The employer is terminating the company's 401(k) plan. One participant has over $5,000 but refuses to sign any paperwork regarding distribution of his account balance. I don't know why. Since we cannot cash him out (over $1,000), would we treat him as we would a lost participant, showing that we went through the steps to locate and pay him but to no avail. Then, having done that, just set up an IRA for him, roll his money over to that institution, and be done with him?

Thanks

I have a cash balance plan in which the interest credit is 6% per annum. If I were to calculate a lump sum for a vested terminated employee in 2006 using the required 417(e) rates and then reacalculate the lump sum in 2007 using the 417(e) rates, the amount in 2007 is lower than the amount determined in 2006. Is the 2006 lump sum now a minimum? Or, is the lump sum the amount calculated in 2007? The AEQ asumptions are the 417(e) mortality and interest, one month lookback and one plan year stability period.

Where in the code does it address changing from prior year method to current (or vice versa)?

Or was it a Rev Rul?

Can someone point me in the right direction?

I know this is a stupid question, but:

We have a Profit Sharing Plan where the owner has been taking miminum distributions since he turned 70 1/2. He died in calendar year 2006 and had taken a portion of his minimum prior to his date of death, and his beneficiary took the rest this year.

We report the deceased participant's information on the 2006 1099-R, correct? What code do we use on the 1099?

Thanks for your help ;-)

Does an employer have to allocate GAP period earnings on a 2006 excess deferral which is distributed in 2007? Is this now a requirement under the new 401(k) regulations or is it still optional based on the plan language?

A client had a SARSEP plan, into which they deposited deferrals and employer contributions for part of the year. They then discontinued the SARSEP, and started a Safe Harbor 401(k) plan with a new comparability profit sharing allocation. They would like to make a profit sharing allocation for the year also. Are the contributions to the SARSEP plan considered in 401(a)(4) testing at all?

An employer plans on making a profit sharing contribution for the 2006 plan year. However, the plan will merge with a related employer's plan as of 1/1/07. Is it okay for the employer to make this profit sharing contribution after the merger of assets? It seems a little odd to be making a contribution to the merged plan on behalf of participants of a plan that no longer exists.

We have a situation where a participant unfortunately has late-stage cervical cancer. She is not able to hear, comprehend or communicate in any way according to her doctor. She is unmarried. She has a sister who apparently had an adversarial relationship with her. Who would be the approporate person to make decisions regarding her benefits? She is eligible for early retirement and also has a death benefit. Can we accept a distribution selection form from her sister? We want to handle this the right way and wish we could communicate and satisfy the participant's wishes, but we can't find out what those wishes are. Can anyone point me in the right direction?

It seems to be my week - NOT!!!

An auditor for one of our plans has requested the following, and they maintain that they are provided this information from 'many' TPA firms:

1. Participant information in an electronic/downloadable format;

2. 5500 information in an electronic/downloadable format; and

3. Access to participant documents (such as enrollment guides!) and other correspondence on the web.

Are other auditors asking for information this way, and is anyone actually providing information this way?

Lets say on 1/1/06 an active participant over age 65 received a lump sum based on an accrued benefit of $7,600/mo. life only. The lump sum was paid, based on the 417(e) rates in effect. The amount was $912,000.

The participants 100% comp limit was $8,000/mo. and using 5.5% also produced a lump sum of $912,000. Therefore, even under the post PPA 06 method, the lump sum was permitted.

It is now a year later and the participant has "accrued" an additional $300 under the terms of the plan.

Question 1 - is it possible to pay this $300 as an annuity w/out violating the 415 limit or because the participant received a lump sum equal to 100% of comp, no additional accruals are permitted?

Question 2 - If 3 years from now the participant increases their compensation limit to $18,000, how should I value the previous lump sum that was paid? Would I roll it up using plan factors, 417(e), 5.5%, none?

Searched and searched and searched! no luck.

