i'm pretty new to the benefits administration field and so far i've only had experience with Relius Administration. Could anyone point me towards any alternative software other than relius? Thanks

What are the consequences of making a lump sum payment to an owner when the current liability is not 110% funded? We took over a plan that we are now terminating and have discovered that this occurred in 2002.

I have asked an attorney to check on this, but would like some feedback from others. A self-funded medical SPD drafted by the claims administrator contains an exclusion for any solid organ transplant if performed as a treatment for cancer. Does this violate HIPAA? If this exclusion is permissible, it seems a plan could exclude any number of benefits for specific illnesses; for example, no blood transfusions if performed as a treatment for AIDS. The second issue is that when I asked to have this removed, the claims administrator refused, stating it was a standard provision. The plan sponsor should be able to remove this, but I suppose then the reinsurer could retaliate by raising rates. Regards to all, Sue T

Husband and wife DB plan, both receiving benefits in 100% J & S form since early 90s. Once had a corp, but has since been dissolved. Now reporting as sole proprietor, as with other case, if plan were to terminate and distribute assets or purchase annuities for each, there would be a reversion.

If both were to die (say in a car accident together), again sicne benefits would cease, would all remaining assets become the reversion? Being a sole proprietor - to whom or what?

I have a one-man DB plan - participant has been receiving a LA annuity for the last 10+ years. If plan were to terminate today, there would a reversion of assets to the corporation after his payout or purchasing an annuity.

If he were to die while plan is still in existence, since benefits would obviously cease, do all remaining assets become a reversion to the corporation?

Is a public university considered a governmental plan in regards to filing a 5500 report? Specifically, this is for a 125 Health Reimbursement plan. They have more than 100 participants, but do not hold their assets in a trust.

Would this university be exempt from filing a 5500 report?

Thank you.

We have plan that upon review have discovered that an employee who took a hardship withdrawl in 2005 continued to defer compensation. The employee also received a matching contribution on that deferral. The plan has been amended to allow a participant to begin contributions after 6 months of the Hardship.

What is the best way to correct this? A self correction or VFCP? Should we correct; Employee was actually benefited by receiving the matching contribtuion.

Any thoughts? Thanks!!

The new 403(b) regs. indicate that a 403(b) plan can be terminated and distributions made only if no contributions are made to an alternate section 403(b) plan within 12 months after the distribution of all the assets. The regs. don't seem to prohibit the termination of the 403(b) and distribution of assets and immediate establishment of a 401(k) for an eligible employer. Is this correct as of the effective date of new regs?

A local governmental defined benefit plan has a discrepancy between the plan definition of part-timers for eligibility purposes and its personnel rules. It has therefore been excluding certain part-timers that should have been eligible under the plan (for about ten years now!). What is the appropriate correction method?

Is a SARSEP protected during the bankruptcy of a company?

A corporation established a VEBA on July 21, 2006, but did not fund the VEBA prior to July 31, 2006, the last day of the corporation's fiscal year. Under Code Section 419(a)(2), is the corporation precluded from taking a deduction for the fiscal year ended July 31, 2006. I believe the answer is yes, but I wanted to check any way. Thanks in advance for your responses. Ed

I am a non-highly compensated employee of a large US corporation and participate in their 401(k) plan. I maximize my contribution each year.

I also have an unrelated video business (just me) and want to establish an "Individual 401(k)". I'm being told that between the two I am limited to $15,000 for 2006 (I'm not old enough for the extra $5,000).

Is that true? I'm asking because I'm getting two different answers -- my employer says no, my accountant says yes.

I want to put $15,000 into each plan.

Thanks for your help!

DnW

Is a ratio greater than the midpoint between the safe harbor and unsafe harbor a reasonable and prudent target for passing the nondscriminatory classification test when testing for non discrimination in amount of benefits?

And when the ABP ratio is close to 90%?

And when many of the employees excluded from profit sharing allocations make over $100,000 but are not considered HCEs due to top paid group testing and thus bring down the NHCE ratios?

Curious to hear thoughts.

Thanks.

