Also, any authority for this? Thanks.

I'm trying to get a sense of how prevalent HSAs are in the California healthcare industry, specifically hospitals. Does anyone have any idea where I might be able to obtain any current survey data?

2004 rec'ble for a ps plan was $29,067.99. Client makes a deposit 4/28/05 of $30,000 anticipating a contribution in 2005. Medical practice not doing well, does not want to make any contribution, Oh, the plan is top heavy!

Client's accountant says to pay out the difference of $932.01 to us as TPA for our services. (He shows $29,067.99 as the deduction in 2004) I'm trying to convince the client this is not correct(or is it?) since she clearly made a one time deposit of $30,000 and intended it all to be contributions and contributions cannot be re-characterized.

Any references in the code that I can send to the accountant? Thanks.

Linda Michals

Have a client who has decided they would like to become a Safe Harbor plan in order to avoid ADP/ACP testing. With the 30 day notice requirement- I am assuming it is too late for 2006. What if the client changed their plan year from a 12/31 to a 3/31 so they could move to a SH plan 4/1 and have time to get the notice out. can that be done and what other implications might this have (other than the traditional short plan year things)? thanks.

The rules under 1.410(a)-7(a) require that the employee's hire date be used to calculate periods of service for vesting purposes when the plan uses elapsed time for vesting.

For a new plan (not a successor plan) the law permits the plan to exclude for vesting purposes all service prior to the effective date of the plan.

Therefore there is a conflict between these rules which seems to be resolved by 1.410(a)-7(a)(3)(ii)(B) which states the true hire date may be 'adjusted' for periods of service not required to be counted. Although this may create multiple 'hire' dates, that is just the way it is.

Therefore, I conclude that if a plan uses BOTH elapsed time for vesting, AND excudes years prior to the effective date of the plan for vesting, then those hired before the effective date have an 'adjusted' hire date for vesting equal to the effective date of the plan.

Any disagreement on this?

Now to figure out how to make the software work!

Is it possible for a cafeteria plan to give employees the option of making pretax contributions to a SUB fund whereby the employer will not have to pay FICA/FUTA taxes and the employee does not have to use after-tax dollars?

An employer has been operating a cash balance plan for the past 4 or 5 years. The employer is waiting for an IRS Determination letter relating to the plan's initial qualification. It is my understanding that the Service goes to great lengths to issue a favorable letter, having the employer make whatever changes to the plan that might be necessary in order for the IRS to give their blessing.

But what if, for whatever reason, the plan does NOT get IRS approval. Or perhaps the employer terminates the plan before IRS approval is granted?

In either case, I'm thinking the employees would be entitled to whatever assets had accumulated over these last few years. Obviously, if the IRS determines that the plan has not achieved qualified status, the participants would receive taxable distributions with no option to roll.

Could there be a circumstance where the assets would revert to the employer?

Must a participant loan policy allow a participant to revoke payroll deductions for repayment and force it to go into default?

Took over a plan where the required beginning date is defined based on the TRA '86 of age age 70 1/2, regardless of whether the 'EE has retired. Participants have been paid their RMDs based on that RBD. The employer now (2006) wants to amend that provision to the SBPJA date of the later of 70 1/2 or retires.

Can participants, who are over age 70 1/2 but not yet retired, now elect to suspend their RMDs because of the amendment? Or is it too late for those participants because the plan wasn't amended during the GUST remedial amendment period and such a participant did not make an election during that RAP?

I have a DB plan that is terminating. Has other two participants besides the owner. One participant has moved out of the country and the other is incarcerated. How would I go about paying these people out so that we can finalize the termination of the plan?

Please respond to the following email also:

Jamess@derbyco.com

Thanks,

James

I have a client who has a Safe Harbor 401(k) Plan. They satisfy the safe harbor requirements by making the 3% SHNEC. They have recently asked me to amend the document to exclude bonuses from the definition of compensation. (They no longer want to allow the participant to defer on their bonuses and they no longer want to consider bonuses when calculating the 3% SHNEC.) Aside from the additional compensation testing that needs to be done for excluding bonuses, can this be done? Is it permissible to exclude bonuses in a safe harbor 401(k) Plan?

A minor child is designated as the beneficiary of a death benefit. In most (all?) states, the benefit can't be paid directly to the child. The payment check(s) must be issued to the "Parent or guardian of the minor child...".

How do you prepare Form 1099-R at year-end? Common sense tells me that the income is taxable to the beneficiary, not to his/her guardian. Shouldn't the Form 1099-R should be filed under the minor child's name, as recipient, using the child's own SSN? The fact that the payment checks are issued under the protection of a parent or guardian doesn't change the ultimate tax treatment of the benefit.

How do you handle this situation? How do you prepare Form 1099-R when a minor child is designated as beneficiary of a death benefit?

Can the user fee for a funding waiver application be paid from the pension trust?

client has a MP and a PS that have not been amended for GUST or EGTRRA. they want to get rid of the MP. is it necessary to bring both the MP and the PS into the VCP program and then merge the MP into the PS or can i first merge the MP into the PS and take the merged PS into VCP. this would cause the emoloyer to only have to pay one compliance fee. however, my inclination is you have to submit both plans.

Is it permissible to allow participants to elect to contribute to either the pre-tax or the roth 401k, but not both? (Not allow them to elect 2% Roth and 2% pre-tax)

Here are the facts: Participant's account balance is $1800.00. Participant wants a loan in amount of $1000.00. It is my understanding that the loan amount can be up to $1800.00 but the COLLATERAL for the loan cannot exceed 50% of the account balance. If this is correct and the participant wants to put up additional collateral, how is this handled?

I have a Profit SHaring and Money Purchase plan that has not been contributed to in almost 20 years. It was transferred to a bank trust department and held there for about 5 years. Then transferred to a Brokerage company and just held and assests have continued to grow. I have not filed any 5500ez because I only recently discovered that maybe I was supposed to. I have been told to just transfer all of it to an IRA in the same brokerage company. Is that a good idea?

a participant in a 401(k) rolled his balance into an ira when he left the employer. now, after surrender fees have passed, he wants to roll this ira into another ira that he has set up. is this ok??????

What are permissible ways for a TPA to pass on 12b-1 fees to a company? Can the TPA place the reimbursed fees into the forfeiture account if the employer uses that account to reduce the match?

If a plan sponsor if selling two stores from it's overall portfolio of stores, what happens to the 401(k) vesting of the participants who work at that store? Do they automatically become 100% vested? If not, could the plan sponsor, as a good will effort, make all of these employees 100% vested in the 401(k) plan? Or would this be viewed as discriminatory.