Does Rev. Ruling 2006-36 apply to section a self-insured medical reimbursement plan described in Treas. Reg. section 1.105-11?

The issue in the Rev. Ruling is whether amounts paid to an employee under a reimbursement plan are excludable from the employee's gross income under section 105(b) if the plan provides that amounts may be paid as section 213(d) medical benefits to designated beneficiaries (non-spouse, non-dependents, non-employee).

The answer is no, the amounts are not excludable, and in fact, none of the payments made to any person, including amounts paid to the employee, spouse, or dependents to reimburse medical expenses, are excludable from gross income.

The Rev. Ruling discusses the issue in the context of an HRA, but it seems like this could cover plans described in Treas. Reg. section 1.105-11 (self-insured medical reimbursement plan).

Can anyone shed some light on this?

Thanks!

In order to Pass the ADP Test, can you target 5% QNECs to terminated non-highly compensated employee who had very low gross earnings?

My friend is getting a divorce. She is filing a QDRO for her share of her husband's ESOP, it is a small company, her share will be about $ 200,000 worth of stock. She has heard through the grape vine that she "cannot" cash this in till her ex-husband is 55 years old. But one of their friends that worked at the company cashed his in. She can't ask him because he is friends with her ex. How does she find out about cashing this stock in? I guess the attorney for the company is stepping in and putting his two cents in. Her attorney that is doing her QDRO doesn't seem to understand ESOP's very well, she is paying her $ 2000.00 to file the QDRO but can't seem to answer any of these questions. Go figure. I have tried to read up on ESOP's and I have found that some people do cash them in or the "EX" buys the other out.

A temporary agency (provides individuals for office administrative positions, such as if a secretary is out) wants to set up a 401k but wants to exclude the temps to the extent legally possible. Aside from requiring 1000 hours, is there any other way to exclude individuals? Thanks in advance.

I have an integrated ps plan which has a retirement age of 59 1/2, normal form is lump sum at retirement, but allows annuity options. Also, the death benefit is exclusively annuity forms for over 5000.

My questions are:

1) if i create a NC/CB where the retirement age is 65 for the CB plan. Can I test them both at 65?

2) if 1) is no, how complicated is it to change the retirement age of the PS plan to 65.

Thanks in advance,

Andrew

Revenue Ruling 2007-43 clarified that both vested and non-vested participating employees are taken into account for the partial termination calculation. Is it safe to assume that participating employees means that only active participants are taken into account? It would seem to me that such an interpretation is more in keeping with the spirit of the rule.

The final 415 regulations provide that a multiemployer plan can no longer disaggregate a benefit attributable to contributions from 2 contributing employers for purposes of applying the 415 benefit limit. However, the ability to disaggregate for benefits accrued through 12/31/07 is grandfathered if the plan was amended to allow disaggregation prior to the 4/5/07 effective date of the final regs.

Does anyone have any sense of how this rule would apply to a former single employer plan that converted to multiemployer status under the PPA procedures effective 1/1/06? Specifically, if a participant's benefit from the converted plan is attributable to contributions from 2 employers, but the contributions of one employer were all for years prior to 1/1/06 when the plan was a single, would the plan still be able to disaggregate for the entire benefit accrued through 12/31/07? Or would disaggregation only apply to the portion of the benefit accrued for 2006 and 2007? If the latter, am I correct in assuming that the plan's ability to disaggregate for 2006 and 2007 would effectively be worthless, since the plan only received contributions on the participant's behalf from one employer during those years?

I have not found any IRS guidance on this specific issue, and I fear that none exists, so any insight that anyone might have would be greatly appreciated.

I failed to file the form 5500ez for my retirement plan until this year (It was over 100k by the end of 2003). Now I received a letter from IRS with a penalty of 14,750 for the late filing.

I am looking for professional help who had successful experience in New York or New Jersey area. Please send your contact information to schow07024@ureach.com, thanks.

A Company was closed for business the last week of 2006.

The Payroll for the 12/22/2006 payroll was paid on 1/3/2007.

My question is do I include this contribution and compensation for ADP testing purposes?

The employees 2006 W-2 does not include this contribution, since it was paid in 2007.

Two companies merging and as a result one plan is terminating. The terminating plan has former employees that were foreign nationals nonresident that have since returned to Italy.

They do not want to take their assets from the terminating plan due to tax issues.

Can the plan transfer the funds from the terminating plan into the other plan? Could they set up IRAs if there is not a QJSA option? Can they purchase an annuity if there is a QJSA?

This is the first company we have worked with that will have employees shared between the US and a foreign country.

A company as two branches each covered by its own PS Plan. Each Plan covers about 70 participants.

