What does an employer need to do (if anything) if an employer contribution is mistakenly made to a participant's 401(k) account. Several employees were laid off and received severance checks (not "comp" under 401(k) plan definition). However, employer contributions were made based on the severance amount. I cannot find anything on this in the IRS correction procedures. Is this a windfall for the participants? Thanks.

I am wanting to contribute to an HSA using pre-tax dollars with no employer contributions/connections whatsoever (personal HSA plan). Is this possible? Thank you for your help in this matter.

1) I am doing payroll for employees that are now participating in a 401K plan for the first time. Should the taxes for Fed Withholding, Soc Sec and MC be calculated on the remaining amount of pay (gross - 401K contribution) or just the gross amount? 2) If one of the employees is putting 100% of his paycheck into the 401K, is there any difference in calculating the taxes? 3) When do I have to send it the contributions to the 401K management company. Thanks for your help on this matter.

I've come across an employment agreement in which the employer agrees to hire an employee on a consulting basis after 'active employment' ends. The payments for the consulting work will be bi-weekly or monthly and they will be a % of the employee's average pay during the last 3 years of active employment. At first blush, it looks like a simple agreement to keep a valued former employee's knowledge with the company. I don't see a deferral of compensation. The former employee will be paid as the contract calls for and may be terminated at anytime.

However, the new 409A regs lead me to believe that the Service would consider the agreement to be a deferral of compensation; though it's not entirely clear.

I'm guessing that termination of the agreement will not lead to penalties, so long as nothing is paid out as a result of the termination. What about payments that have been made to current 'consultants'?

I'm not sure what to do here....

Company X provides a 401(k) plan to its employees in which the first y% of employee after-tax contributions and/or 401(k) contributions are matched dollar-for-dollar. Company X also permits to employees to make after-tax and/or 401(k) contributions in excess of y% but these contributions are not matched by the employer. In the withdrawal provisions the employer restricts withdrawals of matched after-tax and/or 401(k) contributions to contributions which have been in the plan for at least 24 months unless an employee has participated in the plan for at least 60 months. When a participant questioned whether this was necessary, the employer referred the participant to its TPA which stated that these restrictions were required by two Revneue Rulings issued in 1974 with respect to employer contributions geared to employee contributions. The Revenue Ruling numbers are 74-55 and 74-56. I thought that when 401(m) was enacted, these rulings were made obsolete. Has anyone heard of this or have any thoughts on this?

We have a plan sponsor who mistakenly withheld deferrals on severance pay for one individual and this amount was deposited into the plan. According to the ERISA Outline Book, one of the ways that this can be corrected is to distribute the mistaken deferral to the participant.

Since the participant was not previously taxed on this amount, I believe that this participant should be receive a 1099R at the end of the year. What Distribution Code should be used?

May an employer establish a 401(k) solely to match SARSEP deferrals? If so, are there any pitfalls in doing so?

Has anyone used a reputable collection agency for pension overpayments? Thank you!

This may be a stupid question - but may a nonstandardized prototype plan only cover union employees of an employer (assuming this is properly reflected in the adoption agreement) and have the non-union employees in a separate individually designed plan?

The DOL National compensation survey reports employer premiums for health coverage as $252 and $576 for single and family coverage respectively.

http://www.bls.gov/news.release/ebs2.nr0.htm

The Kaiser Family Foundation reports premiums as $335 and $907.

http://www.kff.org/insurance/7315/summary/index.cfm

Anyone else find this gap interesting? I dug a little into the survey methodology - couldn't find any glaring differences.

Hey Dave,

I take a day off and everything changes.

New Look. New Name.

Looks good.

anyone aware of whether the service is going to apply the katrina hardship rules to wilma victims?

One of my groups has temporary lay-offs up to 3 months. the carreir is willing to cover the eeys. They company continues to pay 75% of the single premium but some eeys do not elect to maintain the insurance as they do not get paid any more. Do they need ot get a COBRA notice??? Is this a qualifying event?

Sometimes the temporary lay-off turns into a permanent at which point they eeys are terminatred and COBRA is offered. How about the ones that did not elect to continue? If they discontinued coverage earlier, woudl this event allow them to pick up COBRA?

Let us say the first plan year is 12-31-04 to 12-31-05 and the fiscal year of the employer is 1-1-04 to 12-31-04. The beginning of the year minimum required contribution is $75,000 and the end of year contribution with 6% interest is $79,500. Is the deduction for the 2004 fiscal year the full $79,500 or just the $75,000 with interest to the end of the fiscal year - which is zero. I think it would be the full $79,500 but have come across some valuations deducting $75,000 in 2004 and the rest of the minimum required contribution in 2005. It looks to me like the timing rules of 1.404(a)(14)(f)(3) just apply to maximum deductions higher than the minimum funding requirement.

Is anyone out there ready to start administrating the Roth (401(k)? You can't help but pick up any news article and read about the pro's and cons of the Roth, but the articles never mention the fact that Vendors or administrators or even payroll providers are ready. Curious as to what people are doing right now in this area.

Thanks

How is the valuation and funding standard account handled for two plans that merge into one plan mid-year?

Any help is appreaciated!

We have a client that has contributed $200,000 to their DB Plan during 2005. The minimum required is $100,000 and the maximum is $250,000. The client wants to only deduct $100,000 for 2005 and deduct the remaining $100,000 in 2006. The contribution range for 2006 should be the same.

Is this possible?

Hello. In understanding the discrimination rules in an HSA, is it possible for an employer to fund different contribution amounts for employees? for example, if the can more be funded for employers with family coverage vs. single?

In January of 2005 my ex husband died. We were divorced about five years ago.

I received a letter from his annuity department asking me to sign a waiver for death benefits because I had signed a prenup. I signed the prenup four days before our wedding without legal council. Obviously I started the QDRO process.

The QDRO is about to be finalized. I recently received a letter from opposing council asking me to appear in court as the children of the deceased are contesting the QDRO. He participated in three plans. The plan has recognized me as the alternate payee. What are my chances of winning. Can I send someone to represent me in court. I filed the QDRO with a QDRO firm as opposed to going to a lawyer. This was a very costly process. The court date is scheduled in another state than I live in now. I really dont want to appear in court. I feel very uncomfortable in front of the family.

If I dont show up in court I dont see why this would decrease my chances for

winning this case. Arent ERISA laws on my side.

Please advise so confused.

Does anyone out there know if the PBGC changed its mailing address from Baltimore to Detroit? If so, does anyone know when they did this? We got back a premium form and check marked "refused", and we had no idea that they changed the address. It's in the 2005 instructions, but who looks at those anyway?