Has anyone worked with a search firm locating missing participants that you can recommend at a reasonable fee??

We have a 401(k) plan that is being audited by the IRS for the 2002 plan year. We have several participants that terminated employment in 2005 and will be due a distribution after the end of the plan year.

If the audit is not finalized, is there any reason we should not go ahead and distribute assets to terminated participants?

Hello,

I am currently contributing to a 401 (k) which I will likely roll over to a Roth IRA in 3-5 years when I resign from my job to move. I know that you can use a Roth IRA towards purchasing your first home however, I have a technicality. I may be getting engaged soon and would likely be married at the time of the home purchase. My significant other is currently a homeowner. Would I still be able to use my Roth IRA to purchase the home or would I be disqualified due to previous ownership by my prospective wife?

Thanks for any help.

Joshua Dix

Imagine, if you will, a tax-exempt employer that maintains both a flex plan and a 403(b) plan; the 403(b) plan is of the "conduit" variety (i.e., employee contributions only, minimal employer involvement). Some of the communication materials distributed to employees could be read to suggest that opting out of medical coverage under the flex plan will send the amount that otherwise would have covered the medical premiums to the 403(b) plan. These materials also could be read to suggest that there is no cash option available under the flex plan.

Potential oopsie #1: impermissible flex plan benefits (i.e., 403(b) contributions). Potential oopsie #2: no cash option in the flex plan. Potential oopsie #3: blowing the ERISA "voluntary plan" exception by sending in deemed employer contributions (i.e., the opt-out money coming from the flex plan).

The consequences of Nos. 1 and 2 are pretty unappetizing to behold. No. 3 is fixable (at least w/r/t annual reporting), but not without tacitly conceding that you screwed the pooch on Nos. 1 and 2.

The alternative is (assuming there is something -- anything -- to back up the idea that the flex plan and 403(b) really were separate and that opt-out flex plan dollars were not getting remitted directly by the employer to the 403(b) vendor -- and I think there may be) to, well, not read the prior employee communications materials this way, revise them going forward to be really clear about how the opt-out money will flow (it goes to the employee as additional cash compensation and can then be -- at the employee's initiative -- directed in whole or part into the 403(b) plan), and hope that the statute runs before anybody from Harry Beker's office drops by for a visit.

Anyone have any bright ideas about this?

My company has a VEBA plan adopted. Variable Life Insurance plans were purchased FBO employees. There is no cash left in the trust account. All contributions were made over several years. It had 3 employees participating in VEBA.

Two employees retired 2 years ago. Income is too low for business to sustain operations. So business has to be shut down.

1) Need advice & help on planning the termination of the VEBA plan.

2) Anyone you can refer in California (Orange County or San Jose).

3) To avoid tax consequences, I understand that if the policies are rolled into a Lifer Ins Irrevocable Trust, it will be best. Does each employee set up their own Life Ins Irrevocable Trust ?

4) Any alternate choices or feedback is welcome.

Thanks in advance.

Sean

An employer maintains a DB & a DC plan and the two plans are aggregated for 410(b).

DB plan covers the Owner and owner's Spouse [spouse was included to pass 401(a)(26)]. Spouse took a nominal salary for plan yr 1 and accrued a benefit. For plan yr 2, the spouse took no wages and as a result did not accrue additional benefit during plan yr 2 (because her average comp was halved – benefit formula is flat % with fractional accrual).

For 401(a)(26), did the spouse benefit under the plan for plan yr 2?

A nonprofit org. has a 457(f) plan that is linked to 401(a) plan, which provides benefits lost under qualified plan due to compensation limits. For 409A reasons (plan previously used rolling vesting and not sure how to reconcile), the org. is thinking of terminating 457(f) before 12/31/05 deadline w/o paying benefits. What types of alternatives are people recommending to replace this type of benefit, or is 409A seen as prohibitive in t/e executive comp. area?

In California, Employers that offer group health insurance to eligible spouses must also make coverage available to registered domestic partners. In addition, if the employer is providing a contribution for eligible spouse coverage, that same contribution must be made to domestic partners. However, the premium the employer pays for domestic partners is to be considered imputed income to the employee. My question:

How does the employer show the imputed income? Is it calc'd at year end and added to the employee taxable income?

I read prior discussions on this topic on this Board and have couple of question.

