We have just recently began offering HDHP's w/HSA's. I am trying to fully understand what can be reimbursed through a "limited purpose" and a post-deductible FSA.

I think I understand that the post-deductible FSA can only reimburse eligible medical expenses after the deductible of the HDHP has been satisfied. Don't see any real issue here.

My questions surround how the limited-purpose FSA works. The IRS Notice says that it can pay or reimburse expenses only for preventive care and permitted coverage (eg dental and vision care). Since this limited purpose FSA is able to reimbuse for preventive care expenses, can the FSA reimburse expenses for preventive care, such as well-child doctor visits and immunizations, that would be applied against the deductible of the HDHP?

Also - should the FSA TPA offer a separate plan document or plan amendment for the post-deductible and limited purpose FSA's as opposed to offering only one FSA and with the understanding that those HDHP/HSA participants only submit reimbursement for qualifying expenses?

The question is, since a plan offering safe harbor 3% non-elective contribution is not subject to top heavy testing, if they have immediate elgibility for employee salary deferrals, but a one year wait for safe harbor contributions, does that make them still subject to top heavy for the employees who are deferring who have less than one year of service but 1000 hours of service by the end of the plan year?

Thoughts on whether the following works as a matching safe harbor and/or whether it would require any additional tests: mandatory match of 100% of the first 6%; first 4% is vested; 5th and 6th% is subject to a 6-year graded vesting schedule. Any comments are greatly appreciated.

Assume that you have a controlled group that includes Company A (has a safe harbor match) and Company B (has a non-safe harbor with a modest match). Historically, Company B has passed 410(b) so it's plan can be tested separately. But what happens if Company B discovers in December that they no longer pass 410(b)? It's too late to make Company B's plan a safe harbor plan. Do you simply bump everyone's match up to the safe harbor level with 100% vesting? What about those who chose to limit their deferrals in Company B's plan to maximize the modest match? What a mess!

the question is this: could this ESOP get the 404(k) ESOP dividends invested deduction?

the details are this: we have an ER that has a SINGLE pension plan w/ "moving parts." there is a 401(k) component, an EE match component and a profit sharing component, all under the same pension umbrella. the profit sharing part invests (100% as of right now) in its own (publicly traded) ER securities. the EE choose if they want to participate in the plan. the ER says that the part of the plan invested in ER securities is the "ESOP."

assume that the ER invests only 5% or 1/2% of the ESOP part in the whole pensioit plan, as determined by EE demand. can the ER still get the 404(k) dividends deduction??

what is the authority i should be looking to; thus far, i have struck out on every avenue.

desperate for an answer!!!!!!!

A friend of mine has been on COBRA since her divorce. At about 20 months, still on COBRA (!?!?!?!) she is diagnosed with breast cancer. Another friend, also in benefits, calls and finds out that the COBRA administrator has friend #1 on COBRA due to DEATH of spouse, not divorce.

Having a hard time giving her advise. She has no other group plan to go to, as she is self-employed, so creditable coverage issue doesn't really matter. My biggest concern is what happens when COBRA administrator finally discovers error and drops her coverage. Any ideas about best course of action?

Thanks to all for any advice!

Sheila K

8-)

I have a controlled group with 2 companies. Company A has a 401k plan, Company B does not. For 410(b) testing purposes, if I test the employees in Company B in Company A's plan and they pass 410(B) testing; can I test the 2 company's separately for ADP/ACP or do they have to be tested together for ADP/ACP since they were tested together for 410(b)?

payroll accidentally turned off someones deduction in 2005, he finally 'noticed' and brought it to employers attention Dec 2006. what is employer liable for?

do they owe him any contribution dollars (matching or otherwise) for the period he wasnt contributing but should have been- as he elected????

he does receive a weekly paycheck and quarterly statements for his 401(k)

thanks so much!

Section 223(d) of the Code provides that an HSA must have a trustee that is a bank, an insurance company, "or another person who demonstrates to the satisfaction fo the Secretary that the manner in which such person will administer the trust will be consistent with the requirements of this section."

Can anyone point me in the direction of where to look to determine how the process (of gaining approval by the Secretary to be a trustee) works, what information is likely to be required by the Secretary, and how long the process generally takes?

Is there a more recent Minimum Distribution amendment for Defined Benefit plans, issued after the one in Rev Proc. 2002-29? Thanks.

