Has anyone ever had any luck with writing a report that would inception to date contributions, gains/losses, etc? Is it even possible to write such a report?

A participant in a salary deferral-only plan has inception-to-date deferrals of $25,000, an investment loss of $5,000, and therefore a balance of $20,000 at the time of a $10,000 loan (i.e., the loan was funded entirely from actual salary deferrals). All deferrals are post-1987. Six months later, the participant has repaid $300 in interest, $850 in principal, and the non-loan assets in the account have earned $1,000, so the participant’s balance (including the loan, now valued at $9,150) is $21,300. The participant has received no other loans or distributions. What is the current maximum hardship withdrawal available?

A) Lesser of i) $25,000 (inception-to date deferrals), or ii) $21,300 - $9,150, or $12,150 (i.e., current non-loan assets);

B) Lesser of i) $25,000, ii) $21,300 - $9,150, or iii) $10,000 + $850, or $10,850 (non-loaned deferrals plus repaid deferrals);

C) Other (explain).

I'm trying to make our DV notice more understandable to the "average" participant. Is there someplace I can find out what the actual requirements are, including an example?

Thanks in advance - I've spent hours so far looking on the web.

If you could help or let me know where to get the following information, I would be much obliged.

1. Our cafeteria plan has two checking accounts, one for the medical reimbursement and one for the health insurance. What happens to this money IF we terminate the plan? Does it become taxable?

2. Do we need to file a 5500? We have 85 participants. I think we do, in as much as it is a "funded" plan.

3. We have a "reserve account" on the company books, for deferrals not yet transmitted to the plan accounts. Is there a limit on what we can have in this account?

Thank you!

Plan uses 3% non elective to satisfy safe harbor adp test requirements. No matching contributions are made, but there are employee after-tax contribs. I looked through the final 401k regulations and did not see anything which superceded Notice 98-52. in that the employee contributions must be tested using the current year testing methodology. Does anyone agree/disagree with this conclusion?

Thanks

client has a new EIN, and needs an extension for the 5500. should we file the extension under the old number and note the change when the 5500 is filed, or should we file under the new number?

Must loan repayments be paid back monthly? Can the amoritization schedule require that they be paid back quarterly?

Hey folks. We forgot to congratulate, and thank, our intrepid webmaster. In April 2005, BenefitsLink became 10 years old!

Attaboy Dave!

I have a start up company that is planning on offering an HDHP and HSA plan along a hi and low PPO and an HMO. Employer is adamant about contributing 100% of HDHP deductible into Employee's HSA accounts via 12 equal installments. I have two questions.

First question: If an employee has a catastrophic situation the first month of the plan year, can employer help the needy employee with a lump sum payment to HSA to cover employee's deductible while only doing month by month deposits for all other less needy employees?

Second question: With the employer hell bent on incentivising all of the employees to participate in the HDHP, I'm concerned that the HDHP/HSA products are too new to give a 100% endorsement and that employer should cool off since many of the products / concepts are untested? Feedback?

I'm looking for comments on charging terminated vested participants an account maintenance fee. Does anyone have any practical experience with this? Are the fees typically paid directly from the plan to the administrator? Would these amounts be placed in an escrow account or something? Could the fees be applied however the sponsor sees fit (for example, dividing the fees amongst a number of vendors)? Any advice/tips on this would be appreciated. Thanks.

We would greatly appreciate comments on the following:

If an employee is discovered to have stolen pension assets, what reporting, disclosure and notification obligations does the plan sponsor have? Form 5500, Schedules G and H (covering prohibited transactions; requiring disclosure of a loss due to fraud or dishonesty) are relevant.

Would this constitute a "reportable event" and require the filing of PBGC Form 10?

Is anyone aware of any other obligations to the DOL, IRS, PBGC or any other government agency?

Does it matter if the plan if a single employer or multiemployer plan?

Could there be state law obligations?

Thank you very much for your comments.

Donald

Father owns 100% of company A. His over-age 21 son owns 100% of company B.

