My employer has a nonqualified deferred comp plan for executives that utilizes the 1983 Group Annuity Mortality Table (83 GAM). My question is the following: Does ERISA or some other regulation require that the Plan be amended to use the 1994 Group Annuity Reserving Table (94 GAR)? Or is it up to the employer if it wants to change from using the 83 GAM to the 94 GAR?

DB Plan wants to buy a building for approx 1M (which will be almost 90% of the plan assets)in which a portion will actually house the plan sponsor of the DB plan. We are sure this would be a PT – however client would like actual sites. Comments?

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Assume the following - Orthodontic services began in 11/05.

1. Participant begins participation in health fsa 01/01/06 and continues to receive orthodontia treatement throughout 2006 - can these expenses be reimbursed from the health fsa?

2. Again, participant begins participation in the health fsa 01/01/06, however, paid orthodontist in full in 2005 through a financial institution and continuing those payments in 2006 and continuing treatment in 2006. Are those payments being made to the financial institution reimbursable under the health fsa?

Most of the guidance on orthodontia is informal - just wondering how others have dealt with this.

If you know of any written guidance, please provide link.

Thanks for any help provided!

A proposed regulation was going to change the mortality table used to a pre/post RP-2000 table with improvements. Was this regulation ever finalized to anyone's knowledge??

The proposed regulation indicated that the improvements would be 15 years for nonannuitants and 7 years for annuitants. However, when looking at the factors in the proposed regulations it appears to be using 22 years and 14 years.

I am attempting to contact IRS and determine whether there is a glitch or I am just performing the calculations (and matching their numbers by the way) in a fashion not intended.

Thanks for any and all comments.

With the recent passage of the PPA 2006 and the sweeping changes to corporate plans, has anybody seen an analysis outlining the changes to government pension plans? I have seen a review by NCPERS, but it only outlined 6 areas. Could the changes to government plans be that limited?

Can we deem a loan for a participant who has filed for bankruptcy and her loan is in default?

I'm wondering if anyone has encountered similar situations with medical providers.

A plan participant was injured by a third party over a year ago. Most of the medical providers submitted claims on behalf of the participant. The plan has a provision which states that it has a subrogation interest in any payments it makes for injuries from the above third party accident.

The participant's personal injury attorney has settled with the third party and is in the process of settling the subrogation claim and the medical liens. The settlement (the full amount of the third party's insurance) is rather small compared to the claims.

Here's the kicker- one of the medical providers has never submitted its bill to the plan. It has a policy of waiting until the personal injury attorney files a motion/petition to adjudicate the medical liens. Rumor has it that the medical providers do this in an effort to obtain the full amount of their claims and not the discounted ppo amount. If the settlement does not provide for the full payment, THEN they will submit their bill to the plan. Unfortunately, under the terms of the plan, this bill will be late and the plan will deny the claims pursuant to the terms of the plan.

The attorney has filed a motion to adjudicate this provider's bill for well above the settled amount and the plan's subrogation interest. It seems unfair and unethical that the participant and the plan should have to incur additional legal fees, etc. because the provider has a policy of waiting to submit bills.

I have a current group insurance client that we do cost containment services for. They are going into the workers' compensation market and state they will still use our services but need to go through a TPA and are going to consider one from our recommendation.

To capatilize on this, we're looking into purchasing a TPA but are aware that this may take some time. In the meantime, we are considering private labeling with someone else's TPA. Which brings me to this question; when private labeling a TPA, does this require for us to create a new license with the state and additional bonding?

Attorney drafted an order had it signed by all parties and approved by court. It contains a formula requiring benefits to be calculated based on date of marriage to date of separation (September 3, 1998 to June 4, 2004). I explained the problem with this and he is having a CPA do the calcs. OK with me.

When the CPA comes up with the number, my recommendation will be that all parties sign off on the number and how the assets are to be separated (order calls for the administrator to make a determination).

