Are any ERISA benefits taxable to participants?

I have already posted this on the Nonqualified Deferred Comp board, with no response, so I'll try here. A NQDC plan is funded entirely through the purchase of life insurance. The plan is to provide 20% of average pay (w/o regard to the 401(a)(17) and 415 limits) at age 65. Is such a plan sublect to FAS 87?

per a request. here is a crystal report that hopefully will produce the safe harbor notice needed for plan years beginning 2007. (will print vesting and distribution info) This was converted to 11.0. the 10.2 version is posted on the relius board.

first I should say I don't have any convoluted plans (e.g. different vesting schedules for different stuff)

one can always add more items by entering data in the user fields.

this report is based on a combination of Corbel's example and (if I remember correctly) Sal "The ERISA Outline Book" example of a few years ago. but maybe I am wrong there, I don't recall where I received my original example.

alpha numeric User fields in plan specs:

#20 deferral changes can be made (e.g. quarterly or monthly, etc)

#21 is compensation definition (e.g. Total or comp less bonus, etc)

#22 and #23 distribution conditions (e.g. upon termination)

#25 contact person (e.g. Blunky the one eyed newt)

#26, #27 and #28 vesting schedule

#26 2yrs 20% 3 yrs 40%

#27 4 yrs 60% 5 yrs 80%

#28 6 yrs 100%

#29 hours for vesting (this might only be available on version 11.0) I added this after the fact. I figured it can't hurt.

As far as I can tell, I have included everything needed. If there is no match then those portions of the report can be surpressed. etc. etc.

per a request. here is a crystal report that hopefully will produce the safe harbor notice needed for plan years beginning 2007. (will print vesting and distribution info) This was written at 10.2 I will a version for 11.0 on the 401k board

first I should say I don't have any convoluted plans (e.g. different vesting schedules for dufferent stuff)

one can always add more items by entering data in the user fields.

this report is based on a combination of Corbel's example and (if I remember correctly) Sal "The ERISA Outline Book" example of a few years ago. but maybe I am wrong there, I don't recall where I received my original example.

alpha numeric User fields in plan specs:

#20 deferral changes can be made (e.g. quarterly or monthly, etc)

#21 is compensation definition (e.g. Total or comp less bonus, etc)

#22 and #23 distribution conditions (e.g. upon termination)

#25 contact person (e.g. Blunky the one eyed newt)

#26, #27 and #28 vesting schedule

#26 2yrs 20% 3 yrs 40%

#27 4 yrs 60% 5 yrs 80%

#28 6 yrs 100%

#29 hours for vesting (this might only be available on version 11.0) I added this after the fact. I figured it can't hurt.

As far as I can tell, I have included everything needed. If there is no match then those portions of the report can be surpressed. etc. etc.

I am hitting on some problems here and need some help.

When filing the 5550 and dealing with multiple manufacturing locations, does ALL information (including Schedules A & C) need to be made available to all facilities so employees have the opportunity to review?

Thanks for your help.

A NQDC plan is funded entirely through the purchase of life insurance policies. The plan is to provide a benefit at 65 equal to 20% of average compensation (w/o regard to the 401(a)(17) and 415 limits). Is such a plan subject to FAS 87?

A missionary organization has been putting monies into what is described as a Section 72 plan. The organization is chartered as a church.

The monies are contributed after tax and apparently grow tax deferred.

Advantageous because of the overseas exclusion allowance.

I am not familiar with this type of plan and am wondering if it is part of old deferred comp approaches, etc.

Also, what can be done with the monies other than indivisual distribution? Rollover to IRA, 403b, etc.

Thanks for your help.

Bruce

In an Erisa plan, are employers required to set aside funds to pay for benefits?

I know that employees have a right to see statements about their benefits, but do they have the right to obtain information regarding benefits provided to other participants under the plan?

A CBA provides for a Taft-Hartley health fund and monthly deductions by the employer to fund the plan. The CBA also has a provision that allows for an employee to opt out and receive some cash from the employer if the employee can demonstrate that he/she is covered by another plan. The Plan itself does not mention the opt-out rights. Is there a cause of action under ERISA against an employer who has stopped paying the opt out cash? I see this is an issue in Cafeterial plans, but what about Taft-Hartley health plans?

thanks.

