I have a client who wishes to encourage those dependents who are eligible for coverage through their employer to take that coverage. In order to succeed in getting dependents to take coverage through their employer, there will likely need to be some financial incentive offered. Does anyone have any experience in doing this? What has worked? Are there any problems or pitfalls to avoid when doing this?

If NY co reincorporates but does not change its name, does it have to terminate its benefit plans and establish new plans under new entity?

I recently read that the conversion rules changed for 2005. According to the article, individuals are no longer required to include RMDs when determining Modified Adjusted Gross Income.

Where would I find the official IRS guidance on this?

I see a post from 1999 regarding using social security retirement age as the normal retirement age when doing cross testing.

Do current software packages that do cross testing, either for an average benefit test or a general test, provide the option of using the normal retirement age as defined in the plan or social security retirement age? Whichever provides the best results?

Thanks

Just got the case of a client who worked for a company with a defined benefit plan. He separated from the employer in 1998 and received a lump sum distribution in 1999 of his account balance (rolled over to IRA). His next employer was later taken over by the same company and he then participated in the same plan from roughly 2000-2003 and then retired. Another lump sum distribution was made of his account balance in 2004 (also rolled-over). The plan reps contacted him by letter in July, 2005 and claimed the second represented an erroneous distribution and demaned a return of the entire balance---providing no detail of accrued benefits. The plan reps waited only 9 days before filing a Federal suit to seek return of the entire second distribution and a restraining order against alienation of the funds. My client doesn't have good personal records to figure this out (there may well be some overlap in the second distribution, but how much??) and is now faced with the expense of defending a federal lawsuit and a hearing on the restraining order in one week.

Questions (1) anyone with any similar experinces and suggetions: (2) was the plan required to attempt some alternate dispute resolution before filing a federal suit?; (3) what is the most efficient way of resolving this matter?

Any thoughts are appreciated.

i know the ESOP must report on the 5500 the income distribution it receives as an S-Shareholder. where/how is this reported on the 5500?

what exactly is an 11-k? Is a plan required to file if it offers company stock as an investment option?

We always understood that the actual grant of partnership profits interests were not immediately taxable, but now have documentation of a grantee making a Section 83(b) election at time of grant.

Are we missing something? If the grant is not taxable because fo the character of the property (partnership proftis interest), not the restriction, is it eligible for an 83(b) eleciton?

A spouse is entitled to a death benefit under a 412(i) plan. The plan states that the death benefit is the amount available under the insurance contracts. Is this amount includible in income by the surviving spouse? May the surviving spouse roll it over? Please let me know if any of you have experience dealing with this. The plan does allow for rollovers and the contract was paid for entirely by the employer. Thanks.

I cannot find this anywhere in the Form 5500 instructions, but I have been told that a final 5500 cannot be extended. Is this true?

Thanks in advance

New client just informed us that the prior TPA incorrectly calculated and deposited contributions to participant accounts for 2004 profit sharing. Some received too much and others recieved to little. Since the plan is is conversion to us now, we have been elected to help fix it. Can we jsut give and take as appropriate? What do we do with the difference? Any sites on how to correct this would be appreciated.

An employee embezzles a large sum of money from the employer (not from the plan). The employee has a significant balance in the company's 401(k) plan, but it's my understanding that the employer cannot attach the plan.

I guess the next best thing would be to have the employee sign over the distribution check, but the 20% withholding rule means that the employer will not get a chunk of what he's entitled to.

The only other thing I can think of is to have the employee roll the money into an IRA and then take the distribution from there to avoid the 20% withholding.

Does anyone have any other suggestions for getting the employee's money from the plan?

We are trying to do a one person DB val on Relius using an assumed retirement age that is earlier than the NRA under the plan.

So far, as we have it set up, the system is treating the projected benefit at assumed retirement age as if it were also payable at that age rather than at NRA.

My colleague (much more experienced in Relius than I) believes there is no simple way to do what we want without a lot of hand calculation and many system overrides.

I would like to hear from anyone who has accomplished this in Relius with some hints as to how they proceeded.

