generally can a plan rollover annual payments to a term participant over 5 years?

Just found this site - thank goodness.

I realize late deposits are considered prohibited transactions, but my problem is...what is considered late? If a company is consistently depositing by the 15th of the following month are they still not timely due to the "reasonably segregated from employer's general assets" rule?

Do we report a prohibited transaction since the company could have deposited the contributions earlier than the 15th?

Any help would be appreciated.

Thank you!

A participant has taken his money from his IRA and wants to roll it into his retirement plan. The bank where the funds were held issued him a cashiers check for the funds and he mailed to his 401(k) custodian. The custodian rejected the cashiers check, and they mailed it back to the trustee of the plan. The trustee has not received it yet - 30 days later.

In order to re-issue a check, the participant must:

1. Pay $ 500 to the bank to cover an indemnity bond and then they will stop payment and immediately do a reissue or;

2. Wait 90 days until the bank will do it for free.

The funds will be out of the IRA over sixty days if he has to wait for a free reissue, and he cannot afford the $500.

What is he to do. I have never heard of a custodian rejecting a cashiers check, nor have I heard of a bank charging a fee to stop and reissue a cashier's check.

Ugh!

Beneficiary of plan participant disclaimed a portion of the pension benefit to go into charitable remainder unitrust. Does the pension trustee report the distribution to the trust on a 1099-R? The other portion was rolled to IRA in beneficiary name. The beneficiary will receive a 1099 for this part.

The IRS gave us an extension for making automatic rollover amendments in Notice 2005-95. What about an extension of the extended period for operational compliance provided by Q&A-9 of Notice 2005-5?

Owner wants to put wife in plan for 2005

she has worked 4 days per week, 8 hrs per day since 1/1/04 but has never received compensation

eligiblity 1 year service, age 21 - entry 1/1, 7/1 with changes to salary reduction any time

owner wants to pay her just enough salary so she defer max for '05, receive 3% safe harbor and profit sharing

does anyone know if you must receive compensation to consider your "year of service" for eligiblity?

this sounds wrong to me

any other issues that stand out here?

thanks

I always believed that under the Dependent Care Program, the provider had to be a licensed day care center, and that relatives were not acceptable. I have read that this is not the case. Has it always been this way? Also, can language be added to the plan document indicating that only "licensed" providers can be used?

I am aware that one of the prohibited transaction exemptions is that if a DB Plan has insurance policies, that when the plan would otherwise surrender the policy, that it could instead sell the policy to the Participant.

PTE 92-06 says that the price of such a sale would be at least the "amount necessary to put the plan in the same cash position as it would have been in if it had...surrendered it"

So, when a participant terminates employment in a DB plan with insurance, I will inform the client that any policies held for that participant are to be surrendered and the proceeds should be deposited with Plan Assets. However I tell the client that before they surrender the polices they should first see if the participant wants to buy the policy from the Plan, and the price would be the Cash Surrender Value.

I was recently told by someone that new guidance says that the Cash Surrender Value is no longer what the participant would have to pay to buy the policy. That the price is now some formula or whatnot. Can anyone explain or cite me this new guidance.

I went wireless and broadband this fall after a lot of nagging from daughters and wife. System works great, should have done it long ago.

BUT.... I find problems getting past security at this site on anything but the new system. There are four family computers I use at home or when I travel, plus the occasional public library / hotel system. Is there a connection between the log on system using email addresses and the email address associated with the computer you are using? I hope not. Any suggestions?

With PFEA expiring, i was curious to know if anyone has heard anything other than going back to 30 year treas. rates for calculating 415 limits. Thanks.

My plan is allowing Roth 401(k) contributions begining in 2006. Can I also make a contribution to my Roth IRA in 2006? I meet the Roth IRA AGI limitations.

Our company excludes the son in our documents to remove the negative impact of a young hce receiving an allocation in 401a4 testing.

I believe we should make children their own rate group and give them a 0% allocation to help our testing further with a 0% allocating to an HCE under 401a4.

My colleague believes the IRS would not approve of my strategy. What are your thoughts?

Thank you

I barely know enough about this to be dangerous, but I'm trying to help out a CPA. If a kind soul can help out a newbie I'd appreciate it...

Medical group pays 100% of medical premiums for owners. My understanding is that this is OK, since there is essentially no non-discrimination testing of health plans themselves - if that's wrong please advise.

