I'm taking over a new account in which a portion of the client's db assets are held by financial company A in what the client calls a fiduciary service account. This account consists of several subaccounts which has the names of existing mutual funds and were treated as such in prior years Schedule H. Prior audit reports has shown them as PSAs.

Upon discussion with the client, these holdings are not mutual funds. Their description of these acounts is that company A pools assets from my client as well as others and has mutual fund companies B, C and D manage them. Unlike other comingled funds I've seen, where my client would have a share of the each of the funds in B, C and D, each subaccount provides them with a statement showing their holding of shares in stocks.

I have never heard of a fidcuiary service account before. What do I have on my hands - is this a CCT, PSA, ...??? Does the handling of these subaccounts make sense or is my client just misinformed? And since these funds are not mutual funds, would I need to go back and correct years of prior filings?

Thanks for any help or insight.

A question has come up as to what HIPAA disclosures are necessary on a paper enrollment form

We are also thinking about utilizing a survey tool to capture the enrollment information for 2007.

The employee would log on to a website from either work or home and enter their info , name , ee#, benefit elections and then hit submit. The online tool does not require a userid or PIN

Do we need to worry about adding any sepific HIPAA disclosures ?

We are including HIPPAA Special Enrollment rights language in our benefits guide

Physicians group consisting of 8 doctors (equal ownership) maintains a Simple 401k Plan. 3 doctors resigned to take other jobs. The remaining 5 doctors decided that the corporation will be dissolved effective 11/1/06 and the remaining 5 docs will form two new entities, which will be unrelated after 11/1/06.

It has yet to be decided what will happen with the assets of the corporation but assuming the assets will be split between the new practices, is this an asset sale?

The plan sponsor mentioned plan termination, but wouldn't a spinoff work or a direct transfer of assets/liabilities here with one of the new practices assuming the sponsorship of the existing plan?

If the existing plan was terminated, what happens to the participant loans in the Plan? Would they be able to rolled over into the new plan of the practice where they will be working?

One of our concerns with plan termination is that this plan never submitted for a determination letter. The only amendments to it were IRS mandatory amendments and one change to add a trustee. The document provider and the employer felt that a D/L was not necessary because they were no modifications to the volume submitter in the plan design.

Thanks

Hi! If an employer overpays wages and as a result makes a larger than usual employee contribution and employer matching contribution to a 401(k) plam, how should this best be corrected? The employer has proposed that the employee will repay the excess wages and employee contribution via check or payroll deduction over a period of time. This does not seem to correct the problem that the money should not be in the 401(k) account. The error happened with a small number of employees at a very large employer. Thanks, JWIRA

A client and his wife are the only participants in a DB plan that is sponsored by Company A. Company A is owned by an irrevocable trust. The client owns 100% of LLC B that also employs 10 employees. LLC B pays Company A certain amounts for non-management services provided. Becuase of the existence of the irrevocable trust, Company A and LLC B are not required to be aggregated.

Of course now the client wants to sell Company A to an unrelated purchaser and retire. The client also wants to terminate the DB plan. The client and his wife are considered NHCEs and, as such, I thought that they were not able to effectively waive benefits under the DB plan. Am I missing something?

Is there a way for client and his wife to effectively waive benefits? If the DB plan were terminated, client would need to fund approximately $190,000. Of course they can freeze the DB plan, but that doesn't change the fact that they wouuld have to make up the shortfall anyway.

Thanks in advance.

Ed

A client is the beneficiary of an annuity policy. The annuity is qualified money and my client is not related to the annuitant who recently died. Can my client transfer the proceeds to another annuity or to an IRA? She doesn't need the money now and she would like to avoid current taxation if possible. Thanks.

Can a company apply a designated automatic enrollment percentage to all eligible employees(not contributing) and not just newly eligible. Would this cause a problem with those that origianlly chose not to contribute?

Is an unforseen emergency distribution from a governmental 457(b) an eligible rollover distribution?

I know this has come up before, but there seems to be disagreement about whether an employer can go after a participant to recover a money that was overpaid from the DB plan. In this case, the participant received a lump sum distribution. Several months later, the participant was notified that he received several thousand too much and the plan wants it back. In a perfect world, the participant would say "Oh, sure. Here you go." But nothing is that simple.

I've heard that it depends on if the money can be tracked to a specific account where it is still being held. Is that true?

Is there somewhere I can look to find out what the employer's, the plan's, and the participant's legal rights and obligations are?

Company X has a 401(k) plan permitting participants to elect, among other options, distribution in the form of an annuity contract. The plan language lists three or four available options. Under the annuity contract provided by Insurer I, more annuity options are available than are described in ths plan document but because of the plan's language, annuities offered to X's participants have been limited to thos specified in the plan. X would like to adopt a more flexible provision, basically allowing a participant to select any form of annuity offered by Insurer I.

