This is a profit sharing plan with self directed investments. A participant, who is highly compensated, invests part of his plan account balance in a real estate limited partnership. He owns 29% of the real estate limited partnership.

I think it is a prohibited transaction. Any other thoughts?

We are about to pay out on a levy (legal gave it the blessing) - but my question is if we have to send a participant a letter telling him that we are paying on the levy and/or "cc" the participant on the letter to the IRS? T

he participant is aware of the situation, the levy, etc. (he was served with the levy, has discussed it with the IRS, is past his time to appeal, etc.).

I know it is just a practical question, but any thoughts would REALLY be appreciated!

I know that a lot of 401(k) shops have call centers so I am posting this here:

I am in the process of reviewing/developing an incentive plan for our customer service representatives. My question is - does anyone know where I can get information on what companies are doing for incentive/bonus programs at other companies (primarily interested in the mutual fund/transfer agency industry).

Thanks

I am in the process of reviewing/developing an incentive plan for our customer service representatives. My question is - does anyone know where I can get information on what companies are doing for incentive/bonus programs at other companies (primarily interested in the mutual fund/transfer agency industry).

thanks a million.

A company inadvertently instructed its DB plan trustee to pay an invoice that related to its DC plan. Upon realizing the mistake, the company repaid the amount to the DB plan (it has not yet calculated or repaid any interest factor). This seems like a prohibited extension of credit from the DB plan to the company. Can (or should) this be submitted under the VFCP as a "loan at below-market interest rate to a party in interest"?

I have someone who is "arguing" with me about whether or not he needs a bond on his plan. The plan is a profit sharing plan and he has not made contributions for at least two years. The plan has two eligibles in it - the doctor (who is the sole prop.) and another employee. Only the owner has money in the plan. He feels he doesn't need a bond to cover himself.

I was under the impression that he would need a bond - we file a regular 5500 and not an EZ, as the other employee is not his spouse, etc. Am I wrong? Should he forgo the bond until he decides to make a contribuiton to the plan? He currently does not have one, and I have told him to get one.

Thoughts, anyone? Thanks!

I have a sponsor client who maintains a 403b/401a combined plan. The 401a component houses the employer match and annual fixed profit sharing and the 403b employee deferrals. The plan is currently record kept as one plan with segregated money type to carve out the 401a/403b portions of the plan. The 401a portion is in place I believe since participants active in one of my clients sponsored Defind Benefit Plans may not receive employer allocations and 403b plans require universal availability. The plan has assets totaling 12 million and 1050 participants.

I have some questions for the forum relating to this "hybrid" setup?

1. How common is 403b/401a combined plan arrangement?

2. Names of providers out there that would operate a plan like this as a 403b/401a combined plan (plan located in Midwest)?

3. Any other information you might wish to share regarding your experience with similar plans.

Thanks for your input.

David

Is there a website or other place that compiles information on retirement plan trends? Specifically, I am looking for information on company's that may have switched from a traditional 401k to a safe harbor, possibly detailed by company size.

Thanks

What are your thoughts on the impact of Circular 230 on the types of materials often prepared in connection with cafeteria plans? For example, do you think we might need a disclaimer on an SDP for a medical FSA?

We have a 401(k) plan where the stock fund (publicly traded stock) has been converted to an ESOP for purposes of the dividend pass-through deduction. Even after implementing the automatic rollover rules, any stock in a participant accounts will need to be liquidated when we force-out accounts under $5,000. Is failure to distribute stock in this situation an issue?

PAL

We administer a DB plan and are presenting to a top 25 HCE the option to receive his full accrued benefit in the form of a lump sum if he agrees to sign a Repayment Agreement. The plan is less than 110% funded. Under what circumstances would the Plan Administrator have the right to enforce the agreement and have the employee pay back to the plan all or a portion of his lump sum distribution?

Can this failure be corrected without filing with the IRS or must you file under VCP and request a waiver of the excise tax?

Multiple employer VEBAs are considered MEWAs, and as such, would be regulated by the states.

According to Section 514(b)(6)(A)(ii), any law of any state which regulates insurance may apply to the extent not inconsistent with the preceding sections of this title.

I know there is a separate section which outlines the purposes of ERISA. Are they included in Title 1? If not, wouldn't it be prudent to consider the outline of purposes for ERISA in determining whether any state laws were "inconsistent" with ERISA?

Don Levit

Does anyone know when a government plan had to be amended in order to benefit from 411(e)(2)? Was there a remedial amendment period for a government plan's compliance?

Plan provides for a discretionary match. At the plan's inception there was a Board of Director's resolution limiting the match of 50% of deferrals up to 5% of comp. The match formula is also disclosed to EEs every year in the company newsletter. In 2004 payroll did not cap the 5% of comp. This affects HCEs and NHCEs.

Is this considered an operational defect where the affected Ps will loose the match or can you give the additional match because the plan provides for a discretionary match? (See message board Q&A from March 9, 2002 - Correction of Error in computing Matching Contribution.)

Additionally, someone one suggested running a 401(a)(4) availability test. If it passes it would be okay to leave the additional match contribution in plan. I never heard of using this in an operational defect situation. Anyone ever heard of this?

Thanks!

If a DB plan has no active participants and uses the individual aggregate funding method is it true that there will be no minimum funding required, because there is no normal cost? I am taking over a plan in this situation that has a full funding limit of $60,000 but no required minimum contribution. The only participant is a terminated participant who is the owner.

In looking at the Catch-Up regulations, it states that "catch-up contributions with respect to the current year are not taken into account for purposes of section 416. However, catch-up contribution for prior years are taken into account".

If I'm doing the top heavy test for year 2005 for a CY 401k plan, I'm comparing account balances as of 12/31/04 (the determination date). So what catch-up contributions am I permitted to exclude from the test? What is the "current year" the regs are referring to?

the combo plans provide the top heavy in the DC, so it is 5%.

an ee works over 1000 hours and quits, so he is not eligible for the top heavy in the DC.

now, does he have to somehow get the top heavy in the DB, or is there some some rule that says 'no, the plans are now considered combined and we operate using the rules for whatever pln provides the top heavy - in this case the dc requiring last day employment.

Received an existing volume submitter plan (401(k)) to review. The allocation formula for employer contributions is - 3% up to $95k, plus 6.565727% in excess of $95k. That's all it states. Doesn't seem to meet the permitted disparity rules that I am aware of, not only because the intergration level exceeds the TWB but the disparity is greater than it should be.

Can you provide any insight or information that would justify the formula? And the plan filed and rreceived a favorable IRS LoD.

I understand that it is possible for an employer to directly reimburse an employee for their individual health insurance premiums. In fact I learned that here Rev. Rul. 61-146.

So here is the question. Our company has an HRA plan (employer funded) for all employees. Each are given $1000 a year to spend on medical expenses and it rolls over from year to year. Nobody uses it for premiums because they don't need to but could if they wanted to.

We plan to hire an individual in need of coverage and planned to offer to reimburse him up to $500 a month for family health insurance premiums upon his submission of proof of coverage/premium statements.

Can we do this outside the standing HRA. The new employee would get that too but do we have to offer all the old employees the same "deal" as this new employee? Our arrangement is part of salary negotiation and has been included because we do not offer group coverage due to our small size and it being so cost prohibitive.

Do you see any problems with our proposal?