How does everyone handle benefits when an employee goes out on military leave? We extend COBRA for medical/dental/EAP/physical after 30 days, but what about other benefits like LTD, Life, AD&D? Do you carry for the term extended to other Leaves? (we carry for 12 months) And then if you term these benefits do you still leave ee active but on military leave? What's the limit for leaving on military leave - 5 years?

Is there any exception from 20% withholding on distibutions on account of disability ? Presumably most disability distributions are still eligible for rollover treatment (except the rare very severe ones that may be excluded from income altogether) so I'm inclined to think they are subject to the 20%, but would appreaciate any opinions/thoughts. THx.

Advisor wants to put in whole life policies for owners and term policies for staff. No doubt this flies in the spirit of the (a)(4)-4 regs on discrimination within benefits, rights, and featurs. However, is there something "explicit" that states the polcies have to be of the same type ? Did the guidance on insurance that the service issued a year or so ago (mostly directed at 412i policies) address this issue ? Just looking for something specific if it exists to show the advisor.

How would a Company decide how much to charge for COBRA on a medical expense reimbursement plan? Can they simply charge 102% of the maximum amount available under the plan? The plan is fully funded by the employer from their general assets.

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Wife's out of town on business and kids are at school, so I guess you're the only ones to crow to. 20th anniversary today and my mother turned 80!

Snide comments always accepted!

Has anyone ever had this problem? You enter a new plan into Relius (a takeover) and enter beginning account balances. When you try to post the gain for that year, you get an error message that it cannot post because there's a zero basis. The census account screen shows beginning dollars and units, but there's no beginning cost basis. Is this related?

This is a PS with 1 employer account and 2 rollover accounts, all cash.

I'm trying to find the answer to a trivia question. So far, I've come up short.

There have been 3 players born in Maryland who hit 40 home runs in a season. Who are they?

I've come up with:

1. Babe Ruth (well, duh)

2. Jimmy Foxx

3. ??? I don't know

The answer isn't Al Kaline, Harold Baines, or Cal Ripken. Despite their brilliant careers, none of them ever hit 40 in one year.

A sole proprietor is the only participant in a qualified plan. The individual dies, so there's no longer a plan sponsor or administrator. Who can sign the Form 5500-EZ?

NOTE: This isn't an orphan plan; there's a successor trustee. But, the trustee doesn't sign and file Form 5500/Form 5500-EZ.

The statute defining adjusted gross income for purposes of the Roth conversion privilege provides that AGI is calculated excluding required minimum distributions pursuant to IRC Section 401(a)(9). The final regulations, however, provide for the following:

1.408A-3, Q-6. Is a required minimum distribution from an IRA for a year included in income for purposes of determining modified AGI?

A-6. (a) Yes. For taxable years beginning before January 1, 2005, any required minimum distribution from an IRA under section 408(a)(6) and (b)(3) (which generally incorporate the provisions of section 401(a)(9)) is included in income for purposes of determining modified AGI.

(b) For taxable years beginning after December 31, 2004, and solely for purposes of the $100,000 limitation applicable to conversions, modified AGI does not include any required minimum distributions from an IRA under section 408(a)(6) and (b)(3).

This language does not say that RMDs of 401(a) plans may not be excluded. It is simply silent. Both the BNA portfolio series and CCH state that any RMD is excluded. But, I have seen many commentators who say that only IRA RMD's may be excluded.

So - what does this community think?

Thanks for any insight.

new client wants to utilized VCP to correct failure of updating plan for GUST/EGTRRA/401(A)9 etc. 2 participant psp. since i have never had to file a VCP and am not an enrolled agent, i am not eligible to include Power of Attorney. it would be a waste of my time, money, etc to become an enrolled agent unless i was doing VCP filings frequently. what options do i have other than to prepare the application and have the plan sponsor sign off on it? any unenrolled agents have experience with this?

Small 401(k)/Safe Harbor Plan. The company had extentions on their taxes for 2004. They just submitted their 2004 SH contribution and the 2 HCE (both owners) figured their final 2004 income and sent in 2004 employee deferrals for themselves. Is this considered a late payment? Do they have to mark yes on the 5500 and pay in excise tax etc?? Any suggestions? Thanks!

We have an employee who is on the Company's medical plan. Her husband works for another employer and will be going on long-term disability effective Oct. 1. Can her husband enroll in our Company's plan or is this not considered a qualifying event? I’m assuming his coverage will terminate since he will be going on LTD.

Thanks for any insight.

Is it customary for earnings on the pre-marital portion of an account to be considered non-marital? For example, husband has $100,000 in his account on the date of marriage. Contributions of $300,000 are made during the marriage. Contributions of $5,000 are made after the marriage, prior to the QDRO. It is clear that $300,000 plus applicable earnings are marital. It is also clear that $5,000 plus applicable earnings are NOT marital. Although earnings on the $100,000 were earned during the marriage, are they typically considered part of the marital portion? I realize what the parties agree to and what the Order states are what goes. Looking for customary equitable distribution rules. Thanks!

We acquired a smaller hospital that operated a governmental 403(b). We are non-governmental and operate both a 401(k) and 403(b). We want to stop our involvement in sponsoring the acquired hospital's 403(b). There are no employer contributions, just employee elective deferrals. There are no plan documents just provider service agreements. With no termination provisions for 403(b) plans, how do we formally end our involvement with the acquired company's 403(b)? Can we just terminate the provider service agreements? Any advice is appreciated.

Hi. We wrapped our welfare benefit programs into one plan mid year. Does anyone know the proper way to file 5500(s) for this year. Do we need to file separate final 5500s for all of the individual programs, or can we file one 5500 for the wrap plan? I don't know which is the proper way since we wrapped our programs into one plan in the middle of the year.

Thanks.

Our Health Plan runs 10/1-9/30 and our flex plan runs 1/1-12/31. We have just switched our Health Insurance Carrier for the plan year beginning 10/1/05. I have elected to switch to my spouse's employer sponsored plan effective 10/1/05. My employer provides a flex credit to employees - one amount if you are on the plan (because the employer pays the single premium) and a higher amount if you are not on the plan. For the period 10/1/05 - 12/31/05, can my employer credit increase since I am electing off of our plan? I am being told that it cannot because change in coverage is not a change in status. I understand that I cannot change my own pre-tax election, but I was thinking that a change in an employer credit would be allowd. Any thoughts?

Thanks!

Hi. We wrapped our welfare benefit programs into one plan mid year. Does anyone know the proper way to file 5500(s) for this year. Do we need to file separate final 5500s for all of the individual programs, or can we file one 5500 for the wrap plan? I don't know which is the proper way since we wrapped our programs into one plan in the middle of the year.

Thanks.

Hi. We wrapped our welfare benefit programs into one plan mid year. Does anyone know the proper way to file 5500(s) for this year. Do we need to file separate final 5500s for all of the individual programs, or can we file one 5500 for the wrap plan? I don't know which is the proper way since we wrapped our programs into one plan in the middle of the year.

Thanks.

Does anyone have any experience with the IRS program with regard to over 50 "lost participant" requests? I have some information that tells us that requests of over 50 employees will be billed at $1750 plus $0.50 per person. (Up to 49 is free.) We have a client with approximately 60 lost participants. It's hard to explain to them why the cost jumps from $0 to $1750 when they are only over by 11 participants. I know the line had to be drawn somewhere......

You must submit a preliminary letter for review prior to sending in the over 50 requests. Is it possible that the IRS reviews each case individually and, when they respond to advise if the letter is acceptable, then provide you with a fee that might be more reasonable? Any experiences/thoughts appreciated.