However, I see two problems with amending the X plan to state "and any annuity form of benefit provided under the annuity contract with Insurer I at the time of the Participant's Termination of Employment." They are: (1) The IRS consent regulations require that the plan furnish a participant "a general description of the material features of the optional forms of benefit available under the plan." Reg. Section 1.411(a)-11©(2). and (2) IRS regulations provide that it is a violation of the anticutback requirement if the availability of an optional form of benefit is conditioned upon the exercise of discretion by the employer or a third party. See Reg. Section 1.411(d)-4, Q&A-4 and 5.

Does anyone have any suggestions on how to deal with these issues in this context? Could the plan be amended to state that an annuity contract will be purchased to provide an annuity in form X, Y or Z and such other forms as are then provided under the annuity contract between the insurer and the plan." The description required to satisfy the consent requirement would have to be updated to reflect the addiion of optional annuity forms.

I have a physician employment agreement in which he is to be paid on severance from service (1) collections received during a specified run-out period (5 months), and (2) accrued but unpaid amounts (he receives a monthly draw and then there is a quarterly reconciliation to actual collections, and if collections exceed draws, he receives a percentage of collections).

The agreement has a "good reason" provision so the severence exemption is not available.

Are both payments on severance from service, NQDC subject to 409A?

Client failed to execute proposed amendment referenced in determination letter within 90 days. Propose to file as nonamender, but want to avoid determination letter application.

The amendment involved was a model amendment (which would normally not require determination letter application with the VCP).

Will it stick?

A company has grown in size to where the insurance carrier is changing from age-related premiums to composite premiums. As a result, the company is considering restructuring how it charges employees for premiums. It is considering paying 100% of employee-only coverage, but requiring employees to pay a portion of spousal or family coverage. The cost to each employee would be the same for spousal coverage, but for family coverage the employee's cost would increase for each child. So, for example, an employee with 4 kids under family coverage will pay more than an employee with 2 kids under family coverage. Any reason this can't be done?

Does anyone have a good summary of how the Pension Protection Act affects 403(b) plans? Also, do the provisions that require a 75 percent QJSA and extent the notice period to 180 days apply to 403(b) plans?

What news letters, subscriptions are people using to keep on top of pension issues?

Thanks!

The new diversification requirements under the Pension Protection Act generally apply only to DC plans holding publicly traded employer stock. However, the rules generally provide that where the plan holds employer stock that is not publicly traded, it will be treated as publicly traded if the employer (or any member of the employer's controlled group of corporations) has issued a publicly traded security. I have a client which holds employer stock in their plan that some 5 or 6 years ago was publicly traded but is no longer (having gone private). Does anyone have any insight on how this new rule will apply? How far back will we have to look? Has there been any discussion on this?

401(k) plan is a large plan filer. All of plan's assets are participant directed and held in separate accounts at a mutual fund company.

I know I have to check line 4i "YES" - assets held for investment purposes. Is there somewhere I could see a sample of the schedule needed for mutual funds?

The format is

(a) {What the heck is this column for???}

(b) Identity of issue, borrower, lessor, or similar party....would this be "XYZ Mutual Fund Co"?

© Description of investment including maturity date, rate of interest, collateral, par or maturity value.... would this be "XYZ Balanced Fund"?

(d) Cost....does this mean that I have to list purchase of each individual transaction (2 pay periods per month, with 12 funds available for 175 participants)?

(e) Current Value - I understand this one.

Also, does this mean I have to list individually the info on each participant loan?

There should be a smilie pulling out his/her hair

Thanks

Monica

May an employer create a VEBA and immediately fund it before any claims for benefits have been "incurred by not paid"? Is this contribution deductible by the employer? Everything I have read on the contribution and deduction limits speaks in terms of contributions made at the end of the taxable year. But my client wants to create the VEBA and immediately make a contribution. Any help would be greatly appreciated!

I think I am thinking too much today....

In another area I asked the question... controlled group? Now I think I have the answer but have this question... Here are the specifics:

Company A ... son and wife 50/50 owners

Company B ... son, wife, mom, and dad 25/25/25/25 owners

From my research (hope I am getting it correct) this is not a controlled group. And since it is not a controlled group can the son and wife both participate in both plans? 2 separate 415 limits?

To delve deeper... Company A would establish a plan and since it would be a husband and wife business there would not be a 5500 requirement. But, if Company B was to also establish a plan would we still be able to file an EZ?... 4 partners/owners? No 5500 requirement? Is there a catch I am missing?

Thanks!

Pooled PS plan has $3 million in assets. They want to investment $100-$150K in an investment that will have no return for 5 years. Allowable, prudent, draw backs, etc.?