A participant in two different plans dies. The last beneficiary form shows the children as beneficiaries, however, the participant remarried, and the spouse did not waive. Therefore, the spouse is the beneficiary. The spouse is not a US citizen, and lives in South America. She has not responded to any attempts to contact her.

One plan is terminated. As long as we have documented the necessary steps to try to locate the beneficiary, is it okay to roll over the terminated plan's participant account balance to an IRA in the participant's name? Then the beneficiary could claim the benefit from the IRA rollover carrier if/when they appear.

The other plan is not terminated. According to the document, the spouse is not required to take the benefit until the participant would have reached age 70 1/2, which would be in the year 2025. Does the participant's account balance need to stay in the plan until that time? Or is there any way that this can be handled (rolled over to an IRA) earlier than 2025?

MEWA will be established as a single self-funded ERISA plan (an association of bona fide group of employers is the sponsor).

Association needs to pre-fund to get it going. State insurance laws require certain reserves, etc. Association would like to loan the funds directly to the MEWA trust.

My feeling is that we need to follow the requirements of PTE 80-26 as amended and do this as an interest-free loan to the plan.

But, I was thinking, the plan does not exist yet so could the contribution merely be viewed as a setllor function.

MEWA will be established as a single self-funded ERISA plan (an association of bona fide group of employers is the sponsor).

Association needs to pre-fund to get it going. State insurance laws require certain reserves, etc. Association would like to loan the funds directly to the MEWA trust.

My feeling is that we need to follow the requirements of PTE 80-26 as amended and do this as an interest-free loan to the plan.

But, I was thinking, the plan does not exist yet so could the contribution merely be viewed as a setllor function.

I am drafting a 115 Trust...if anyone has a form they would be willing to share I would really appreciate it! Thanks.

Client is completing an application to invest in a new asset. He is a single person plan investing in a limited partnership. One of the questions is below. How would he answer the question without being too vague (i.e. investor is a qualified retirement plan)

"If the investor is exempt from US Federal Income Tax, please indicate the basis for the exemption:"

Thanks!

I heard it mentioned at the ASPPA annual conference that there is a way to import data into Relius 5500's to avoid having to enter all SSA's into the necessary form. I read over the Help instructions in Relius briefly but they sounded foreign.

Is there anyone who is utilizing this feature, and can it be used for the Schedule of Assets schedule as well?

Is it just a matter of setting up your excel file properly? If anyone already has the format figured out, I would be very greatful if I could get a copy. Thanks.

I am drafting a Section 115 Trust...does anyone have a form they would be willing to share?

I hope I'm posting this question on the correct Board. I'm dealing with a self-directed multiemployer defined contribution plan. Currently participants don't show up for the offered investment education classes and thus about 80% of the plan's assets are held in the default fund. The Trustees want to provide a $25.00 gas card to those participants who show up for the education classes and select investments. Can these cards be paid for out of the Trust? The plan provides that plan expenses can be paid out of the trust.

I am new to DB plan general testing and cash balance plans. I've been trying to figure out how to calculate a normal accrual rate and equivalent allocation rate for a cash balance plan. In the text below, I've shown my attempt to calculate both rates. Can someone who is familiar with these concepts take a quick look at these calculations and let me know if they are correct and, if not, why not? I greatly appreciate any help--I'm largely operating on my own and don't have the benefit of working with an actuary or compliance testing specialist. Thanks again!

Data:

Mary Smith

Pay = $220,000

AA = 48

RA = 65

Cash Balance Plan Hypothetical Pay Credit = 7.5%

Hypothetical Interest Credit = 6%

Part 1--Calculating Mary's Normal Accrual Rate

 Using the current year as the measurement period.

 Since using the current year as the measurement period, Mary's testing service is equal to 1.

 Using current year pay as average annual compensation.

Step 1: Mary's hypothetical pay credit @ 48 = $16,500 (i.e., $220,000 * 7.5%)

Step 2: Mary's accrued benefit @ 48 = $16,500 projected to RA using hypothetical interest credit (6%)

= $16,500 * (1.06)65-48

= $16,500 * (1.06)17

= $44,431

Step 3: Convert the accumulated value of the hypothetical pay credit to a single life annuity ("SLA") payable at age 65 using the cash balance plan's definition of actuarial equivalence (assume GAM83 @ 6.5%)

= $44,431 ÷ 10.45

= $4,252 annual benefit

Step 4: Divide the annual benefit by Mary's annual pay

= $4,252 ÷ $220,000

= 1.93%

Normal Accrual Rate = 1.93%

(ignore Most Valuable Accrual Rate for now)

Have I computed this figure correctly? If not, why not?

Part 2--Calculating Mary's Equivalent Allocation Rate

Step 1: same as above

Step 2: same as above

Step 3: discount the $44,431 to age 48 using a standard interest rate (say 7.5%)

= $44,431 (1.075)-17

= $12,994

Step 4: Divide the discounted benefit by Mary's annual pay

= $12,994 ÷ $220,000

= 5.9%

Equivalent Allocation Rate = 5.9%

(ignore Most Valuable Equivalent Allocation Rate for now)

Have I computed this figure correctly? If not, why not?

IRS Notice 2005-58 (July, 2005) made NO provision for a source of authority for nonqualified deferred compensation (NQDC)plans in Federal Credit Unions AFTER the August 15, 2005 deadline to have in place or authorize a plan under 457, eligible or ineligible. Looks like the IRS project on FCU's is no place close to an answer and won't be until way into 2007, since the interagency committee to review FCU's has not even met yet, if my information is still current.

