OK, heres my situation. I'm a recent college grad with a decent job and I want to start saving for retirement. I make around $40,000 a year with salary and bonuses and my employer's 401k plan will match up to 6% of my contribution. I have heard that ideally, I should be depositing around 10% of my income for retirement, so here is my question: Would it be smarter to put all 10% in the 401k and only get a match on some of it or would it be better if I put the extra 4% into an IRA account? If an IRA is better, could anyone suggest which one would make the most sense in my situation? Thanks in advance for all the help.

I am trying to determine whether or not I have a consistency issue with a VEBA Trust Agreement and a Master Plan Document. The Trust Agreement allows the trustees to pay for life, ad&d, medical, dental, vision, LTD coverage and benefits as they deem appropriate. The associated Master Plan Document is only for medical and dental coverage. The Plan's 5500 is including life, ad&d, medical, dental, and LTD coverage and benefits paid - some by the Trust and some by the employer.

I have a feeling that things aren't operating quite as they should be.

In my head, the Trust Agreement spells out what benefits COULD be offered. The Plan Document spells out what benefits ARE being offered. If the Plan Document doesn't include life, AD&D, LTD, then this activity should not be included on the Plan's Form 5500 or on the Trust's Form 990. In addition, the insurance related to these benefits should not be paid for out of the Plan's checking account.

My question is primarily this - can a VEBA Trust fund more than one benefit plan (as defined by a separate plan document) or does there have to be a one on one relationship between a VEBA Trust and a Plan? I know there are multiple employer arrangements that include multiple employer's plans, but can one VEBA Trust be used to fund multiple plans of ONE employer? IE fund the life plan AND fund the health plan?

I hope that makes sense.....

Julie

Edited

Can a health plan require a person whose injury or sickness is the basis of a claim to be examined by a physician designated by the Plan as often as may reasobably be required during the pendency of a claim?

Is there some rule prohibiting this?

Is there any problem with defining an eligible dependent as "you spouse, who is living in the same dwelling as you, unless legally separated."

There are several instances where the employee and spouse are living apart but are still married. Should the "spouse" still be entitled to coverage? Is there any rule or precedent for this?

Fully insured plan. If a qualifying event COBRA notice is not sent by the deadline, should an employer/administrator send one out asap or just hide? This is the only fix we can think of to avoid potentionally unlimited exposure on claims, but it really raises a red flag.

Any tips on explaining this to the insurance company or ideas about whether we will get it covered?

Is there some point that this doesn't make sense (what if one year late, for example). We assume that the qualified beneficiaries can be required to pay for any elapsed premiums (the deadline for these arrearages is unanswered apparently), but at some point, the past premiums get pretty high.

Any general thoughts would be appreciated!

Employer wants to set up HDHP/HRA combo-no reimbursement would be made from the HRA until the employee reaches ERA (55/10 YOS).

Is this permissible?

Recently received some unsolicited information on a "Custom Benefit Plan" that would allow a small business owner to contribute a "minimum of $70,000 to the owner's personal account, without similar increases for the rank and file employees."

Does anyone have any thoughts as to what this might be?

I have a general knowledge of retirement plans, but am not sure if this might be a fit here. Four member LLC with no other employees. Members ages range from 52-61 and K-1's will show income of 150,000+ each.

Thanks.

Had a question come up to which I think I know the answer, but not certain. Participant in a PS plan died, and had life insurance. Plan is owner and beneficiary of the policy. Beneficiary of participant's death benefit asked the PA if a form 712 needed to be completed. PA naturally passed along the question. I'd never heard of a 712, so looked it up on IRS website.

The Form 712 is used for estate tax purposes. Since the plan owns the insurance policy, the policy itself is not included in the estate's tax return. Presumably, the estate should include the participant's (decedent's) rights under the pension plan. But these rights are distinct from the funding mechanism (the life insurance policy).

So, I do not see a requirement to complete a form 712 in this instance. Anyone have any knowledge or experience with this? Thanks.

Does it violate HIPAA privacy legislation to require a doctor's note for an absence to be considered excused (this is in regards to a part time attendance adherence policy). This is with the understanding that the note would not say anything about the patients condition, treatment, or payment, simply that they saw a doctor.

I was recently informed one of my clients have been issuing a 2nd paycheck to some employees for additional pay. Not bonus pay, but compensation after the 1st check was issued.

