Does anyone know: Has there been any further clarification on Election changes under 409A?

Specifically, if a participant changes his election from a lump sum to an annuity within the 12 month effective/in-advance time period, is this considered subject to the 5 year change in form requirement? Or, similarly, if a participant lengthens his annuity payments from, for example, 5 to 10 years, is this subject to the 5 year change in form requirement.

Is there anything to hang my hat on out there?

It's been a while since anyone has posted on this board. Is there anyone else out there taking this exam this fall?

While preparing the Accountant's Opinion the CPA discovered that the loan interest rate used for a couple of loans was incorrect (prime rate had changed, loan rate should have moved with it but did not). As loan procedures are made part of the document by reference, it seems that this may be a qualification issue. Maybe not?

As one loan has already been paid off, with $150 too much, and the other still out there, what are the remedies? Must (or should) the overpayment be returned? It seems as though a Participant has technically contributed after-tax dollars which are not allowed in the plan, and these should be fixed. But as always, what am I missing?

I'm new to administering ESOPs and I have a general question. The ESOP has investments in mutual funds and some GNMA bonds. I'm wondering when it comes to allocating earnings on these non ER stock is the allocation made on a participant's total account including the ER Stock or account minus the ER Stock? I'm going to read the document carefully to see if it specifically addresses this but thought someone who administers these on a regular basis could give me some guidance.

Our 5500 preparer is telling us that it is no longer acceptable to create an attachment to the SSA, allowing one to put 50 people on the same page. As a result, we are looking at a SSA filing that is 600 pages long.

I thought this might have come up before, but my search turned up nothing that was on point.

Confirmation or rebuttal?

As we all know, one contributing factor in the decline of DB plans is the lack of understanding/appreciation by the individual participant. Since most actuaries are keenly aware of this, and since many of us have a hand in producing a yearly “pension statement”, I suggest we consider how that statement can improve employee understanding and appreciation. Thus, I suggest using existing materials as a vehicle for this improvement.

Specifically, when you produce a statement that shows a benefit projected to NRD, I suggest including a short message on every Statement. This can also be expanded to the production of benefit calculations and estimates. The purpose is a simple method to alert the recipient to the value of the benefit. For example:

"The plan benefit is payable for your lifetime. You cannot outlive your pension income. Looking at this another way, if you receive the projected pension benefit for 20 years, you will receive a total of $xxx,000 from the Plan."

Comments? Suggestions?

We are trying to work out an arrangement where a bank would accept these accounts. Their IRA service provider advises that they can only accept these accounts from "recently" separated participants and not "lost" participants. So, the bank wants to define "recently" which we understand is not defined in the final regulations. Other providers I'm working with do not make any distinction between "recently" separated and "lost" participants. They will accept accounts as requested by Plan Sponsors with whom they have agreements to provide this service. Reality indicates since the forced IRA rules are so new, plan sponsors may have a backlog of participants who may be "lost" at this point. Can anyone shed any light on this?

What is the HCE definition for 2006? $95,000?

Hi everyone,

I posted this on another topic board but didn't get an answer - can anyone here help? Thanks....

I've read everywhere (including right down to the code) that the plan can have "qualifying employer real property" in the plan. The IRS website even mentions that this can be mortgaged by the plan (I realize that you have to watch for a PT).

However, what I cannot find are specifics about mortgages in a qualified plan- how much can be mortgaged, specifics of payments, etc.

Can anyone point me in the right direction? I'm looking for specific citations, etc. Also, if anyone knows of any examples it would really help!

WASHINGTON, DC -- Today the IRS and Treasury issued proposed regulations with respect to the comparability rules for employer Health Savings Account (HSA) contributions. The proposed regulations generally follow the previously issued guidance on comparability rules. The rules also provide additional clarification with respect to a few issues not previously addressed.

Unlike many other employer-provided tax-favored benefits, the HSA rules do not have nondiscrimination rules restricting the amount of benefits provided to highly compensated employees. Instead, the HSA statute requires that all employer pre-tax contributions to employee HSAs be comparable. That is, all employer contributions to employee HSAs must be the same amount or the same percentage of the High Deductible Health Plan (HDHP) deductible for all employees with the same category (self-only or family) of HDHP coverage. These rules, as provided in prior guidance, provide an exception from the comparability rules for employer contributions to HSAs made through cafeteria plans.

