I just got our new quote for e&o coverage for our tpa firm. premiums up 45% from last year? I realize that the premiums increase when our annual revenues increase, but this is unbelievable.

is this standard practice? a $15k deductible is in place and the vendors we work with (Nationwide, Hancock)_require 1million in coverage...

in business for 6 years and 25 years of admin. experience and no claims... this seems unreasonable.

any comments? thanks.

Client made 200K plus for 20 years. In 2005, starts a new DB plan with initial funding contribution of 110K/yr (50 yoa). However, in 2005, w2 income drops to about 50K per year. Client funded full contribution in 2005, now I'm uncertain how to fund for 2006 and 2007,etc.?

If a plan sponsor deposits their profit sharing contribution into a holding account in the plan in installments throughout the year, are the earnings on that account considered to be Annual Additions for 415 when they are allocated to the participants? Specifically, there are several participants at the 415 limit already--can they get an allocation from the holding account earnings?

Hi all:

I'm new here, and just looking for some advice. My company ( I am an officer and plan administrator) filed chap 7 BK about a year back and terminated all the employees. We were current with all 401K obligations at the time of BK, but the recordkeeper has refused to "decertify" the plan, and has kept piling up the billing anyway. Most, but not all of the employees have rolled out of the plan, but there are still 2 in it, that have not done so (despite my urging). I would like to leave this cleanly, but I am not going to pay the recordkeeper $3K+ just so they will decertify the plan (which, if they had done so at the beginning, they would not have racked up the $3k+)!

If the recordkeeper will not decertify, what are my options? Can I just walk away?

Thanks in advance for any and all suggestions Chris J

There are several active (non owner) participants who turned 70 1/2 in 2003. The client thought they had elected to defer receiving benefits, but we have determined that they never made such an election.

1. Must they be offered an election at this time, effective as of age 70 1/2, or can we simply wait until they retire?

2. If they are offered an election, and they choose to begin receiving benefits, must payment be retroactive to age 70 1/2 or can they simply start up at 4/1/06?

Can someone educate me on the proper calculation of Self-Employment Tax and earned income? Do the deductions for contributions to employees and for the self employed individual come before the calculation of the self-employment tax or after?

does anyone have a handy spreadsheet for calculating the SET & earned income when a self employed person has employees?

Thanks.

Expected changes to EPCRS Revenue Procedure 2003-44 included correcting the problem of excluding eligible employees from making deferrals. The expected change required a make up contribution of only 50% of the ADP for the employee’s category. Does anyone know if you can rely on the proposed change before it is finalized?

Could someone in laymens terms, define the difference between an HRA and a Section 105 medical reimbursement plan? I have an employer that wants to move from a $500 80/20 medical plan to a $2500 100% medical plan. Which vehicle would be the best to use. Also, he already has a 125 plan with FSA reimbursement, could he not just make employer contributions to fund the difference and utilize the 125 plan? He intends to keep the employees portion at $500 and 80/20 to $1,000 out of pocket. Thanks so much.

Wisln

Hi,

We are trying to phase out our DB plan and put in a new 401(k) plan. We are divided on how to structure the allocation forumla. Since there are so many long term employee here, some of the committee members want service to be the only variable in deciding allocations and they want to increase allocations as service increasses. (Funny, they will all benefit from this formula). I, however, disagree with that rational. I have been with the organization not quite a year and have brought with me over 25 years of experience and education to the position. I feel that the committee needs to find a blend between long service and age to take into account the more recent seasoned hires. For example, I would need to work here until close to retirement to take advantage of the increased contribution. What seasoned employee would be OK with that situation? Trust me, this has occured since my hire. But at least I am on the committee and get a say.

I want to propose giving 1 point for each year of service and 1 point for each birthday. Then stager the allocation by points. Those under 45 points get 2%, 55 points get 4%, etc... I am not sure they will buy it.

Can anyone think of any creative yet simple formula out there that would accomplish a more fair allocation?

Is there such a mandate for chiropractic services? If so, what is the enabling legislation (a statutory citation would be appreciated)?

Isn't there something the employer had to do before the beginning of the year to be able to amend the 401k to be a Safe Harbor 401k in the middle of the year. I thought I remember something about having to give a 3% nonelective and some other requirements.

