I am looking for cases, (as well as one in particular that I heard happened in Ohio) where employers paid the premiums for individual insurance policies.

Is it permissable to allow the reimbursement of individual insurance premiums through an HRA that also can be used to reimburse qualified medical expenses? I had read in an EBIA manual that this should be permissable, but was wondering if there was currently any litigation on it. I had heard of a case in ohio.

Any help on this would be greatly appreciated!

We have a potential new client- the current document is on a "Non-Standardized Capital Accumulation Plan" Can this plan be restated as a 401(k)?

According to the client it is operating the same as a 401(k), 5500 being filed plan number 033 plus and all testing.

Anyone else having issues with this? Seems as if they have issued revised Schedule A's with new figures. Amended returns=pain in the butt!!!

A client never told the EEs they could defer on their bonus pay, and thus had to contribute make-up contributions on these bonuses for the 2002 - 2004 PYs. This contirbution was made in 2007.

Now they are failing the 2005 ADP (they are passing ACP); they use prior year testing method. The test WOULD pass if they used current year testing, but obviously we didn't amend the plan in time to change the testing method.

Anyone eligible for the catch-up contribution has been taken into account. Because of the prior year testing, we cannot allocate QNECs.

My thought was that we should go ahead with the refunds (most are about $250), and have the client pay the 10% excise tax because it's WELL PAST the 2 1/2 month correction period.

Any thoughts?

Hello,

I am 36 years old and a brand new investor considering opening a Roth at Vanguard. I have been thinking about putting $4,000. into the Vanguard Target Retirement 2035 Fund. The funds current target asset allocation among the underlying fund is: Total Stock Market Index Fund 71.8%, European Stock Index Fund 10.6%, Total Bond Market Index Fund 10.1%, Pacific Stock Index Fund 5.1%, and Emerging Markets Stock Index Fund 2.4%. The funds annual operating expenses are .21%. Does anybody out there have a strong opinion either way about whether this is a wise move or not? As of right now, I have no other retirement funds. I just want to make sure I've considered everything. I plan on making an initial investment of $4,000. and then have $333. automatically deducted from my checking account on a monthly basis. Any constructive criticism of my plan would be much appreciated, as I am a new investor, and a little nervous. Thanks for reading!

can anyone give me some practical examples and opine on these specific facts as they apply to participant directed 401(k) plans. i am looking at the QDIA regs and wondering if an RIA that is hired as an investment advisor is considered an Investment Manager as required by the regs and as that term is defined in Section 3(38). To be a Inv Mgr you must have the ability to manage or dispose of the assets. in our case we are an RIA. we select and monitor investment options in the plan as well as construct asset allocation models for participants. we accept fiduciary status. we do not accept custody, does this make us an Investment Manager qualified to construct QDIA's.

Hi,

This may be a little complicated, I'll try my best to describe the situation. I work for a hospital who provided a defined benefit retirement plan to us (call it hospital A) In 1993 this hospital merged with another local hospital (call that hospital B) in a "merger of equals" with a new name for both hospitals. Both hospitals had defined benefit retirement plans. Then on 1-1-1994 they did the following....in the case of the employees from my hospital (hosp A) they said our retirement benefits were frozen forever as of the 1-1-1994 value but we could participate in the combined hospital's retirement plan as of 1-1-1994. The plan they chose as the retirement plan for the combined hospital was Hospital B's plan. Employees of Hospital B had no frozen values as of 1-1-94 but continued normally.

So how this works out is employees of Hospital A get a retirement benefit of their frozen benefit as of 1-1-94 plus the new benefit from 1-1-94 on.

The employees of Hosp B receive totally the new plan.

The problem is the benefits for employees of equal years of service works out vastly different for the two groups of employees. The benefit formula highly depends of years of service and in hospital A everyone was given a 1-1-94 date as beginning their service even if their actual hire date was way before that. Hosp B employees years of service is based on their hire date, not 1-1-94.

