I know Rollovers are irrevocable from a QP to an IRA. I just can't find where it says so. I've searched my sources i can find secondary sources (Appleby's article on Investopedia) but can't find a primary source. I know its out there.

Please help.

Thanks

In order for a plan to be in a required aggregation group for top heavy, each plan must be one in which at least one key employee 'participates' (per ERISA Outline).

Does 'participates' have the same meaning as the coverage rules and all those eligible are 'participants' - even if they choose not to defer and have a $0 balance? Basically, do the key employees have to be specifically excluded in a 401(k) plan document in order to exclude the plan from the required aggregation group? Any cites? Thanks!

If the name of the plan sponsor changes (e.g. from "ABC Company" to "XYZ Company"), but the name change is effective after the end of the PY 2006, but before the 2006 Form 5500 is filed, does the name change need to be reported on the 2006 Form 5500?

Line 4 says "if the name and/or EIN of the plan sponsor has changed since the last return/report filed for this plan, enter the name . . . below:" There is no qualifier that you do this only if the name change was during the plan year; however, logic tells me that since the old name was in place during the entire plan year it would be proper to report under that name, and make the change next year, on the 2007 Form 5500 (since the name change occured during the 2007 plan year.)

Any thoughts?????

Has anyone thought up any ingenious ways of getting the 1/1/2008 funded status of all their DB plans "certified" by April 1, 2008?

Consider the regulatory ambiguities, software issues, learning curves, etc., as well as the data collection issues during FAS and 1099 season.

Dear users of the VEBA message board,

I am the BenefitsLink.com, Inc. employee who acts as the

"administrator" of these message boards. I want to keep

the boards running as a valuable, free tool for employee

benefits practitioners.

I have taken an administrative action that some of you will

not like, but which I believe to be in the best interests of every

user of the message boards.

I decided to remove a topic (a message thread) about a

particular, named VEBA service-provider whose business

practices were roundly criticized in messages in the thread.

The service-provider contacted me by email and by phone this

week and we discussed the message thread in some detail. Until

then I had not read the message thread.

The service-provider says that some of the statements posted in

the message thread are false, and that they are damaging his

reputation.

I do not know whether the statements are true or false.

If a statement is proven to be false and it harms the reputation of

an individual, the individual has a legal cause of action for defamation

against the person making the statement.

Per the ground rules that are displayed when a new user

registers, a message can be taken down if a person complains

that it is "objectionable" to him. (Also, users agree not to

post defamatory statements.) As the administrator of the message

boards it falls to me to determine in my discretion what's

"objectionable" when a party complains.

If you or some other user say to me as administrator that a

statement about you in a message is defamatory, I believe you've

pointed out a message that's objectionable to you, and that the

message should be taken down.

My reasoning is that you wouldn't want to have to defend

yourself by rebutting such statements via a public "point-counterpoint"

exchange in a thread on the message boards. Among other reasons,

it would be hard and time-consuming to put down into text all of

the things you would want to say in response, especially responses

to claims made by anonymous posters. Damage to your reputation

could be catastrophic and perhaps irreparable, because a Google search

on your name by a potential client might easily include a link to the

message thread.

Naturally, when one believes that people are being harmed by a

service-provider, he wants to be helpful by warning others. I can

appreciate how very strongly you could feel about

another service-provider's business practices, especially if

based on your first-hand experience or on other information that

you believe to be certainly and provably true. The question, though,

is whether these public message boards ought to be available to

do that. You would have other opportunities to share your opinion,

such as conversations in person, via private email, or via some

other medium that is not publicly viewable. You also could write

and publish an article on a web site that you own or operate,

if you wish to publish your opinion on the Web.

I would like to emphasize that BenefitsLink.com, Inc. has not

made any investigation into whether various statements that were

made in the message thread are true or false. That's not a role

the company has taken on. BenefitsLink.com, Inc. is not the

"publisher" of messages posted to this public message board,

pursuant to interpretations of defamation law made by several

courts, and we do not monitor messages to determine whether or

not they might be considered defamatory. But we have agreed to

take down messages that a party finds to be objectionable if the

party complains.

I know this action might offend you, especially if you put time

and thought into making one or more posts in the message thread.

I can see how you would feel offended and disappointed by this

action affecting your already-posted messages, and for that I

sincerely apologize.

I am not questioning the good faith of any of the folks who

posted messages in the thread. Also, I do not mean to imply

that posts made anonymously are unwelcome.

Thank you very much for all the great help you provide to

practitioners and plan participants through your posts on

these message boards. I hope you continue to find them

to be valuable in your practice.

Dave Baker

Email: davebaker at benefitslink.com

Here's a fun one. We took over a plan in which 2 prior TPAs appear to have done the share release incorrectly and based it on principal only when the exempt loan was for longer than 10 years. The problem is that this started back in 1993. There are other allocation corrections that need to be done so we are starting over anyway and revising the allocations for years 1993-2006. Does anyone know if 54.4975-7(b) allowed for the use of principal only share release when the loan was longer than 10 years back in 1993? I don't see anything in the history of that section and regulation that would allow but wanted to make sure I wasn't missing anything.

THANKS!

I am seeking examples of how Benefits Credits are explained to employees. It would be helpful if there were sample figures or examples.

I have a prospective client whose use of Benefits Credits has me asking questions.

For example, the Benefit Credit is $500 per month, the Health Insurance premium is $650 of which the employee share is $150.

This employer pays the $500 to the employee as Taxable Income then has the employee do a section 125 Salary Reduction of $650. The logic is that the employee is paying the difference which happens to be the same as what is the employee share of the premium.

