California governmental entity sponsors a Section 457 plan and offers investments through one large insurer.

Govt. entity wants to offer CalPERS' 457 plan to employees.

Per CalPERS reps, gov't. entities commonly do this (maintain "private" 457 plan alongside CalPERS), with each provider's plan document governing only those monies invested with the provider. No "global" plan document is prepared.

Participants are notified about keeping deferrals within one single 402(g) annual limit and about making sure beneficiary designations are current under each plan. Also about withdrawal charges if they intend to move money from the insurer to CalPERS.

Questions: have any of you seen arrangements like this? Any thoughts or comments as to such an arrangement?

Clients has an employment agreement with change in control definitions broader than IRC 409A allows. No amounts are actually deferred under the agreement -- the change in control payment is the only provision that triggers IRC 409A. If Client fails to amend their employment agreement to comply with the final IRC 409A regs by 12/31/07, it is subject to a tax on the "amount deferred." (Treas. Decision 9321.) But in this case, there is no amount deferred. Or do we treat the prospective change-of-control payment as the amount deferred for purposes of the penalty? Any insights would be appreciated.

Recently we received a call from a prospective client regarding the proposed design of their new plan. They own two companies. Specifically, they stated that they wanted to cover one company (Company 1) and not another (Company 2). They then went on to say that they have a number of employees who receive pay from both companies. Forgetting the coverage issue that goes with the exclusion of Company 2, my question revolves around the ADP/ACP testing and the people who work for both entities. After some thought, my opinion is that the ADP/ACP tests should initially be run using the plan deferrals and ONLY the compensation from Company 1. The compensation would then have to be tested using the compensation ratio test. If that test is failed, then I would need to use all comp (Company 1 and Company 2) for everyone who worked for both entites. Essentially, all employees who are eligible for the plan would be using all comp earned from the control group. (People who are employed by Company 1 whether or not they also received pay from Company 2.)

Is this clear? Does this sound correct? Any comments would be greatly appreciated

After reviewing the new proposed regulations issued August 3, 2007 by the IRS and published in the Federal Register, I have a question on the implications about group term life insurance, which is now a qualified benefit.

My question: with the new proposed regs, will employers and employees save on payroll taxes for this benefit if it's in a cafeteria plan?

The new proposed regs say: the entire amount of salary reduction and employer flex-credits for group term life insurance on the life of an employee is excludible from the employee's income.

The new proposed regs provide that the employee includes in gross income the Table I cost of the excess coverage (minus all after-tax contributions by the employee for group-term life insurance coverage) and that the entire amount of salary reduction and employer flex-credits for group term life insurance coverage on the life of the employee is excludible from the employee's gross income.

Susan Middaugh, CEBS

Have Pen, Will Travel

Baltimore

410 727-0336

Now that the 5558 is no longer required to be signed and dated, how would we go about showing to a client that we timely filed for an extension. We mailed all of our 5558s in this year. So all we really have is internal documentation. There is no date on the 5558 and we receive nothing back from the government. Has anyone else had to deal with this or does anyone have any suggestions?

Does anyone have any insight into the QDRO qualification process in which a divorce decree is issued from a Canadian court? One of the parties is a participant in 401(k) plan, and the decree entitles his ex-spouse to a portion of his 401(k) account. Since the DRO is not issued from a state court, it seems as though the plan administrator cannot qualify it. What is the process that non-U.S. citizens have to go through to get a QDRO from the appropriate state authority?

To file the PBGC forms electronically, it appears that either (a) the Plan Administrator must give his electronic authorization or (b) the File Coordinator must assume the Plan Administrator role.

I have a number of clients who if a gun were held to their head could not handle the "digital signing" as Plan Administrator. Consequently, the viable alternative is for me to submit the form. However, I surmise that doing so would place me in the role of Plan Administrator which takes on a role that I eschew.

Consequently, it would seem that there should be some sort of waiver I should get the client to execute to permit me to file the form without assuming the responsibility (and liability) of Plan Administrator.

Has anyone crossed this path or am I concerned about woodpeckers in the woodpile?

We have a client that I am desperately trying to convince to go daily val. Presently all money is one master brokerage account and we (the TPA) are responsible for doing quarterly valuations and coordinating with the broker regarding investment trades needed (such as recurring deposits, and account rebalances). I'm sure others are familiar with this nightmare!

My question is, I seem to recall that once upon a time there was an article regarding what a fiduciary nightmare this was.

Does anyone remember seeing this article? Sounds like a stretch, but I've had fruitful results with similar obscure questions!!

The HSA Answer Book, 3rd Edition, has been released.

LINK: HSA Answer Book - Information

Authors: Christine Keller, Esq.; Gary Lesser, Esq.; William "Bill" Sweetnam, Jr., Esq., and Susan Diehl

Aspen Publishers Order Desk: 800-638-8437

Relevant Background Information

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Company A just acquired stock of Company B.

