I can't find anywhere the clearly definds what changes to the AA require an amendment and which can be accomplished with just an SMM. Can anyone help me? Do you amend the AA for just an address change? What about a phone number change? HELP!!!

Do we know yet whether the ability to send balances of "lost participants" in termed dc plans will only be available to Plans terminating after a specific date? Or will the opportunity be available for all terminated plans, even if terminated in the past (or near future)?

Corporation with ongoing SIMPLE 401k will dissolve as of 11/1/06.

2 unrelated corporations that will not have any affiliation will be formed; the employees of the old corporation will be split down the middle.

I read something that I thought said Simple plan year must be full plan year (thru 12/31). Are there any exceptions in a situation like this? If it must be a full year, can both new corporations be part of the plan for the last 2 months of the Plan year (one being the new plan sponsor and one being a participating employer)?

Thanks

Can a terminated participant receive a distribution from a 401(k) plan that is to be rolled over into an IRA, "hold" the money for 59 days, then make the deposit to the IRA? (The person wants use of the money in the meantime). I don't like the situation, but is there any rule against doing this? I should also mention it is one of the trustees of the plan.

Thanks for any help.

Section 1101 of the PPA requires the EPCRS to become more liberal. The clause that struck me talks about IRS having the power to reduce/eliminate income and excise taxes. If that means literally what it says, it represents a significant change from the past, when IRS didn't have such authority. Any thoughts?

For a welfare benefit plan, if the company pays all of a service provider's fees (the plan does not pay any fees), do the fees paid by the company have to be reported on Schedule C?

401(k) Plan does not permit participation of Union Employees, which was not an issue since there was no union. Recently, a large percentage of the workforce goes union. It is understood that going forward Union Employees do not accrue additional contribution under the Plan as an excluded class, but do continue to be credited with vesting service. Furthermore, it is understood that we can't simply pay these people out as unionizing is not a distributable events. The Plan does, however, permit transfer of benefits to another qualified plan provided that person is "fully informed" and elects for the transfer. This would be desirable as 1) the Union Employees want to transfer their benefits to their union plan, and 2) the employer would like to allow them to do so. Does anyone have any thoughts on this situation, or processing of "plan benefit transfers"?

Company repurchases stock from employees.

Are there any tax implications and if so what are they?

Does this create a triggering event to distribution from the plan for the employee?

At renewal we want to do an audit to verify that covered members are still legally married and that their dependent children still meet the insurance company's definition of an eligible dependent.

Does anyone have a sample form to do an audit of eligibility for benefit plans?

Can anyone tell me how they are handling HSA enrollments with regard to the Patriot Act requirements?

I have been told by an HSA custodian that employers can not electronically enter election form data directly into it's data base because there are questions the employee must be present to answer to the bank to open the account.

Such as--your mother's maiden name, etc.

If this is true, this is a huge stumbling block to data entry especially if there are numerous locations and a high level of computer illiteracy among the employees.

There are numerous custodians that brag about their capability of direct data entry via "employer portals".

What is the answer to this?

We all know that a plan sponsor may cover PREVENTATIVE prescription drug coverage below the deductible without endangering the HSA eligibility status of a plan participant.

My question is what is a "Preventative prescription drug"?

IRS Notice 2004-23 sets the standard as "any service or benefit intended to treat an existing illness, injury or condition." The IRS had requested comments on "the extent wo which drug treatments, either solely by prescription or as part of an overall treatment regimen should be treated as preventative care and the appropriate standards for differentiating between drug treatments that would be considered preventive and those that would not." I have not been able to locate any further guidance on the definition of preventative prescriptions.

Various PBMs have different interpretations of what prescriptions are "preventative" under this standard. If the IRS later determines that a plan has reimbursed something as preventative that did not qualify, is the whole plan no longer a HSA compatible HDHP?

Any assistance would be appreciated.

Is anyone familiar with Hawaii's speciific requirements for medical plans?

Please provide a site if possible on further detail

Merci!

When advising on 2006 deduction limits, we get to use the value of 150% of current liability, reduced by 100% of assets. My question is: what interest rates are allowable in 2006 for this determination?

The law essentially says to continue using the same rules as 2004 and 2005, and the IRS has allowed the use of the old 90% -105% weighted Treasury rates during those years. I am a little uncomfortable that the IRS will hold us to the 90%-100% corporate bond rates.

Anyone think there is definitive guidance on this issue? Any cite?

So let's say in September of 2005, a participant takes a hardship withdrawal. However, the employer fails to suspend deferrals. This is not discovered until July of 2006.

An apparently acceptable fix is to treat the deferrals for the 6 month suspension period as discontinued, and the participant will forfeit the deferral and any match. The employer will then make the participant "whole" in his paycheck currently, and use the forfeited deferrals/match as a current employer contribution.

Question - I would assume such a fix requires going back to re-run the ADP testing for 2005? It seems unlikely that it could be avoided if they are being treated as never made, but sometimes truth is stranger than fiction...

Thanks.

