Is a prepaid legal services plan that is funded solely by a portion of fees collected by a union, not an employer subject to ERISA?

It is intended that those union members who choose to participate will contribute a flat fee per month, a portion of which will go towards funding this plan.

If I'm not mistaken, as long as participation is voluntary, there are no employer contributions and the sponsor is the union and not an employer, it is not subject to ERISA.

Please advise if I am correct.

Thanks.

Under 1.401(a)(4)-5(a), a plan cannot be amended in a way that discriminates significantly in favor of the HCEs. THis is based on relavant facts and circumstances. Does anyone have any guidance or opinion with what the IRS would view as significant or insignificant here?

Here's the situation: the plan requires 1000 hours for a year of vesting service, they have 5 HCE doctors and 9 or 10 NHCEs. They usually have 1 to 3 NHCES leave each year and they are replaced by rehires. This year, 1 doctor left with under 1000 hours and was only 80% vested, the 20% nonvested portion is over $40,000. Two of the other 4 HCEs are still not yet 100% vested either, but they're still working. Some of the NHCEs are fully vested, some are not.

Would it be a significant favor to the HCEs if the plan is amended to only require 200 hours for vesting only for 2006? (Assuming 1 or 2 nonvested NHCEs also leave with over 200 but under 1000 hours)

Or would it be a significant favor to the HCEs if all participants' vesting was bumped up by one year (this would now increase 3 HCEs, not just one, but it would help several NHCEs).

Any other ideas?

Consider the following data for a participant (with completely made-up numbers that may not make sense):

Monthly Accrued Benefit BOY: $100.00

ABO last year: $2,000.00

PBO last year: $5,000.00

Termination date: October of year, after benefits have been earned

Vesting %: 20% BOY, 40% at termination

Monthly Accrued Benefit @ term: $150.00

ABO, PBO end of year, $2,500.00

ignoring partial vesting:

Questions

1) what benefit is used for the ABO increase for the year? $50? Or $-40? ( $150.00*.4 - $100*1) Is there any guidance in FAS 87 as to whether you can have a negative ABO increase?

2) What is the PBO and ABO as of the valuation date of December 31st (after the October termination) for this particular individual? $2,500, or 40% of $2,500? Any guidance on this?

I believe these questions are dealt with under FASB 88 - correct?? Somehow, the prior ABO/PBO numbers are adjusted so that at the end of the current year (when the vested accrued benefit is only 60.00).

Any takers on the proper method of calculating the decrease?

Have a health care reimbursement account for 2006. Terminated employment with employer on Jan31st of 2006. By that time I had "deposited" $ in my HCRA. In mid Feb, made claims exceeding the amount in the HCRA which fell into 3 categories:

1. Expenses incurred 1/30 or prior

2. Expense incurred 1/31 (my last day)

3. Expense incurred 2/8

HCRA administrating company paid:

1. All

2. Denied saying "incurred following account cancelation"

3. Denied, same as #2

I called them, they agreed #2 was an error but were unclear as to why #3 would be denied saying something about "termination" but unable to point to law or prior supplied information that would support that view.

Neither the company information packet nor the administrator's web site speaks to any restrictions other than the well known "use it or lose it" restrictions. And I had though that, while my termination might stop any contributions, any expenses incurred during the plan year would be eligable to be reimbursed from what had already been "deposited" into the HCRA account.

Insights anyone?

Do these forms need a signature or was this requirement suspended in 2005?

If my plan document has me eligible for my pension at 10 years credit service, what good does it have me vesting at 10 continuous years under my welfare plan

i know you can withdraw your original contribution w/o any penalty or tax consequences.

but how do you document it on the tax return.

what forms do you fill out to say that the distributions reported on the 1099R are the original contributions?

i'm not finding any clues on the irs website,nor is my tax software helping either.

help!!!!!

i'm fustrated.

Can anyone give a legally correct answer to this question and provide sources to support the answer. I currently have a funds in a QDCF plan (Qualified Deferred Comp Funded plan). I would like to start taking distributions now. However, the form requires "spousal consent" because my spouse is the beneficiary. It doesn't seem fair that I can not even retrieve my own retirement funds if my spouse doesn't care to cooperate. Is this requirement legal or just an attempt to retain my funds and cover themselves. I don't know if this is considered a 457 plan or not.

Thanks

Can anyone give a legally correct answer to this question and provide sources to support the answer. I currently have a funds in a QDCF plan (Qualified Deferred Comp Funded plan). I would like to start taking distributions now. However, the form requires "spousal consent" because my spouse is the beneficiary. It doesn't seem fair that I can not even retrieve my own retirement funds if my spouse doesn't care to cooperate. Is this requirement legal or just an attempt to retain my funds and cover themselves. I don't know if this is considered a 457 plan or not.