The practice pays some portion of premiums for everyone else. They have a POP plan to let the employees pay their portion on a before-tax basis. A quick look at the non-discrimination requirements under 125(b)(1) appears to indicate that as long as everyone is getting the same portion paid by the employer, this shouldn't be a problem.

And the requirements of 125(b)(2) can't become a problem because there are no Key employees in the POP plan, since their premiums are paid by the company.

Thanks for any feedback.

re new relative value regs: We were just told that three of the optional forms of benefit under the pension plan are not actuarially equivalent to the QJSA. We understand it would be good to amend these to be actuarially equivalent by 12/31/2005 - but they are union plans so we really can't make that type of change without bargaining w/ the union. Also, are there any anti-cutback problems with amending the non-actuarilly equivalent optional forms to make them equivalent to the QJSA?

Here, for your reading pleasure, is an excerpt from Prop. Reg. Section 1.409A-1(b)(9)(iv), relating to the reimbursement of post-employment expenses for a limited time:

"To the extent a separation pay arrangement (including an arrangement involving payments due to a voluntary separation from service) entitles a service provider to reimbursement by the service recipient for a limited period of time of payments of medical expenses incurred and paid by the service provider but not reimbursed and allowable as a deduction under section 213 (disregarding the requirement of section 213(a) that the deduction is available only to the extent that such expenses exceed 7.5 percent of adjusted gross income), such arrangement does not provide for a deferral of compensation."

I would be particularly interested to know if anyone has any thoughts about the red italicized language or has heard anyone at IRS or Treasury make mention of it. The context is this: what if an employer agrees to pay or not charge or subsidize an terminating executive's COBRA premiums for 18 months -- how do you steer that around 409A? COBRA premiums are deductible under Section 213(a) (assuming you satisfy the 7.5% AGI test). If the "not" in the foregoing excerpt applies only to the word "reimbursed," you've got a clear way to exclude the COBRA subsidy from 409A, and the "allowable as a deduction" phrase clearly liberalizes things by excusing the former employee from the 7.5% AGI test. On the other hand, if the "not" applies to both "reimbursed" and "allowable as a deduction," you'd need another exception or else you'd need to comply.

The welfare plan exception in 1.409A-1(a)(5) is a little troubling because it refers to "any other medical reimbursement arrangement, including a health reimbursement arrangement, that satisfies the requirements of section 105 and section 106." What does it mean to satisfy the requirements of Sections 105 and 106? Does that mean a COBRA subsidy limited to random HCEs who terminate would be a problem due to Section 105(h)?

Maybe the COBRA subsidies are just hard-wired into a severance plan or agreement and provided on an unalterable monthly (or whatever) schedule, thereby complying with 409A?

Anybody have any brilliant solutions to this one or am I just missing the forest for the trees?

I am 53 yrs old....I want to invest for 10 years...I have been told that the Roth IRA is the way to go for me.

Need opinions....I already have retirement thru my job, 401K, and 403B....this investment will be money coming in that I did not expect......what are your suggestions....which funds?....don't slam me...I am a rookie at this.

Are government employers, i.e. the State of New Jersey required to comply with the ERISA Law, specifically as it relates to the attached final report, and the State's obligation to pay in to the Public Employees Retirement System(PERS).

final_report.pdf

Retired doc continues to earn de minimis salary so he gets health insurance from the Employer. His accountant tells me he also has certain amount of 'deferred compensation' and will for a certain period of time.

He does not and will not provide services to the Employer.

Is 'deferred comp' in the situation described show up on a W2?

Thanks

Hope this is an acceptable place to ask whether Ortho Evra is a covered expense or not. I was surprised not to find it on the list offered at pacificbenefits.com. It has birth control pills, but not this one...

So is not covered then, or is my reference list not complete?

Another thought I had was just if it is a diferent category, like a prescribed med? Is that how it works? I don't see a lot of medications listed, but presume they are if prescribed and my insurance doesn't cover it.

I'm new to this so please excuse my lack of knowledge here, just trying to figure out if this is worht it or not and I have limited time and info.

Thanks!

Q. Upon distribution, what kinds of repurchase rules are there for 401(k) plans upon lump sum distribution of a participant's account that holds some closely employer stock? Obviously the put-option and repurchase rules of ESOPs do not apply, but if the Plan Document is silent as to form of payment, just that participants have a right to lum sump, could employers make distributions in-kind? If so, how the heck can a participant find a market for the closely held stock?

You can email me directly at koreambear@yahoo.com

Thank you and have a nice weekend.

Will L.