Has anyone seen where a plan administrator has given plan signing authority to the TPA? I'm not sure if a TPA would want to do this since it would also make it a fiduciary. If this can be done, would it be considered a prohibited transaction? ERISA does permit a fiduciary to be able to be compensated for fiduciary services.

Thanks!

Can someone tell me the formula used to determine the Allocable earnings for the Plan year for a failed ADP test.

I have the following information, but not quiet sure of the formula:

Total Earnings, Opening Balance, Contributions, Withdrawals, & Refund.

Thank you, AJM

Hi, I noticed a guest post a reply on a topic. Is that supposed to happen? I thought you had to register to use the forum. Just wanted to bring it up in case it is an oversight.

The participant was taking MRDs when he died. Can a nonspouse directly rollover the death benefit to an Inherited IRA after the MRD is taken for the year?

Example 1: Participant dies in 2006 and took his MRD for the 2006 distribution calendar year. In 2007 the nonspouse is due an MRD. Can the nonspouse directly rollover to an inherited IRA after taking the 2007 MRD?

Example 2: Participant dies in 2006 and took his MRD for the 2006 distribution calendar year. In 2007 the nonspouse takes the 2007 MRD. In 2008 can the nonspouse directly rollover to an inherited IRA after taking the 2008 MRD?

Thanks

Is a municiple DB plan required to provide a benefit statement to a plan participant upon request (as is required in a private sector plan)? Similarly, what about the SPD, must it be provided upon request?

I have a non-calendar year end 401(k) Plan (04/01/06-03/31/07). One of my HCE's went over his 402(g) limit for 2006 and has already been refunded the excess (about $900). I have just completed the ADP test for the 03/31/07 plan year and the same HCE has to return around $250. Do I need to refund this employee the additional $250+ or can I use part of the excess 401(g) contribution that has already been refunded to him.

We want to provide our employees with a death benefit that is similar to life insurance such that when an employee dies, his/her beneficiary/estate will receive a nominal amount. We are not purchasing a policy to insure the death benefit but rather are paying any benefit ourselves. Is the benefit taxable, and if yes, can we structure it so it isn't taxable to the beneficiary (we don't want to purchase a group life insurance policy however.) Thanks in advance for any responses.

Does anyone have an opinion or can site resources on whether or not an electing Church or Religious Entity can sponsor a Multiple Employer 401(k) Plan? If so, do you need to exclude clergy and only cover non clergy? I know it is off the track a bit, but I am trying to determine if this is a suitable option. I believe a 403(b) is a better fit, but see nothing that has been codified that would suggest that a 401(k) is out of bounds. Thank you!

Jim

Upon withdrawal from a plan, can an employer simply make a lump sum payment to satisfy its withdrawal liability never to be bothered again or is there some catch in doing this (i.e., is the plan potentially entitled to an additional contribution later on if, for example, the plan assets decline?)?

Can attorney fees be paid from qualified plan assets?

This employer really needs direction / opinions from an ERISA attorney. The company may not have the resources to pay those fees but the pension plan will have excess assets.

Has anyone heard anything recently about the final regs? What's the likelihood that the regulations will be finalized any time soon? What about the termination provisions...think they'll make it into the final version? Has anyone sought a ruling on terminating a 403(b)?

Am I interpreting Revenue Ruling 2004-45 correctly?

"A post-deductible health FSA does not pay or reimburse any medical expense incurred before the minimum annual deductible under Section 223©(2)(A)(i) is satisfied....The deductible for the HRA or health FSA ("other coverage") need not be the same as the deductible for the HDHP, but in no event may the HDHP or other coverage provide benefits before the minimum annual deductible under Section 223©(2)(A)(i) is satisfied. Where the HDHP and the other coverage do not have identical deductibles, contributions to the HSA are limited to the lower of the deductibles. In addition, although the deductibles of the HDHP and the other coverage may be satisfied independently by separate expenses, no benefits may be paid before the minimum annual deductible under Section 223©(2)(A)(i) has been satisfied."

