I just received some Schedule A information that includes a page of "Supplemental Compensation Data".

Certain amounts ("additional compensation paid") are provided for non-cash compensation, incentive plan payouts, and other items allocated to the policy and attributed to a broker and/or agent.

Is anyone familiar? My initial thought is that "additional compensation paid" is just something extra to report on Schedule A, Line 2. But, the amounts are neither commissions nor fees, so they don't fit neatly into the form. Any thoughts?

I have just gotten a new client that has two 403(b) plans and two 401(a) plans. They are having a law firm draft the documents and when I asked if the law firm was also doing the SPD's they did not have an answer. They just checked with the law firm and the charge for the four SPD's will be between $11,000 - $12,000 (ouch!).

Is anyone aware of any service that would take these documents and make an SPD?

Thanks!

Willow

Does anyone have any recommendations on seminars for a beginner looking to learn the basics?

Thanks in advance for any guidance.

Does anyone have an update on the new regulations? I thought they were scheduled to come out by the end of August. Someone must know something.

We have one ESOP, it is for a privately held company. I was asked to do research on a new (i think) provision which allows the Sponsor (as opposed to he plan) to offer put options to buy back particpant ESOP shares for non-marketable securities. Does anyone have any information on this relating to mechanism, requirements, type of transaction etc? I confess to having very limited ESOP experience, so it might be easy to talk over my head. I thank you in advance for your time, consideration and patience.

the client had documents sitting around and decided to sign and send docs to IRS one year after receipt. by that point they were late. IRS wants client to pay 3000 dollar sanction rather than 750, the fee they would be eligible for had the submitted under VCP. their justification is they (the IRS) discovered the failure rather than the client bringing the error to the attention of the IRS through a VCP scenerio. I think this is unduly harsh under the circumstances. plan is small and plan sponsor did in effect turn himself in by submitting document. anyone have any suggestions on how to deal with the service on this?

I have a question about the simplified determination of creditable coverage test that was set forth in the CMS creditable coverage guidance. Specifically, a prescription drug plan is deemed to be creditable if it "provides reasonable access to retail providers, and optionally, for mail order coverage," among other things.

Assuming a plan meets all the other requirements but doesn't provide mail order coverage, does this mean that the plan does not satisfy the simplified creditable coverage test? Alternatively, does a plan have to offer mail order coverage in order to meet the simplified creditable coverage test?

Thank you in advance for any thoughts.

Is anyone 100% convinced that participants in a 403(b) plan will absolutely not be allowed to do a 90-24 transfer come January 1, 2006? Would you advise a client with a 403(b) plan who is switching providers to encourage participants, if they also want to switch providers, to do so NOW?

I was wondering if anyone had any insight:

- The assets of ABC Corp. are acquired by XYZ, LLC in April of 2005. ABC Corp. maintained a 401(k) profit sharing plan prior to the asset sale. The Plan used the prior-year testing method and, taking into account contribution rates for the NHCEs, the HCEs of ABC Corp. could have contributed 5% of pay (3% ADP for the NHCEs). XYZ, LLC took over the sponsorship of the Plan at the time of the acquisition.

Is XYZ bound by the prior year testing results of ABC? In other words, are the HCEs of XYZ limited to 5%? Or, because it was an asset sale, is the Plan treated as if there was no prior year (therefore allowing us to assume 3% for the NHCEs and 5% for the HCEs)?

And, for 2006, would XYZ use the ADP of the NHCEs for all of 2005 of just April-December?

Thanks!

For tax reporting purposes, how would you report employee contributions to a 401(k) Plan for an employee who is on military leave but is receiving compensation from his employer to supplement his military pay to make it equal to what the employee received while actively working for the employer? Would you use a W-2 or a 1099?

Has anyone gotten any input on the range of acceptable interest and discount rates (particularly from auditors) for SFAS as of June 30, 2005?

Sorry, I didn't think the first post went through.

Has anyone gotten any input on the range of acceptable interest and discount rates (particularly from auditors) for SFAS as of June 30, 2005?

Our firm works with many different financial advisors and performs only tpa services (no investment/insurance product sales). We are also approved/recommended tpa's for several larger fund families. Recently, we received an email from one of the mutual fund families requesting that we provide a fee quote on a plan that we already handle the admin for. An outside financial rep got in touch with the client and will be proposing new funds, options, etc, and the fund house contacted us requesting that we provide this rep with a quote.

Can anyone offer their advice on how to proceed? To do nothing would jeopardize our tpa role in the plan, and yet to offer a quote would seem to be going behind the back of the current financial guy who brought us in. Our fee quote would likely be less than what they are currently paying since the new investment structure and platform would reduce the services that we provide.

Any thoughts are greatly appreciated.

Company A has maintained a SIMPLE IRA since 1999. In 2004, Company A acquires another company and the total employee count now exceeds 100. The transition period runs out 12/31/06 to convert to some other qualified plan.

During 2005, a new entity is formed (Company B) which acquires the stock of Company A along with 5 other previously unrelated companies. Some of the employees of Company A will remain on that payroll, while the others will be moved to the payroll of Company B, the parent, during 2005.

Company B expects to set up a 401(k) for the entire group effective 1/1/06. But, for the balance of 2005 Company B wants to continue the SIMPLE IRA for those employees moved from Company A to its payroll.

Can Company B adopt a SIMPLE IRA now for the benefit of the transferred employees? Or, because Company B did not maintain a SIMPLE before the acquisition, is it precluded from establishing one now since there are more than 100 employees in the controlled group? If yes, how do they continue the SIMPLE benefits fro the transferred employees through 12/31/05? Can Company B just make contributions to the existing accounts without signing Form 5304-SIMPLE?

TIA

Can an employee assistance plan be paid for by employees using pre-tax dollars? A client wishes to attach the cost of the EAP to its medical plan, of which employees share in the cost.

If you do, would you be willing to let me ask you some specific questions off the board?

TIA

Plan has a terminated employee who cannot be located. He had a loan balance for which he should have received a 1099R for a defaulted loan in 2000. To date a 1099R has not been issued. For plan audit purposes is this considered a reportable event?

Sam adopts a profit sharing plan for his sole proprietership. The sole proprietership does not have any employees. The plan has less than $100,000 in assets. Sam also owns an LLC that does not have employees & does not adopt the plan. My understanding is that since we have a group under common control a 5500 must be filed. I do not see any exception merely because the LLC doesn't participate.

Anybody disagree? I just want to make sure I am not missing something.

Is anyone sending out EE notices regarding dependend child and tax issues to members?

I have seen this question answered several ways on this board. If a 100% shareholder in a corporation (with no other employees) sponsors a 401(k) plan with a 1/31/05 plan year end, can the individual who makes a CODA prior to 12/31/05 (plan year end of 401(k) plan) defer $14,000 on compensation earned by 12/31/05 and have compensation contributed to 401(k) by due date of corporation's 1/31/06 tax return (with extensions)? I'm guessing that this is the same riule for a sole proprietor that maintained a 401(k) plan. So the rules under 2510.3-102 do not apply in either case? Thanks. Ed