I'm wondering if this is happening at all. THanks.

I'm not looking for any "secrets" or "proprietary" information. I'm just hoping to get some suggestions to help me better handle the SH notice situation in our office. If a new client wants to establish a SH 401k plan and you start discussions w/ them in middle of December, let's say how do you handle the new plan? Let's say you aren't able to get the client to commit to the 401k SH until early in January. Obviously they can't start deferrals until they decide to do a plan. Do you draft a plan document that is effective 1/1/2005 (let's pretend it is 2005) with SH provisions effective 1/1/2005 or do you date the sh 401k provisions later into the year? When do you give the notice? I was under the impression it had to be given 30 days BEFORE deferrals started. My boss says we have up to 60 days AFTER to give notice. I'd like to exchange info with anyone willing to discuss the topic.

Does anyone have a cite for the rule that taxable benefits provided to retirees are reported on Form W-2?

Thanks,

Ken Davis

Univ. of South Alabama

Can anyone tell me how you calculate the accrued liability and normal cost under this method?

Looking for some user friendly guidance on continuation of coverage - from what I have already read, not much official and topic is rather confusing.

Thanks.

Should the OYTC be calculated on the full face amount of the insurance or on the net amount at risk (FA-CV)?

We received Schedule D reporting stating that we have a PSA that must be reported. We also received a Schedule A from the same insurer listing unallocated insurance contracts of the same dollar amount as was listed for the PSA. How do we complete the Schedule H when it comes to reporting unallocated insurance contracts and PSAs. Obviously, if I put the amounts in for both the PSA and the unallocated insurance contract in the Schedule H I'm out of balance with the plan finanicals by the same amount. Did I get bad info from our insurer or am i just confused? We determined that our 5500 preparer had no clue because they backed into a number to get the Schedule H to balance with the financials. Now we are trying to clean up this mess. Any help would be greatly appreciated.

Can a defined benefit plan be designed or amended to permit only lump sum distributions in the event of a plan termination even for former employees currently receiving annuity payments?

A participant in a PS plan has turns 70 1/2 in 2005. He has terminated employment and is preparing to roll his account balance into an IRA. Can he roll his entire account balance into his IRA and take the RMD by 4/1/06 or must he take his RMD prior to rolling the balance into his IRA?? Thanks.

We have just taken the plunge to high deductible insurance plans and HSA's. But I am very disappointed with the limited options on who will serve as Trustee for the HSA's and how much they are paid to do it. Seems to me that the banks take all the money, do little if anything to service the account and are making a killing in fees. The bank trustee we are using charges a $3 monthly fee, $1.50 for each electronic debit plus numerous other typical bank fees. No statement is generated; only available on the web. A 1099 is generated each year. The account holder is fully responsible for determining the amount of the deductible contribution and the qualification of the disbursements. All services appear to be electronic and no human intervention is needed to maintain the account. I could accept the fees of $50 or so per year, per participant if at some point the fees were waived if the account balance exceeded $2500 or something.

I also have discovered that part of the $36 annual service fees are going back to the agent, I suppose to compensate him for the lower commission he earns for the high-deductible plan he sold.

Does anyone know of a bank that is willing to serve as Trustee for less? Maybe I should apply to the IRS to become a non-bank trustee for HSA's!

a participant in a profit sharing plan has received a lien. the lien wants to attach his account balance to pay for back child support of appx. $4500. has anyone seen any rulings on such?

In a Plan termination situation, what is done with participant account balances that do not return paperwork and have larger balances (over 5,000)? Does there come a certain point where the client can pay out the balances, or does the plan have to linger until the paperwork comes back?

Thanks

Can a plan have an effective date (for example, 1/1/05) when the sponsoring company was not started until say 5/27/05?

Can a plan routinely give a QMAC ontribution based on payroll period instead of a match contribution or do you have to fail testing before a QMAC can be given? Also, if the QMAC is always included in the ADP test can you use prior year testing?

Do plan documents have to be amended by 12/31/05 to reflect the final 401(k) & 401(m) regs? Has the IRS given us a model amendment?

Plan has major investment bank as investment adviser. A separate investment advisor of the plan wants to use same major investment bank to trade futures. My limited understanding of these rules leads me to believe this may be a pr. tx under ERISA 406(a)(1)© for the furnishing of services b/w the plan and party-in-interest. If so, are there any class exemptions for this type of arrangement?

We currently use Relius Admin. for producing plan documents for our Self Funded Health clients. Does anybody have any other source for plan documents which is reliable, easy to use and provides for ongoing ERISA compliance?

I'm going to stay on the topic of Targeted QNEC's...

What's the easiest way to determine a plan's representative contribution rate?

Let me just use an example to make this easier. Let's say I have 24 NHCE's and 10 HCE's. They all make ED contributions and those are matched. So the ED contributions are tested in the ADP test and the matching contributions are tested in the ACP test. To make it simple - there are no other contributions.

We'll say the ADP test fails. The HCE average is 12% and the NHCE average is 4%. So in order to pass the ADP test I need a NHCE average of 9.6%. That means a 5.6% QNEC (9.6% - 4%) to 24 NHCE's which equals a 134.40% QNEC.

The new rules say I can give the greater of 5% or the plan's representative contribution rate. If I give all 24 NHCE's 5%, then I'm only at 120%. So that won't work.

Here is where I'm stuck. How do I determine what the plan's representative contribution rate will be?

I know that the plan's representative rate is equal to the greater of:

1) the lowest contribution rate of any eligible NHCE among a group of eligible NHCE's the consist of one-half of all eligible NHCE's for the plan year or

2) the lowest contribution rate among all eligible NHCE's under the arrangement who are employed on the last day of the year.

So I'll start with the #1. I'll work with the formula of:

12x + 2(12x) = 140%

12x + 24x = 140%

36x = 140%

x = 3.89

2x = 7.78

12(3.89) + 12(7.78) = 46.68 + 93.36 = 140.04

So if I give half of the group a 7.78% QNEC and the other half a 3.89% QNEC, then I should meet the requirements of #1.

I think I'm making this way more difficult then it should be though. Anyone want to help me out?

We had a company come to us. They said that their 401(k) Plan terminated in 2001 when they were bought out. They have recently discovered that there were some left over assets in the Plan (around $15,000). This money belongs to more then one participant - some HCE and some NHCE. The money as of date has not yet been paid out.

Any suggestions on how to handle this? Apparently there was a final 5500 done for year 2001.

It's a mess we are trying to determine if we should get involved in or not!

Thank you.

Could someone please confirm for me that Title II of ERISA only applies to qualified plans. For example, coverage testing is not required for a nonqualified ERISA plan. Thanks.