Folks:

We had a very interesting discussion regarding this topic recently.

The DOL issued Advisory Opionion 2005-23A, which deals specifically with our concerns.

Go To:

http://www.dol.gov/ebsa/regs/aos/ao2005-23a.html.

Don Levit

Taxable (conplex) Trust with employees. Can it adopt a qualified retirement plan? I can't get my arms around this question on a Friday for some reason and would appreciate help!

Very general Q: Are deductions for 401(k) contributions (say match or NECs) technically under 162?

When you report the value of life insurance for the 5000, do you use the cash surrender value or the face value?

Notice 2005-95 extends the time by which certain amendments need to be

signed depending on whether the amendment is a discretionary one or one due

to correct a disqualifying provision. The Automatic Rollover/ Mandatory

Cash-Out amendment is one needed to correct a disqualifying provision and

the time to sign the amendment has been extended for certain plans.

Question - if the plan had a $5000 cash-out threshold and has decided to

lower that threshold to $1000 via the Automatic Rollover amendment, does the fact

that the cash-out level has been reduced to $1000 constitute a

"discretionary" amendment on behalf of the employer and should have been

signed under the time frame disregarding the extension afforded by 2005-95?

Relevant Background Information

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An employer maintains a defined benefit plan and a defined contribution plan both having plan years ending Febuary 28th. The defined contribution plan is merged into the defined benefit plan as of Febuary 28, 2005. As of Febuary 28, 2005, all participants in the defined contribution plan are 100% vested with the exception of one participant that is partially vested. The partially vested participant terminated in a prior year but has yet to be fully paid out and has not incurred 5 consecutive breaks in service. The defined contribution plan allows for the reallocation of forfeitures upon the earlier of (a) the distribution of the entire vested portion of the participant's account or (b) the last day of the plan year in which the participant incurs 5

consecutive breaks in service.

Specific Questions

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Once the plans merged on February 28, 2005, what should have happened to the unvested portion of the partially vested participant's account?

Must the unvested portion be reallocated as of February 28, 2005 based upon the profit sharing plan's allocation formula although the participant has not been fully paid out or incurred 5 consecutive breaks in service?

Conversely, can the unvested portion be used to reduce future contribution in the defined benefit plan? As such, under this scenario, it is not reallocated to participant's accounts.

Long story short...got a big 2004 bonus and did not qual for any Roth contributions. I had already put in 3K for me and 1.8K for the wife. I recharacterized that $ into traditional IRAs (done in Feb 2005). Thinking that all that was in the past as a "2004 thing"...I then put another 8K into our Roths this year (2005). I got my 1099-Rs today from Morgan Stanley and then it dawned on me....does that money (the 4.8K) count against me, limiting what I could contribute in 2005 to my Roths? Did I contribute 4.8K too much again this year???? Help! Thanks!

Tax-exempt employer (not a government entity) wants to provide a retirement benefit to executive director who is retiring this year. In general, the employer wants to credit, say, $100K to a book-keeping account for director (account remains an asset of the employer, subject to employer's creditors), and then pay this amount to the director in annual installments over the next 10 years. In essence, this arrangement is nothing more than an unsecured promise by the employer to pay benefits to the employee in the future. Is this type of arrangement subject to Code section 457? Thanks.

Can anyone remember when the required date to amend for ERISA was? Before anyone sends hair-trigger reply, the act was signed into law 9/02/74 but it took a while to write the regulations and there was time for sponsors to amend plans to comply with ERISA. Am thinking is was sometime in 1976 to 78 time frame.

I am looking for that date where you had to either have it done or you stayed pre-erisa forever.

Thanks in advance!

The husband of a co-worker had his company insurance cancelled because he was deemed to be "a risk". Not only was he not allowed to enroll during 2006 open enrollment for medical, but he was also denied access to their company's dental and vision coverage.

At the same time he was allowed to remain in the company 401k, AD&D, STD & LTD programs.

My question - is it legal to isolate certain employees and deny them continued coverage?

My research so far suggests that no statutory penalty has been set for a plan sponsor's failure to timely provide Medicare Part D Disclosure Notices to participants. Obviously, Plan has something of a legal and fiduciary duty to do so in order that participants can make appropriate choice as to Medicare Part D. Are there also no penalties imposed for failure to file a Disclosure Notice with CMS other than inability to receive subsidy if that is applicable?

I am curious what others' experiences have been where Plan files a Disclosure Notice late with CMS and also provides late notices to participants.

thanks

I was wondering if anyone has had any dealings with this IRS under Announcement 2005-80 with respect to a 412(i) plan. In particular, if a company could have deducted 125k under a traditional DB plan but instead contributed 200k under a 412(i) plan, is the starting point in IRS discussions the difference of 75k. Thanks in advance. Ed

I am working with a 403(b)(1) plan where there was a 7 year surrender charge for participant accumulations. Can the forfeiture account be used to make participants whole after the money has been transferred as part of the re-allocation process?

Are there any legal issues in obtaining life insurance beneficiary designations electronically?

We now have enough welfare plan 5500 filings to justify naming someone (not me, thank you) as our "welfare plan 5500 person". I have attended Corbel's 5500 annual update several times, but I'm looking for training specific to welfare plans. I seem to remember that the firm in Kansas City with a name similar McKay Hochman (Meyer Hoffman?) used to provide this training. Does anyone know of training available for welfare plan 5500's?

Thanks. Maverick

How are distributions reported from NQDC Plans? I am not sure but I think if you are an employee it is reported on your W-2. If your a non-employee then it is reported on 1099-MISC. Is this correct?

The plan is a former ESOP that has been amended and restated as a profit sharing plan. Currently, the plan provides for distribution in either cash or employer stock with respect to participants. Do you think that it would be permissible under Section 411(d)(6) to amend the plan to remove the employer stock distribution option with respect to a "beneficiary" of a participant?

The plan is a former ESOP that has been amended and restated as a profit sharing plan. Currently, the plan provides for distribution in either cash or employer stock with respect to participants. Do you think that it would be permissible under Section 411(d)(6) to amend the plan to remove the employer stock distribution option with respect to a "beneficiary" of a participant?

Plan year ended 09/30/2005.

ADP test failed and refund of excess contribtuion is required for $200 for a participant over 50.

Can this be treated as catch-up if the following deferrals occured?

$13,041.47 for the plan year;

$18,000.00 for calendar year 2005 ($10,458.35 in q1-q3 2005, $7,541.65 in q4 2005)

Company A has a 401(k) plan. For 2004 the employer submitted the December 2004 contribution with a January 2005 paydate in error. This was just recently discovered and we have gone back and re-tested the plan for 2004. The plan already failed ADP and ACP testing but now the refunds would be higher by $300. Since we are past the 12 month correction period we were going to correct using the one-to-one correction method under SCP.

It is my understanding that because the plan uses prior year testing so the QNEC would go to the eligible 2003 NHCE's.

The problem is when we allocate the $300 QNEC it results in contribution ranging from $0.10 to $7.00 and a large number of these participants have left the company.

Do I have to allocate this way - it does not seem appropriate to create 50 participant accounts for which the client wil be billed and go through all the work to pay out such small amounts. Is there any kind of deminimus amount provision for this? Any ideas on correctioning the problem?