Are there lump sum options where the EE and EER can prepay the HI tax on SERP distributions? If so, is the SERP required to notify the EE of the lump sum HI tax prepayment option?

I prepare QDROs. Lately I've had a rash of IRA cases in which the IRA Custodian requires a "QDRO" and requires that the Account Holder sign a Letter of Instruction (which essentially recaps the "QDRO."). In addition, the Custodians usually require that the Account Holder obtain a medallion guarantee on his signature.

I know it sound like a tivial problem, but what about the case where the Account Holder is no longer around?

Has anyone successfully challenged the IRA Custodian on the LOI requirement? What techniques are you using to effect the transfer of funds for the IRAs?

I prepare QDROs. Lately I've had a rash of IRA cases in which the IRA Custodian requires a "QDRO" and requires that the Account Holder sign a Letter of Instruction (which essentially recaps the "QDRO."). In addition, the Custodians usually require that the Account Holder obtain a medallion guarantee on his signature.

I know it sound like a tivial problem, but what about the case where the Account Holder is no longer around?

Has anyone successfully challenged the IRA Custodian on the LOI requirement? What techniques are you using to effect the transfer of funds for the IRAs?

As we know the 409(p) regs define deemed owned shares as shares allocated to a person's account plus their share of unallocated shares determined using the same proportion of shares they received in the most recent allocation. Assume for a moment that a participant retires in 2006 and gets an allocation of shares. Because he has retired, he will obviously not be getting any future allocation of shares. Assume further that allocating the unallocated shares to him results in his becoming a disqualified person and a nonallocation year. Admittedly not that likely, but possible. It appears that under the reg. he would have to receive an allocation of unallocated, even though it will never happen. Can anyone justify computing the deemed owned shares without the retired person getting an allocation of unallocated? I would think if this approach could even be justified, you would have to do it for all similarly situated participants like other terminated participants who got an allocation in 2006, and the results might not be any better than following the regs. Just wondering what the community thinks.

(Obviously in 2007 he will not get an allocation of unallocated, but if there was a nonallocation year in 2006, the plan might not make it through 2007.)

I wanted to know if anyone here has experience in purchasing pre-IPO stock using their IRA?

I am looking to purchase shares from a current stockholder in the company. The company will allow the sale of the shares, just have to get approval.

Thanks,

Rick

Does anyone know what will constitute required quarterly contributions for 2008 plan years? Will it be based on whether the DB plan was 100% funded in 2007 (pre PPA law- 412) or will it be based on whether there is a funding target shortfall in 2007 (PPA 430)? Thanks.

Our plan is missing the mandatory distribution amendment. We can not find it in our files. Our former TPA had all of its documents seized by the DOL, so their copy is also not available.

Is there a procedure for replacing a lost document?

Searched for this issue but did not find anything on point and would be grateful for anybody that might point me in the right direction for further research.

Our company received a request from the lawyer of one of our participants who was recently injured in a car accident. Per our arrangement with our TPA, the TPA is seeking subrogation / reimbursement for the health plan amounts paid on the injured participant's behalf. The lawyer has written back requesting all variety of plan documents so they can determine if our plan has an acceptable reimbursement policy. They also include a lengthy warning reminding us of the penalties for failure to respond within 30 days and for taking any action against the participant for exercising his ERISA rights. One of their requests is for certification by the Dept. of Labor that our plan is an approved ERISA Plan. In addition, they note that any reimbursement they make will be offset by a pro rata share of the attorney's 1/3 contingency fee.

I have never seen such a letter before and was just wondering if this was familiar to others? The whole thing seems a bit suspicious to me--as if it is intended either to try and scare us away from enforcing the subrogation provision and/or possibly to cause us some exposure to ERISA penalties or weakened position on the reimbursement request for failure to provide all possible plan documents in a timely fashion.

Also, I have never heard of anything along the lines of the DOL certifying that a plan is an "approved" ERISA plan so don't know where that comes from. Anybody ever seen a similar request before.

Finally, my vary limited research suggests that offsetting the reimbursement recovery for attorney fees may be possible and that this is an issue that appears to vary from circuit to circuit.

Anybody able to shed any light on these items? Thanks.

A floor offset plan is established and an employee after several years develops an accrued benefit (net of the offset) which is $1,000.

Can this benefit be decreased in subsequent years due to the following:

1 No additional accruals in the DB (for some reason) but the DC balance is increasing.

2 Better than average investment results in the DC

OR must the $1,000 be grandfathered.

Thanks for any and all comments.

