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.

Are benefits accrued under a govermental pension required to be aggreated with pension benefits under a private sponsored DB?

It would be great if anyone had a site on this.

During 2006, we (as TPA) sent a distribution request for a former participant of the plan to the custodian/investment company of the plan with instruction on the payout, requesting 20% federal tax be withheld. The investment company withheld 20% ftw and mailed the check to the plan sponsor instructing them to send to the IRS. Instead, the plan sponsor gave it to the former participant who in turn cashed it. We were not aware of this until the plan sponsor received notification from the IRS regarding the Form 945 that was filed showing the ftw amount for the participant. Any quidance on how this should be handled at this point? Thanks in advance.

I made a 2007 contribution to Roth IRA's for my spouse and myself in early January. Since then, I have recieved an inheritance (annuity beneficiary taking a lump sum distribution) that has moved my 2007 income over the allowable contribution limits. What steps are involved in rescinding our contributions? Should this be done sooner or later?

Any advice would be appreciated

Rev. Rul. 2006-38 explains how the "first tier penalty tax" is computed and provides an example. It then says that the revenue ruling only applies to the first tier tax. While it does have some explanation of the second tier tax, I am not understanding the "when and how" of the second tier. Could someone explan when the second tier applies, and how much it is, using the example in Rev. Rul. 2006-38? Thanks!

I've heard that California doesn't allow the emailing of information with employee social security numbers in the email.

Are there other states that don't allow that?

If so, does a password protected zip file allow for the transmission of that information?

Thanks

Christopher

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

a stubborn doctor who lost his self employed practice to Katrina currently works for another doctors group. His practice, not his new employer, has a profit sharing and a money purchase plan. His new financial advisor is trying to get him to term the plans and rollover the assets into a IRA. The doctor contends that he wants to maintain the plans in the case he wants to take out a loan and invest in some real estate. When coaxed to move the funds to an IRA, he states the funds would be subject to creditors. Outside the fact of annual admin fees associated with maintaining the plans, making loan payments, having annual appraisals on land, what other reasons are there that he should really consider terminating these plans? His practice does not exist, so I would think the plans are frozen.

12/31/2006 valuation for a 1 man plan. Contributions were made in Feb of 2006.

Does interest HAVE to be applied to those prepaids?

Could you please state the regs on whether or not interst must be applied?

Any and all assistance you are able to give is much appreciated.

Here is the situation. Company A sponsors Plan A. Company A filed for bankruptcy, we as the TPA were notified after everything was complete. Company B had one of their related entities we'll call Company C acquire the equity, but not the debt of company A. Meaning this was a stock acquisition, Company C is now the new plan sponsor.

Company B refuses to provide any information about company C. Their position is that they did not purchase the retirement plan, and they are not responsible for it. Meanwhile we have received no participant information from company B as to which ees were retained (we know a large group of them were) and we cannot perform anything other than recordkeeping. Meanwhile our fees add up.

The trustee of Plan A was the former owner of Company A and wants us to pay everyone out, which is illegal.

Does anyone have any thoughts about this? Can we call this an orphan plan? Can we just quit the plan?

We are a small business that is closing our doors (possible bankrutpcy in near future). The owner is shutting the existing company and beginning a new company with new tax id number, new name, new address, etc..

We do not want to pierce the corporate veil of the existing company or show any linkage between the two companies due to possible lawsuit down the road.

The old company has a 401k plan and our plan was to shut the existing plan under the old company down and send out distribution/roll over forms to everyone. The new company was going to create a new 401k plan for the new company and that would be an option for the employees who were going to the new company. Is this possible to do? Is is violating any laws, successor law, ect?????

We thought it would be okay because the two companies are totally separate from each other and the old company will no longer be in business.

Please let me know what you think.

Does anyone have a Crystal report that pulls inception to date deferrals for calculating hardships?

Does "Safe Harbor Non-Elective" mean that the Employer's contribution is automatically 100% vested or is that still plan specific?

This may be a basic SH match question, but I will ask it anyway. SH 401(k) plan currently uses the basic formula for the SH Match (100% of first 3% and 50% of next 2%). Company wants to add a discretionary match that will be a tiered match that will exceed the 6% deferral limit. Here is my question. I know that the additional discretionary match does not meet the ACP safe harbor. However, when I do the ACP test, do I only use the discretionary match, or do I use both the basic match and the discretionary match. Said another way, does the basic match automatically meet ACP regardless of the additional discretionary match? Thanks.