. The "if and only if" language is quite strict, and once an employee hits the 1,000 hour mark it appears the second prong is blown -- the employee is not under 1,000 hours "for each plan year" after the initial 12-month period.

How have others been interpreting this language? I haven't come across any guidance or commentary on this specific issue.

I'm just looking for confirmation that the rules I remember for leased employees haven't changed.

My recollection is that a leased employee can be excluded from the leasing company's plan (plan in place at the company where they are performing services) for the first year, but after that they must be covered under the leasing company's plan -- unless the leased employees are covered by a 10% money purchase plan sponsored by the leasing organization (the company that leases them out).

Is that still the case?

Hello.

My boss has taken a client that has not filed a 5500 for his plan since 2001. The client wants all past 5500s completed and filed including that of 2006.

The trust and accounting records are not the best and I'm having a bit of difficulty producing adequately completed 5500s for all the past years.

The plan is on a calendar year basis for filing purposes and July 31st is approaching fast.

My question is would it be prudent to file an extension for the 2006 Form 5500 while I complete all the past years?

My boss thinks that filing an extension for 2006 would put the gov. on notice which would result in the DOL sending a letter to the client re past missed filings which would disqualify the client from using the delinquent filer program.

My opinion is that the extension is filed with the IRS and that notices from the IRS don't disqualify delinquent filers from the DFVCP.

Any help with this matter is greatly appreciated. Thank you.

We are considering taking over a multiple-employer plan. The 5500 which was prepared by the current TPA was coded as a single emplyer plan. The plan covers a group of unrelated business entities that share a common trust. The current TPA stated that for 5500 purposes it is possible for a multiple-employer plan to file as a single employer.

Is anyone aware of any exceptions that allow a multiple- employer plan to file as a single employer for the 5500 filing?

There are several times during the year when I want to batch print one report for many companies. In the group I have set up, some Plans are calendar year and some are fiscal year. The date I would like to print is for what ever is the last date of the latest plan year on my computer. When I try to print, there is almost always a few Plans that won't print. Now Relius will not let me delete these plans without a lot of bother in actually changing the group.

I have found that some choices for date work better than others. Plan year is the best choice I have found. I would like to hear what the best choice for date other people have found.

Thanks.

1. The final regs say that installment payments that are not an annuity are considered a "single payment" unless the plan specifically states that each scheduled payment is considered a "separate payment." Reg. 1.409A-2(b)(2)(iii) What does this mean?

2. I have an arrangement where employees elected deferred compensation payments in 5 annual installments. An idea was that the employee could elect to change the payment date on the first installment under the 1 year/5 year rule, so in a sense the employee making that sort of election every year could indefinitely delay payment, with the only downside being that he or she would have to be paid out over 5 years.

3. Now if the installment payments are considered a "single payment," does this mean that the election to delay under the 1 year/5 year rule would mean that none of the installment payments could begin until 5 years after the originally elected payment date, but that the entire thing could be paid as a lump sum then?

4. If the installment payments are designated as separate payments, does this mean that you could get the "rolling" payment effect described in paragraph 3, but that you could never get a lump sum payment unless you elected to get paid 5 years following the end of the original payment period for the last installment?

If anyone has thought about this, I would appreciate your thoughts.

May a plan provide that if a participant elects an optional form of benefit and the participant dies within one year after the annuity starting date, that the beneficiary receives a minimal pension benefit (defined as same benefits that participant received up to a total of 60 months). But if the participant lives one year then the beneficiary receives benefits under the optional form.

411(a)(3) would seem to permit this. However, Treasury Regulation 1.401(a)-20, Q-10(a)(4) states that once the annuity commencement date occurs a plan must pay the benefit in the distribution form elected. It is my understanding that Treasury Regulation 1.401(a)-20 is directed at the QJSA and QPSA, does it apply to optional forms of benefits in this instance?

Any thoughts? They are greatly appreciated.

The Plan Document for a DB plan states that for early retirement purposes, a year of service is 1000 hours. In actuality, the Plan measures service in "elapsed time." Setting aside the operational failure, can the Plan amend the Plan Document to conform with current practice w/o violating 411's anti-cutback provision?

My initial thought is that this would violate 411. Any thoughts?

1.401(a)(4)-3©(3) --- "safety valve"

I haven't been able to get any good explaination regarding this reg... anyone have any comments?

A company set up a Top Hat plan back in the 90s. We just found out that they did not file a letter with the DOL as required. Is there an amnesty program for this type of error? The company is willing to comply, but we're wondering what penalties might be involved.

A participant has a qualifying change in status (in the particular case in question, a marriage) and changes their Medical FSA election. Their inital annual election was $500. In early April, participant submitted a claim and was reimbursed for $500 with receipts in excess of that amount. Late April, participant marries and changes annual election to $1000. Participant submits claim in July for $490-over half of the receipts submitted with claim are from prior to the qualifying event (marriage). Is participant entitled to reimbursement of the claims incurred before the increase in election or only those incurred after the change in status and election change. Participant is not trying to submit claims for the new spouse from before the marriage...most of the expenses are actually OTC. The question is does the benefit itself cover the participant retroactively even with a prospective election change? My instinct and I believe some backup (changes must be on a prospective basis) indicate that he should only be reimbursed for the expenses incurred after the election change and not those incurred before but it was an interesting question and I wanted to get input from anyone here who has any thoughts.

Has anyone heard of any informal guidance pertaining to the actuarial certification? In particular, how will the EA certify the funded percentage if it is to reflect prior year accrued contributions made after the certification date? Presently, the EA would not sign Schedule B until after receiving evidence that all contributions have been made.

I have some series EE savings bonds from the late 80's and early 90's. I know some are drawing 6% and probably 4% interest. Would it be wise for me to cash these bonds and put the money into a Roth IRA? Or just leave the bonds alone?