Any word on when the 2007 limits will be published?

An employee completed a salary reduction agreement and enrollment form in 2004. Nothing was ever withheld for this person though. He just noticed this year, 2 years after the fact. In reading the regs it appears that this can be corrected through SCP, right? The plan is a safe harbor plan with enhanced match so there is no ADP test. So, should he be restored using the actual % that he indicated on his enrollment forms? Or do we have to figure out what the ADP was for the lower group (he's NHCE) for the years in question. Also, are the earnings calculated using the same provisions as under the lost earnings for missed deferrals (i.e. DOL calculator under VFCP)? Or do you need to make up earnings based on the actual investments that the participant chose?

Thanks.

Can anyone think of any problems that would arise if a plan is amended to provide for faster vesting, and require fewer hours of service to to comprise a year for vesting purposes for one particular group of employees but not for others? I can't think of any. The group of employees at issue are not highly compensated, and the current hours of service requirement in the plan is less than 1000. The plan is a multiemployer plan, and eligibility to participate is essentially immediate if the employee is covered by the contract.

The following exception from 10% penalty applies to distributions from IRAs: Distributions equal to or less than your qualified higher education expenses.

If my minor child has a Roth IRA (from employment), could she get the full amount distributed to her and then contribute this entire amount to her 529 plan? Would such 529 contribution be a "qualified higher education expense"? Please point me to any support that says so (regs, pubs etc.)

Thank you,

hope to see at least a few faces at the Conference next week

If an employer decides to terminate an HRA for retirees, what can the employer do with any remaining acount balances as of the termination date?

Must the employer continue the HRA until all participant accounts are depleted?

IRS guidance indicates that a participant has the right to receive cash under the arrangement, payments made to all participants in the current year and future years must be included in gross income. (IRS Rev Rul 2006-36).

Can a plan allow a participant to pay off a deemed loan if the plan does not otherwise allow for after tax contributions?

One person employer currently has a safe harbor plan (previously covered more employees, all of whom have left). Wants to change either to sep or simple, but the regs seem to say it can't be done if another plan is still maintained by the employer. 2006 contributions won't be made until tax filing date. Does this mean SEP or SIMPLE can't be adopted until after the 2006 contribution to the safe harbor plan is made?

Are any ERISA benefits taxable to participants?

I have already posted this on the Nonqualified Deferred Comp board, with no response, so I'll try here. A NQDC plan is funded entirely through the purchase of life insurance. The plan is to provide 20% of average pay (w/o regard to the 401(a)(17) and 415 limits) at age 65. Is such a plan sublect to FAS 87?

per a request. here is a crystal report that hopefully will produce the safe harbor notice needed for plan years beginning 2007. (will print vesting and distribution info) This was converted to 11.0. the 10.2 version is posted on the relius board.

first I should say I don't have any convoluted plans (e.g. different vesting schedules for different stuff)

one can always add more items by entering data in the user fields.

this report is based on a combination of Corbel's example and (if I remember correctly) Sal "The ERISA Outline Book" example of a few years ago. but maybe I am wrong there, I don't recall where I received my original example.

alpha numeric User fields in plan specs:

#20 deferral changes can be made (e.g. quarterly or monthly, etc)

#21 is compensation definition (e.g. Total or comp less bonus, etc)

#22 and #23 distribution conditions (e.g. upon termination)

#25 contact person (e.g. Blunky the one eyed newt)

#26, #27 and #28 vesting schedule

#26 2yrs 20% 3 yrs 40%

#27 4 yrs 60% 5 yrs 80%

#28 6 yrs 100%

#29 hours for vesting (this might only be available on version 11.0) I added this after the fact. I figured it can't hurt.

As far as I can tell, I have included everything needed. If there is no match then those portions of the report can be surpressed. etc. etc.

per a request. here is a crystal report that hopefully will produce the safe harbor notice needed for plan years beginning 2007. (will print vesting and distribution info) This was written at 10.2 I will a version for 11.0 on the 401k board

first I should say I don't have any convoluted plans (e.g. different vesting schedules for dufferent stuff)

one can always add more items by entering data in the user fields.

this report is based on a combination of Corbel's example and (if I remember correctly) Sal "The ERISA Outline Book" example of a few years ago. but maybe I am wrong there, I don't recall where I received my original example.

alpha numeric User fields in plan specs:

#20 deferral changes can be made (e.g. quarterly or monthly, etc)

#21 is compensation definition (e.g. Total or comp less bonus, etc)

#22 and #23 distribution conditions (e.g. upon termination)

#25 contact person (e.g. Blunky the one eyed newt)

#26, #27 and #28 vesting schedule

#26 2yrs 20% 3 yrs 40%

#27 4 yrs 60% 5 yrs 80%

#28 6 yrs 100%

#29 hours for vesting (this might only be available on version 11.0) I added this after the fact. I figured it can't hurt.

As far as I can tell, I have included everything needed. If there is no match then those portions of the report can be surpressed. etc. etc.

I am hitting on some problems here and need some help.

When filing the 5550 and dealing with multiple manufacturing locations, does ALL information (including Schedules A & C) need to be made available to all facilities so employees have the opportunity to review?

Thanks for your help.

A NQDC plan is funded entirely through the purchase of life insurance policies. The plan is to provide a benefit at 65 equal to 20% of average compensation (w/o regard to the 401(a)(17) and 415 limits). Is such a plan subject to FAS 87?

A missionary organization has been putting monies into what is described as a Section 72 plan. The organization is chartered as a church.

The monies are contributed after tax and apparently grow tax deferred.

Advantageous because of the overseas exclusion allowance.

I am not familiar with this type of plan and am wondering if it is part of old deferred comp approaches, etc.

Also, what can be done with the monies other than indivisual distribution? Rollover to IRA, 403b, etc.

Thanks for your help.

Bruce

In an Erisa plan, are employers required to set aside funds to pay for benefits?

I know that employees have a right to see statements about their benefits, but do they have the right to obtain information regarding benefits provided to other participants under the plan?

A CBA provides for a Taft-Hartley health fund and monthly deductions by the employer to fund the plan. The CBA also has a provision that allows for an employee to opt out and receive some cash from the employer if the employee can demonstrate that he/she is covered by another plan. The Plan itself does not mention the opt-out rights. Is there a cause of action under ERISA against an employer who has stopped paying the opt out cash? I see this is an issue in Cafeterial plans, but what about Taft-Hartley health plans?

thanks.

A participant took a regular 5 year loan and used the proceeds to acquire a principal residence. subsequently the participant decides he wants to extend the repayment terms. can he modify or refinance this existing loan so that it is a home loan at some time after the purchase of the residence? what would be the procedure for this. ie does he have to take a new loan or can you just modify the terms of the existing loan?

I have read several strings that generally allude to the provision of severance benefits through a qualified defined benefit plan. I am curious as to how these benefits are structured given the prohibitions of IRS Reg. 1.401-1(b)(1)(i) and the discussion in GCM 39869. Are the severance benefits discussed truly severance benefits, i.e., temporary benefits (for example, a % of pay for 6 or 12 months following termination) that end prior to retirement which cannot be characterized as a social security supplement? Any thoughts would be greatly appreciated.