Company A acquires the stock of Company B in December. Under the terms of the acquisition agreement, Company A is required to establish a pension plan for employees of Company B that mirrors the plan sponsored by Company B's former parent, to be effective as of the closing date. Is there a requirement that the new plan document must be executed by the end of the calendar year of closing, or, since it will take some time to draft, review and finalize the plan, is it OK if the plan is executed early the following year, effective retroactively to the year of closing?

Does anyone have any thoughts on how to handle a situation where an FSA administrator failed to withhold any wages in accordance with the FSA plan participant's salary deferral election? Note, the plan year ended 12/31/05 (with the exception of the 2 1/2 month grace period and administrative run-out period). The employer has indicated that it is okay with reimbursing the ee for his qualified medical expenses as a 106 expense. My thought is that this fix would be okay (however, the participant would, in theory, be a "zero" for nondiscrimination testing). Any thoughts? Is there any guidance on this issue? I can't seem to find any.

can you exclude severence pay from eligible comp under the SIMPLE IRA plan and thus not have to withhold or match that severence pay?

Does anyone have any thoughts on how to handle a situation where an FSA administrator failed to withhold any wages in accordance with the FSA plan participant's salary deferral election? Note, the plan year ended 12/31/05 (with the exception of the 2 1/2 month grace period and administrative run-out period). The employer has indicated that it is okay with reimbursing the ee for his qualified medical expenses as a 106 expense. My thought is that this fix would be okay (however, the participant would, in theory, be a "zero" for nondiscrimination testing). Any thoughts? Is there any guidance on this issue? I can't seem to find any.

I currently have a 401K with my current employer and one from a previous job. I am looking to roll the old 401K money into the current plan. The current plan has a loan outstanding. To pay off the loan, the current plan only accepts bank certified checks. Why can't I use some of the rollover proceeds to pay off the loan? The old 401K money will eventually be invested in the current plan, why can't it just pay the loan off to get there? Thanks.

Question in brief: Has anyone seen (or prepared) legal analysis analyzing whether it is permissible under the ADA to require that employees complete a detailed health risk assessment and submit to a medical examination in order to be eligible to participate in an employer-sponsored group health plan?

Here is additional detail:

Several employers have asked me whether they can require employees to complete a detailed health risk assessment and submit to a medical exam in order to become eligible (or continue to be eligible) to participate in the employer's group health plan. The medical exam would consist of a blood screening and a cholesterol test. The medical exam would be administered by a third party health professional and no individually identifiable health information would be shared with the employer. The employee's job would not be affected by the result of the test, and the cost of participating in the health plan would not be affected by the result of the test. The medical information would be communicated to the employee to guide them in improving their health.

If an employee refused to take the exam he or she would not be eligible to participate in the group medical plan.

The short version of my answer has been: this violates the Americans with Disabilities Act (the ADA), which prohibits employers from requiring that employees submit to a medical examination. There is an exception for "voluntary" examinations, but an exam is not voluntary if an employee is penalized for refusing to participate.

However, some employers have questioned this advice, citing their knowledge of other employers who have implemented such a program. One employer cited a recent article posted at benefitnews.com, which reported that "Cadmus Communications has taken a radical approach to employee wellness: It requires employees to take a health risk assessment, blood pressure screening and cholesterol screening. Seventeen employees at the publishing services company in Richmond, Va., lost their health coverage in 2005 because they didn't cooperate." See the entire article at http://www.benefitnews.com/health/detail.cfm?id=8494 The article says that Cadmus checked with their lawyers and determined that this program was permitted.

Can anyone provide legal reasoning as to how such a practice could be permissible under the ADA? (And, just to foreclose discussion of things that would work, but are different from what's described the above -- I do believe that an employee could be offered an incentive to take the exam as long as the proposed HIPAA bona fide wellness program rules are complied with, and I also believe that this mandatory screening could be given prior to an employment offer because the ADA only prohibits mandatory exams with respect to employees.)

Thanks in advance for your thoughts.

Can someone provide a primer example of a loan issued from a Roth 401(k) account. How is the loan repayment applied to the account. What are the default tax implications. Is there a code reference? Does the answer change if the participant has / has not satisfied the qualified distribution criteria?

I am looking for a copy of a 1986 Money Purchase Pension Plan prototype. I am also looking for a copy of a 2002 Money Purchase Penson Plan prototype which refects the 2002 GUST law changes. Thank you.

Hi,

I'm a stay-at-home-mom who used to work and have accumulated a little bit in the 401K which I want to rollover in an IRA since I am not going back to my ex-employer.

