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?

Are safety glasses with a prescribed lens eligible for reimbursement under a health fsa? Certainly, a pair a goggles from the local home improvement store would not be covered.

The argument is that they should not be covered because they are a work related expense. The example being given is a physical for a job. I would agree that such a physical would not be reimbursable because it is not a 213(d) expense - it is only being incurred to secure a job.

Any insight would be appreciated.

How do you determine the maximum amount you can contribute for an individual in a Cash Balance Plan?

So, as I was reading my Maxim magazine today, I stumbled upon a great article about Roth IRA's and how young kids should get into it and create an account. Something like puting just 100 dollars a month from the ages of 25 to 65 would make you a millionaire. Now, that raised an eyebrow.

Unlike the majority of people here, i'm just 21 years old. So i'm going to be starting young. To be honest, I my goal in life is to be secure and have my health; however, being a self-made millionaire would be great. Financially, my family is pretty well off, I attend a Big 10 University (Penn State) and want to open an IRA account.

Before I get judged, I know absolutely nothing about Roth IRA and would like any type of input. I have a steady job and make a pretty good pay for a 21 year old. Every 2 weeks I would like to put 100 into the account.

If somebody could teach me about this, it would be really greatful.

Thanks.

A employer failed to offer a participant the option to make deferrals during the 12/31/06 Plan Year. The employer plans on making a corrective contribution (SR and MT) to the plan on the employee's behalf, in the form of a QNEC, following the example under EPCRS. The plan is cross-tested; could this corrective contribution be included in the general test?

A defined benefit pension plan ("DBPP") was established in 2001. In 2002, an HCE rolled $100,000 into the DBPP. In 2007, the IRS is proposing to disqualify the DBPP for potentionally violating the minimum coverage rules. Whst happens to the $100,000?

Thanks in advance for your assistance.

Ed

Hello,

I run a S-corporation and I am the only employee. I have adopted a self employed 401K plan and have contributed for the last two years.

I am planning to start up another company, where we will be having employees. I do not know what the 401K implications will be. What are my options. Will the employees of the new corporation have to be covered because my other company has adopted a plan. Or there will be no implications becasue they are two different entities.

Also if there are implications, am I allowed to close out the existing 401k plan.

Any pointers will be appreciated.

Thanks

Can you roll or direct transfer a Roth IRA into the Roth portion of a 401k which allows for both pretax and Roth contributions?

I am starting to do some 12/31/06 CB/PS combined plan coverage and nondiscimination testing and it seems I'm a little rusty. I have a calendar year plan with a participant that terminated employement during 2006 with only 300 hours. The PS plan provides a 3% safe harbor PS contribution to avoid ADP testing. Since there cannot be a last day or hours worked requirement on that SH PS contribution then it seems like that participant would then be benefitting for the purpose of receiving a gateway minimum. I don't see a way around the 3% SH plus the gateway but it is weird t give a gateway to someone that can be excluded for 410(b) and 401(a)(4) testing because they are terminated with less than 500 hours. What am I missing?

Corp. 1 sponsors a 401(k) Plan. Corp. 2 purchases 100% of the stock of Corp. 1. As of the purchase date, some of Corp. 1's employees continue to work for Corp. 1 and some immediately start working for Corp. 2. Corp. 2 assumes sponsorship of the 401(k) Plan formerly sponsored by Corp. 1. The individuals who remain employees of Corp. 1 continue to make 401(k) contributions to the plan (if they wish to do so) and if they have outstanding plan loans, they continue to make loan repayments through payroll deduction (as they did prior to the sale).

(1) Have the employees who continue to work for Corp. 1 had a "severance from employment"? My inclination is "no".

(2) Have the employees who, as a result of the sale, have gone to work for Corp. 2 had a "severance from employment"? I still think the answer is "no", but the answer seems less clear.

(3) If eventually Corp. 2 moves all of the former Corp. 1 employees to Corp. 2's payroll (and Corp. 1 continues on as a "shell"), have the former Corp. 1 employees had a "severance from employment" then? Given that Corp. 1 is a wholly owned subsidiary of Corp. 2, my guess is that the answer is still "no". The Corp. 1 employees may not be able to make additional contributions to the Corp. 1 plan, but whether an individual is entitled to make a contribution to a 401(k) plan and whether an individual is entitled to take a distribution from a 401(k) plan seem like separate and distinct questions.

Thanks in advance for any help.

I can find requirements on when you have to give an SPD (Labor Reg. § 2520.102-2©*)or SAR in non-english but I can't find anything similar for when you have to give a rollover/402(f) notice in non-english. Do the same requirements apply for when you have to give these notices in non-english?

*can't seem to edit out conversion of c in parens to the copyright symbol

When doing plan design, attention may be given to the ratio of retirement benefit to pre retirement income. I believe that historically a good target was considered to be between 60% and 75% of pre-retirement income.

A question has come up as to whether in these days of 401(k) plans, those percentages are typically discussed with respect to employer funded benefits only OR taking into account all known sources of retirement income.

For example if an employer has a 401(k) profit sharing plan, do people typically talk about:

1) Only the benefit provided by the profit sharing balance

OR

2) The benefit provided by the profit sharing balance and 1/2 of the Social Security benefit, because the employee is funding the 401(k) and the half of the SS tax.

OR

3) Profit sharing and 100% of Social Security.

OR

4) Profit sharing and 100% of Social Security and 401(k).

I would assume that in (1) the target ratio would be lower than in (4). I can imagine a more complex communicnation where we might say:

Target Income - 75%, provided by:

- Profit Sharing - 25%

- Employer Funded Social Security - 12.5

- Employee Funded Social Security - 12.5%

- Your own Savings - 25%

How is the rest of the benefits world taking about this issue with employers?

We have a client whose pension plan adds 125 deferrals into comp. The payroll department of the employer added in the participant's HSA salary deferrals back into compensation as 125 deferrals.

Is this permissible?

Thanks.

My company will be closing on March 31, 2007. Approximately 20 employees will lose their jobs. We have a 401(k) profit sharing plan with a 5-year vesting cycle. The company was started in 2000 and most employees are not fully vested in their 401(k) accounts. Our 401(k) plan is shared with a sister company that will not be closing and none of the employees working for that company will lose their jobs. Is my company required to fully vest all of the 401(k) contributions it has made to the participants' accounts? There is conflicting information and the company does not want to vest everyone.

Parntership loses one of its partners. This partner left 8/2005. There is still a k1 for this parnter for ther 2006 year. he did not work any hours in 2006. He only has k1 earnings. Is he still considered employed for allocation purposes? No 1000 hour or last day requirement. I think that since he actually left in 2005 and did not work an hour in 2006, he is not eligible.

I am working on a benefit calculation for a plan that is frozen. A participant is retiring at age 68 (normal retirement age is 65). The plan's definition of actuarial equivalence is pre-ret mortality- none, post-ret mortality - 84 UP, pre- and post-ret interest is 6%. Which method should be used to calculate the actuarial adjusment for late retirement?

1. (a65/a68)*(1.06)^3

2. N65/N68

I guess it comes down to how to interpet the definition of post-retirement actuarial equivalence. Does the post-retirement assumptions apply to post normal retirement age or the period following actual retirement from employment?

Has there been a change yet in the mandated mortality table? If not, when will a new table be required and which table is it going to be?