My experience is that the $500 should not be paid but should exist as a "notional" amount which is spent down with any amount needed becoming the amount of the Salary Reduction amount.

I would greatly appreciate some input and enrollment forms with examples which I can use to explain what should be done.

Terminated 401(k) plan paid out all benefits, but overlooked an exisiting QDRO that assigned 1/2 of a participant's benefit to an alternate payee. The alternate payee recently inquired about receiving his benefit and that he plans on rolling the benefit to an IRA. Since the plan and trust are long gone, the employer will pay the benefit out of their general assets. Please tell me if I'm wrong, but I don't think there is anything that the employer can do to create any kind payment that could be rolled to an IRA or another employer's qualified plan. I don't even think this is a benefit at this point...it's really a settlement payment.

I'm a 401(k) guy, so excuse my ignorance if this is a basic question!!

Looking at a 403(b) Plan which seems to indicate that the employee must contribute 5% of pay in order to receive the 9.5% of pay contribution provided under the Plan.

Specific Question

---------------------

1) Is this a match or a profit sharing contribution?

2) What else do we need to know about this sort of a contribution? Is this some sort of a 403(b) safe harbor, or do I need to worry about coverage issues?

We resigned from administration of a 401(k) plan about 3 months ago due to nonpayment of fees. We have not received instructions to transfer assets or records to another provider to date. When we resigned, we specifically stated the last date we would process any contributions or distributions from the plan.

A participant terminated and wishes to take a distribution from the plan. As we are no longer the service provider, I don't feel like we have any authority to act on the request of either the sponsor or the participants. Do we have any responsibility to process this request, even though we have resigned as a provider?

Plan is definitely Top Heavy for 2006.

Both NC and CB have a 1 year eligibility rule for contributions and we are giving all active non-keys with over 500 hours, 5% between the two plans.

My question is this... the 401(k) enrollment is immediate with dual entry... so if a participant enters 7/1/06 and is eligible for deferrals, has over 500 hours, but is missing the one year for contributions... does he/she have to get the TH minimum?

Can an ESOP participant sue a plan fiduciary for mistaken tax reporting if penalties are imposed by the IRS? Is there an ERISA or IRS issue?

What is the effective date of the new $250,000 threshold? (Is it known?)

Is the question about prior filers with under $250,000 needing to continue resolved? Do they need to continue filing if they ever filed?

Thanks

An ESOP may have miscalculated the release of shares and as a result, the loan may not be exempt.

Does the Service have the authority to waive or reduce the 4975(a) prohibited transaction tax? Under ERISA Sec. 3003, they may waive the 4975(b) tax, but may they also waive the 4975(a) tax?

At first blush, GCM 38637 appears to be favorable, but it only applies to 'subsequent' 4975(a) taxes and not those already imposed.

Has anyone had any success negotiating a reduction or waiver of the (a) tax on the basis that the tax will hurt employees (reduce the value of the stock in the plan; it may also prohibit the employer from making discretionary contributions to other plans of the employer)??

Thanks

I am trying to find out what the rules were when the age discrimination laws went into effect in 1988 with regard to late retirement benefits.

To make my question simple, what if NRD was 65 and an active participant was 70 on the date the new rules went into effect? Would they need to get actuarial equivalent increases from age 65, or only from age 70?

This is hopeful, wishful thinking but I am going to ask anyway.

Plan terminates and decides to use benepay to pay everyone out. Money moves from John Hancock to Benepay.

Are the plan assets officially distributed now? Once it is in BenePays hands and they pay people out, are they still considered plan assets until they are distributed?

*holding breath, praying for answer I know I wont get*

Employer has an excess DB plan for compensation above limits. Excess DB plan has a normal retirement age of 65, however offers early retirement at 55 with 10 years of service. It seems that this will no longer be allowable due to 409A no acceleration, however I have not seen this example.

If employer changes normal retirement age to 55 with 10 years of service otherwise age 65, does this change present any problems?

Sole employer has a SEP in place and has funded it for 2007, but is looking for other ways to shelter some additional money. His earnings in 06 were 1.4 mil and expected to be the same this year. I was told he can not fund the SEP if he establishes a DB, but I do not think that is accurate.

I recently came across a company called Exec-U-Care that is designed as "Supplemental Medical Reimbursement Insurance". I looked over their brochure, and it claims that you can reimburse HCE medical expenses tax-free. Furthermore, it goes on to state " "Exec-U-Care" is designed to give you the freedom to reward those employees you feel are most deserving". This sounds like a red flag to me. If you are trying to be discriminatory, you're probably discriminatory, right?

Here is my thinking: If this was really a win-win situation for employers to cover HCEs, then (a) why isn't EVERYONE doing it? and (b) Isn't it only a matter of time before the IRS comes after them?

My question is, how are they doing this? Is this legal? If so, what IRC is this governed by and what types of requirements are they subject to? This seems to go against almost everything I have ever been told about employee benefits.

I'm quite perplexed by this. It seems to be an interesting topic and something to look into, but i am still more than a bit suspicious.... . I would greatly appreciate any thoughts on this.

For more information, the website is www.exec-u-care.com .

Employment agreement provides that employee's SERP benefit is calculated as though he were three years older for both age and service credit purposes. These fictional 3 years increase the PV of the benefit by almost $1 million.

Is granting the additional age and service credit an impermissible acceleration? Would the answer differ if the benefit of the additional three years was to qualify for a subsidized early retirement benefit?

I think the answer is no, but I can't find the cite to the rules on granting age and service credit in the final 409A regulations.