Prior discussions and Pension Answer Book appear to say that, in general, any partially vested participant paid out prior to the plan termination date need not become 100% vested.

Is there a minimum period between the payout date and plan termination date for this to apply?

Suppose, in a calendar year plan, some partially vested terminated participants were paid out in March, June, August and October 2005, say.

1. If the plan is terminated in November 2005, say, is anyone of the participants paid out in 2005 required to be vested 100%?

2. What if the plan is terminated January 2006, the plan year following the plan year during which the distributions were made?

3. What if some of the payees had 1+ year of break in-service and some did not as of the plan termination date?

I am looking for additional sources of information for my clients who enroll in either a HRA or HSA. Right now I can direct them to the carrier, but that information is somewhat limited. Does anyone know of sites, or even products/services I can purchase to help?

I have a small plan where non-ower doctors are an excluded class.

I pass 410(b) for coverage with him excluded.

Is this non-owner doctor still in the 401(a)(4) testing (as a 0) or no?

Thank you for any help!

Can anyone point me to a study of the costs an employer pays for actuarial services on a pension plan? Our contract with our actuary is to be renewed shortly and we are trying to determine how much a plan of similar assets and participant size would pay. We are reluctant to perform a RFP due to the time and costs involved. At this point, we just want to make sure what we pay is at least reasonable.

Thanks

If there are two Puerto Rico employees who are eligible to defer in a US -based 401(k) plan, when testing the Puerto Rico part of the plan, do you have 0 or 1 HCE (1/3 of 2 is .6667)?

I thought that you rounded to the nearest integer, so if there are at least 2 Puerto Rico employees, you will always have at least 1 HCE.

???

Some clients and referral sources are getting a pitch from a company that takes other company's employees in conjunction with them joining a union, which supposedly has collectively bargained for flex benefits where the now "union employees" can choose which benefits they want "purchased" for them under an ala carte menu of benefits (say $500 per month). Since they're union and collectively bargained the client can now exclude them from their pension plans using the union employee (w/collective bargained benefits) exception to 410(b). It will shock you to know that most of this is being offered to doctor groups.

Anyone seen this ? I have a hard time seeing the "good faith" collective bargaining here. It doesn't appear the union employees hired their own attorneys for the "collective bargaining". Also the employees were not approached by the union to join the ranks, but rather the employer basically tells the employee you "will" join this union as we're only hiring from this "union" now.

Brilliant idea ? or one step ahead of the IRS to be closed down next year ?

One of our clients has an underfunded DB plan with funding deficiencies They have been filing the 5330s and paying the tax. In 2004 the HCE forfeited enough of his benefit to make sure the NHCE received 100% of her vested benefit. The IRS claims that eventhough the HCE waived a portion of his benefit, they still must file the 5330 and pay the tax. Our position is that the HCE waived a portion of his benefit, effectively freezing the benefit, therefore the plan is no longer underfunded and no need to file a 5330. The IRS is looking for some regs to back up our position.

Any help is greatly appreciated.

Obviously I'm not well versed in the land of DB plans, but had this question posed to me recently...

Can a business owner -- who along with his wife are the only employees of the company -- start a DB plan after reaching age 65? What are the limits, if any, of DB plan startups and payouts. Thanks for the input.

A 401(k) plan with match feature excludes commissions and bonuses as an eligible form of compensation. The plan would pass the compensation ratio testing. The plan year runs 01-01 to 12-31. Can the plan be amended prior to 01-01-2006 (i.e. November 1, 2005) to remove the compensation exclusions or would this be some type of cut-back?

The match is paid on a pay period basis and has no accrual requirements.

A company wants to start a 401(k) plan effective 12/1/2005, with a 1 month SPY, before operating on a calendar year starting in 2006. It is a doctors office, with about 17 employees. The 2 owner docs will receive very large bonuses in December, from which they will make 401k contributions. ADP testing is always a concern, but other than that, is there anything else to worry about with this situation? For example, if the docs get bonused (and do 401k from the bonus) and no on else does, is that a problem? ADP may not be too bad, since although there will be a small dollar amount of 401k for the NHCE's, we would use only 1 month of comp which would drive up the ADRs.

Thanks

Anyone here using debit cards with success? Any problems? Does anyone know of a vendor that can outsource the debit cards without "taking over" and existing cafeteria plan?

Thanks

Wisln