An individual is receiving payments from a DB plan as a retiree. They are subsequently rehired. We have been counting them as a retired individual in pay status on line 7b. Do we now start counting them as an active participant on line 7a (instead of counting them on line 7b)? Does it matter whether their benefit payments stop upon rehire or whether they accrue additional benefits after rehire? Thanks.

We have a trust set up years ago for the care of a severely disabled patient. The trust is in good order and its legalities are not in question.

The trust employs people to care for the patient - round the clock nurses, an administrator of the trust (several million dollars), workers on a farm owned by the trust, and the mother is an employee who is the main drive behind the good care for her son.

QUESTION: May this trust establish a profit sharing plan for the benefit of these employees? There would, of course, be a separate retirement trust to hold plan assets.

Any thoughts?

Thanks.

Employer wants to start a 401k plan and wants to have life insurance as an option. He has money in an IRA that he would like to rollover into the plan, and use either some, most, or all of the rollover to purchase a life insurance policy. Is it allowable to purchase insurance with rollover money, and is it discriminatory if only he purchases the insurance (ie, no one else wants insurance)?

Thanks

Have situation where father is custodial parent who pays all child care expenses. Under court order, child spent 7 weeks with mother this summer.

Can father change his election to reduce because he had no child care expenses for 7 weeks???

Employer has asked if it can front-load the 3% safe harbor contribution. Without looking at the plan doc a number of issues come to mind. 1. 3% of what number? 2. what if participant terminates early in the year or their comp. for whatever reason is less than last year's comp. ? E/ee will want all $$ earmarked for him/her 3. if total comp. is less than last year's e/er can't get the money back 4. plan doc. issues Anyone looked at this previously or have other issues? Thanks.

Health and welfare multi-employer plan subject to collective bargaining agreement. Trustees want to negotiate increase in employer contribution mid-contract. If employers do not agree to increase, and option to voluntarily withdraw from plan is given, are employers subject to withdrawal liability? If so, is this complete or partial withdrawal?

As a pension Plan administrator, I am in the process of calculating a pension for a recent retiree. Said retiree is divorced with a Divorce Judgement on file. According to this document, the ex-wife shall receive the sum of $800 per month for the lifetime of the retiree. I was contacted by the ex-wifes' attorney recently and he informed me that the two parties in the Divorce judgement now have an oral agreement stipulating that the ex-wife will receive $300 per month as opposed to $800 per month. The lawyer requested information on the retiree's pension amount in order to 'calculate' the amount owed to wife and draw up a QDRO. Which, is very confusing considering they agreed to a set dollar amount, eliminating the need for calcuating a percentage of his pension.

At any rate, his pension will begin soon, should I retain $300 per month in anticipation of the forthcoming QDRO? Or $800 per month as per the Divorce Judgement? Or nothing until receipt of QDRO? Because this is a NON-ERISA Plan. does the 18 month QDRO determination period apply?

A client would like to implement a weight loss incentive program. The client is proposing to reimburse employees (and covered dependents) for the cost Weight Watchers meetings upon reaching certain Weight Watchers milestones. Weight Watchers recognizes the following milestones:

5 lbs

10% weight loss

Every 10 lbs thereafter

Goal Weight

Maintaining weight for 6 weeks

After successfully attaining the above milestones, the client will reimburse the employee for the cost of WW meetings through the milestone.

I do not see a HIPAA issue, but wanted some other input.

Also, I believe such reimbursements would be taxable compensation, other thoughts?

Thanks

Plan allows only one outstanding loan at a time.

Participant replaced an outstanding loan in November, 2004 (following the new regs).

Now participant is asking how much more can she borrow.

How many times can a participant do this?

I thought I remember reading once a plan year.

Can a 5500EZ be filed if the only employees are the owner and her 8 yr old daughter who will be participating in the Plan? I've never run into this situation before. Thanks in advance for anticipated assistance.

Could someone help me with this?

Of the basic plans, Hybrids Defined Contributions Plans, Government & Exempt Plans, IRA's and Qualified Plans... Is there a rule of thumb of knowing which retirement plan allows employees to contribute?

