Client contributes 7.5% profit sharing to NHCE's and around 12% for certain HCE's. They wish to add a safe harbor match to remove adp testing, but they still want everyone to have at least 7.5% total employer contributions. They through out the idea of the profit sharing offset by safe harbor matching contributions.

Any suggestions?

Looking for help with dealing with PBGC penalty assessment-experiences of others.

This is the same problem takeover case I have posted about before-actually one of several.

Sponsor did not file PBGC premiums for several years; service provider never informed sponsor of the continued responsibility after plan was frozen and never completed the forms. Service provider admits guilt and responsibility but has no money to go after.

New TPA completes and sponsor files four years of forms and PBGC sends penalty and interest notice. Sponsor files a request for reconsideration. PBGC responds by waiving 40% of penalties for last 3 years (no interest waiver-they claim they cannot do that). No waiver is granted for 2002, the first non-filing year. Assessment was 100% of premium plus interest. This is the year the PBGC sent a letter that was not responded to timely. It is what awoke the sponsor to the issue and fired the service provider.

Question is: Is a 40% penalty waiver following normal TSL and request for reconsideration high, low, or similar to the experiences of others? Should they file another appeal or pay it?

Is a governmental employer that sponsors a Section 127 plan subject to the discrimination rules under Section 127, namely Section 410(b)? Section 410© states that Section 410(b) doesn't apply to a governmental plan, which would apply in the case of a retirement plan but its not clear whether the exclusion would apply in the case of a welfare plan such as a Section 127 plan. I would appreciate anyone's thoughts.

Does anyone know where the freeerisa.com website obtains its 5500 information? They charge for "older filings" but if they can get them somewhere, we should be able to as well. Thanks!

When there is a reversion of surplus assets to a noncorporate entity, does the reversion have to be reported by the distributing entity, e.g., trustee, to the IRS, e.g., on a form 1099, or is the only reporting that applies the Form 5330 and Form 5500 reporting?

Has anyone heard of a Lawyers Lien on a Third Party Liability Reimbursment for a Medical Claim? So instead of reimbursing the plan for the full medical expenses which were paid on behalf of the claimant, they want to reduce that amount by one third for a lawyers lien. How is the plan made whole in this case? Please advise.

I just finished the CEBS program (yeah!) and just found out that our company doesn't permit the use of professional designations on business cards. Some how, I've totally missed this policy and am a bit surprised. PLEASE tell me if your company/firm has the same policy. And the reason why? I can only think it's to limit liability... heavens knows we don't want me flaunting my excessive knowledge of compensation policies and practices.

Thank you!

Background: 4 related employers on one non-stand document. Each employers profit sharing contribution goes only to employees employed by that entity.

In a situation where only one employer makes a 3% pro-rata profit sharing contribution, would I consider the other employers allocation rates at 0% and still need to rate group test/average benefit test or would the coverage test take care of this because they are not benefiting. Is the formula still deemed uniform? My initial thought is NO, and must perform 401(a)(4) testing.

What are the pros and cons about allowing employees to pay for individual insurance products like cancer and accident policies by pre-taxing the premium through the Section 125 plan? I have heard that if this is done it could create a liability under ERISA.

Thanks

This is the name of a novel published in 1968, and made into a TV miniseries that was broadcast in December, 1976-January, 1977.

The book is a favorite of US Army and Marine Corps officers, and is required reading at West Point and other military schools, I believe. It's also a favorite of this former enlisted man, and I'm sure a lot of others.

Inexplicably, the film has never been available on VHS/DVD. (You would think with the 'crap' that's out on DVD, a fine film like OAE would have been out long ago.) How many former officers and enlisted men in the US? I've got to believe the DVD would sell, millions maybe?

I want to do my part to get this film released on DVD. I'm going to send a letter (to Universal Home Video, the owner) urging "Get this film out on DVD!!" and register to vote for release of OAE on DVD at this link:

http://www.tvshowsondvd.com/showinfo.cfm?showID=5424

Any others who know and enjoyed this fine story do likewise.-Thanks

A new client (under 5 participants) with a PSP has not filed 5500's for the last few years.

