Company B buys all assets of Company A. Both companies have 401(k) plans. Purchase was effective 3/1/2005.

Company B wants to assume sponsorship of Company A's plan and then terminate the plan. I don't know why Company A just doesn't terminate the plan, but this is the situation with which we have been presented. To further muddy the water, some of the employees of Company A have gone to work for Company B. They continued to have deferrals taken from their pay but the deferrals have been deposited to Company A's plan.

1. Is it okay for Company B to assume sponsorship of A's plan and then turn around and terminate it? If so, does this action have any impact on the A employees who have gone to work for B?

2. Does anything have to be done about the deposits to the A plan from wages of employees who now work for B?

Can anyone tell me when the 15 yr os service catch up was allowed in 403(b)s?

Many US companies have illegal aliens working, but their illegal status is not known to the employer for quite some time. These workers become "eligible" to participate in the plan because of age and service, but choose to not participate in the plan, for obvious reasons. When the employer discovers their illigal status, these employees are terminated. Should these illegal aliens be excluded from the ADP/ACP testing?

I've lurked here in the forum for a while now and finally screwed up the courage to post a topic.

I've recently taken some work with a management company covering several thousand employees in a self funded benefit plan.

The participants are all FT employees of the plan sponsor, however, many of the physical locations are owned by the plan sponsors clients. the plan sponsor allows owners to choose from a number of different contribution schemes to support the plan. some owners contribute 50%, some contribute 70%. the end result is that similarly situated employees of the same employer end up paying different amounts to participate in the same plan. My little brain cannot get around the apparently discriminatory appearance of this arrangement.

Before we start the meter with our erisa counsel, does anyone have an opinion regarding this arrangement ?

Help! My husband worked for an extremely large telecommuications company. I had sent his benefits department an e-mail requesting COBRA rates. My husband was considering another job where there were no benefits; however, we could pick up COBRA for the 18 months and then pick up a plan through the AICPA. He paid over $200 a month into his benefits for family coverage.

So I got the e-mail back with the rates and felt it was beneficial to take the other job and pick up the COBRA as it wasn't that horribly expensive.

However, once we got the official paperwork, the rates were $600 more a month than what the e-mail had said. When I contacted the benefits department, they stated that they quoted me lay-off rates as they didn't have a reason for my requesting the rates. They automatically assumed he was being laid off. No where in the e-mail that they sent to me did it say that the rates were just a sample or subject to change based on termination reason. We used the rates that we were given in our determination. I feel that they should honor those rates. The company said they always use the lay-off rates.

Is there anything that I can do about this? I have all the documentation. I have all the e-mails, etc.

Thank you.

Plan sponsor wants to terminate a non-PBGC plan and pay out participants in 2005. Benefit accruals have been frozen since 12/31/02. Using a funding interest assumption of 5%, the PYB 1/1/05 valuation has a $0 maximum deductible contribution. But when we calculate the lump sums payable at 4.86% (Dec. 2004 GATT rate), the plan's assets will come up short by about $30,000. There is a single HCE with a lump sum benefit of $355,000 (nowhere close to his 415 limit).

Is there any way to make a "just-in-time" deductible contribution in 2005 that is exactly enough to pay all benefits on the planned distribution date of 9/30/05?

Dave Peckham

Anyone aware of an cases where the retirees claim to life time medical coverage was based on lanugage in an asset/stock purchase agreement?

Anyone aware of a lawsuit were retirees claimed their entitlement to life time medical benefits was based on language found in an asset/stock purchase agreement?

Hello,

Can I collect NYS Workers' Compensation & Social Security Disability at the same time?

I am an RN who was injured in 2002 on a previous job.

I currently have an opened Workers' Compensation case. Though I have submitted and been approved for reimbursement of multiple medical bills, I have not yet lost any time from work related to these injuries.

In April 2005, I became medically sick and have not yet returned to work. My medical condition, alone &/or in combination with my WC injuries, will require that I apply for Social Security Disability.

Many thanks in advance for your replies.............BLB

I haven't run into this particular situation before and wanted to see if anyone else had or had any ideas:

In 2004 small plan (plan year end 12/31) discovers late participant contributions from 2003 & 2004. The enter and complete Voluntary Compliance (received final DOL letter). The plan has filed for extension for 2004.

On Schedule I, do they answer yes to late contributions question or not?

If yes, do they complete the Form 5330?

401(k) plan fails ADP in 2003 and no corrective action was taken in 2004. Am now in 2005 and thinking of doing 1 to 1 correction under EPCRS.

One of the HCEs is eligible for catch up and can recharacterize some of his ADP return as catch up.

Question: Can I still re-characterize the ADP failure as catch-up for the HCE even though I am past correction period?

If question 1 is true, can I exclude the $2000 (adp failure recharacterized as catch-up) in calculating the 1-1 return AND the QNEC (with gains/losses up to correction date)?

Or, just wait for the new EPCRS for now?

A 401(k) plan received a QDRO for an active participant's account. The QDRO created a separate interest for ex-spouse under plan of 1/2 of account. Plan divides account after QDRO approved by court. QDRO does not address spouse as surviving spouse or state (in any form) that the ex-spouse waives any other interest in the account other than her 1/2. Four years later, participant dies with a beneficiary designation to the ex-spouse and no contingent beneficiary. Ex-spouse wants $ to go to son of her and participant.