The father tells me that the "two companies are independent", but the father says that sometimes when Company B (son's company) can't meet payroll, company A (father's company) will give Company B money to meet payroll.

What further questions do I need to get answers to so that I can definitively determine if it is common control or not.

Has anybody ever seen a DB plan that requires the benefit of a participant, alternate payee, surviving spouse or any other beneficiary who can't be located to be forfeited unless and until the individual shows up and establishes a valid claim for the forfeited amount?

For a Multiple Employer plan, a separate Schedule T was prepared for each participating employer of the plan. The participating employer was identified on lines 1a - 1b. With the elimination of Schedule T in 2005, it appears that a separate schedule is not required for a participating employer (with the exception of Sch B).

Could this be correct or is it an oversight?

My company was bought though a stock acquisition on 4/15/05. As an incentive to stay, the new company is giving my company's employees a signing bonus, some of which are as much as $65,000. In order to receive the signing bonus employees must be employed on 4/15/05 though 4/15/07.

The purchaser has a 401(k) plan (Plan A) and so do we (Plan B). The plans will eventually merge sometime in 2007. We would like to put the signing bonus into one of the 401(k) plans and have a 2-year cliff vesting schedule so that employees cannot have access to the money until 4/15/07.

I know that we cannot put the money in our plan because we must count service with our company towards vesting. Could the money be put into Plan A and not count the service with our company? Can you have a cliff vesting schedule that runs from 4/15/05 - 4/15/07?

I know not all employee incentive bonus dollars can be contributed in one year because of the 415 limits. The formula we are proposing to use is the 415 limit minus the elective deferral limit (our plan is an EE Payall). If there is any money left it would be put into the Plan A in the next limitation year. I think this formula passes the 401(a)(4) test. I know the Plan A will also need to pass coverage. (I assume that this also would not allow us to use the coverage transition period.)

Does anyone have any other ideas as to how we can put the dollars into one of the 401(k) plans? We do not want to maintain a nonqualified plan.

Thanks!

I was reading the updates on the changes to the 2005 Form 5500. I see the IRS has discontinued the Sch. T and placed a coverage question on Sch. R. However, it does not look like the instructions changed for who has to file a sch. R. For instance a profit sharing plan that had zero distributions does not have to file a sch. R. I get the impression though that this is not want the IRS intended and this schedule should be required. Any other thoughts or comments?

We maintain a separate plan (because of a controlled group situation) in which only agency employees may participate. Because pay/personnel records are maintained by each agency, rather than our corporate headquarters, things go on that I never seem to know about until after the fact.

Recently, the accountant for one of the agencies, who happens to do the payroll and send contributions through to the record keeper, decided he no longer wanted to be an employee of the agency even though he's spending more than 40 hours per work doing the agency accounting. He convinced the agency principal that he should be paid as an independent contrator. (Rumor has it that he did this due to his impending divorce.) Anyway, he has an account balance in the plan and an outstanding loan. I just found out that the independent contractor status occurred about a month ago, and luckily he stopped contributing, but he did not stop making loan repayments.

I'm totally lost on how we should be handling this. In my mind's eye, because he's no longer an employee, he should not be permitted to make contributions or loan repayments. I'm also not sure that we can permit him to withdraw his entire account balance, which is what he wants to do now that I said he can't make loan repayments. By the way, our plan does not permit a terminated employee to continue to make loan repayments.

Any thoughts??

What type of state regulatory laws would apply to governmental plans, such as tax-exempt colleges and universities? Specifically, regarding VEBAs funding health benefits for employees of these organizations, would the state department of insurance regulate reserves and surplus levels for the self funded portion of these plans? Or, would that regulation be subject only under the auspices of the DOL?

Don Levit

I have a client who took it upon herself to take a loan from the plan. However, she took $5,000 more than she was entitled too. What do I do now? Does she have to repay including interest and earnings, or does the $5,000 she wasn't entitled too get treated as a distribution?

Any ideas, before I get more annoyed?

A person, age 72 makes a large withdrawal from his IRA. Can the taxes due on the withdrawal be stretched over a period of 10 years?