This year's Grey Book from the EA meeting had several questions on optional forms and I believe at least one of those questions referenced final regs under 411(d)(6) - does anyone know how you search for these regs ? - I tried on the CCH website to no avail ???

Hope there are some NJ experts out there!

In January, the acting governor signed into law a bill that would amend the insurance code requiring any group contract issued or delivered in NJ after May 12, 2006, to cover children until age 30 provided certain qualifications are met. As we read it, the law requires the the employee or "child" (if you can call a 25-30 year old a child) to apply for this coverage in writing to the insurance carrier and pay necessary premium to the insurance carrier. The benefit then provided are identical to the group plan and employers are not required to contribute to the cost of coverage for these overage children.

Employers are, however, obligated to notify the employees of the law immediately before its effective date (May 12) and when any child would age out of the plan otherwise (we use age 19 and 23 for full time students). My question is this, we currently have several fully insured HMO's in the state of NJ that provide coverage. Our plan renewal date is 7/1, after the effective date of the law. However, as of 7/1 we will only be offering a self-insured national plan. Are we still obligated to send out a blanket notice of the law to all NJ employees even though it will never apply to our plan?

I received a call from a client today asking about the Special Tax Notice. I met with them recently to amend the plan to allow Roth deferrals and now they are asking about the Special Tax Notice because it says specifically that you cannot roll over benefits to a Roth IRA. My client pointed out this could be very confusing to some participants. Has anyone else thought of this? Is there an updated Special Tax Notice?

Don't know why, but I had it in my mind that the PBGC was required to respond within 60 days to a notice of reportable event. Of course, I now cannot find any reference to such a requirement and, in fact, have not run across anything that places any duty on the PBGC to respond.

Any practical experience with when and how the PBGC responds to reportable event notices? Is anyone aware of any requirement that the PBGC respond within a specific time frame to such a notice?

Thanks!

Registered member #15,000 today.

no prize? no baloons?

again, thanks for maintaining the site!

plan's NRA is 65, does not allow for in service distributions and has no early retirement provision. owner, age 62, wants to rollover a portion of his account to an ira and remain a participant in the plan. should the plan doc be amended to incorporate an early retirement age of 60 or add an in service distribution option? wouldn't the latter open up the possibility of more participants removing funds rather than those who have just reached age 60?

A corporation dissolved in the mid 90s. The officers and Trustees of the corp are still around, so they've kept the plan going. It's been properly updated and 5500s have been filed. Nearly everyone has been paid out, but now the IRS is having a fit because, technically, there isn't a plan sponsor. They want to disqualify the trust and put them through the CAP program.

Maybe I'm out in left field, but it seems to me that the IRS is overreacting. Why can't the Trustees be considered liquidating agents, acting as successors to the employer? Any thoughts from my peers?

Just looking for the comfort that comes from a collaborative consensus.

Under final regulations, designated Roth contributions are subject to the rules of section 401(a)(9)(A) and (B) in the same manner as pre-tax elective contributions. MRDs based on Roth deferrals are non-taxable.

Am I missing something?

Lets say you have an MAGI of 95,000 and you convert a large traditonal IRA to a Roth (resulting in higher income and taxes), is your MAGI still considered 95,000 (i.e. is the conversion ignored) for your Roth IRA contribution meaning you can contribute the full $4000 or does the conversion play a role in your MAGI for the contribution?

Can a Profit Sharing plan that has money invested in a hedge fund incur UBTI? The hedge fund has sent a letter to the effect that the hedge fund has operated in a way that creates Unrelated business taxable income. Does this require the plan to file a 990-T? What other repercussions could there be from this investment?

Document loan policy says loans will be given at a "commercially available rate". I always thought this meant that the loan would be given at the same rate as a fixed, secured rate (similar to a loan secured with a CD or savings account.) The loan at that rate would be around 6%.

I am hearing that the rate should be "Prime" or "Prime Plus" something and that I am wrong about what rate should be used. The prime rate is much higher.

Can anyone comment? Much appreciated.

How are self-insured plans integrating HSAs into their plans? How are premium savings determined for a self-insured plan when stop-loss rates are not decreasing by implementing a high deductible plan? Are self-insured plans changing to fully-insured only plans or are employers offering both of these options? What are common examples of plan offerings that employers are providing when adopting high deductible plans when they currently have a self-insured option only? How can Third Party Administrators make up the loss of pepm from the self-insured plan and/or loss of revenue from stop-loss?