The difference is significant. I did some calculations and for a 20 year employee with similar salaries the following are approximate yearly pension amounts"

Hosp A $18,500

Hosp B $25,000

This is for 2 identical employees, identical years of service and similar salaries. The only difference is one employee worked for hosp a and one worked for hosp B. All the workers now work for hospital C (the combined hospitals). Is there any ERISA violations here?

Thanks,

Francis

can anyone give me some practical examples and opine on these specific facts as they apply to participant directed 401(k) plans. i am looking at the QDIA regs and wondering if an RIA that is hired as an investment advisor is considered an Investment Manager as required by the regs and as that term is defined in Section 3(38). To be a Inv Mgr you must have the ability to manage or dispose of the assets. in our case we are an RIA. we select and monitor investment options in the plan as well as construct asset allocation models for participants. we accept fiduciary status. we do not accept custody, does this make us an Investment Manager qualified to construct QDIA's.

Hello,

I have a 1 participant MP and PS plans with Fidelity. I am planning to terminate the plans (unfavorable business conditions.) I have been talking to Fidelity about this and they have asked me to do 2 things

-- Write a letter to IRS stating that the plan is being terminated (And Fidelity said you don't have to mail it!! That makes me wonder?)

-- File a final 5500 within 7 months.

Does that sound right? I haven't seen the 7 month requiement any where in the forum. I will be happy to file the final 5500 next year in 2008 for plan year 2007. Is that good enough?

Thanks in advance

A 4 participant PSP historically has been allocating contributions as a Corporation. 2005 plan year each participant received 20% of their comp as a contribution. The doctor and sole HCE, received the$42K max. We just discovered through their CPA that this company is a sole proprietor. Therefore, it appears as if the plans PS contributions have been erroneously calculated, possibly since plan inception. The Doctor comp on census has always been reported in excess of 401(a)17, with the exception of this year when their CPA advised his comp to be $212,671 as his "net self-employment earnings from the clinic before any deduction for contributions to the plan or half of his self-employement tax". This is where we discovered the sole proprietor status!!! I'm thinking that due to TEFRA, the doctor received the max contribution in previous years(20%) and that his employees should have received 25% rather than 20%.

Anyone else run into a similar situation? Is this heading to a VCP filing? Amended returns, etc.???? The plans 2006 restated plan doc. as well as past docs have always reflected the business entity as an LLC taxed as a corporation.

A small company merges nto another small company.

The new small company now adopts the plan and the first plan year is to be a short plan year from 4/1/07 to 6/30/07 with each subsequent plan year from 7/1 to 6/30.

In order to receive a year of credited service the plan requires 500 hours during a plan year.

As far as I can see, if the participant works 500 hours during 4/1/07 to 6/30/07 then the participant can recieve one year of credited service.

Does anyone have concrete evidence indating otherwise?

Thanks.

Have a plan that is cross-tested, 8 different groups. Because of turnover, cross-tesing really doesn't work very well and it's too late to amend the allocation method for the year we are in . Does anyone agree or disagree, that you could run the calculation integrated and then plug the contribution figures into the participants within the groups? As a side note, if we do that, it fails AVB Test and General Test which I know we have to do as part of cross-testing. Some feel that this is acceptable because we are essentially testing on a contributions basis and it passes ratio. I seem to not be able to get past that being okay but can't prove it, and don't we have to amend to state the Integration Level in the Adoption Agreement and state that the contribution will be allocated on an Integrated Basis?

Thanks for any input.

(Second attempt to post) I am researching if it is customary for ALL insurance companies writing voluntary group life policies to include an "Actively At Work" provision. A TPA recently changed insurance companies for a Voluntary Group Life policy and provided an open enrollment period. During the open enrollment period an employee who was on medical leave for a terminal illiness increased the limits of his coverage during the open enrollment period. He died before he returned to work and met the "Actively At Work" requirement. His estate is now suing the TPA and argues that the TPA should have selected an insurance company that did not have this provision. I am trying to determine if there is ANY insurance company that provides voluntary group life coverage that does NOT have this provision. If there is one... I have not been able to find it. Thank you - Jim

This a medium-sized DB plan (> 900 participants).

We found that there are 8 terminated participants who should have commenced annuity payments years ago.