Client's HDHP deductibles are $2600 for self-only and $5,150. Since the minimum annual deductibles under Section 223©(2)(A)(i) are $1,100 for self- only and $2,200 for family, are these lower amounts the most they would have to meet before the health FSA can start reimbursing expenses? Or am I confusing it and the client's higher HDHP deductibles must be met?

A fully-funded terminated DBP wants to distribute 90-95% of benefits to participants before the end of the PBGC 60-day review period. The remainder would be distributed after approvals.

The plan is in good shape, is following all the rules (except the one I'm asking about), but for financial statement purposes, needs to make distributions sooner rather than later.

What are the consequences, penalties, jail terms, etc.?

Am I correct that the 20% additional tax does not apply to amounts included in income as long as the deferred comp plan meets the 409A requirements of distribution, acceleration of benefits and elections and operates in accordance with them?

Thanks,

Ken Davis

We have been contacted by a participant to see if sun-protective clothing is reimbursable under a health fsa; this individual has developed an allergy to the sun and needs special clothing.

The only thing we are able to find is the eligible expense under FSAFEDS and it states the following -

Sun Protective Clothing

Clothing that offers at least 30+ UVA and UVB sun protection for individuals with melanoma, or other skin cancer, systemic lupus erythematosus (SLE) or other significant dermatologic condition may be eligible with a letter of medical necessity from your doctor. The clothing is reimbursed for the difference between "normal" apparel and this specially constructed clothing up to 33% of the total cost. The receipt must show the purchase was from an accredited sun protective company such as Solumbra or Coolibar.

There is nothing in the plan document that would prevent this type of reimbursement.

We already looked at Pub. 502 and did not see a reference.

Has anyone had any experience with this - if you have some ideas, please let us know - citations would be appreciated.

Thanks.

I have a client that is (last year and this year) being put through the ringer about tighter auditing standards, including SAS 112, as applied to DB 5500 audits. But this is my first 2006 audit.

The context is a limited scope audit. The auditor (for the first time) wants the sponsor to draft the footnotes and schedules that will comprise the 5500 auditor's report. They are implying that there may be control weakneses that may need to be reported as "deficiencies" otherwise.

The auditor (last year) insisted upon reviewing many retiree calculations done many years ago. They are insisting there can be no hand corrections to benefit calc worksheets-records must be perfect and retyped if necessary.

This is a meticulous client with near perfect records. This seems like complete nonsense to me. Is there anything to this? Is anybody else experiencing this increase in zealousness? Or is this all about higher fees or profit margins?

I can understand the applicability to corporate financial statements. Does SAS 112 revolutionize pension 5500 audits?

I hope this is isolated and not a wave of the future. Comments?

We have a client with a new plan eff 1-1-2007 that has SH Match. They were bought by another company and told to keep the current 401(k) plan in place until the end of 2007. They were told to stop the SH Match immediately. I know we must give 30 days notice to employees, so they need to fund match through that date but I wasn't sure if we could stop SH Match and use current year testing for ADP/ACP for 2007. They will rollover new plan's assets to buyer's plan at the end of 2007/beginning of 2008. Thanks for any insight.

Employer is a non-profit entity. It sponsors a 403(b) plan under which employee pre-tax elective deferrals are made. Employer also sponsors a 401(k) profit sharing plan under which only employer profit sharing contributions are made. No pre-tax elective deferrals are made to 401(k) plan. Broker is asking if the 401(k) plan may be amended to include Roth contributions (still no employee pre-tax elective deferrals). My inclination is to say that if Roth contributions are going to be allowed they should amend the 403(b) plan.

Any thoughts?

If a plan is effective 1/1/2002 and freezes benefit accruals as of 12/31/2006 (but is NOT terminated) and terminates as of 12/31/2007, what is the fractional reduction in the 415 dollar limit?

Is it 5/10 or 6/10?

A SEP has a plan year end of 4/30/07. When are contributions due.

We have been asked to design a 401(k) plan for this group and they want to make their final SEP contribution.