My wife would like to maximize contributions to her 457b over the next three years beyond the $20,500 allowed to someone over 50. We have inquired into the regulations that govern being able to contribute up to $30,000. The plan document seems to put the normal retirement age at 55 (though, in reality, no one or hardly anyone ever retires at that age and pensions are not available until one is 60). The question is whether this mention in the plan document means that one could only take advantage of the special catchup contributions, therefore, at age 52-54. The plan administrator does not seem to be too savvy about this matter nor does the rep from the investment firm who gets all the 457b business. Their bottom-line answer is that she is past the time when she could have done this? Is this the meaning of NRA in this context? Or does it means something else?

Frank

I’m a former employee of a company that has just been acquired. I left the company around 5 months before the announcement was made.

ESOP shares are historically paid out at the appraised value for the year of termination. Since the appraised value is not known until the close of the financial year, the former employee would have to wait until after the close of the financial year to receive their funds.

In the past, distributions have been made at least 6 months after the close of the financial year. I was expecting my ESOP account to be transferred to me in March/April of 2008.

As I left 1 month into the new financial year, I would normally have to wait until mid 2007 before knowing the appraised value for the stock I own. Since the company has been purchased by a publicly traded company, this appraisal process will no longer take place.

Should I expect to receive the buyout price for the ESOP shares? How are former employees who left in the plan year normally handled? Any insight would be appreciated.

We use Relius Administration version 11.1.2 as our valuation software. The software give you an option to apply IRC 404(a)(1)(A)(ii) for purposes of calculating the maximum contribution. When this option is selected, if any three individuals together have more than 50 percent of the total unfunded cost for the plan, then their unfunded costs will be amortized over at least 5 years.

I'm curious why the software give you an option to apply IRC 404(a)(1)(A)(ii). I wasn't aware that this regulation is optional. Are there circumstances when the regulation is not applicable?

Obviously, in many cases the maximum deduction using IRC 404(a)(1)(d) (150% limitation) is greater than the normal cost applying IRC 404(a)(1)(A)(ii). As such, my question would be irrelevant.

However, in situations where the maximum deduction using IRC 404(a)(1)(d) is not available (i.e., new plan), must you apply IRC 404(a)(1)(A)(ii)? I think the answer is yes but why does Relius give you an option?

I did a search to see if this question has been posed before, but couldn't find anything.

A participant has low compensation and defers most of it. The plan is top-heavy and the TH minimum contribution would put the participant over the 415 limit. Is the TH contribution reduced so it doesn't exceed the 415 limit, or is the TH minimum paid and the participant would then have a refund of deferrals for exceeding the 415 limit?

Under PPA, the lump sum limit seems to be defined in terms of the interest rate (ie. the greater of 5.5%, the rate that would provide 105% of the benefit that would be provided using the s417(e) rate, or the rate in the plan.

What if your plan actuarial equivalence is 6% and the 1983GAM table (50% blend)? Is the max lump sum based on 6% (being the highest rate of the 3) and the plan mortality table (83GAM(50%))? Or, 6% and the latest GATT (ie applicable mortality table)?

I had a company from 92 to 96 which had keogh plan for me (only employee). Company was dissolved in 96 or 97. I have never filed 5500EZ and off course had no idea it had to be filed. I was trying to consolidate my retirements accounts in SEP-IRA when fidelity inform me that I need to file all old 5500EZ.

I hear its a big penality for late filing.

total money in plan is about 180K.

I am really really looking for any professional who can help me to file these or figure out how to resolve it.

if you know of anyone who does this for living, please let me know.

thanks a million

harvi

Lots of forfeitures.

Are the rules for reimbursing the sponsor/administrator for expenses from FSA/DCAP forfeitures are strict as the DOL rules for retirement plan reimbursements (i.e. direct expenses only and not overhead) or is there more flexibility?

I have a participant who was terminated 12/31/2005 and I'm doing testing for 2006. He got one last paycheck in 2006 for the first pay period in 2006, where he made $190 in deferrals and got a $90 safe harbor match. Do I include him in 2006 testing and use 01/01/2006 as his termination date or ignore him for 2006 testing?

I'm finding a lack of detailed information on this subject. Client allows employees to sell up to so many vacation days to directly offset pre-tax health plan contributions. Net taxable income is the same as if employee cashed out the days. There is no option to purchase vacation days.

If an employee doesn't sell any days and doesn't use all their vacation days, can they still roll-over vacation? I know the difference betwn elective and non-elective days, and elective days cannot be rolled forward, but not sure how to differentiate when ees only have the ability to sell.

Thx, Lp

I am trying to access a scorecard that can be used to evaluate proposals for health insurance coverage. Suggestions?

Thank you.