I know this is probably a very simple question to answer but I was wondering if anyone could reference me to the regulatory documentation that states when employer (matching) contributions paid for the participant must be submitted to the plan. Also I was wondering where deliquent employer (matching) contributions are reported on the Form 5500, if there are required to be. looking for any sort of guidance. thanks

i know this is probably a very simple question to answer but I was wondering if anyone could reference me to the regulatory documentation that states when employer (matching) contributions paid for the participant must be submitted to the plan. Also I was wondering where deliquent employer (matching) contributions are reported on the Form 5500. looking for any sort of guidance. thanks

A group of companies intend to adopt one 401(k) plan for all employees of all 4 organizations, A, B, C (nonprofits), and one LLC (partnership). The reason for the question is to obtain feedback regarding risk. The plan is intended to be established on a volume submitter document that allows for multiple-employer adoption. The issue is that we do not know if they are considered to be a controlled group (or possibly an affiliated service group). Even so, with the use of this type of document, what risks exist if the employers decide not to hire an ERISA attorney to help them with their determination.

Here is their situation: 501©(3) entity A and 501©(3) entity B are controlled by their own separate boards as follows:

Entity A's board is comprised of 2 appointed members plus 3 other members. According to their by-laws, the 2 appointed members are each appointed by their respective county board of supervisors (there are 2 counties). Thus each county's board gets to appoint one board member for entity A. The 3 other board members are determined by the existing (sitting) board (1 per year to serve a 3-year term). Removal of any board member is done when their term expires (3 years) or is done by a vote of the other members of the existing board. Entity A provides vocational (job) assistance.

Entity B is also a 501©(3) entity. About half of the clients of entity B choose to do business with entity A. According to the by-laws for Entity B, their 5 member board is determined under the same methodology as Entity A. These board members for B could end up being entirely different, partly the same, or entirely the same - they are not tied to each other by the by-laws. It just so happens that the same 5 people currently sit on the board of entity B who also sit on the board of entity A. Entity B provides in-home care.

Entity C is also a 501©(3) entity. The selection (control) of Entity C's board members is handled by the existing (sitting) board of entity C. Entity C is not related (by clients or otherwise) to entities A or B. The board members are also not related.

Entity C and Entity A together own an LLC (50/50 partnership). This LLC will primarily provide services for one county, one which does not currently have a service provider.

Are Entities A and B a controlled group? I’ve been reading 1.512(b)-1 (for non-stock organizations) and I am interpreting this to mean that determination hinges on how the board members themselves are controlled (appointed and removed). If that is correct, then only 2 are controlled by the same outside groups?

Would A and B possibly be an affiliated service group?

Would the LLC be considered part of a controlled group with Entities A or C? I find no way to insert the LLC (partnership) into the potential controlled group picture with the non-profit agencies – proposed reg 1.414©-5(b) applies only to two exempt entities – right?

Is there any benefit to using a standardized adoption agreement anymore as opposed to having the exact same provisions on a non-standard agreement?

The prototype plan doc. excludes non-resident aliens with no U.S. source income. Client has hired a Canadian citizen. They understand that any W-2 EE with US-based income can participate in their 401(k) plan. This one has a few twists, however.

This Canadian EE has no taxable US income and does not get a W-2 form.

They have arranged to pay him through ADP Canada although they use PayCore (sp?) for all other EE's.

Employer considers this EE an employee, not a contractor or temporary EE.

He participates in other employer-sponsored benefit programs, such as life insurance and DI.

Employer now pays in to the Canadian program for him (CPP).

They understand that participation in their 401(k) plan would not necessarily result in any US tax deferral ability. They are more concerned with allowing him to defer so that he gets the ER match.

Under these circumstances, I'd like to know whether this Canadian EE can participate. I would assume he cannot as he would be excluded by the document. Any thoughts would be appreciated.

Thanks very much,

Has anyone seen anything related to the RPA rates that will be applicable to 2006 now that PPA has passed?

An employee of an HVAC company which sponsors a 401(k)sop wants to start his own company and rollover his acccount balance (appx $70,000) to his own company's plan. He will be the onnly employee and wishes to have a loan provision in the plan, obtain a $10,000 loan to assist with start up costs and effectively repay the loan back. I'm thinking this may be a prohibited transaction and that he could do a partial distribution of say $15,000, pay the taxes, use the net towards the start up costs and roll over the balance of appx $55,000.

thoughts?