I don't know if this make sense but I would like to know are there any significant diffrence on the type of Roth IRA that you would invest in a company Such as the "target funds" and regular funds? Thanks.

Just got back from attending the Western Pension and Benefits Conference summer meeting in Las Vegas. The final session was about fiduciary duties and was conducted by S. Derrin Watson. In his slide presentation he gave as an example of a PT the case where a qualified plan purchases a piece of real estate at fair market value (as set by independent valuation agreeable to both parties) from the sister of the owner of the Employer corporation. Although he acknowledged that the sister is not a party in interest (or disqualified person), he insisted that the transaction was a PT because the owner of the business certainly would not have had the plan purchase the real estate simply as an investment for the plan, but would only have entered into such a transaction to benefit his sister.

He asserted that the trustee who caused the plan to enter into the transaction would be liable for the excise tax relative to the transaction. (Presumably the transaction would need to be "corrected" as well.)

"I strenuously object." Congress obviously didn't agree with Mr. Watson's view or they would have named siblings of parties in interest or of fiduciaries as parties in interest in their own right. Has anyone run accross an IRS or DOL agent applying such specious logic to commercially reasonable transactions not involving a named party in interest? Does anyone agree with Mr. Watson's specious reasoning?

Doing some wotk for a new DB plan. Plan is cross tested.

Normal Retirement Benefit is % of Avg Mo Comp multiplied by Yrs of Serv limited to a max of 10 yrs.

The problem we are having is that each employee has a stated %.

NCHE1 gets 0% of Avg Mo Comp

NHCE2 gets 2% of Avg Mo Comp

NHCE3 gets 6% of Avg Mo Comp

HCE1 gets 6% of Avg Mo Comp

HCE 2&3 get 0% of Avg Mo Comp

Can you state a different percentage for each ee?

We usually do it by classification (i.e all owners get x% all NCHEs get y%)

I have a client with a 401k/ps plan established currently as a ps safe harbor plan design. Can we change it, as of 1/1/07 to a safe harbor match design?

Does anybody know of a source to consult for average rates of participation for plans with various matching contribution formulas? Broken down by compensation level would be ideal....

Thanks!

Facts: Plan A's year ends 1/31/06; Plan B's year ends 12/31/06

Both plans must be tested for coverage on a controlled-group basis for the plan years ending in 2006. Plan A is maintained by one member of the controlled group and Plan B is maintained by another member of the controlled group. Both plans are 401(k) plans.

Question: Plan A fails the ratio test on a controlled group basis for the year ended 1/31/06. The TPA wants to perform the average benefits test. What data should the TPA use for the ABR testing group with respect to Plan B? Can it use the 12/31/05 benefit percentages, given the fact that the plans's year has not yet ended for 2006?

Plan XYZ is a 'Supplemental Executive Retirement Plan' (SERP) which we

think is a 457(f) non-qualified plan. Participant F is retiring. The

Plan Sponsor is purchasing an annuity to fund Participant F's payout.

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Specific Questions:

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Q1-What tax form, if any should be used to report the purchase of the

annuity?

Q2-What tax form should be used to report the annuity payments?

I have a plan that is transferring from one insurer to another. The insurer's contract has a surrender charge for leaving before five years. Can the CDSC be treated as plan expense and be paid by forfeitures and/or the plan sponsor?

I'd like to follow-up with a question recently asked since I have a similar situation as this one:

http://benefitslink.com/boards/index.php?showtopic=32782

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A large calendar year plan was part of an ME plan with Paychecks. The client stops participation in the ME plan in April 2006 and assets are moved to another provider in May 2006. The document is restated effective 3/1/06.

1. Do you agree that this is a continuation of the plan and not a New or Successor plan?

Assuming it is a continuation,

2. On Form 5500, would the Beginning of the Year assets be shown on the form, or would they be listed under “Transfers of Assets”?

3. What is my beginning date for filing Form 5500? (1) The document restatement date, (2) the date the client starts participation with the new provider, or (3) the plan year beginning date?

4. Would participants that had been previously reported on Sch SSA under the ME plan needed to be added using code C?

Thanks!

Is a charter school eligible to sponsor a gov't 457(b)

Having a little debate on a takeover plan. I'm always willing to believe I'm wrong, so here goes.

The plan is new for 2005 - calendar year plan and fiscal year. It is a DB plan, based upon an approved VS document, but using a modified compensation definition that makes it fall outside of the safe harbors and the current VS language, so we are requiring that they submit for a determination letter as a condition of our performing TPA services.

As I read the RP 2005-66, this falls under the 5 year individually designed plan deadlines, which are dependent upon the last digit of the EIN. So let's just suppose it is 7. This would be "Cycle B" and therefore must be filed by 1-31-2008.

Filing currently (this year) on an "off cycle" is an option, but I don't find any specific deadline for this, since an off cycle filing is voluntary.

Any disagreement? I guess as a further question, do you see any benefit here to a current off cycle filing? I can't see any other than perhaps getting a quicker response. But the RP specifies that off cycle filings will only be reviewed once ALL on cycle filings have been reviewed and processed, so it could actually take longer than waiting. Maybe I'm missing some important point.

Thanks in advance.

Has anyone tried the new E-filing? We can't decide which method to use/try.

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.