Sole prop establishes a 'solo' 401(k). Does not yet have to file 5500-EZ.

I know he needs to get a Federal EIN, but when? When he first needs to file the 5500-EZ?

If sooner, I need a cite cuz a broker is fighting me and I can't find anything other than instructions to the EZ!

Can someone help?

If the entity is a sole proprietorship or a partnership and they make an election to defer the maximum allowed by law by 12/30/2006, when does the deferral have to be deposited by - the due date of the entity's tax return?

Thank you.

Our company requires a new election form each year for our cafeteria plan. If an employee does not turn in a new election form, can we continue to use the previous year's elections or assume no elections at all?

Thanks!

Pam

We have a client who offers three health insurance options to its employees, the newest one being a HDHP HSA. The other two options include a standard indemnity plan with deductibles and a PPO with co-pays. They also offer Health FSAs. Only 10% of their employees have elected the HSA option for 2007. The question is, must the employer convert ALL General FSAs to Limited-Purpose or Post-Deductible FSAs during the grace period REGARDLESS of the health insurance option the employee has elected? We have read the regs numerous times, but cannot clearly asertain if the language is addressing an employer who is offering only the HDHP HSA and no other health coverage option to its employees or if the language applies across the board even to those employers who offer multiple health plan options. If it is indeed across the board, it really appears it is penalizing those employees who do not elect the HSA option. Has anyone else run into this question or know where it is clarified in the regs?

Can someone confirm if my thinking is correct: If after a DB plan is funded to only meet minimum funding requirements for the 2007 (calendar) plan year (no credit balance) it is 65% funded based based on PPA interest rate. Is it true that the only way to avoid the benefit restrictions would be for the plan to be sufficiently funded at 92% based on assets less the pre-funding credit balance (which would be $0 at 1/1/08). If the plan did not meet the 92% threshold, the assets used to determine the funded percentage for the benefit restrictions are reduced by all credit balances so any additional 2007 contributions would only be a wash in regard to the benefit restriction funded percentage calculation.

Any guidance would be appreciated. Thanks.

Suppose two unrelated employers domiciled in State A form a MEWA to provide welfare benefits to their employees. Further suppose that one of the employers has limited operations in State B and therefore some of the employees covered by the MEWA reside and work in State B. Does the MEWA need to be registered and otherwise comply with State B's MEWA laws?

This question came up with a client of mine that is domiciled in one state (i.e. it is incorporated and headquartered in that state) but has employees in up to 15 different states. It wants to cover its employees and the employees of another related (but less than 25% commonly owned) employer (domiciled in the same state) under a single group health plan. Is this possible or would this arrangement be a MEWA subject to regulation of all 15 states?

Employer wants to change vesting schedule effective 01-01-07.

Employer contributions made prior to 01-01-07 will continue to vest on the prior 5 yr cliff vesting schedule and beginning 01-01-07, any contributions made will vest on the 6 yr graded schedule; of course, salary deferrals are 100% vested.

Is this a problem? Any IRC/reg guidance would be appreciated.

Thanks!

This topic was brought up a few years ago, but I wanted to see if anyone had heard or seen anything definitive. The employer is an LLC that checked the box to be taxed as a corporation. We're not so much concerned about the IRC, but can't seem to find anything related to ERISA s 407 that would allow LLC interests to be considered "stock." Any thoughts?

Does anyone have any relatively recent disability tables they could share? I’m looking for incidence, not disabled mortality. I have the old UAW tables and a table from 1985, but I was wondering if anyone has anything more current. We looked on the SOA site and didn't really find anthing.

We are looking mostly at blue collar groups (1,000 lives) and as we update mortality to one of the RP2000 tables, using a 1955 disability table doesn't seem reasonable.

Non profit has 1 HCE 50 non union NHCE and 100 union HCE

Can the union NHCE be left out of the ADP test? i.e. disregarded because the benefits are part of their bargained package