I have already suggested a disclaimer (guess that trust and estates law class was good for something), but, with no contingent beneficiary, it is unclear where the account would go. Plan default if no designation is spouse, then estate while state law default is spouse, then children - unsure which would trump the other. I have also told the plan administrator to tell ex-spouse to go talk to a probate attorney.

Why did I think that there was case law on this type of situation?

I am not familiar with Long Term Care. I know the premiums cannot be reimbursed through an FSA. But a question arose regarding age. Can a participant age 60 or over pay for a portion of their LTC with their FSA? If they are 62 or over can the full amount be covered under the FSA? I have never heard of this. Any input would be appreciated. Thanks!!

I've searched the regs and old posts and haven't found an answer to this question:

Can a plan, relying on a payroll period safe harbor match of 100% of first 5% deferred, amend to increase the rate to 100% of first 6% deferred in the middle of a plan year?

The regs clearly state that you may reduce or suspend a safe harbor match during the year, if you provide notice, amend the plan, and run the ADP test using the current year method for the entire plan year. However, I can find nothing that addresses an increase in the safe harbor match rate during the year. Can you also provide notice and amend the plan? Are you then subject to ADP testing?

A calendar year DB plan’s death benefit is the greater of PVAB or the (insurance) Policy proceeds. The face amount of the insurance policy to fund the death benefit is 100 times the projected benefits.

For purchasing the insurance policies, the plan states:

“….. as soon as practicable following the Anniversary Date coincident with or following a Participant’s satisfaction of the eligibility requirements, the Administrator will direct that a life insurance contract be purchased with a face amount ……………..

The Anniversary Date is January 1.

A participant met the eligibility late 2002 and entered the plan on 1/1/2003. A life policy was purchased for him based on his projected benefit computed @ 1/1/2003 (BOY val date in case the actuarial val date is of any consequence).

As a result of increased projected average comps, projected benefits computed @ 1/1/2004 and 1/1/2005 increased and additional polices were required for 2004 and 2005 for all participants (for both years the required policy face amount was above the minimum threshold required for a policy to be purchased).

The participant died (suicide) during January 2005.

Except for the deceased participant (obviously too late to buy a policy), the required additional policies for 2004 were purchased in April 2005 (made effective in 2004) for all participants. The additional policies for 2005 have not been purchased yet.

Admittedly, there was not enough time to perform calculations for 2005 to determine the additional policies required let alone purchase them. But what about the required additional policy for 2004? Do the beneficiaries have a claim against the Plan/Plan Administrator?

Does the following affect the answer?

1/1/2004 computations were done mid 2004 and the sponsor had funded the required 2004 contributions, including the required premiums (split funding method) for the existing policies and for the additional required policies for 2004, by December 2004!

What type of retirement plans are available to associations?

I have money I would like to put into a Roth IRA, the problem is I may be to young and it needs to be under my name. So my question is at what age can one start a Roth IRA under one's own personal name?

New financial advisor wants to put a program in place for one employee (SD insurace) place while the employee stays w/ the company).

the company is supposed to lend money to the employee for the premim deposit where the employee is the owner of a split dollar (SD) insurance benefit.

If the employee dies, the employee names a beneficiary who gets a tax free death benefit and the company will get their deposits back.

He says the employee will get a tax free gain at separation from service (for full length of agreement).

But if the employee separates prior to the date (or poor performance) the company will take back its contributions.

The agreement is supposed to end at the rollout date.

The employee will pay tax on the below market interest rates on the loan.

He says the company will have a claim to all money set aside w/in the SD plan.

Then he says to do this we need to complete a new NQDC agreement promising the employee money in year 21 if he is still with the company at that time.

If employee quits after year 21 - he gets 400,000 (not directly tied to the SD amount).

Option to add: if the company wants to let the employee also defer additional money, he could get even more at year 21.

to me (with limited knowledge) it sounds like a loan regime split dollar is informally funding the NQDC plan. the first part is the SD program that will provide financial backing while the employee is actively employed by the employer with a golden handcuff - and the second part of it sounds like a serp agreement.

How would this be set up? SERP? NQDC Top Hat? Just a SD agreement and then a SERP down the road (or all of them now). Any 409A problems-I know there are issues with golden parachutes, but I'm not sure re golden handcuffs?

Just seems so different than anything I have encountered that my head is spinning a bit.

Will a domestic relations order issued in another country (i.e., Canada) be effective in the United States. Section 414(p) of the Internal Revenue Code requires that to qualify as a domestic relations order, the order must be issued pursuant to a State domestic relations law. Thanks!

If a participant takes a withdrawal from a mutual fund that charges a back-end- load, or CDSC charge from the participants account, in order for the fund co. to recoup its investment costs, would you recommend reporting this charge on Schedule C - Form 5500 under the Fund Co. EIN, or do you have any other suggestions on disclosure or if it is even reflected on the C at all? Also, how would you disclose on the Schedule H? As other fees, contract fees etc?