A company sponsors a DBPP for its two employees and excludes himself, the owner.

The company is dissolving and is in the process of terminating its DB plan.

The plan is covered by the PBGC or at least has been paying annual premiums.

The plan assets are $300k and the plan benefits on termination basis are 450k.

The employees are willing to just take the benefits covered.

To my knowledge an employee cannot waive benefits even if they are willing to and thus as far as I can see the only way to terminate the plan is in the form of a distress termination.

Any other creative ideas out there?

Thanks.

I just want to confirm that a 501©(6) (e.g., business leagues, chambers of commerce, professional football leagues) can have a 401(k) plan. Is there any special recordkeeping ot tax reporting that needs to occur?

If a person is paid indirect compensation, in cash or some other form, under an agreement with an insurance company based on volume and/or profitability of business placed with the insurer and some of this business involves ERISA covered plans, presumably (based on DOL AO 2005-02A), a portion of this compensation has to be allocated to the ERISA plans and appropriately reported by the insurer to each plan for Schedule A purposes. At the least, this needs to be done for compensation paid to external persons, e.g., brokers, etc. Noncash compensation reported should reflect the cash or fair value of whatever is provided. What about similar indirect compensation paid to internal sales persons, i.e., employees of the insurer? For example, an insurance sales employee gets such additional indirect incentive compensation over and above any set base salary. Does this additional compensation for such employees need to be allocated and reported for Schedule A purposes?

1. Radiation Therapist

2. Nurse Paralegal

3. Genetic Counselor

4. Legal Nurse Consultant

5. Art Therapist

6. Computer Forensic Expert

7. Medical Illustrator

8. Veterinary Physical Therapist

9. Animal Defense Lawyer

10. Animal Assisted Therapist

(According to CareerBuilder.com)

Is this correct?

http://www.post-gazette.com/pg/06299/732847-28.stm

If so, does it affect every lump-sum payout?

Thanks

Particpant in divorce proceedings. Has requested hardship distribution for purpose of buying out spouse's interest in their home. Participant claims he will loose the home if hardship not allowed. I am inclined to disallow; however, could this be construed as a distribution to prevent foreclosure on the mortgage?

It has been a while since I had a top heavy plan. As of 12/31/2006, owners had greater than 60% of total plan assets, creating a 2007 top heavy plan. For 2006, the only contributions made by all participants were salary deferrals. I know the original 416 regulations said count key employee deferrals and ignore non-key employee deferrals.

Have there been any changes? So we can count non-key deferrals, for insatnce.

Jim

Company maintains a 401(k) plan for its employees. One of the provisions states that if the plan administrator is unable to have a check to a participants or beneficiary cashed, after the use of reasonable diligence in attempting to locate the person, then the check amount is forfeitred until or if a claim is made for the amount, in which case it will be fully restored without earnings. Similarly, if a benefit is required to be paid by the plan, but cannot due to inability to locate the participant or beneficiary, then the account balance is forfeited until a claim is made, in which case it will be restored. Based on IRS regulations, I am comfortable with this approach.

The question that arises is how is the Schedule SSA reporting handled? If the participant terminates employment and does not take a distribution, then the participant's account balance is reported on the Schedule SSA. If there is an uncashed check or an account balance that is forfeited because the participant could not be located, are you now required to enter Code B or C in line 4 box A? What if the check remains unclaimed or the account balance remains unclaimed? Do you enter Code D in line 4, Box A?

The participant's designated beneficiary is his estate. The participant died in 2007. The 401(k) plan allows nonspouse beneficiaries to directly roll over the death benefit to an inherited IRA. Can the executor of the estate directly roll over to an inherited IRA?

This is an attempt (of course, use at your own risk - but someone has to try to make life a little easier) at generating the required participant quarterly notice.

In order for this report to work, the user fields in Plan Specs would have to be coded as follows:

Date field 26 = date vesting was last updated

alpha field 29 = hours needed to accrue a year of service (e.g. 1000)

alpha field 31 = vesting yr 1 (e.g. 0%)

alpha field 32 = vesting yr 2

alpha field 33 = vesting yr 3

alpha field 34 = vesting yr 4

alpha field 35 = vesting yr 5

alpha field 36 = vesting yr 6

must have something in these fields, e.g. put 100% fields 4 5 and 6 if fully vested after 4 years.

alpha field 37 = no if plan is not subject to permitted disparity.