I noticed the following on Sunguard Corbel's Website and though it may interest some of the visitors here

http://www.corbel.com/news/katrina.asp

A business owner consulted me about the best strategy for securing penalty waiver for late filing of his 5500-EZ. He did a mass filing of these forms on January, 2005 for 1998, 1999, 2000, 2001 and 2002 for his money purchased and profit sharing plans, a total of 10 late forms. He admitted the reasons for not filing is forgetfulness or lack of knowledge. He understand that there is a potential $150,000 (10 x $15,000) penalty if the IRS decided to throw the book on him. He recently received 6 IRS notices and he is at loss on what to do. I am seeking help from all the good and knowledgeable folks on this forum to extend help and their most recent experiences on this subject so he can plan on to resolve this heavy burden.

If these filings were done in 2002 or before, the IRS is extremely helpful in granting 100% waiver. For the years 2003 and 2004 I have heard that some people got 100% waivers and some got reduced penalties. For 2005 I am not sure how the IRS will respond to his request. Is it advisable to hire a CPA or a tax lawyer to write a reasonable cause letter? If you can provide referrals for CPAs and/or lawyers who have a lot of experienced related to this matter will be highly appreciated. If you can write your most recent experiences and outcome on late filing will also be appreciated.

A plan's definition for final average compensation is the average of the highest 60 consecutive months out of the last 120 months.

A highly paid participant has less than 60 months of service. The participant earned $40,000 for two months in 2003, $210,000 for 12 months in 2004, and $100,000 for 5 months in 2005.

Should the average be (40,000 + 205,000 +100,000)/19*12 = $217,894, or should it be limited to the (210,000 + 205,000 + 200,000)/3 = $205,000?

Thanks

1) non standard protoype doc was never updated for gust/egtrra/401(a)9

and

2) new client did not want to apply for VCP under EPCRS, but wanted to terminate plan

would you...

A) prepare final 5500 with schedule P. showing assets liquidated

or

B) run from this "dog".

Note: plan is profit sharing est jan 1995. two participants. less than 200k in assets. any "benefit" to filing schedule p, since if it does get audited, they would be in world of hurt regardless?

HAs anyone seen or heard of any IRS or DOL relief granted to Disaster Area victims of Katrina? I've seen the PBGC notice and notices regarding regular income taxes from the IRS.

Has there been any notice regarding Pensions or IRAs such as relaxing requirements for signed receipt of notices and waivers etc. Generally we see relief regarding 5500 filings which I haven't seen either.

Also, are any of you in the institutional trustee/custodian business changing procedures to assist disaster victims?

Thanks for any information

JEVD

I have a situation where we (institutional trustee) detected almost 2 years worth of uncashed checks. We assumed she was deceased, but found she was not. Instead we learn from the TPA that she is collecting, but not cashing the checks to avoid (attachment) by the IRS. In addition, apparently there is some form of alert across our bank (on which the payments are drawn) to flag when she attempts to cash the checks. Its quite easy to and we will be cancelling out all these checks and restoring the funds to her account in the plan, however:

1. What is our obligation to continue making her periodic payments, given what we know and

2. How can we force her to take these payments? Is her refusal to accept the payments enough to be considered instructions to stop her pension payments?

Anyone been down a road as murky as this one?

Most of the QDROs I review are not cut and dried in terms of discerning whether the intent of the author is that it be deemed a separate interest or a shared payment. I understand the difference between the two methods, however, is there a surefire way of determining whether a QDRO is one or the other? Obviously, there are implications in term of survivorship issues which leads me to my next question. In the case of a defined benefit plan, does the alternate payee ever have the right to designate a beneficiary, and if so under what circumsatnces?It seems to me that if this were the case, figuring the alternate payee's benefit would be contingent upon her/his beneficiary which would really influence the actuarial calculations and perhaps, given the beneficiary, call for an actuarially increased benefit to the alternate payee. If you can't tell, I am new at this. Any help would be appreciated.

If a distributing plan has grandfathered and non-grandfathered after tax contributions and the accepting plan only has non-grandfathered dollars (e.g., original effective date of the plan was after 5/5/86), does the accepting plan need to mirror the distributing plan?

If yes, the accepting plan must account for the pre-87 and post-86 after-tax contributions and permit the distribution of the grandfathered dollars first. If no, all the after-tax dollars would be subject to the basis recovery rules.

Usually rollovers come into a plan clean, but the roll over of after-tax dollars are a direct trustee-to-trustee transfer.

Does anyone have experience on how to recordkeeping the rolled over after-tax contributions?

Thanks!

I have searched everywhere that I can think of and cannot find the answers to these questions

Would it be okay for an employer to terminate a SIMPLE IRA mid-year?

Also would it be okay for an employer to change employee eligibility requirements mid-year for the current year?