A participant took a regular 5 year loan and used the proceeds to acquire a principal residence. subsequently the participant decides he wants to extend the repayment terms. can he modify or refinance this existing loan so that it is a home loan at some time after the purchase of the residence? what would be the procedure for this. ie does he have to take a new loan or can you just modify the terms of the existing loan?

I have read several strings that generally allude to the provision of severance benefits through a qualified defined benefit plan. I am curious as to how these benefits are structured given the prohibitions of IRS Reg. 1.401-1(b)(1)(i) and the discussion in GCM 39869. Are the severance benefits discussed truly severance benefits, i.e., temporary benefits (for example, a % of pay for 6 or 12 months following termination) that end prior to retirement which cannot be characterized as a social security supplement? Any thoughts would be greatly appreciated.

I have another issue, isn't life wonderful. We have debit cards for some of our participants, one of the higher ups used his card for amounts which require substantion. He wrote to the broker on the account and complained. The manager of our company now wants us to just go ahead and substantiante the card swipes without receipts to make the participant happy and to keep our relationship with the client even though we have told them that the IRS requires substantion of the receipts. I was so mad about this this morning, I was crying. Any suggestions? Please help.

:angry: :angry: :angry: :angry:

Is a non-prescribed defibrillator an eligible FSA UME expense? I know that Code Section 213(d) defines what is considered “medical care” for the purposes of the Section 125 plan. Section 213(d) provides that an item is medical care if it is “for the diagnosis, cure, mitigation, treatment, or prevention of disease or for the purpose of affecting any structure of function of the body….” I do not believe that it is because it was not prescribed by a physician. Do you agree?

I have a TIAA-CREF contract that permits no loans. It was issued in the early 1970s. Is it possible for the assets in such a 403(b) to be used as collateral for a loan from another source either before retirement or after initiating distributions from the assets? Possible sources of information about this would be most welcome.

Thanks.

I've got a p/s plan where the owner is over age 50. Owner is very generous to the participants and has provided 15% p/s contribution from year to year. None of participants are near age 50 however. Owner would like to take advantage of the catchup provisions.

I've got another plan where i've set the plan limit to zero and thus only those eligible for catchup can defer, but all of the participants in that plan are HCE's.

Can I do the same here even though the only person who can take advantage is the HCE?

I'm creating an amendment to modify an integrated plan into a new comp plan. Each participant is going to be in their own group. Of course I don't want use names in the plan document.

Can anyone provide me some sample language that I can use in this amendment?

Or is it as simple as saying "each participant shall be considered members of seperate groups" ?

My understanding of the new rule under the PPA permitting non-spouse beneficiaries to roll amounts out of a plan is that even though such amounts can be rolled, they are not considered "eligible rollover distributions" for purposes of the tax withholding rules. In other words, unlike where a surviving spouse decides not to roll amounts over, a designated beneficiary that elects against setting up and rolling to an IRA would not be subject to mandatory 20% withholding. (The basis for the treatment of the spouse's distribution is 402©(9), which treats spouse as if he/she was employee -- ©(11) has no such provision.) Is that correct?

Will this be an issue that will be addressed in the IRS' update of the 402(f) notice?

OK, I am trying to get the procedures for processing RMD's updated. I have been looking at the processing of these calculations for some time. I appears that the organization that I work for has been taking the RMD out of after-tax balances (when processing lump-sum withdrawals). Therefore, we are not withholding any taxes from the distribution. This seems incorrect since the whole purpose of the RMD is to force an individual to withdraw a portion of their account and pay taxes on it.

Any thoughts?

I have designed a new 401(k) plan with an initial short plan year of 9/1/06 - 12/31/06. All current employees are considered to be eligible at 9/1/06 per document. Compensation for the initial plan year I chose as, "for the 12 month period ending in the initial year of participation" thinking that it would enable to owners to defer as much as they could up to the IRS limit which is also specified in the doc.

My question is, can the owners, and any other participants for that matter, defer to the $15,000 limit in the short plan year....(being limited to the ADP test of course)? I believe they can...just wanting to check.

Thank you!