Therefore in total the company has over 100 participants, but again, each plan is under 100 participants.

Assuming you meet all the other conditons by having all qualifying assets, do these Plans require IQPA reports?

A ineligible employee was allowed to contribute to the Plan. It was discovered after the Plan Year end 12/31/06.

The excess contribution plus earnings were distributed in 2007.

My question is do I include this excess contribution in Participant Contribution line 2a(2) on Schedule I? Also, do I include the Ineligible employees account balance in the ending plan assets value 1(a)?

It is my understanding that 457 plans must have a plan document in place. If there is not a plan document what are the ramifications and is there a correction program such as those for plans operating under ERISA such as a voluntary correction program.

An underfunded plan covers only the business owner. Because the assets have been less than the present value of the accrued benefit for the last several years the prior actuary has been calculating the owner's RMD amounts based on the plan assets rather than his pure PVAB. Apparently his reasoning is that the owner will never get the PVAB, so the assets are the PVAB. In effect he's carrying the "account balance" method to the exterme. Is there any basis for this?

Issues: A new contractor remits contributions to our Funds - as per policy, a request for the company's signature page of their CBA is forwarded to the respective Union. The Union responds, 'No Contract'. It is confirmed with the hall that no agreement exists between the Union and the company. What is the basis for the Funds to collect contributions from the company? Now comes the domino effect: How does a plan administrator go about verifying the contributions from the non-signatory through a payroll compliance audit? How does the Delinquency Department or Fund counsel pursue the company for possible delinquent contributions if the company inconsistently reports (i.e. contributions are remitted for August, no report filed for September, October but remits for December - reporting gaps)? Does the Fund Office credit hours for future unreported hours claims by members that may have worked for this non-signatory?

Ultimately my question is this...Do the Funds accept or <gulp> refund the contributions in this case? (I gulp at whether these are actually plan assets) I understand that this is a widespread problem that is both procedural and political in nature. I am especially fearful for the Funds' position when considering Lawrence Beebe's evaluation of the insolvency of Roofers Local Union 30 citing inadequecies of the Roofers' organizers/Business Agents to follow through.

Advice? Similiar problems?

A builder, who earned in the 7 digits last year, is concerned that the market might go south and he would not have the funds to fund a plain, one part DB plan in a down year. I understand that the funding requirement is somewhat based on income, yet what other considerations should be given if in fact he can not fully fund the plan? He wants to put away as much as possible. What would be the pros/cons of overfunding the plan in a good year, to make up for a possible future underfunding?

When exactly did the HCE/nondiscrimination rules become effective under TRA 86? I believe those rules became effective for plan years after December 31, 1988. Does that sound right?

Hi, i need some help. I have a client that wants to setup a HDHP with an HSA as opposed to being on the employer group plan. The employer is ok with this and wants to fund up to what it would cost to cover her faimly on the group plan. What is the legal and best way to accomplish this goal. I have been told that it isn't legal for the employer to pay for an individual hdhp premium. Is there any other option besides just raiseing the employee's salary to compensate for the HDHP premium and HSA contribution ? I'm also concerned about how this applies to other employees who are on the group health plan. Is it ok to have one employee setup this way and the others stay on the group plan ?

thanks alot for your help.

My husband's plant closed and we would like to use the money in his 401k to pay off our house. He can withdraw the money with a 10% penalty since he will no longer be working for them. My question is... can he withdraw some this year and some next? Or is the withdrawal a one time deal. I want it to hurt the least at tax time. We would end up paying $30,000 in interest on the house so if I keep the penalty around that I'm happy. We need $71,000 to pay it off.

Cross-Tested plan where each eligible employee constitutes a distinct and separate class. Employer decided what Profit Sharing amount to contribute for each NHCE class before the plan year-end and sent in the funds and had it allocated (before the 06/30 plan year end).

The plan has a last day and 1000 hour requirement, so as you have already guessed, a handful of these "classes" have been assigned money by the employer which is now sitting there, but no one in that class is eligible for it.

The document states to apply forfeitures during the next plan year - 1st for expenses, 2nd to reduce contributions.

The plan passes 401(a)(4) even without these handful of NHCEs getting their P/S allocation (it passes coverage too, even without them getting this).

The employer would like to amend the plan to remove the last day / 1000 hour requirement for last year and for future years. No HCE would be affected for last year (none quit, all had 1000+ hours).

The employer would like to adopt a 100% immediate vesting schedule as well to have these funds vested for these NHCEs. The HCEs are all already 100% vested.

I don't see where this retroactive amendment would violate 411(d)(6), but I'm not confident that it would be allowable due to its retroactive nature (since we are past the year end).

What would you suggest?

edit: typo