If a plan has any eligible employees away on USERRA-protected active duty, can the plan be terminated?

If so, how does the employer honor the obligation to make USERRA-required contributions upon the employee returning from that active duty after the plan's been terminated?

Contributions to a qualified plan by a sole proprietor are excluded from gross income but subject to self employment taxes. If that sole proprietor sets up an LLC and elects to be taxed as a corporation, can they avoid the self employment tax? What if they are the only member?

DoL Tech Release #92-01 exempts cafeteria plans that do not voluntarily create a trust from the ERISA requirement to have a trust. If the sole source out of which benefit claims are paid is the general assets of the employer, then the cafeteria plan has not voluntarily created a trust as to which the ERISA trust rules apply.

If such an employer chooses to pre-pay debit cards in the amount of the medical flex accounts elected by employees, by transferring funds of the employer at the beginning of the year to the issuer of the debit card, has the employer voluntarily created a trust (i.e., the pre-paid debt cards) that is subject to ERISA trust rules?

Any citations to applicable DoL authority would be appreciated. Thank you.

One person doctor corporation. For 2005, we told the doctor that he could contribute $14,000 401k plus $28,000 profit sharing. He deposited the $28,000, and his 2005 W-2 shows the $14,000 deferral.

However, he never deposited the deferral. Is it too late? He files a 5500EZ so DOL probably not an issue.

Med

Doctor group wants 3 tiered CB formula (10k, 25k, 50k) where each doctor will initially choose which formula they want to be under and plan doc will be drafted accordingly. Only Doctors will be in the plan as plan easily passes 401(a)(26) as they're emergency room docs with few staff ee's. Plan is aggregated with existing PS plan using permissive aggregation, staff ee's under the PS benefit under rich formula 16% formula (this level of contribution has more to do with their historical benefits package than discrimination testing though it is sufficient to pass 401(a)(4) on an aggregated basis).

Anyone have any problem with naming names in the CB plan doc in a case like this. Maybe something like:

Group A will get 10k and consists of: Dr. A, Dr. B, Dr. C

Group B will get 25k and consists of: Dr. D., E., F.

Group C will get 50k and consits of: Dr. G, H, I, etc...

I assume I can use a flat dollar amount instead if % of compensation, so I guess I'm mostly wanting to check on using names instead of job classifications. Do I need to pass the 401(a)(4) using the 70% test instead of ABPT ?

I have an employer with a 403(b) plan. The matching formula they are currently using is 100% match up to 2% of deferrals after 1 year of service. Then 100% match up to 4% of deferrals after 2 years of service.

I understand that this Plan needs to be ACP Tested. Is this formula allowable?

Thank you!!!

Linda

This is about as basic a 403b question as it gets: It seems like there is very little in the way of information that is needed when preparing a 5500 for a 403(b). Am I reading the instructions correctly that only the Form 5500 needs filed and that there are no schedules that need to be attached (e.g., not schedule H/I financial information)? Furthermore, participant count information on the 5500 is also not needed (line 6&7)?

Finally, if the above is true, then does the SAR omit the financial and participant count information as well?

Thanks for your help.

I am looking at a contract with an IRA vendor for purposes of implementing the automatic rollover process. According to IRS Notice 2007-7, the PPA expansion allowing nonspouse beneficiaries to make rollovers does not apply for purposes of Code Section 401(a)(31)(B), the automatic rollover provisions. Does this mean that if one extends the automatic rollover provision to nonspouse beneficiaries, the automatic rollover does not get the protection of ERISA Section 404©(3)?

It is my understanding that on and after 8/25/07 if assets are exchanged from one vendor to another and information sharing agreement may be required. That is, share information re loans, hardships, distributions, etc.

However, if an employee does not exchange assets, the information sharing portion goes into effect on January 1, 2009 when the plan document is in place. So, if an employee wants to take out a loan from an existing vendor before January 1, 2007, that can be done without first going to the employee to see if any other vendor offered a loan.

Is this correct?

well, ok, here is an attempt to pull/sort whatever

age 55 and 10 years participation for purposes of diversification

this report adds 10 years to date of entry

adds 55 to date of birth

then takes the later of the 2.