Does anyone know whether the IRS is allowing SEP prototypes to provide for immediate eligibility of existing employees (assume there is only one, the owner) of a new employer, and for future employees to satisfy a three-year service requirement? I've heard that the IRS is "no longer" allowing such provisions (but a few may have gotten through). All comments appreciated.

The SEP-LRM (attached) does NOT provide for such a provision.

sep_lrm_2_2002.pdf

I have searched and searched this board, IRS, etc and find nothing new. With the elimination of Schedule P did IRS provide specific instructions that state the SOL starts w/ filing of Form 5500? Maybe I just missed seeing it?

Can a church plan pay lump sum based on its actuarial assumptions and not use GATT Rate as a minimum?

I had an employee who was terminated in July. I am getting ready to send in the employer's 2% contribution for which she is eligible. However, she has terminated her account with the broker where the money is to be invested. What am I supposed to do with her money?

In a divorce situation, the non-custodial parent is required to provide health insurance for the children. For whatever reason, the custodial parent also elects family coverage and to have the kids on her plan. Therefore, the kids have primary insurance (non-HDHP) and secondary insurance (HDHP).

I am understanding that the non-custodial parent with the family coverage in a HDHP can still make contributions to HSA when the kids are also covered on the custodial parent's non-HDHP at the family limit ($5,650 for 2007).

Is my understanding correct?

I have a situation where an employee performs separate and distinct services for two commonly controlled employers. Each employer sponsors a Defined Benefit plan. Employee is participant in each plan. Plans are tested on a controlled group basis. Employee is paid under two separate payrolls. Can the full § 401(a)(17) compensation limit be taken into account under each plan when determining employee's benefit, due to the fact there are separate payrolls? Any help would be greatly appreciated.

Is there any way to move all my VEBA (501c) $ (over 60K) to a different company? I currently have my VEBA $ with MetLife/ISTA Financial. ISTA is the Indiana State Teachers Union. MetLife/ISTA Financial oversaw most of the "buyouts" of severance-type beneifts here in Indiana. But, in my school, they got involved in the negotiating of our buyout contract (of: a) accumulated sick days and b) future health care. Their agent got up on our stage, in front of 100 teachers, only 5 days BEFORE the teachers voted "yes" on their contract. Their agent told us what the agreed upon terms were in the contract.

Long story short: our superintendent of schools got DEEPLY involved in altering a settled contract. When all the lying and cheating began, our local teachers union, MetLife, and ISTA tried to run away from the promises they had made. They tried NOT to defend teachers. It was up to me to hold all parties responsible. I will not go into details, but it got NASTY....I had to recruit a junior high teacher and teach him everything the superinendent was attempting. I knew I was due $81,000, the superintendent, by altering agreed upon terms, tried to give me as low as $68,000 total (in VEBA and 401A monies). By holding everyone's feet to the fire (I have the e-mail ISTA sent out telling our local union NOT to defend the teachers and NOT to speak to me...heck, I was holding all parties responsible, as I said), I eventually recovered most of my promised and negotiated $: $81,000 anyway. I am STILL owed over $1,000 of VEBA $ by the school district.

Anyway, ISTA is obviously connected to MetLife as you can see. I DO NOT trust them with my $ after their behavior: they were the ones on stage (this is all on video tape...I have the video!) making promises to our teachers of the terms of the contract. While I think they told the truth, when the superintendent started all the lying and cheating, MetLIfe and ISTA ran away and even told the teachers to file a grievance.....pretty pathetic when you consider that my firend and I eventually got one filed (we have a VERY weak local teachers union), and $400,000 was won for the teachers....$13,000 of that mine.

What are other companies that I could transfer the $ to? Can such a transaction (changing VEBA companies) even take place? The amazing thing here is all the evidence I have on MetLife and ISTA...on video and e-mails of an effort to tell the techers to just let the dishonest superintendent run all over them. No, I do not trust MetLife/ISTA Financial! I would love to take my $ away from them. I already took my 401A $ away from them in an IRA Rollover, but I have no idea how to get the VEBA $ away from them....they are SO dishonest!

Sincerely,

3 Point Shooter

I am working with a school district that has a 403(b) and is interested in starting up a new 457(f). They are interested in 457(f) portability issues. Specifically, what events would trigger one being allowed to transfer assets between their 457(f) and their 403(b). Any help you can provide or resources you can direct me to are much appreciated.

Unrecognized gains/losses are amortized over active employees future service. When a plan becomes frozen are gain/losses fully recognized? Or do you continue to amortize based on future service to retirement even though no additional service is recognized for benefit accrual?

I understand that the Top-paid group election can lower the # of HCE's for testing. Is this true?

Can I elect year to year? does it need to be in the document? what are the restrictions?