I have a client that has sold his practice (not his Corp) with 4/30/07 effective date. His employees will be working for the new DDS and the new DDS is not taking over the retirement plan. The retirement plan will remain open so our client can continue to fund for himself going forward.

Question: I know the participants become 100% vested due to partial termination but do they get paid out as of 12/31/2006 valuation or is an interium valuation required as of 4/30/07?

Thanks!

The sponsor of a DB plan wants to freeze benefits for current participants and close the plan to future new entrants. The plan is underfunded on an accrued benefit basis, so the there is no potential for reversion, which means that the special rule of 1.411(d)-2(b)(2) is satisfied. Does the freeze of future entrants create a PPT under the general rule of 1.411(d)-2(b)(1)? If so, who has to be brought up to 100% vesting? The people who are the cause of the PPT are not participants, and the actual particiapnts are not affected by the PPT.

If an employee transfer from nonunion employment with healthcare coverage back to union employment with lesser healthcare coverage, must the employee (and his or her covered beneficiaries) be offered COBRA?

If a contributory DB plan is frozen providing for no future accruals can the plan continue to require that contributions be made by employees? In this situation the plan would, however, provide for an accrual to the extent that the accrued benefit derived by employee contributions, as determined according to IRC 411©, exceeded the plan’s formula benefit.

What if you have members from one union (say "A") working for an employer and the employer makes contributions to the 401k plan but made them to the wrong union plan (say "B"). There is no reciprocity agreement between the two unions A and B. It has been caught within the 6 months to return mistaken contributions to the employer but there have been gains on the contributions. How do we get contributions and the gains to the correct plan for the participants? Of can we?

Should a plan document be prepared only by lawyers?

Those interested in the "unlicensed practice of law" issue, in states where bar associations seek to apply those rules to plan document preparation by non-lawyers, will want to look at this site (which I just came across) for support or in horror, depending on your position:

http://www.naldp.org/

I do not have a lot of recent multi-er experience, but I was wondering - is it common for plans to use one rate for funding, but a different interest rate assumption for w/drawal liability?

If so, does this make sense?

thx!!

A US citizen is paid by a foreign subsidiary of a US Corporaton. This income is taxable as 'foreign income' for purposes of US income taxes.

Can we use this income to determine benefits under the US Corporation's qualified plan(s)?

I think that I remember in the last year a new law being passed that if a dependent delays going to college to go to the military, then they get an additional time period to remain on their parents coverage when they do return home and enter college. Example, dependent goes to the military at age 20 and therefore is removed from health insurance. Dependent returns home at age 22 and begins college (change in status and added to parent's plan). Our age cutoff is 23 but I think the dependent is allowed to stay on because of a military exception but I can't find it anywhere. Can anyone help? Thanks for your help.

Greetings all,

I'm looking for help with a code site so that I've got something for my files.

I've got a client who is a statutory employee with a life insurance company. She's also in that life insurance company's plan and has made deferrals and received an employer contribution allocation.

She's also got her own plan with her own company. She's adding the W2 from the life insurance company to her Schedule C compensation.

When they're not benefitting from another company's plan that kind of makes sense with what I understand about a Statutory Employee. However, when that W2 compensation is being used to provide an Employee benefit under another Employer's plan, how do we use that very same compensation twice?

What am I missing?

Following up on a thread posted below re ER-specific data from a multiemployer plan, we had a multi-ER group health care plan that was informed that premiums were to be increased by over 10%. when asked about the basis for the increase, the fund administrator refused to release that information (claiming there was a confidentiality agrmn't in place between the fund and the health care insurer).

Is there any provision in ERISA or the DOL regs that would require the fund administrator and/or insurer to release basis for the 10%+ premium increase?

I think that I remember in the last year a new law being passed that if a dependent delays going to college to go to the military, then they get an additional time period to remain on their parents coverage when they do return home and enter college. Example, dependent goes to the military at age 20 and therefore is removed from health insurance. Dependent returns home at age 22 and begins college (change in status and added to parent's plan). Our age cutoff is 23 but I think the dependent is allowed to stay on because of a military exception but I can't find it anywhere. Can anyone help? Thanks for your help.

Employer fails 401(k) test for 2005 - not corrected until 2007 - being corrected by use of QNEC's as outlined in EPCRS. Plan was also top-heavy for the year - question - can the QNEC's being made to fix the failed APD test also count towards the 3% top-heavy minimum due the plan? I could find nothing in ERISA outline book which references this.

Eligibility for retiree medical benefits requires that retiree have 15 years of service after age 47. An employee who retired early under Pension plan, but did not have the required 15 years of service after age 47, was inadvertantly enrolled in the retiree health plan. Can the plan stop providing benefits to this individual?

Participant was receiving minimum distributions. He died in 2005. A mrd wad made in 2006. Beneficiary is participant's daughter. Can she rollover the account balance to an "inherited" IRA (if plan allows) in 2007? If so, over what time period must the daughter take out minimum distributions?

If an employee terminates in the middle of the year, having been deducted say half of their election, but they claim the full amount of their election, isn’t the second half really a taxable income to the employee? Why would the IRS not want us to withhold the full election on termination? It’s not a matter of an elimination of the risk of loss to the employer, it is a case of the employee potentially receiving un-taxed income.

If an employer sponsors a 403(b) with a match, do the deferral deposits fall under the same DOL timing as 401(k) plans?

Are these notices required for 403b plan?

Are SEP plans subject to the PPA 06 quarterly benefit statement requirements?

Does anyone have any info on possible ways to avoid sanctions arising out of the IRS crackdown on 412(i) plans? For example, we want to argue that the plan sponsor operated the plan as it was approved in the prototype opinion letter, and thus sanctions should be N/A. I have heard that some sponsors have been successful in getting sanctions waived based on that type of argument, but we cannot find anything helpful. Any leads, articles, etc. would be appreciated.