I suppose if someone doesn't complete a year of participation, then of course 10 years of participation will be wrong, so in fairness years of participation are printed. If ee terminated with less than 10 years of participation it will indicate ee not eligible to diversify.

and there is a note to indicate which year of diversification ee supposedly is in

(it will be negative if ee has not reached year of diversification.)

what the heck. its a free report, use at own risk

I guess I am confused. I am preparing an SAR for a welfare benefit plan. THe plan has health & dental insurance. Do I need to include specific insurance information on the SAR? By insurance information - I mean does the SAR need to include who the employer has contracts with and how much it paid in premiums?

I am confused because

1. the employer has a master group policy - does this mean the above info is not needed?

2. My software is not including the additional info which makes me think it's not necessary.

Thank you!

I guess I am confused. I am preparing an SAR for a welfare benefit plan. THe plan has health & dental insurance. Do I need to include specific insurance information on the SAR? By insurance information - I mean does the SAR need to include who the employer has contracts with and how much it paid in premiums?

I am confused because

1. the employer has a master group policy - does this mean the above info is not needed?

2. My software is not including the additional info which makes me think it's not necessary.

Thank you!

I have a prospective New Comp plan that is considering a Roth 401k feature. Do the Roth 401k deferrals effect the employer contribution to the New Comp plan any differently than they would if they were from a traditional 401k plan with regards to limits and testing?? Thanks.

On schedule H, is the value of "benefits responsive" insurance contracts reported at fair market value or contract value?

The instructions to Schedule H say use the same basis as line 3 or line 6 on schedule a, but the instructions in those line items don't tell you what basis to use?

Is anyone inquiring regarding Fair Market value? Is there anything published which explicity states contract vs. fair value?

Greetings-

I realize that this forum deals with some very advanced and complicated 403b issues and many of you are professionals with a focus in Fiduciary Guidance. So forgive the ignorance implicit in my posting. However I do think this relatively general question and the corresponding input may be a valuable contribution to this forum.

Background:

I am the CFO for a small 501c3. I am a CPA but know very little about administering 403b plans. I do the payroll in-house using Quickbooks. We have 5 employees and I have been tasked with setting up our 1st 403b plan. There will be a 1% employer contribution to the new 403b. I know we are required to be ERISA compliant. We plan on hiring a professional to draft our Summary of Plan Description.

Questions:

What kind of time will I have to put in on a monthly basis to maintain our 403b once it's set up and running?

Is maintaining our 403b something that requires expertise above and beyond prudent investor level?

Am I getting in way over my head?

Is it practical to set up a 403b Plan for a 501c3 that is small and operating with a limited admin and overhead budget?

The company owner "borrowed" $100,000 from the plan a few years ago. He has been paying 8% interest on the loan to the plan, but no principal payments.

Line 4d of Schedule I asks if during the year were there any nonexempt transactions with a party in interest.

The original transaction occured in a prior year. For excise tax purposes on the prohited transaction, I know each year that it is not corrected it is considered a new loan for calculating the tax.

Would this "loan" be put on line 4d each year until it is corrected, or would it be put on line 4d only in the year that the original tranaction took place.

Thanks.

Safe Harbor plan using 3% nonelective. The plan was prepared with an effective date of 7-1-07. The document defined the first plan year as a short PY (7-1 to 12-31). The 3% nonelective is based on compensation for the plan year. For the first year that means from 7-1.

Can the plan be amended now to state the first plan year will be from 1-1 thru 12-31 and still retain its Safe Harbor status inasmuch as the S-H Notice already distributed defined the first plan year as a short PY?

Also - if the Safe Harbor Notice already distributed didn't mention a Match (other Employer contributions), can the plan (same plan as above) be amended to include a Match without jeopardizing the Safe Harbor status?

Can a flexible spending account and a limited purpose flexible spending account (offered in conjunction with an HSA and HDHP) be combined and filed on one Form 5500?

A doctor uses only leased employees. Currently he makes no contributions on behalf of those leased employees. His current plan's contributions mirror those allowed in the leasing organization's plan; deferrals, safe harbor match, and discretionary profit sharing (3% of pay). The 3% profit sharing is proving not to be enough for the doctor's retirement needs.

Since the profit sharing is discretionary, can he increase his profit sharing to (let's say) 10% for himself and contribute an additional 7% on behalf of the leased employees to make sure that his plan passes coverage?

Any thoughts or concerns are greatly appreciated.

We have a client that changed service providers at the end of 2006, and the new provider made the client amend and restate to the provider's document platform. The client also decided to add Roth 401(k) contributions. The problem is that it is now August and nobody bothered to inform participants that they now have the ability to designate pre-tax elective deferrals as Roth Contributions.

Anyone else have this problem?