Hi everyone. I'll admit it, I'm in the dark, but you have to start somewhere and would appreciate any advice offered. I want to start a Roth IRA, using ONLY guaranteed investments like FDIC insured CD's, or similar. I am absolutely NOT interested in mutual funds, etc. I have only about 12 years to go and I want to play it safe and then some. CD's interest me because they pay an interest rate I can live with, currently 4.5 % or better. My question is can these accounts be used in an IRA, and where can I get info on them? I just seem to be going around in circles sending emails that don't get replied to. I would also consider other safe investments like Treasury Bonds, but I could use some advice to get started. Thanks Rick

Is it possible for me to open an ROTH IRA for my 9 year old daughter? I am divorced and do not have custody of my daughter. I do have visitation rights and pay child support (on good terms with ex so I can get my daughter whenever I want).

My daughter has a basic savings account that is in my name but for her (my old savings account before I switched banks). I would like to start her ROTH IRA with the funds that are currently in the savings account since it earns pennies each month.

Is a minor allowed to have a ROTH IRA? Will I have to be on the account? Does it matter that she does not live with me? I want to control the account since I will be making the contributions on a bi-weekly basis.

I've been contributing to my 401k (TSP) for the past 4 years. This will be my first investment outside of the 401k and basic savings account.

What institutes should I look into? I have heard a lot about ING. I bank with Bank of America, Suntrust, and First Georgia Community Bank if that matters.

Thanks for any help!!

if an ER has a new program whereby HCEs in a 401(k) plan make their 401(k) election online w/o a paper copy going to HR, and the ER finds out that the HCE has inadvertently set level too high, could the

ER itself or the TPA go into that HCE's account, w/o the HCE's consent, and automatically reduce the elective deferral so the plan doesn't run afoul of ADP testing?

If not, what other remedies are available to the ER??

thanks in advance for your help.

Plan was cash balance Defined Benefit with a GUST determination letter. This plan was restated on July 2006 to a non cash balance plan using a GUST volume submitter.

The employer EIN ends in 6, so my question is: Since cycle A for individually designed plans is from 2/1/06 to 1/31/07, should this plan have been amended for EGTRRA before being amended onto the volume submitter document?

Thanks

Thanks to the IRS for changing the 2006 1099-R instructions. See the release at http://www.irs.gov/formspubs/article/0,,id=109875,00.html

*** If you downloaded the IRS 1099-R instructions prior to 11/10/2006, junk that copy and download the newest version (http://www.irs.ustreas.gov/formspubs/index.html).

Two big changes for IRA providers - (a) The IRS finally clarified the issue of how to report IRA distributions that might contain nondeductible amounts and (b) the IRS clearly state thats the responsibility of qualifying an entity for a charitable IRA distribution is on the taxpayer. Unfortunately, the IRS hasn't released the 2006 version of Pub 590 to give the taxpayer more guidance on the charitable IRA distribution issue.

Can the beneficiary (of a "Beneficiary IRA") of an IRA owner who was over 70 1/2 when owner died, make a distribution to a charity?

I received a 401k Safe Harbor notification on Friday December 1.

On the following Mondy, I received another email saying that my employer is changing their mind because too many people called to increase their contributions!

Is there somethink wrong with this? I assumed there would have to be a reasonable announcement time to abandon just like there is to switch the plan.

thanks for any references,

Helcul

anyone here aiming for a million dollars from their 401k plans? it says in this article, http://www.research401k.com/millionaire-401k.html that if you contribute $10,000 total a year, you would have a whopping 4.8million upon retirement!

I'm curious as to what other TPA's are doing that handle only allocated accounts, where the investment company produces account statements. I'm an independent TPA not in the statement production business. Some investment companies are already stating they will not assist w/ the PPA vesting notice requirements even though IMHO programming this information would be relatively simple.

Is it permissible to generate a generic statement to participants at year end that states the vesting provisions of the plan and how to apply them, or does PPA require a customized statement for each participant, stating their particular vested percentage for each money type. Although such a statement would be a redundant repetition of the SPD, the alternative which is to provide a customized statement will prove very costly to the client (in terms of what I would have to charge to recoup the production costs).

Thank you in advance for any help.

A plan's normal form of NRB is life only annuity.

To satisfy the RMD rules, among other alternatives, the payments can be made a) as an equivalent 100% J&S annuity and b) as an Equivalent increasing annuity with annual increases <5%.

Q1: Can these two be comined, i.e. as an Equivalent increasing 100% J&S? I don't see why not.

Q2: Are there any documents that are required to be executed to use these alternatives or does one just compute the numbers and keep them in file?

Thanks.