So, does anyone think that there is a nonqualified deferred compensation plan, DC or DB, that can be safely created for an FCU during this period before the IRS completes its project and establishes a specific authority for FCU's. If so, what does it look like and what is the argument that it will be OK regardless of the unknown outcome of the project on FCU's and NQDC plans, since I don't believe there is any authority for correction if the drafter guesses wrong?

I've seen marketing materials suggesting that it is "conservative" for FCU's to proceed with a 457(f)/409A plan design(no legal support) in the current situation.

Plan's revenue sharing $ have been used to offset monthly admin fees paid by the employer. The admin fees are based on # of participants and total participant assets.

Client changed its mind and has decided to begin charging terminated employees the per participant and asset fee. They choose to only pay admin fees for the active employees. However, revenue sharing $ will continue to offset the employer's charges.

My concern with this arrangement is that the terminated participants will essentially pay inflated admin fees because their assets are being used to fund a portion of the active participant fees (via revenue sharing) and again used to fund the terminated participant admin fees. We are not crediting any portion of the revenue sharing $ back to the terminated participants.

Any problem with this?

We are about to file a VFCP submission for late deposit of elective deferrals. Does anyone have a sense for how long it will take the DOL to get to, and process, the submission under the revised VFCP? Thanks.

A client wants to gift $100,000 to his former university from a qualified retirement plan.

If this is possible, what type of distribution is this from a qualified retirement plan? …rollover or cash?

Cash?

Distribute $125,000 ($25,000 payable to the fed for w/h and $100,000 payable to the participant) and have the participant endorse the check to the university. Or, have the participant deposit the check and have him issue a personal check to the university.

Can this be a rollover?

Thank you.

does anyone know of caselaw discussing trustees' using a "blended rate" to calculate an ER's withdrawal liability?

I have a client that recently had an "awakening" with regards to their insurance broker. The guy had lots of whole life insurance policies inside and outside the db plan. There was also some large stock re-purchasing contracts outside the plan.

Is there anyway the policy holder can find out exactly how much the agent has received in commissions? The "commissions paid" was generally left blank on the previous Schedule As.

Does the policy holder have a right to know this information? If so, will the insurance company provide it if they are contacted directly?

Client withheld money from employee paychecks without completed enrollment forms. Employees email HR department asking them to withhold money. Is an email sufficient? My initial reaction was that these are not 401(k) contributions and the employer should return the money to the employees, have the employees complete enrollment forms and then withhold deferrals from pay. Any thoughts?

I've looked at several similar threads on this, but most are old enough that I wanted to see if there were any new ideas...

4 participants of a plan have returned to Ecuador - a very "in the middle of the night" kind of deal. Three have balances in excess of $5,000, and the other is over $1,000 (which is the plan's new automatic distribution threshold effective 3/27/05), so there's no basis for an immediate distribution anyway.

Can these participants be declared "lost" or "missing"? They have sent certified letters to their last known address (which have all been returned, naturally). They were not in any of the employer's other plans, so there's no information there. Regarding beneficiaries, they either didn't complete it or were each other's beneficiaries, so that's not going to help. And I can't imagine the IRS or SSA letter forwarding service is going to be able to find them - they'll have the 2005 address, and I highly doubt they are going to pay taxes in 2006!

Our plan document (Datair prototype) says that if they don't respond within 3 years of sending a certified letter, "the ultimate disposition of the then undistributed balance of the Distributable Benefit of such Participant or Beneficiary shall be determined in accordance with the then applicable Federal laws, rules, and regulations."

It seems that I just have to tell my client to sit tight until 3 years have passed and then revisit the issue, right? But let's say that three years is now - what would I do with this money?

Thanks.

Is there much of a difference for a non-electing church plan to go with a 401k vs 403b? Does using a 401(k) make it subject to ERISA?

Also, as a TPA, I'm having a tough time seeing what role we would have in adminstering a church plan. If the document has to be individually designed and maintained (which we do not do) and there are no 5500s, discrimination testing, etc. for us to provide service on, then what, if anything, is there for TPAs to do?

Does anyone know whether the value of retiree health coverage provided to a retiree's domestic partner under an employer-sponsored retiree health plan, which is typically imputed income to the employee, is reported on a Form W-2 or, alternatively a Form 1099?

I have looked at the regs, the instructions to the 1099 (specifically the instructions to the 1099-R and 1099-Misc) and the W-2 and Publications 15, 15-A and 15-B and everything seems to point to the following:

1. The employer should treat the value of the DP retiree coverage as imputed income to the employee;

2. The imputed income is wages for purposes of employment taxes and withholding; and

3. The wages should be reported on a Form W-2.

Note: The coverage is being funded through a VEBA.

Does anybody have any thoughts? One additional rub... if the W-2 is the correct form, withholding clearly applies, but there will liikely be nothing to withhold from because the former employee will not have wages in addition to the imputed income. This leads I think to the unpalatable result of either (1) the employer paying the amount needing to be withheld (which is also wages to the employee and subject to tax, etc.) or (2) requiring the employee to make some sort of after-tax payment to the employer equal to the amount to be withheld.

If anybody has any ideas or has looked at these issues, please help!!!!

Individual sold the assets of his single member LLC (assume it was an "asset" sale, since there was no "stock", per se, to sell). Same individual subsequently established a new single member LLC and wants to set up a PS Plan for the new LLC. Some of the employees of the "old" LLC are now employees of the "new" LLC.

Must/may the PS Plan of the "new" single member LLC take into consideration service performed for the "old" LLC for initial eligibility and/or vesting under the new PS Plan?

Thanks!