I have a client with a MP plan. My predecessor allocated contributions to eligible employees based on 1,000 hour service requirement. This is a standardized plan, as a result several participants did not receive contributions in prior years that should have possibly dating back to 1997. Based on the length of time passed, would it be best to restate the plan to a non-standardized document?

Under current regulations, you cannot cross test in an ESOP. Could you merge an ESOP with a cross tested 401(k) Plan? Would you then be able to continue to allocate profit sharing contributions using a cross-tested allocation and then perodically purchase company stock with the profit sharing balances?

Does a participant have to be able to revoke a deferral election within a certain period of time? For example, if a plan's enty dates are semi-annually (Jan & July), can we make a participant wait until July to revoke an election? I have searched the regs and the best I can find is that a plan can't lock in a participant's election but are semi-annual entry dates sufficient?

If a participant elects to split their distribution and take part of it in a lump sum payment now and defer the rest is the remaining portion reportable on the Schedule SSA? I am reading that they should not be reported if the participant receives "some or all of the benefit, whether as a lump-sum payment , or...), but I also see that participants should be reported if benefit payments cease. I would appreciate hearing how others are handling this.

Does anyone know if an employer that has both union and non-union* employees is obligated to offer Roth 401(k) contribution options to both groups? It can be beneficial to hang on to new benefit options like this until the next collective bargaining cycle rather than offer it up to everyone regardless of union status, but I'm unclear as to whether this is okay in this case. I know the universal availability business was eventually amended with respect to catch-up contributions due to concerns about the administration of such requirements to collectively bargained groups, but I haven't seen anything either way for the Roth 401(k) stuff.

*using union and non-union in place of reference to collective bargaining agreements' existence/non-existence

Plan termination submitted to PBGC as a standard termination based on sponsor's representation that he would make up the shortfall, calc'd at that time to be approx. $500k. PBGC did not isssue a Notice of Noncompliance. Sponsor subsequentlycontributed 300k of the 500k shortfall, and benefit payments were to commence upon deposit of the remaining amount of the shortfall (now 300k due to lower 417e rates). Sponsor is now bankrupt. At the very least PBGC must be notified of the change in status. What happens then? Must the participants be notified?

Corp I and Corp II are a brother-sister controlled group as a result of ownership by individuals A,B,C,D, and E.

Corp II and Corp III are a brother-sister controlled group as a result of ownership by individuals C,D and E.

Are the above 3 Corps a controlled group?

Has anyone else become concerned about the interaction between Medicare Part D and HSA rules?

Beginning in 2006, a HDHP may not cover prescriptions before satisfying the deductible (unless the IRS backs off of their vehement declarations to date that the transition rule will not be extended).

A prescription drug benefit that is subject to a HSA qualifying deductible will not be "creditable coverage" for purposes of Medicare Part D. If a medicare eligible individual who does not have creditable coverage does not enroll in Part D when first eligible, they will be subject to higher premiums as a delayed enrollee when they finally do enroll.

However, if they enroll when first eligible, they will have non-qualifying coverage that will make them ineligible to contribute to an HSA.

Does anyone see a way out of this result (unless CMS or the IRS does something)?

A 401(k) profit sharing plan only offers lump sums and installments. In order to be exempt from the QJSA/QPSA rules it must require the spouse to be the beneficiary of the participant's account unless the spouse consents. Does this requirement just apply to distributions prior to the commencement of retirement benefits? In other words, if the participant dies prior to the commencement of retirement benefits, the spouse is the default beneficiary. But the spouse doesn't hve to consent to the lump sum distribuiton, does he/she? I am really concerned about the installment distribution? Is spousal consent required for the participant to designate another beneficiary if he/she elects an installment distribution???

I was hoping someone could help me out regarding the compensation limit when determining 415 limits for a DB plan.

The ERISA outline book says "The compensation limit is prescribed by IRC 415(b)(1)(B) and equals 100% of the participant's average annual compensation. Average annual compensation is the highest average of the participant's section 415 compensation over 3 consecutive years of service. Treas. Reg. 4.415-3(a)(3)."

My question has to do with counting the compensation in a year in which a participant terminates.

Let's say a participant has the following 415 compensation:

1/1/02 to 12/31/02: 55,000

1/1/03 to 12/31/03: 58,000

1/1/04 to 12/31/04: 62,000

1/1/05 to 10/12/05: 57,000

Would you count the 2005 compensation even though the participant terminated in that year?

Thanks for any help!

I have a client who did not stop the automatic payroll payments after the loan was paid off. How do I return the overpayments? Do I return earnings? What are the tax consequences?

I left me employer in February and have been covered by Cobra insurance. All of my payments have been made on time. Recently when I went to get a prescription I was told that my coverage has been cancelled. After many frustrating calls to my employer and the insurance company, I was told that the policy was cancelled because of non-payment. The entire plan was cancelled because the employer did not make his payments. Furthermore they informed me that it was cancelled 2 moths ago. My former employer is downplaying this as a mistake that will be taken care of. (That was several days ago and they have not returned any phone calls)

This is a HUGE inconvience because my family has been to the doctor many times and my wife is having a difficult pregnancy requiring many prescriptions. I have to take on the finacnial burnden until this is resolved.

Do I have any rights or recorse with this? How can they contimue to collect my premiums but not provide any coverage?

Please help me!!!!!

We have an employee who participates in our "Top-Hat" SERP. He is in the process of a divorce. Are nonqualified plans subject to the QDRO requirements? If anyone has dealt wiht this situation, please let me know. Thanks.

Client wants to terminate their 401k plan, do I need to file for a determination letter? What procedures do I need to take in order to terminate a 401k plan? They would like to terminate it this year.

Is it a requirement to have a separate EIN for a pension trust?

employer of 10 whose HCE will make around $250K wants to max out. would a TSA allowing him to defer $14k coupled with a discretionary SEP allowing him to receive the additional $28K be a viable option?

thanks

How are distributions handled when the amount to be distributed is less than the distribution fee?

Client maintains a pooled profit sharing account with Merrill Lynch. The account gets hit with its usually quarterly investment fees. The employer ends up paying back the fees and writing a check to the pooled account to cover the cost. When completing the 5500 and participant statements, should I be showing the fees running through the pooled account and adjusting it through earnings....or should I not show that any fees ran through the plan since the plan fees are being paid by back by the employer.

Any suggestions, I'm hitting heads w/someone in my office on this issue, and frankly I don't even think it should be issue.

A client has top heavy issues and makes only a safe harbor matching contribution (to those who are participating). Does this satisfy the minimum top heavy allocation?

The vesting schedule is accelerated enough.

Q1. Can we file Schedule C for welfare plan if there is no Schedule H?

Q2. Can we file Schedule C for pension plan if there is no Schedule H?

I think No for the second question. Please confirm this.

Kindly suggest for the first question.