I am trying to find the table that is described in a current valuation report as "Adapted from 1964 OASDI experience (male rates)".

I have written to the Social Security Administration, but it will take several days. Might anyone have something like this table available, or point me in a promising direction?-Thanks

I have read that rollovers between Roth IRAs are not subject to the one-year waiting period. Therefore, I could transfer money from my Roth IRA to my taxable account on 4/1/06. I could then transfer the funds from my taxable account to the Roth IRA on 4/15/06. I could do this every month for a short term loan (as long as the funds are returned to the Roth within 60 days each time).

The following quote is from CCH:

"A rollover between Roth IRAs is virtually identical to rollovers between traditional IRAs. The only difference is that the one-year waiting period for successive rollovers does not apply to Roth IRAs."

[www.finance.cch.com]

Is this true?

Can an employee who terminated that has spent all their medical reimbursement pay off the balance pre-tax with their last pay check?

A 401(k) safe harbor non-elective with new comparability profit sharing plan covers both union and non-union employees. I confirmed with the CPA that the union employees are covered by a collective bargaining agreement that covers retirement benefits.

In addition the 2 owners and one of the owners sons is part of the union group - all three are HCE's.

The plan uses a new comparability profit sharing allocation. I am disagregating the union and non-union employees to test both.

For the non-union employees there are no HCE's.

For the Union Employees there are 3 HCE's. They want to max the two owners contributions up to the 415 limit with minimum contributions to everyone else.

The problem is not all the rate groups pass becuase 2 of the HCE's are younger than all the NHCE's (in the union portion).

In reading the ERISA Outline book it states:

2.b. Collectively-bargained employees. A disaggregated portion of the plan that covers

collectively-bargained employees is deemed to satisfy §401(a)(4) because of the deemed coverage

rule in Treas. Reg. §1.410(b)-2(b)(7). See Treas. Reg. §1.401(a)(4)-1(b)(5). Furthermore, when

testing a nonunion plan (or the disaggregated nonunion portion of a plan), the collectively-bargained

employees are treated as excludable employees in determining whether the rate groups covering the

non-collectively-bargained employees pass coverage, and the contributions or benefits for

collectively-bargained employees would be disregarded in calculating the applicable rate groups

under the nonunion plan (or nonunion portion of a plan).

Can I just max the two owners and give the rank and file union members and non-union members the gateway minimum? Do I even have to give a gateway minimum to the NHCE's - both union and non-union?

Any thoughts would be appreciated.

Hospitals often acquire or operate physician practices through separate subsidiaries. I am looking for information about whether governmental hospitals (e.g., established by a county) usually treat the subsidiaries as governmental as well and include the subsidiary employees in the hospitals' governmental plans or treat the subsidiaries as non-governmental and set up separate plans.

Anyone have experience with this issue?

Thanks.

I was wondering if anyone had experience with the ability of an employer to withdrawal from a multiemployer plan. Before withdrawal liability is assessed, may an employer contract out of a plan if they choose to stop making contributions? I am hoping someone can point me to a good source of information on the subject. Thanks.

Does the alternative payee (ex-spouse) from a QDRO have to have spousal consent, if they have remarried, when receiving their QDRO distribution from theirs previous marriage?

well, looks like I am scheduled to give a talk on "Cross-testing and the 401(k) Plan" at the Western Benefits Conference in Las Vegas (July 16 - 19)

Actually I am down twice, once on July 18 and then repeat July 19, so there is your chance to come throw tomatoes or whatever. all kidding aside, always look forward to the opportunity to meet anyone who frequents Benefits Link, so stop by and say hello if you make it! (Yes, I will probably sing the Louis Armstrong 'pension song'.)

Looks like I am also now the official 'scribe' for the IRS Q and As, so I guess if there is a real stumper of a pension question you can forward to me and I'll see it gets on the list. oh well, I can always give up sleeping.

Hello -

I'm 26 years old and married with 1 newborn. I am a teacher while my wife is a stay at home mom. We have very little to save for retirement but we still want to get started with something. My school district offers a 403b, but tied to a variable annuity or a loaded mutual fund with high fees. I've also looked into a Roth IRA but unsure of how much those usually cost to run. Is one better than the other?

Thanks!!!!!!!