We have completed all back 5500's and are going to submit to DoL's DFVC program.

Should we hold off on filing the 2005 5500 until we submit the plan to the DoL or should we file the 2005 return and the deliquent returns at the same time.

Any guidance would be helpful.

I brought this issue up partially before, but am hoping to get a survey of responses and reasons from the field here to get a more direct answer.

Company has a 401(k) plan with a December year end. There were 3 eligibles who did not work any hours in 2005 but, because of the 2 weeks in arrears payroll system they are on, received checks on the Jan 15, 2005 payroll, thus received W-2's. Would you include them in your 2005 ADP test?

This question was posed after session to an IRS official at an ASPPA conference earlier this year, and there response was yes, you include them..

Please, if you could, post your feelings and explanations. Thanks ahead of time for any responses!

Prospect is currently a participating employer in a 401(k) plan sponsored by Paychex. Only contributions being made are employee deferrals. Client wishes to terminate their relationship with Paychex and adopt there own 401(k) plan with a safe harbor feature. Would this new plan be considered a new plan or a succesor plan and would they be able to adopt a safe harbor formula for the balance of the 2006 plan year? Thanks in advance for any input.

I understand that there is supposedly something in the 457(b) world referred to as the 10% rule, dealing with eligibility. This, in effect, states that only 10% of HCE's can be included in the plan. Is this true? The person telling me about this was unclear himself, and I am just trying to chase down his information and find out what I can. From what I can tell, those arguing against the 10% rule, say that in order for an HCE to be eligible, they must simply be grouped properly with the other HCE's. As you can tell, I'm very green on this. Thanks in advance for your help!

I have an LLP group client. Many of the partners in this LLP have their own C-Corp. One partner is interested in implementing a medical reimbursement for himself.

Question 1: Can this partner implement his own reimbursement plan (under his c-corp arrangement) or does he have to include the other partners under the LLP/S-Corp arrangement?

Question 2: If he is able to set up a plan under his c-corp, is he required to purchase an executive reimbursment plan such as ExecuCare to be eligible?

Question 3: Does "Attribution" come in to play here? If so, please explain.

If someone could also please explain the differences between an S-Corp and C-Corp in this situation and how each is treated that would really be helpful.

Thanks!!!

One of my special district clients with a long-standing defined benefit pension plan (fully funded, fortunately) would like to implement mandatory employee contributions (to be picked up by the entity) for all participating employees. They are proposing a 3% contribution in years 1 and 2 with an increase to 4% in years 5 and 6 (the increased percentage being applicable to all then-current and all new employees), a 5% mandatory contribution requirement in year 7 and possibly going to 6% in year 8. This seems a bit rich to me. What are you seeing out there, anything higher than 3-4%? Does anyone have a similar schedule of automatic increases? Thank you for your thoughts.

We have an employee who stopped contributing to his dependent care FSA because of a permitted change in election. However, he has a balance in his account but will not have any dependent care expenses for the rest of the year. Can we refund him the balance?

Plan was a 'near-orphan' plan; though company went out of business a few years ago, owners had another business and for the most part continued to maintain plan and file 5500s. DOL audited plan and found nothing major, but as a result the company, or what is left of it, has decided to terminate the plan. Plan has 2 participant accounts (HCEs) and a forfeitures account.

There have been no employees and no compensation paid for 2 years.

The company proposes to terminate and distribute the 2 participant account but there is the sticky issue of the forfeitures account. The way I see it, they can't file a final 5500 until all assets are distributed, but the forfeitures account will likely stick around for several years if the only use for the forfeitures is to pay plan expenses (administrator fees, 5500 filing, etc.). The plan allowed the forfeitures to be used to offset employer contributions, but there have been no contributions for the past few years. They would rather finalize the termination this year.

Any other suggestions short of reversion and paying the excise (which I'm afraid would lead to another audit)?

Hello,

I have a client with an existing 401(k) plan. In considering 401(k) plan options, can the the current entity have one plan for existing employees, and a second plan for everyone hired after a certain date? The second plan's offerings would be different than the first.

Thank You

Is it possible to convert existing 401k contributions that were made after-tax into a Roth 401K?