The IRS treats an employee who has not met plan eligibility requirements, but who has rolled a balance into the plan, as a "limited participant" (IRS Rev. Rul. 96-48). This person is excluded for coverage/nondiscrimination/top heavy purposes.

Is this employee reported as a participant on lines 6 and/or 7 of the Form 5500, as appropriate?

I have searched old posts and reviewed the Form 5500 instructions carefully, but have not been able to answer this question to my satisfaction.

It seems logical to report such a person, as they maintain a 100% vested balance and are owed future benefits from the plan.

I have a client subject to GASB 45 and for a few unique reasons, wants to dump the entire liability, now, into a fund (instead of funding through a VEBA with its annual contribution restrictions). I'm looking at establishing a trust under IRC 115, and wonder if anyone else is doing the same AND if anyone has submitted any request to the IRS for a private letter ruling? If so, I'd like to pick your brain (and am always happy to reciprocate!) Thanks!

New boss has decided to completely terminate all retiree health benefits. I told him about the proposed EEOC regulations, AARP's response, the problems with medicare coordination and the equal cost/benefits rules (and offset for retirees, etc.). The Plan is insured with some assets in a master trust.

There is no CBA, it appears no one is vested (or has been told they are vested - but you never know for sure) and the plan has the proper language allowing plan sponsor to amend/term.

Boss wants to amend the plan effective January 1, 2006 (with board approval) to completely eliminate any retiree health and argue that anyone who terminates or retires will only receives COBRA.

I tried to get as much on-line as possible, but now I am plain stumped because of the EEOC Manual, ERIE case, the ADEA implications, etc.

Is this a time bomb waiting to happen (employee relations/PR aside)?

My employer would like to begin offering some sort of phased retirement package, and have asked me for ideas on how to do so.

They would like to allow executives that are in their early 60s, the option of cutting back hours to 20-30 hours per week. The difficulty is that these executives will have their categorization changed from full-time to part-time employees. This fact will eliminate the individual from eligibility for certain benefits (i.e., disability) and increase cost for other benefits (i.e., health insurance).

One option we are talking about is creating some sort of separate welfare wrap plan for these individuals. That way, they would not lose welfare benefits when they cut back. However, these are all high paid executives, so we could possibly run afoul of discrimination issues.

Another thought is to gross up the salaries of the individuals cutting back their hours. That way, they could go out and purchase certain welfare benefits on their own, but not suffer financially. The big issue here is that we are talking about employees in their early 60s. If they have to go purchase their own life insurance for a benefit of 2.5 times salary, it will cost a small fortune.

Does anyone have any other thoughts on an approach to this? What have other companies done?

Thanks.

The basic Roth 401(k) distribution rule as stated in IRC 402A(d)(2)(A) requires the following events to occur for a Roth 401(k) distribution to be classified as a qualified distribution:

1. age 59 1/2,

2. disability,

3. death, AND

4. account has been established for 5 years.

However, it appears that the distribution events are expanded in the proposed regulations "Other Rules" section because the "Roth contributions are subject to the nonforfeitability and distribution restrictions applicable to elective contributions."

So, my QUESTION, if the plan also permits distribution of elective deferrals upon termination of employment, and I terminate and take a distribution of the Roth contributions plus earnings AFTER the 5 year period that the Roth account was established, are the earnings taxable or nontaxable??

I'm brand new to NQDC (10+ years as ERISA qualified and welfare plan attorney). Firm has now asked me to take over NQDC due to attorney turn over, etc.

Any suggestions on a good place to start with the basics and then with the new 409A issues (reference materials, etc.)? Any assistance would be greatly appreciated!

I'm trying to determine the best way to prove a definition of compensation is or is not discriminatory.

Situation one: Compensation used to calculate employer contribution is pay based on what the participant was paid in the last pay period of the year times 26 pay periods.

Situation two: Compensation used to calculate employer contributions is pay minus current year bonus, plus prior year bonus.

With both situations I am ending up with compensation greater than total comp for the plan year. Would both of these situations require a general nondiscrimination test or is there another way to prove nondiscrimination?

Thanks