We have a max accrural on vacation time, and someone has recently suggested that we can allow the employees who are about to lose hours of vacation time, to contribute that to the 401(k) Plan instead.

Fact about the plan I think you should know- 401(k) Plan is management only, all others are subject to CBA.

I know under a cafeteria plan you can buy and sell vacation time, however, you if you are going to allow employees to transfer unused $$'s to the 401(k) you have to also offer a cash out.

If we offer the option to transfer at risk vacation hours to the 401(k) would we have to offer that as a cash-out as well?

Thanks for any advice and or guidance links.

In the next few days, I am planning to begin a Roth with one of Vanguards target-date retirement plans. The plan is to deposit what we can each month. (between $150-$250).

Now I am wondering if I should also start one for my wife? We would give the min. needed to start one (1-3K) and then most likely only deposit once or twice a year if we get some extra income. The ultimate plan would then be for her to make larger contributions on hers when she goes back to work full-time in around 10 years. (home with baby)

If we plan to do this, would it be wise to have her start her own roth with a different company? Say T.Rowe? Or does it matter? I would think we could have a little more risk with hers, that's why i was thinking T.Rowe.

Thanks for any input!

Participant died in 2000 prior to their RBD at age 60. The spouse is the sole beneficiary. The spouse did not elect to take a full distribution prior to the end of the 5th year following the participants death. They would now like to take a distribution of the full amount.

Generally, they should be taking payments over their life expectancy which can begin at or before the participant would have been 70.5. Is there any way to accelerate the payments and get the $ out of the plan now or are they stuck with annuity payments?

First a confession...Some slacker friends came over to my home last night and I ended up only get 4 hours of sleep. So stating the obvious, I am having a rough day. Ok now on to my current dilemna...

Some other company set up a safe harbor 401(k) plan we have a DB plan for the client. All employees are covered by both plans. His combined DB and matching contributions are under the 25% limit, but once you add in his deferrals the contribution is over the 25% limit. I am trying to convince myself that this is ok because if there wasn't a matching contribution then I wouldn't be worried about this at all.

Total eligible salary = 272,300

Total DB contribution = 59,275

Total Match contribution = 8,169

Total Deferals for 2005 = 14,000

25% of eligible comp = 68,075

If I subtract the DB and matching contributions from the 25% limit, the plan is $631 under the limit.

What are my options here?

1)Tell them to return all of the deferrals less $631?

2)Eliminate the match contribution (although it is safe harbor and I don't think can just be done away with).

3)Or I am confused and deferrals don't count against the 25% limit anymore, the plan is fine.

4)Something else.

Of course I want to vote for #3 !!

I'm an active employee with a 401(k) account with my current employer. Can I rollover my 401k account while I'm still employeed into an IRA? If so, can I then take a distribution from the new IRA? I am under 59 1/2 years old.

This started out in the "Retirement Plans in General" section, but i think it needs to be in the DB section. It seems there is a window of opportunity for a restricted employee to recieve reduced compensation in the year prior to termination/retirement/distribution to take them out of HCE status so they can receive a lump sum. If a non-owner active participant who has been earning more than the HCE threshold recieves less than the HCE threshold in 2006, they would not be considered an HCE in 2007 and therefore could retire and receive a lump sum distribution in 2007. Is this considered an acceptable loophole? I don't think the intent was for the 110% test to be circumvented. I'm not sure if this is something that needs to be discussed when a restricted employee is thinking about retiring and taking a lump sum. Any thoughts would be appreciated. Thanks.

I have a question about the proposal from the Centers of Medicare and Medicaid Services to require health plans to provide personalized notices of creditable prescription drug coverage upon request. Unless the Medicare Part D enrollment period gets pushed back, we’re supposed to be ready to provide these personalized notices on May 15. How are you planning to make that happen?

I found an older thread on this topic (3/28/2002) but I was wondering if there are any updates or is there some additional thought on the subject. The ESOP did not give diversification notice and now the 6 year period has completely passed.

If we give the participant opportunity today to diversify, how would we handle the distribution? Participant is not yet NRA and the plan does not provide for in service distributions. Any thoughts, suggestions or other references are appreciated.