1. Which path is best to take? Roth IRA or traditional IRA?

2. Since Roth IRA, takes the taxed dollars...it doesn't seem to make sense if I can roll-over the pre-tax dollars from 401K.

3. If I go back to work, combined income may go beyond 160K, can we still contribute to the Roth IRA?

Thanks.

Do you treat the employer match any differently for an owner employee than you do for a regular employee?

An individual who has a business that employs commom law employees is considering establishing a C-corp that will be owned by an irrevocable trust. The C-corp. will establish and maintain a qualified plan for the benefit of this one employee. Under Code Section 1563, is it only important that the plan be established after the irrevocable trust is established and stock in the C-corp. is transferred to avoid a controlled group existing? Does the fact that a controlled group might have existed prior to the transfer taint (1) the entire year or (2) the entire structure? I'm aware of the other concerns. At this point, I am only looking at the stock attribution rules. Thanks in advance. Ed

I cannot find what the penalty is for filing Form 945 late. The tax payments are not late, just the timing of filing the form. The IRS directed me to page 24 of Pub. 15, but that not only deals with Form 941, but also deals with tax due (which in this case there aren't any).

Does anyone know the penalty for filing Form 945 late (after Feb 10)?

Thank you in advance for any and all assistance you may be able to give me.

We had a client install a new 401(k) plan for 2005. The employees elected to defer. The payroll company calculated the deferrals and actually took the deferrals from the checking account to deposit into the plan. However, the deferrals were never actually withheld from the participants. How should this be handled and/or corrected?

My initial thought is this is payroll issue and the company is going to have to amend the W-2s. Any other thoughts?

Takeover DB and DC plans that are top heavy. DC Plan document say top heavy is satisfied by 5% alloc to DC plan. DB plan says same thing. Prior actuary says top heavy provided in DB but offset by pv of dc contributions. Prior actuary produces DB document page that supports such a statement, but this is filled in language that does not provide the specifics. Zero confidence in credibility of past work.

How exactly should this calculation be done? Plan is being terminated and satisfaction of top heavy minimums is in doubt. And plan is very underfunded.

Possible methods

(1) Should the top heavy minimum be calculated each year, and a db supplement added to sustain a minimum 2% accrual for each top heavy year, measured year by year?

Or, (2) can we skip ahead to today and make sure that the cumulative DC contributions projected at some interest rate would exceed 2% x YOTHS?

Or (3) can we take the post-1983 account balance and calculate the equivalent accrual rate of that, which would effectively substitute actual investment performance from any actuarial equivalence definition and mask any years that DC contributions were not made?

Opinions please. Thanks.

How do you correct an error on Form 945 (i.e. too much withholding was initially reported)? We have received conflicting methods from different IRS agents.

Can HIPAA privacy and security be incorporated in the plan/amendment by reference, or do the actual provisions have to be in the document?

Thanks!

We have a plan that had a participating employer using the plan. The participating employer decided to discontinue participation in the sponsoring employer's plan and start up its own plan. The document says that this is permitted. It also states, "The Trustee shall thereafter transfer, deliver and assign Contracts and other Trust Fund assets allocable to the Participants of such Participating Employer to such new trustee or custodian as shall have been designated by such Participating Employer, in the event that it has established a separate qualified retirement plan ..."

Does anyone know if that means the vested account balance of those participants or is it their entire account? If it's the vested balance, then it's treated as a rollover into the new plan? If it's the entire balance, then it's subject to the new plan's vesting schedule or the old plan's?

Thanks!

I searched the boards for this and found something that might help, but I'm hoping to get some further clarification. Plan document says that compensation is only counted from date of plan entry. No problem there. The problem is for the partners w/ K-1. How do I determine K-1 comp for only 6 months or 3 months of a Plan Year? Another post indicated that a partner (actually I think it was referencing a Sole Prop) has only one payroll period, 1/1-12/31. Does this mean that ALL of the compensation was earned on 12/31 so if the partner entered 7/1 or 10/1 his entire K-1 is entry date comp? Any thoughts are appreciated.

Have a 3% Safe Harbor with integrated profit sharing plan.

5/6 NHC participants terminated with greater than 500 hours - profit sharing formula has 1000 hours and last day provision.

Plan fails 401(a)4 in miserable fashion for ps allocation.

When doing a corrective amendment, do all 5 participants have to be brought into the ps allocation or can you select the minimum number of terminated participants to get it to pass (a)4? What is the rationale for selecting participants to bring into the allocation?