If a participant's total account includes 1,000 of employee after tax contributions, 1,000 of Employer PS contributions and a loss of 200.00 how is the cost basis of the 1800.00 determined? I'm trying to find authority for allocating the loss to the after tax amount and reporting nontaxable amount on the 1099R as 900.00 versus the 1000.00. Any thoughts?

I have a plan that is written to have a special vesting provision. It's a school (tribal) and the document indicates that anyone who loses their job due to a loss of funding for their program will accelerate to 100% vesting, assuming they are currently not 100% vested. The plan has a 3-year cliff vesting schedule. The employer is talking about eliminating this special vesting provision (eliminate the immediate 100% vesting due to program loss of funding). They have never encountered this situation where the vesting accelerates and an employee is terminated, so I don't believe we're actually changing the vesting to any participant's detriment. However, we also don't know if over the next 2 years or so some program might lose funding and an employee (perhaps newly hired?) might have been eligible for that accelerated vesting. Thoughts? Thank you.

Employee Bob's spouse became eligible for benefits under her employer's plan. Bob would like to decrease his health care flexible spending account election. He has not used any dollars yet from his FSA account. Can he do this?

re-phrasing part 2 of my prior question : If you change to market for the 1/1/06 valuation, are you locked in until 2011 or with the 2008 valuation do you have the options of continuing with market or changing to average market with a max on the averaging period of two years ?

A few questions : (1) what does averaging market values over at most 2 years mean ? Is it the averaging methodology described in the 412 regs ? and (2) If you change to say market value for a 1/1/06 valuation, are you locked in until 1/1/2011 or do you have to conform to 2 years in 2008 & stay with it ?

And I'm assuming the 2 year averaging methodology isn't required until 2008 ?

We just changed TPA's and were reviewing the plan document.

We are a self-funded plan, with a 12/15 spec.

We have a 2 month filling deadline after the end of the year. Our new TPA is telling us that we need to change our filing deadline to 1 year from date of service.

I question them asking why. They said it was a ERISA regulation. I searched all over and cannot find anything that states this.

I then asked where in the regs. does it state this. They are now saying if I don't change the filing deadline, we are asking for a lawsuit if we don't change.

Can anyone tell me if there is a ERISA regulation?

Also any input as to why we should extend the filing dealine would be appreciated.

Plan allows for distributions when a participant hits Normal Retirement Age (65). Does this require spouses consent for the distribution?

A client did not deposit their 2004 discretionary contribution, they have amended their 2004 corp return to reflect no pension deduction for that year. Can they take the deduction in 2005 even though the allocation is based on 2004 compensation?

Could anyone suggest resources to research buying or selling a TPA book of business?

Profit Sharing plan is established 1/1/05 and 401(k) deferrals commence 3/1/05. Does the 3% nonelective fully vested contribution have to be based on 12 months compensation or can it be limited to the 10 months the salary deferral features of the plan were in effect?

Has anyone received a request by a third party for a copy of an individual's COBRA election packet? For example, a charity foundation or a medical facility will call and request that the election paperwork be mailed to their address rather then the employee. If so, how have you handled that request?

Thank you.

Does anyone know of any good articles or websites that address the use of NQDC for pass-through entities, such as LLCs, partnerships and S-Corps? I have already seen a few threads on this message board but I was looking for something with more detail. Thanks.

Assuming the horrible situation where a participant has invested her assets in investments that become totally worthless, how do you document the distribution when they terminate employment?

The plan does not provide for in-kind distributions, but we are conisdering it if that is the answer.

We need to document that the account is closed out somehow, but don't think a $0 value distribution notice and distribuiton request form works at all. We know that there could (will?) be litigation and am only focused on procedural prudence at this point.

We know that there is no rollover right for distributions below $200, so is that our "out" for not documenting a distribution?

I just read through the actual text (ok skimmed) of Section 903 of the PPA and didn't see the effective date for when we can combine the DB plan with a 401(k) feature. Has anyone seen that date yet? The summaries I have read all mention that you can do it but don't mention which plan year it becomes effective.

All of my plans are small. The frequency of the distributions from these plans are definately not yearly. Many of these plan sponsors (almost all of them actually) need their hands held when it comes to dotting the "i"s and crossing the "t"s. Making withholding payments is especially a problem. To make the process easier for me I was considering instructing them to establish an EFTPS account for their plan and simply transmitting the $ that way.

Am I a dinasaur.. has everyone already done this?

Is there any reason why this should not be the norm?

Thoughts?

Thanks!

If a participant has both Roth 401k deferral and pre-tax defferral and must take their RMD, how do you split the RMD between the Roth and the Pre-tax? Would it be pro-rate based on balance?

I'd love to form some sort of study group if possible? Or, if you're a prior test taker, any hints (or perhaps prior copies of the tests?) you have would be greatly appreciated. Unfortunately, I'm a DC girl so this test is looking mighty scary

Thanks!!!!

Vicki

I understand that for rule of parity purposes, if a participant makes a salary deferral to a plan that person is vested and the rule of party can't be used to forfeit vesting service, but I am unsure how the final regs changed things with regard to repayment upon rehire.

If participant has 10 dollars in a salary deferral account, and 85 dollars of nonvested money in the employer account, is the participant required to repay the 10 dollars in order to have the 85 dollars restored? Or does the plan deem the 85 dollars repaid upon rehire?

client wants to start a 401(k)/ps plan and encourage LT employment. Anything wrong with essentially front loading the contribution in year 1 with a 20% contribution and then having a 5 year cliff vesting on the money.

Following years would have deferrals and possibly a match so continuing ER contributions are going to occur. But there likely won't be additionally PS contributions.

In talking with the owner I quickly saw his thoughts on this...Reality says that these employees are not going to stay for the 5 years (construction industry and very young employees) and so the contribution essentially is going to the owner anyways as a forfeiture. He doesn't anticipate growing so any new employee wouldn't be eligible for the forfeiture. Basically raises his CY contribution to about 70k. Not to mention the tax savings of 25k.

Problems? If the people stay they get the dough...no different than any other plan. Owner claims he has no intent of running them off but even that seems like it's employment law isn't it?

I'm looking for a little guidance.

Here is the situation.

A client of ours had an old paired MP/PS Plan that he terminated in 2000 or 2001 can't remember exactly. All assets (so we thought) were paid out and a final 5500 was filed.

The plan had an LP that was valued at $0. The interest in the LP was never changed from the PS to the individual and now the LP has a value significatly greater than $0.

What do we do with this asset if the plan is no longer in existance?

Any help is appreciated.