As long as I'm at it (see previous post), does anyone have any thoughts on allowing participants to direct investment of their 457(b) plan accounts in in long-term care insurance? I am aware of the PPA of 2006 provision allowing certain public employees to escape taxation on distributions of up to $3,000 to purchase long term care insurance, but here I'm talking about purchase of such policies inside the plan.

Issues that come to my mind are whether long term care insurance is an investment and valuation of the policy upon distribution.

Any thoughts/insights would be greatly appreciated.

I'm thinking no

I am finding conflicting information on the tax treatment of life insurance policies held in a 457(b) plan of a governmental employer and nothing definitive. Reg. Section 1.457-10(d), which appears to apply equally to non-profit employer plans and governemental employer plans, provides that "no amount paid or made avialable under an eligible plan as death benefits or life insurance proceeds is excludable from gross income under section 101." The fact that benefits are taxed on the back end suggests to me that participants would not be taxed on the economic benefit of premiums as paid, but I am finding secondary source materials that suggest that they in fact should be.

Is anyone aware guidance on this issue that I should be considering?

Thanks.

Can a Money Purchase Plan be merged into a 401(k) Plan?

A plan excludes EE covered under a CBA. The same plan includes HCEs. Some HCEs are union members and want to participate in the union-sponsored plan.

How should these people be treated for 410(b) testing purposes?

Client has a 457(f) salary deferral plan that began pre-2005. Clearly the amounts attributable to 2005 and later are subject to 409A. My first question is whether pre-2005 salary deferrals are grandfathered; second, if grandfathered, will a termination of the plan be a material modification that would subject the grandfathered amounts to 409A? Would freezing the plan be the best option at this point?

A client that is forming a TPA business is interested in learning what software package for preparing Forms 5500, Forms 945 and Forms 1099-R might be best (usability and price). Plan documents are not needed, just the preparation of these forms as listed.

The client only knows, at this point, of Datair's package for doing so, but isn't sure how it would even work because Datair plan documents will not be used.

An suggestions that I might be able to pass along?

I am interested in VEBAs that provide medical benefits (retiree medical benefits, so much the better) and use life insurance as a funding vehicle. I would like names of providers or consultants that I could contact. I would also welcome general comments on the arrangement.

A company in the US has a 410(k) plan. They are part of a controlled group with a company in Canada. The company in Canada is a separate company and not eligible for the 401(k) plan of the company in the US.

One of the workers at the company in Canada goes to work for the company in the US. So he is now eligible for the 401(k) plan.

I'm confused on if you would consider his wages at the company in Canada in determining his HC status. If so, how is that done?

I have an employer that would like to establish a profit sharing plan and exclude all non-retiring employees. Basically they would like to only give contributions to employees that are retiring and have reached NRA. My initial thought is that this probably wouldn't be permitted as it may be seen to skirt the maximum age requirement of age 21. Any thoughts or other opinions?

I'm working on coverage testing for the 2004 plan year (working on clean up of a plan that had many issues) for a controlled group of employers. They sponsor 3 plans. Plans will be aggregated for testing purposes.

I am trying to make sure that my coverage testing will not affect my options for the ADP test - which will fail, and will be corrected under EPCRS.

I have DF, MT and ER contributions. I know that otherwise excludable employee disaggregation can be separately elected for each portion of a plan. But I know that I can't disaggregate for the 401k portion or 401m portion for the 2004 year, since I can't do it for the ADP/ACP testing. However, I would like to use it for the 401a portion since I have one plan with immediate eligibility for the ER contribution.

My bosses comments: "The problem I am having with testing otherwise excludables for coverage when not permitted to test separately for ADP/ACP purposes because of the provisions of EPCRS concerning the one-for-one correction for failing to correct within 12 months. Specifically, Appendix B, 2.01(1)(b) states: "Under this correction method, a plan may not be treated as two separate plans, one covering otherwise excludable employees and the other covering all other employees (as permitted in sec 1.410(b)-6(b)(3))."

The problem is that this statement from EPCRS is very broad. It could be interpreted to include coverage, or not. The other thing that bothers me is that if we are using AVG Benefit, rather that ratio/%, then we have to test all benefits together. In that event, we are going to have to include the otherwise excludables in the average benefits test because they have to be included for the k and m components".

I had one additional thought that my boss didn't include and that is .... in EPCRS is also states that the reason you can't treat the plan separately is so that you can't reduce the number of employees that would be eligible for a QNEC. If I am just disaggregating the 401a piece, I am not affecting the number of people entitled to QNECs.

So with all that said, does anyone have additional comments or thoughts on this issue? Thank you.