Employer is terminating a profit sharing plan that provides for joint and survivor annuities. TPA is suggesting elimination of this distribution option to help speed things along. However, termination date has already passed. Can employer amend the plan to eliminate the JSA post termination date? I am aware of PBGC Reg. Section 4041.8, which would prevent this amendment to a terminated DB plan. Is anyone aware of any comparable guidance for DC plans?

Thanks in advance,

Amy

An employer has a 401(k) plan that excludes union employees. The employer acquired another company which has some employees (who enjoy the benefits of salary deferrals) who will be forced to go union. They will be enrolled into a collectively-bargained plan which does not allow employee contributions.

The acquiring employer wants to appease them someway by looking for options for them to defer. My thoughts are to amend the plan to allow union employees to participate in the salary deferral component of the plan but not the employer portion. Are there any concerns that I should be aware of? My understanding is that the union employees are tested separately for coverage testing. If no union EEs are HCEs, there should be any testing issues.

Is there a point at which you can "give up" trying to retrieve overpaid pension benefits from an estate?

We have four pension plans in a Master Trust. 3 participants from two of the plans died in 2004, but we were not notified until after an additional benefit was paid (example - we paid on the 1st of April, but the retiree died March 29th; he/she wasn't eligible to receive the 4/1 payment). We send our entire retiree database for a death records search twice a year, and 2 of the notifications came from there.

We have made several attempts to get the money back from the estates, but with no luck. Plan 1 is owed $3,000 (total Plan assets = $83.6M) and Plan 2 is owed $2,000 (total Plan assets = 19.5M).

Since our company just hired a corporate attorney, we are going to have him send a letter, but are not anticipating a response. In the total scheme of things, the amounts seem so small that it's not worth doing anything, but do we have to?

HELP!

How do you handle repayments on a previously defaulted loan, both for accounting and 5500 purposes? defaulted loan was treated as a deemed distribution, participant is still employed, and there is no distributable event.

We filed the extension form 5558 for a client for their profit sharing plan for plan year ending 12/31/04 in time but they just called to tell me that their other vendor did not file the 401k extension in time. Does anyone know if they can still send the form in and are there any penalities if they send it in late. thanks

HELP!! I have read everything I can find that is remotely related to this situation and have given myself a headache.

Sub-organization of church has a part-time employee who will, effective 9/1, be no longer eligible under the church-sponsored health plan which is changing the definition of eligible employee from 20 hours per week to 30 hours per week. The health plan is offering COBRA to the now ineligible employee. Organization would like to continue paying a portion (80%) of the employee's premiums, which are now COBRA premiums. I believe that this can be done under Code section 106 without being included in the employee's income; I also believe that the employee can keep using the employer's cafeteria plan to pay his portion pre-tax. My question is HOW?

If it will only be for one employee in this one situation, does the employer need a written plan? Can the employer simply keep paying its portion to the insurance company or must it reimburse the employee after he pays? Would it be sufficient for the employer to send the employee a letter outlining his COBRA eligiblity and stating that the employer will continue to pay 80% of the premium either directly to the insurance company or to the employee upon receipt of proof of payment?

WHERE can I find some practical guidance on setting this up??

Thank you in advance!

If an ESOP is terminated in connection with a merger and the consideration for the merger was all cash - do participants in the terminated ESOP have the right to request a stock distribution? Does the answer change is the deal was part stock and part cash? Since ESOP participants were given the right to choose cash or stock merger consideration - is the company obligated to give them a second choice?

We have a self-insured long-term disability plan which requires LTD recipients to apply for social security benefits within 6 months of disability. Our plan currently, however, does not require the appeal of the SSA's decision, nor do we offer to help the LTD recipient appeal the decision.

I've been asked to find out what other employer's are doing in regard to the above. So, help me out here....

1. Do your plans require an LTD recipient to appeal the SSA's decision?

2. If an appeal is required, does your company provide financial help in the way of attorney's fees?

Thanks everyone!

By what date must a 403(b) sponsor deposit a discretionary matching contribution for a plan year?

For instance, assume a calendar year, plan year. The 403(b) sponsor calculates the match based on each pay period, but does not deposit the matching contribution for the 2004 plan year until March 1, 2005. Is that OK? What if the deposit was not made until July 1, 2005? Or September 1, 2005? Or December 15, 2008?

I cannot locate any funding due date for 403(b) employer contributions. Thanks in advance for your help.

is there anything in ERISA that says the assets must be located in the US? we have clients that want to invest in offshore hedgefunds and other types of investments. i dont think there is anything that prohibits it.