This report will look at ees years of service and compare to the alpha field to print vesting %.

of course some modifications would always be necessary. this particular statement says you are always 100% vested in your deferral account and any rollover. If you have QNECs, safe harbor, etc you would have to add that as well.

Have a client who is age 51 and wants to know if she should retire, take her money and run before the new rules kick in ( for calculating lump-sum payments).

She is also trying to determine amounts , should she stay with the company until age 59 1/2.

Anyone know of a calculator that uses the new rules?

I searched high and low, but no luck.

Is the 4/1/07 deadline for RMD's pushed to 4/2/07 because the first is a Sunday? I have been searching everywhere for some written guidance, but can't find anything. If your answer is yes, do you have a cite?

thanks!

Annie

1. A welfare benefit plan has stop-loss coverage. It's the plan's initial year. The PYE is 06/30/06, and the insurance contract year ends on 12/31/06.

2. Known - The plan administrator must check the "Insurance" box as a funding arrangement and segregate the stop-loss premiums on Schedule H, Line 2e(2).

3. Known - Schedule A is required. The plan administrator reports the information for the insurance contract year that ends within the plan year.

4. Not known - What happens when there's no Schedule A information? This is the plan's initial year, and the first insurance contract year won't end until halfway through the plan's second year.

The DOL software will do an edit check, notice the lack of a Schedule A, and issue a letter to the plan administrator. Is there any way to avoid the letter? Or, would you simply alert your client to expect a DOL letter, and then respond to it after it's arrived?

I can't get anyone at EBSA to return my calls. (The EBSA employees might not have a clean and simple answer.)

Regs. allow for a 2% administration fee to be charged on the cobra election. I have written provisions in PD allowing cobra participants to conbribute pre tax all or a portion of their cobra election from final paycheck.

My husband divorced in February/2001 after 17 years of marriage. We married in May/2006. He retired in Aug/2006. The ex filed a QDRO in August/2006 and received a "non-qualified" response in Sept/2006 citing several reasons, the last being he is receiving benefits under a joint plan and she was not named as the surviving spouse. He received a court order to modify the QDRO to comply with Fidelity's response to the non-qualified. In the order her lawyer stated that the wife filed immediatley after divorce but it was not acknowledged by General Motors. So 5 years later they filed again. The judge signed the modified QDRO stating the ex is entitled to pension benefits. She is requesting that she be made the alternate payee and given surviving spouse status for the lifetime of the benefits. The order also states that if the Administrator does not accept this revised order, they and my huband must make the modifications to so that his ex can be given the benfits and status. Right now we are waiting on a decision from Fidelity. I know this will not end. What are our options?

Plan sponsor is terminating 401(k) plan and a profit sharing plan. I know that general rule is that you cannot distribute participant's account balance without consent if greater than $5,000. What happens if the participant, for whatever reason, does not make distribution election? Since all assets need to be distributed within one-year, can the plan sponsor just send these participants lump sum checks? How long must sponsor wait for participants to make an election?

My former employer (known for being somewhat aggressive) taught that when forcing out a participant the distribution had to be processed after 30 days, but before 90 days (pre PPA06) had passed from giving the distribution notice. My new employer says that there is a special rule that requires that force outs to be processed only after the 90 (now 180) days have passed. I have not been able to find anything that says that force out rules are different than regular distributions as far as the notice requirements. Have I missed something?

A participant is a musician in a loud band. An audiologist has recommended ear plugs to prevent hearing loss. Do you think this is a qualified expense?

Is the tax credit still available to companies who sponsor new retirement plans? Is it $500? Thanks!!!!!

We have a self-insured medical plan that includes 4 different medical options and a separate dental option. All options are contained in the same plan (1 plan document, 1 form 5500 filed for the plan), but the employee must make separate elections to be covered under both medical and dental. If an employee terminates and elects COBRA for medical coverage only -- he declined COBRA for dental even though he had dental coverage as an active employee -- must we allow the former employee to elect dental coverage at the next open enrollment period? I know he must be allowed to switch to a different medical option at OE if he desires, but if he doesn't have COBRA coverage for dental at the time of open enrollment, must he be allowed to elect dental at OE?