See, Link to Proposed Regulations

My ex-husband died this year. I did not know I was entitled to benefits until

his union contacted me. I have since filed a QDRO. What are my chances.

The firm I am working with says very good any opinions?

Has anyone ever had the occasion to design a report or have a report designed that would list, by plan, cash flow?

For example:

1. Secify a period (month or quarter)

2. print out a list by plan to Excel that shows for all plans, individually, for the period:

Plan Name Total Transfer in/out Total Def dep Total ER dep Total Distributions

Did you design it? Have Relius design it?

Thanks

Do you have to impute compensation for purposes of calculating the 3% safe harbor contribution for participants on active military duty?

CAN PLAN EXPENSES BE SHOWN AS A PAYABLE FROM THE PLAN (INCURRED BUT NOT YET PAID)?

For a C corp, a person's "compensation" seems basically salary as would be shown on W-2. For a sole proprietor, "compensation" would be net earned income (profit). What about a small corporation with a sub-S election where a business owner has both salary and profit?

Suppose an owner / partner pays himself a base salary of $40,000 and the business has a good year and ends up with a profit of $150,000 allocated to that owner / partner. Would a 3% employer match be calculated as 3% of $40,000 = $1,200 or 3% x $190,000 = $5,700?

Reference?

Any different implications if the company had a SIMPLE 401(k) rather than SIMPLE IRA?

Thanks.

I have an employee who was called to active duty in 2002-2004. Employee has 2 months of earnings in 2002 but none in 03 and 04. Do we need to distribute a revised W-2 if he decides to contribute for 2002. Additionally, is there a certain way we should be coding these contributions. Any guidance would be appreciated.

Thanks,

I've seen conflicting statements regarding what exactly is supposed to go into Code Y of Box 12 on the W-2. A Paychex bulletin states "employees' annual deferrals", Vanguard states to report "all vested amounts deferred during the tax year from all sources", my ERISA attorney states "all current year deferrals, inlcuding earnings on those deferrals", and finally our friends at the IRS state "Include current year deferrals udners a section 409A NQDC plan. Any earnings during the year on current year and prior year deferrals must also be reports here".

I'm going with what my atty and the Service state. However, it looks like I'll need the help of my recordkeeper to determine the earnings on those deferrals.

I'm kind of shocked at the levels of misinterpretation out there. Has anyone else given any thought to this fun little extra step we now need to get done?

Thanks

We have a QDRO that directs the amount to be put in a separate account established under the plan, with language directing that distribution options then be provided to the AP. The plan does allow for payment to AP as a triggering event, but the Participant is over 50 anyway.

Can the AP subsequently rollover the segregated account to an IRA?

Company M offers a SEction 125 plan to its employees. One of the available coverages is long-term disability coverage. Company M pays for the entire premium for LTD coverage equal to X% of pay. Employees may select, during open enrollment, LTD coverage equal to x% of pay, 10+% of pay or 20 + x% of pay with employees paying the pre-tax premiums for coverages exceeding x% of pay. Assuming the coverage is self-insured, can Company M take advantage of Rev. Rul. 2004-55 by having an employee elect to include premiums in gross income, by having Company M impute in employees' gross income the cost of coverage equal to x% of pay with employees continuing to pay the difference but on an after-tax basis? Does it make a difference if the plan is self-insured? The facts of the Rev. Rul and PLR 200527012 were based on an employer buying an insurance policy from a third party carrier.

I've read everywhere (including right down to the code) that the plan can have "qualifying employer real property" in the plan. The IRS website even mentions that this can be mortgaged by the plan (I realize that you have to watch for a PT).

However, what I cannot find are specifics about mortgages in a qualified plan- how much can be mortgaged, specifics of payments, etc.

Can anyone point me in the right direction? I'm looking for specific citations, etc. Also, if anyone knows of any examples it would really help!

Vicki