So this year is my ten year reunion from Arizona State University. I received an email from the alumni association inviting me to the home coming football game, some mixers, tours, yadda yadda yadda. The email was normal except for the picture they used in the email. It is the most bizzare thing I have ever seen. I actually called the alumni association and asked if their server had been broken into and my email address had been stolen.

Not only does the caption seem to imply that the festivities at the reunion are clothing optional, but the people in the picture are ridiculous. This is my ten year reunion so the email went out to people in their early to mid thirties. The "kids" on the picture look like they are maybe 20 and I swear it looks like they are all flashing gang signs. Even the guy that looks like his arms are crossed has his ring finger down in an inconspicuous gang sign. Maybe when we were 21 a naked reunion might have been fun, now though, no thanks.

I had to share this somewhere, I am still in shock over it.

Don't worry though, the alumni association explained to me that the picture was sent on purpose and that my personal infomration had not been stolen.

A non-profit corporation sponsors a defined benefit plan that terminated effective December 31, 2005. The plan has about 30 or so participants as of the current date. The plan was submitted to the PBGC (in a standard

termination) and the plan was also concurrently submitted to the IRS for a favorable determination letter. The plan sponsor is still waiting for the favorable determination letter from the IRS. The plan sponsor would like to await approval from the IRS prior to distributing the plan assets.

As of the current date, the termination liabilities are greater than the market value of plan assets although the plan sponsor intends to fully fund the plan prior to distribution of assets. The regulations state that terminating plans covered under Title IV of ERISA for the plan year in which the plan terminates are allowed to contribute the amount required to make the plan assets sufficient to satisfy all plan termination liabilities and permit the plan to terminate in a standard termination.

(1) Obviously, the plan's minimum funding deadline for the 2005 plan year is September 15, 2006. Since the plan terminated effective December 31, 2005, is 9/15/06 the date by which the plan must be fully funded (on a termination basis)? Is there an opportunity to fund the plan after 9/15/06?

(2) Assuming there is no required contribution for the 2005 plan year, can the plan sponsor fully fund the plan some time after 9/15/06 although the plan is not subject to the minimum funding standards for the 2006 plan year?

Client has a non-ERISA 403b. Has a legal separation agreement but no QDRO yet. Investment provider will not permit beneficiary change without QDRO unless ex-spouse signs off. Not sure if this will happen now due to contentious nature of proceedings. Does my client have any other recourse to pursue or must he simply wait until QDRO is issued?

An employer (sole prop) sponsors a Safe Harbor 401(k) Plan with a basic match. For 2005, the owner's net schedule C (after the common law participants' contributions & SETD) is less than $210,000 and his deferrals are $18,000. The plan's definition of compensation includes salary deferrals. In determining the owner's employer contribution allocation (4% of comp in this case), should his SEI be reduced by his $18,000 deferrals after reducing it by SETD?

This question pertains to Defined Benefits plans that offer immediate lump sums, but have no early retirement provisions.

An enrolled actuary that we work with has stated that a DB plan would not have to offer immediate annuities, that they could make the annuity options only available at retirement, even if the plan allows for immediate lump sums upon termination of employment, further stating that no annuity options exist before Normal Retirement if the plan does not have early retirement provisions.

However, we believe that in order for the lump sum to be payable now, the participant must waive a QJSA that would be payable during the 90-day period that includes the annuity starting date. But, if no annuity is payable during that 90-day period (as the enrolled actuary has suggested), then the participant has not waived anything and therefore has not made a valid QJSA waiver.

Q1. Must a plan that offers immediate lump sums also have early retirement provisions that start immediately upon termination?

Q2. Must a plan that offers immediate lump sums also offer an immediate QJSA that would be eligible to have payemnts begin during the 90-day (soon to be 180-day) QJSA waiver period?

Does a defined benefit plan with the following language contain a retroactive annuity start date ("RASD")? The provision is: "Normal Retirement - A Participant shall be eligible for an Accrued Benefit if his employment is terminated on or after his Normal Retirement Age. Payment of an Accrued Benefit under this Section shall commence as of the first day of the month coinciding with or next following the date of the Participant's termination of employment with the Employer and Affiliated Employer." My concern with this provision is the situation that could arise if a Participant contacts the Plan on May 29 of a Plan Year (calendar year) and wants to retire June 1. Assuming that the Plan was not able to provide the QJSA explanation to the Participant by June 1, does this situation constitute a RASD? The Plan's actuary indicated that this situation is not a RASD because the Plan does not provide the Participant with the right to "affirmatively elect" between a RASD (i.e. the right too have his benefits calculated as of a retroactive annuity starting date) or a current date. Instead, the Plan document does not give a Participant a choice between two different distribution dates. It provides for the payment date (i.e. first day of the month coinciding with or next following the Participant's termination date). I have taken the position that the above situation constitutes a RASD because the Participant's payment relates to a date in time before he received the QJSA explanation, irrespective of whether the Participant had a choice as to the distribution date. Your insight would be appreciated.