Has anyone heard whether Congress will allow employees to contribute to both a Roth IRA and a Roth 401(k), or will employees be forced to stop contributing to their Roth IRA if their employer offers a Roth 401(k)?

Could someone help me out with the 3 year cycle for schedule T? I have been looking for rev. ruling 93-42 but cant find it. I usually file every year for small 401(k) plans that i administer. Just started with another firm and they file every 3 yrs.

All our plans are about 50-60 ees, with terms and hirings every year in most plans. I dont know what "relying on prior year testing" would mean?

I also searched the board, but only found one message on the topic, and it said filing every year was just "easier" than proving that a plan could file every 3 years. Is there some test that you have to pass to prove that you can file every 3?

Thanks much!

Are disability benefits received by a participant from a qualified retirement plan on account of disability subject to mandatory withholding?

Employer has H.S.A. and FSA. An employee has a qualifying high deductible health plan covering his children and himself, but not his spouse. She is on COBRA from her prior employer and the plan is not an H.S.A. qualified plan. He elects to also have the FSA for dental and vision for him and the children. But he also needs the FSA to provide for his spouses medical copays, ded, coinsurance, etc.

Can this be done?

A new plan grants 5 years of past service so it has $50,000 of liability and $0 assets at the beginning of year 1. IRS instructions state that in year 1 the answer to Q/A 4 of Schedule B is 100% and quarterly contributions are not required.

The answer to Q/A 4 of the year 2 Sch. B appears to be 0% and therefore quarterlies would be required for year 2.

However, I found the following that appears to contradict this.

2004 ASPA Annual Conference – IRS Questions and Answers:

Q/A 45:  The instruction to the Sch. B provides that for the first year of the plan the funded % should be reflected as 100%.  Quarterly contributions are not required if the funded % for the prior year is 100% or more.  It would appear that, since the funded % for the first year of a DB plan is reports as 100%, quarterly contributions for the second year of a DB plan would not be required.  Does the IRS agree with this conclusion?

A: Yes

Maybe this Q/A didn’t anticipate the possibility that past service would be credited, but I don’t think the answer is correct. The Schedule B instructions clearly state that you enter 100% on line 4 in the first year or if the RPA liability was $0 at the beginning of the prior year, neither is true in my example.

Does anyone think the employer would not need to make quarterlies in year 2, if the plan has a liability on the year 1 Schedule B?

Can a individual over 59.5 take a tax free withdrawal from an IRA to pay for long term care premiums?

Plan requires a break in service for a distribution. Calendar year plan. Participant is over age 50. Plan does not have immediate payment to alternate payee. QDRO entered in February before particpant has 500 Hours of Service. QDRO rceived by plan in March after particpant has 500 hours of service. What is the earliest retirement age? I know in this situation it would be "The earliest date on which the participant could begin receiving benefits under the plan if the participant separated from service with the employer " However, when do you determine the hypothetical termination? When QDRO was entered (which would mean the participant would have a break in the current year)? Received(which would mean the particpant woudl not have a break into the folloiwng year)? Some other time?

deferred vested plaintiff claims disability pension benefits under ERISA 502(a)(1)(B). defendant plan and plan committee deny entitlement under plan terms. if plaintiff is successful, he would be entitled to present value of earlier commencement date "missed" payments plus difference between dv benefit and disability benefit (if any). would these benefits be payable from the plan or from company assets? thanks for any thoughts.

A former employee was eligible to participate in a SIMPLE plan for the years 2003,2004 and while employed for part of 2005. The employee was never notified of their eligiblity but it is reasonably certain the employee would have contributed 3% and the employer would have had to match.

The employer would like to make the former employee whole, but is also afraid the former employee, who is NOT aware of this issue, would want to cause trouble for the sake of causing trouble. It was suggested that since the dollar amount is not an issue with the employer, that the employer calculate lost earnings based upon the investment that generated the highest return each year as if the money was contributed at the beginning of each year. (It doesn't seem apparent that there would be a way to calculate a higher return.)

The ultimate questions are these:

1. Taking the above approach, what exposure does the employer have if the employee wants to cause troubele for the sake of causing trouble?

2. What can the employer do to make the correction while insulating themslves from a potentially troublesome former employee that is not aware of the oversight?

Has anyone dealt with a situation where the client has been behind on contributions and the DOL gets involved? The DOL is recommending suspending deferrals until the employer is caught up on the late contributions. Do you have the participants sign deferral agreements electing 0%? Do you amend the plan to discontinue deferrals for a period and then amend the plan to add the deferrals back when they are caught up? Any insight would be wonderful.