Company B just acquired stock of Company C.

Both events happenned in the last month.

A, B & C all maintained Qualified 401k plans.

Company B has elected to wait the maximum time allowed to merge plan with Company A.

Specific Question

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What are our options with the plan for Company C?

Can we terminate it?

Can we merge it with B's plan prior to merging them all with A?

Thanks!!

Is it possible to eliminate the actuarial equivalent increases for employees working beyond normal retirement age? In the alternative, can we eliminate the actuarial equivalent increase prospectively by splitting the benefit (i.e., accrued benefit up to the effective date of the amendment will continue to be actuarially increased beyond NRA, however, accrued benefits as of the effective date of the amendment and beyond will not receive actuarial equivalent increases)?

Furthermore, please provide thoughts with regard to eliminating the increase for active employees, but retain it for terminated vested employees.

Any cites/authority would be helpful.

Thanks.

Plan has a normal age 21, one year of service requirement, however, in their 1st year of plan allowed immediate entry into the plan IF they were employed on day one of plan. Does the age 21 requirement then become nill? Document just says "any employee employed on 1st day" of plan can have immediate entry. Just wondering because plan has 2 kids(age 10 and 15) who were "employees" as of 1st day of plan(immediate entry.) Thanks.

Linda Michals

I have a client with a calendar year PS/SH 401k plan. We calculated a total contribution due of $63,000 for 2006 which would be due by 9/15/07 (due date of corporate tax return).

The client is having a hard time coming up with the money. If the client doesn't deduct the $63,000 contribution on his 2006 corporate tax return, does this mean he can take until 10/15/07 to make the $63,000 contribution for 2006?

Thanks.

I have been trying to find answers regarding my brothers 401K.

I am his only survivor and last Aug when he died I applied to be administrator.

The attorney that I talked to today had a big web site and it stated that they were ERISA attorneys and did free consultations.

I called and someone ask me a lot of details and then told me that the senior attorney would call me toda but I had to give them a 250.00 deposit over the phone.

I was to call at 2:00 and have up to a 30' consultation. Well I thought that finally I would get some answers.

I didn't talk to the attorney that I was told I would have the consultation with and then after explaining things he could not give me one answer.

I didn't learn anything more than before I had the consultation.

In order for him to have any answers he wanted a 7500.00 retainer.

I ask him if he could not give me any answers what did I get for the 250 dollars. He said it was all complicated.

So now this is the third attorney that I have paid and I have nothing in return.

In a brief description my brother was divorced three times he made me beneificary of his life insurance and he told me I was beneficiary of his benefits.

It turns out that he never got the second wife off of his 401K as the beneificary and after talking to his third wife she said that he had always told her that he had made her beneificary when they were married.

Fidelity says they don't show any beneficary and the company attorney was the one the told the first attorney that he never got his second wife off.

From what I read of the summary plan benefit after a year if the beneificary had not made a claim it would go to the estate.

Also in the divorce decree she waived it and it is very specific in the wording.

The money is still in the account and I don't think she would have any idea that she was listed.

I have not been demanding with these attorneys they just tell me things and I pay them and find out they don't know anything about ERISA.

HELP please I can't keep going through this on top of the grief of his death.

dulan

What is the treatment of employer stock (not cash) that is distributed out of an ESOP to a participant? Reported on a 1099-R? Is the participant given capital gain treatment upon his sale of the stock? If so, how is basis for the participant calculated?

Has anyone an idea when final 404© default investment alternative regulations might be issued?

Client has welfare benefit plans. Employer pays premiums (no cafeteria arrangement).

Each welfare benefit plan has over 100 participants.

I am looking for a "Wrap Document" in order to cover these welfare benefit plans and file only 1 Form 5500.

I can only find a cafeteria plan document, which refers to pre-tax arrangements.

Our current document provider offers retirement plan and cafeteria plan documents only.

Rather than editing a cafeteria plan document to eliminate and/or insert certain language, I was hoping someone could refer me to a document provider that offers a "Wrap Document" or perhaps is aware of a model that I could use.

Appreciate any help and guidance. Thank You

An employer has a short term training program (90 days) and provides the short term employees with a 90-day health plan.

The plan appears to be covered by COBRA--group health plan for employer with 20 or more employees--but the application of COBRA to this plan seems strange (for lack of a better word).

It appears that if an employee quit the training program or was fired on day 89, and therefore had a qualifying event, the employee would be entitled to 18 months of COBRA coverage. While seemingly the correct answer, it seems odd for an employee to get the 18 months of COBRA coverage from a short term 90-day health plan.

Any thoughts? Am I missing an obvious exception under COBRA?

Thanks.

Historically, many sponsors have allowed plan participants to make exchanges to a number of different providers. How are sponsors now supposed to make sure that all of these providers will comply with the information sharing requirements?

The regs seem to make sense for "new" money, but I don't see where they address "old" money.