Thanks

Is it permissible to amend a plan at any time to change the stability period for determining lump sums from one year to one month? We have a plan that we would like to terminate and would like to take advantage of the recent higher 30-year Treasury yields.

When I was like 14 someone gave me 2,000 into a Roth IRA with charles schwab. Well the money went down to like 400 bucks and I withdrew it. I didnt pay any fees or penalties. Atleast not that I know of? I was like 14. Will that have any effect on my current Roth IRA that I have with T.Rowe price now that im 23. Also when I hit 59 1/2 would what I did when I was 14 and withdrawing that 400 dollars effect me in any way? Or am I ok?

thanks! Dave

Employee age 55 made 14K in deferrals. Can we allocate 32K as PS cont for a total of 46K and still consider the 4K overage as catch-up?

Please advise.

When do you have to file a 5500 for a 125 Plan? What are the requirements?

If a participant has a life insurance policy within their Profit Sharing Plan and dies - and let's say the death benefit is $70K and the cash value at the date of death is $25K - would the difference of $45K be considered the tax free amount? Thanks!

I just ran the ADP test for PYE 12/31/2005 and the test fails. One HCE is due a refund of $6.04. Even though the refund is less than $10 (and no Form 1099-R will be issued) we will still make the distribution of $6.04.

Since this distribution is occuring after March 15th (2 1/2 months after the close of the plan year), do we have to pay the 10% excise tax? After rounding, the total is $1.00. I think the right thing to do would be to pay it, but it is an awful lot of work for such a minimal amount.

Any thoughts on this? Any input would be greatly appreciated.

Thanks!!

If a plan previously had a benefit formula with under the old integration rules (before 1989) and then continued to provide for disparity under the newer permitted disparity rules, does the 35 year cap on YOS include both years earned under old integration rules plus years earned under the newer permitted disparity rules (vs. just starting from 1989 forward) ?? I'm thinking it includes both but would appreciate a confirmation if true.

A multiemployer group health plan with several participating unions is interested in converting their existing "dollar bank" into an HRA/HSA type account that could be used to pay health premiums, out of pocket expenses, etc. For those who are not familiar, a union construction worker will have a set amount of money paid to a health fund for each hour he works. The plan in question puts the contributions into a "dollar bank"--a hypothetical account balance from which deductions are made in the amount of the monthly premium.

One question that has arisen about the conversion/establishment of an HRA/HSA is that many of these members already have similar accounts through their local unions. Is there any legal prohibition against an employee having two or more HSA/HRA accounts established in his name?

I also posted this on the 401(k) board as it is an for two different plans.

Is it possible to freeze an elective deferral-only plan to future deferrals and participation, but allow employees (including new ones) to rollover contributions from other plans into the frozen plan? My concern with the 403(b) is not just the "is it really frozen" but also the universal availability rule.

I feel like I should know this, but I can't find any discussions - either general or 403(b) specific.

Thanks in advance

Hello Folks,

I stumbled onto this site and have been reading for hours now. Those of you who offer information and guidance to those of us who need to hear it in a straight forward manner are rare individuals and my thanks go to you for being so generous.

I am a 47 yo business owner. When I was younger, I did not have the foresight to understand the importance of early savings. I spent 15 years with a very large corporation and thus have a retirement income scheduled from them, provided they do not experience financial difficulties at some future point and simply erase any benifit I have earned. Obviously SS has its own issues and I do not attempt to count on its benifits.

For the past 13 years, I have been unable to do much saving because of the financial burden of starting and maintaining a small manufacturing business. Over this time things have improved financially to the point that I have eliminated all debt, personal and business, except my primary home. I currently have about 12 years remaining on a 15 year fixed mortgage with about 40% equity, and my income is now stable enough that I have begun saving and have resources to fully fund a Roth account and additional each year. I have built an emergency fund for approximately 6 months of expenses.

The problem is I feel like I am trying to play catchup for retirement. Im not so much interested in retiring at a given date as I am simply facing the reality that I will retire someday and want to be as well prepared as possible.

I have enough time, inclination, desire and knowledge to be interested in investing in individual stocks and have opened an account with Scottrade to do so.

My questions to you would be, What opinions would you offer in regard to investing inside or outside of a Roth account? What are your opinions regarding my particular age and situation for retirement planning and is Roth the best place for me, at least to the limits allowed by the program?

Thanks for any help you might provide.

Is it possible to freeze an elective deferral-only plan to future deferrals and participation, but allow employees (including new ones) to rollover contributions from other plans into the frozen plan?

I feel like I should know this, but I can't find any discussion. Thanks in advance.