ERISA counsel suggested to self-correct the error by making backpayments (with interest) for those missed payments.

My question are:

Prospectively, can the participants elect benefit options, even though those backpayments will be made based on the plan's normal benefit form-SLA?

Thank you.

If a nonspouse designated beneficiary elects to directly rollover to an Inherited IRA in the 2nd - 4th year after death, does the plan need to distribute the MRD first?

Example: Participant dies in 2007. The plan only permits the 5-Year Rule.

Year of Death (2007) - Nonspouse can directly rollover entire account to the inherited IRA. The nonspouse can elect the 5-Year Rule or Life Expectancy Rule under the IRA.

Year After Death (2008) - Nonspouse can directly rollover the account to the inherited IRA but only after the MRD is paid first. The plan assumes that the nonspouse is rolling over to the inherited IRA to elect the Life Expectancy Rule. The nonspouse can still elect the 5-Year Rule or Life Expectancy Rule under the IRA.

2nd - 4th Year After Death (2009 - 2011) - Nonspouse still can directly rollover to the inherited IRA, but to the extent only the 5-Year Rule applies under the IRA, does the plan need to pay the MRDs due first?

5th Year of Death (2012) - Direct rollover not permitted since this is the 5th year after death and the entire account balance is the MRD.

Would there be any difference in the scenario above if the plan allows the nonspouse designated beneficiary to elect either the 5-Year Rule of Life Expectancy Rule.

Thanks!

Is there any guidance out there, or insight, on how the top heavy test is impacted when the permissable withdrawal option is included in an 401(k) automatic enrollment plan?

Guys, I've been told by someone in my office that K-1 income can not be used in a person's wages for purposes of a retirement plan; that I can only look at W-2 wages. This client is an LLC and the partners receive mostly K-1 income, and very little W-2.

Please help... what is the answer? Can I use K-1 in addition to W-2 wages? The document says 415 comp, and for a SE individual - their Earned Income.

Thanks.

I have designated a portion of my paycheck to go into a Roth 401K account. This option became available only recently through my employer and to my understanding, it is an option available that is not quite as ubiquitous at the "normal" 401K, i.e, not every major company necessarily has the Roth 401K option, though a traditional 401K is available within most major corporations.

My question has to do with switching jobs. What if I find myself taking a job with a different company at some point in the future and they do not have a designated Roth 401K contribution system in place as my previous employer did? Conversely, what if my new employer DOES have a Roth 401K contribution system in place?

Without getting me too confused, I'm just wondering if my money and it's earnings will somehow lose the privledge of non-taxation, say, by being rolled into a normal 401K plan of the new employer should they not have a Roth 401K option. What must I do in order to ensure that the money contributed to my current Roth 401K plan and its earnings remain tax-free should I change jobs?

Any problem with a plan sponsor deducting two years worth of minimum funding contributions in a single tax year based upon the following?

Election to deduct contributions for plan year beginning during tax year

Plan adopted 5/15/07

First Plan Year 5/31/06 - 5/30/07

Second Plan Year 5/31/07 - 5/31/08

Tax Year 6/1/06 - 5/31/07

Assume 100K minimum funding requirement for PYE 5/30/07 and 100K minimum funding requirement for PYE 5/30/08 (ignore interest for simplicity).

Assume 100K contribution deposit on 6/1/07 for PYE 5/30/07 and 100K contribution deposit on 6/2/07 for PYE 5/30/08.

Can the 200K be deducted for the Tax Year Ending 5/31/07 considering the first 100K as includible contributions (not deductible for Tax Year Ending 5/31/06 solely due to timing of contribution)?

Employer maintains a 401(k) plan and offices throughout country. Employer, in a collective bargaining agreement, agreed to make contributions to the IRAs of 5 employees (in one of its offices) on a weekly basis several years ago. Employer continues to make contributions each week for the employees. Based on eligibility, maintaining other plans, written plan document requirements, etc., this cannot be a SEP, Simple IRA, SARSEP or 408© plan. Should contributions be stopped? Any glaring corrective measures jumping out at anyone? Thanks!