I think this second agreement should be incorporated into the QDRO. Should it go back to the court for approval as a addendum to the original QDRO?

If a Profit Sharing plan uses a points method for allocation (points for compensation increments of $100 plus point for YOS) of employer contribution, is that considered a safe harbor for 401a4 purposes? If not, can it be designed in a way that it would be considered safe harbor?

We have a non-standardized SH 401(k) PS. Some non-highly compensated employees have irrevocably opted out of plan. Where will they need to be counted in coverage and non-discrimination testing?

Thanks!

Our plan gives the greater of final average pay or cash balance for any grandfathered participants. All new participants are cash balance only. The Pension Protection Act requires 3-year vesting for hybrid plans. Any thoughts on how this might apply to our plan?

I have a tiny Traditional IRA (~$2k) with a Vanguard index fund. It's doing fine but I wasn't qualified to make contribution in 2005 due to my AGI. I just married someone with a good income and I don't see us falling below the joint $70k AGI anytime soon (and that would be financially distressing, so I doubt we'd contribute to the IRA).

My question: is this IRA pretty much stranded? I'm paying $20 a year in custodial fees, which equals about 5% of the growth. I pay$10 for an IRA under $5k and $10 for account under $10k. It will be years until my account goes above $5k if I can't contribute to it.

Should I just leave it or should I look into converting to a ROTH?

If I can't convert into a ROTH due to income restrictions, is there anything I can do?

Thanks!

If an employer is subject to COBRA and provides an HRA that permits post-employment expenses against the HRA credits otherwise unused at the time of termination, is the 'loss of coverage' under the HRA for COBRA purposes (a) termination of employment, when the employee no longer accrues new HRA credits, or (b) when the HRA credits are all used up (or some other time post-employment, per the HRA design, when HRA credits can no longer be used)?

Congress Approves Legislation to Clarify Source Tax Law

http://www.watsonwyatt.com/us/pubs/insider...ArticleID=16352

I decided to pull one last arrow out of my quiver.

That arrow being "rate grouping".

SInce I am working with a DC plan that is being cross tested, there are many different benefit rates and restructuring did not seem advantageous and based on the rate groups the plan did not pass the non discrimination tests. Though there were only about a dozen HCEs that would need to have their allocations limited by small amounts.

So I decided to employ rate grouping to see if I could get the plan to pass the tests or at lest make it come closer.

The results were vastly improved, as only 3 HCEs would need to have their allocations limited by a little.

In using the rate groupings, I varied the ranges for different groups. For example one grouping was based on the range 10.5 to 11.5 and another grouping was based on the range 7 to 7.4.

I did not see any restriction against such a strategy. Does anyone know if it is acceptable to vary the ranges? Of course each range met the 5% rule that the endpoint of the range be no more than 5% from the midpoint.

Thanks.

Is there a firm DOL rule for the rate charged to a 401(k) plan participant when taking out a loan? I've heard the rule of thumb being 'Prime plus one or two points', but haven't seen anything to support it. We have just set an arbitary rate of 'Prime plus .5% up to a max of 8.5%', and I want to be sure we're in compliance. Thank you.

We have a husband/wife profit sharing plan where the wife owns 100% of the stock of the sponsoring employer. There is also a participating employer who has adopted the plan that is owned 50% by the husband and 50% by the wife.

Both fathers of the husband and wife work for the sponsoring employer that is owned 100% by the wife. The husband's father is over 70-1/2 so a minimum distribution was calculated for him however, the question has come up that the husband's father is not a deemed owner since his son doesn't directly own any of the stock of the sponsoring employer so he is not required to take the minimum distribution as he has not yet retired.

Is this correct? He is not required to receive the minimum distribution since he is not deemed to be an owner of the sponsoring employer?

Is it permitted for a plan sponsor of a 401k plan who chose to contribute the safe harbor 3% NEC as of the beginning of the plan year switch to the safe harbor matching contribution during the year?