I have been trying to find out how the IRS/DOL will be handling the filing of the Schedule B when they go to the required electronic filing. Everything I have read from the DOL website still says that an original copy of the B needs to be filed.

Has anyone heard if they plan to adopt anything like the PBGC filing where you can have the actuaries certification on file?

Is it just me or is this defeating the purpose of electronic filing/paper reduction? What would be the benefit of filing electronically if you still have to send an original Schedule B in to the EBSA.

Under PPA 2006 for the 2006 plan year. Plan has 2 participants.

My understanding for a single employer DB plan is that the 404 limit is u p to 150% of current liability.

My understanding for a DB plan and a stand alone 401k plan (no matches, etc.) is that the 150% current liability still applies.

My understanding for a combined profit sharing, DB plan situation, the combined plan DB limit is the minimum up to 100% current liability (if greater than 25% of pay) and that a profit sharing contributes 8% of pay, subjects 2% of pay to an excise tax for 2006.

Now here is where things get a little dicey for me.

If we have a combined profit sharing, DB plan situation, and between 1% and 6% is contributed to the profit sharing plan then is the plan DB limit:

the greater of minimum or 100% CL (assume greater than 25%) or

since profit sharing contribution does not exceed 6% is the combined DB plan limit ignored and the single employer limit of 150% of CL applicable?

Thanks.

I am looking at a possible takeover plan that calls for immediate entry for all employees who are at least 21 when they are hired. The plan was established in 2005 with no employees. In 2006 they hired several employees, but did not offer them the option to defer because they thought they had an "owner only" plan that did not allow employees.

The EPCRS correction calls for making a corrective contribution based on the average deferrals of the NHCE group for a non safe harbor plan. Since no NHCEs have ever been permitted to make deferrals, how would that percentage be calculated?

One of our clients uses a trust company that offers IDA or SDBA or whatever you want to call them. After finally getting the statements for 2006, we determined that the trust company made an impermissable hardship distribution to a participant by distributing more than allowed. I can't find a correction for such an error. The amount in question is about $400. Can the participant pay back the excess amount or is there some other correction?

I recently read an article that the IRS is planning to limit the number of HCE rate groups based on the number of NHCE rate groups. However, no amount of my searching gets the article to appear. It may have been in Dave's newsletter within the last 2 months.

Anyone else remember reading this, and more importantly, a link to it? Thank you.

I have a small firm that benefits husband, wife, and 3 employees.

The husband is at the full 415 dollar limit and hits normal retirement age this year. The plan allows for in service distributions at normal retirement.

The hubby would like to take out his lump sum on his normal retirement date, but keep the plan so that his wife can accrue her full benefit.

The client has the ability to make a contribution that will release his benefit so that we avoid any restricted distribution issues (must be nice!).

My question is if he takes a lump sum based on this year's 415 limit, and there is an increase in the 415 limit in some future year, will he then earn a benefit equal to the increase? or is he just done because he was fully paid out at the maximum benefit at the time he took the distribution.

Any thoughts or leads that I could research would be great!

Thanks!

we have several HCEs who are also card-carrying union members. the "office plan" they participate in allows HCEs to participate but excludes union EE. (i don't know anything about the union plan but assume that it would allow these HCE/union members to participate). for some reason, this year they decided they want to start participating in the "union plan."

as far as the "office plan" is concerned, is there anything other than being aware of contribution limits that we need to be thinking about? i went throught the 410(b) regs and 404 regs re disaggregation and deductibility but am not sure if i have explored the universe of worrisome issues. (i am sure i haven't, which is why i woke up at 4:30 this morning.)

do you have any insight(s)?

already a sleep zombie,

lexi.

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?