The plan sponsor deducts 401(k) and contributes the ER Match from the 1st check but does not from the 2nd check. The plan document states the following:

"Such Matching Contribution may be made as of any payroll date or calendar quarter based on the Compensation and Salary Deferral Contribution made as of such payroll date or calendar quarter"

I work in a daily environment & the spreadsheet the client provides us only has one line item for each employee, so it appeared to us they are only receviing one check. This is an audited plan and this "2nd payroll check" was discovered when the auditors were at the client site. We, as the TPA, were unaware of this 2nd paycheck.

What the consequences to the plan? I know we can amend the plan for future payrolls, but what should the plan sponsor do for past years, especially 2004 sinde that is the year being audited?

Thanks!

what is a non qualified employer contribution ?

Thanks

The situation is a 401(k) plan in a nursing home was sold in an asset sale. The participants stopped participating in the "old" plan in the summer of 2003 and switched to the acquiring companies 401(k) plan.

There have been no contributions or distributions since 2003. The Form 5500 was not filed for 2003 because nobody was willing to pay the fee's to the auditor who pre-billed for their services. We are the TPA, and have not received payment for the 2003 audit package.

We have considered our firm no longer the TPA of record but a TPA's signature is needed to liquidate the individual participant accounts.

The acquiring entity does not feel they should have to pay for this old plan since it was an asset sale.

Would it be allowable to charge the participants our fees for administration and the auditor’s fees? It is my understanding that we can not charge the participants for any fees involved in the actual plan terminination. My concern is there are a lot of small balances which the fees could be a large percent of the total balance.

The other concern is there are people who want to get their money out of the plan.

Any advice would be appreciated. Thanks!

All right maybe I'm paranoid., or at least really REALLY cautious.

My employer offers only one 457 plan and that is through Hartford insurance. What if, many years from now when I'm ready to withdraw my 457 contributions, there are 10 major hurricanes somewhere in the U.S. and Hartford goes broke paying all those claims. Is my insurer insured?

In other words, if for example I had my money in a bank account and the bank went out of business, my account would still be FDIC insured, so I would not lose everything. Is there some analogous insurance that I could fall back on to recover my 457 money in the event that Hartford went bankrupt (not that that seems very likely presently)?

One more question and this one's very vague and open-ended: Suppose I do not take advantage of my 457 plan. Yes I know I would miss out on substantial tax savings. But just suppose hypothetically, for some crazy reason of my own, I decided not to participate in the 457 plan. And assume for the sake of argument that I do put the maximum each year in an IRA, so that's not at issue here. How should I invest the money that I would have put in the 457? My only idea would be to regularly buy some kind of federal or municipal bonds in order to get at least some tax advantage.

Thanks for any information or suggestions.

Is the maximum allowable charge still 25 cents per page?

If a sole prop set up a DB plan effective 1/1/05 and had a $200,000 deductible contribution for 2005, but did not have any self employment income in future years, but still had non-deductible contributions, upon plan termination would the entire distribution be considered taxable income or would only a portion of it be considered taxable since he did not receive a deduction since the initial contribution?? Thank you.

Our prototype document forces payout with balances under $ 1,000. My question is this, what date do you use in determining this? Termination date? PYE? Date of Distribution?

Thanks

When calculating the current liability, do you apply all of your funding assumptions?

For example, if I am valuing ancillary benefits (termination, early retirement benefits, etc) in my accrued liability, do I also value those in the current liability?

If I am assuming no pre-retirement mortality for funding, is that what I also use in the current liability calculation?

What is the absolute deadline for safe harbor contributions? Assuming a 12-31-04 Plan year end? Thanks!

Company adopts a standardized prototype plan in 1995 (calendar year plan). I don't have the opinion letter but I would assume it is a TRA 86 document. Nothing seems to have been done (document-wise) since then, although the admin, 5500s, distributions, seem to have been handled timely and properly.

The link below answers many questions in this situation:

http://benefitslink.com/boards/index.php?showtopic=26811

I wanted to quantify for the plan sponsor what has been missed with their document. Is saying that GUST amendments, RMD amendment, and involuntary distribution amendment (although still not really late) are needed, catch everything? Secondly, if going through VCP to correct, the user fee is $750 (10 employees). Is there usually other government fees or negotiated settlements that take place in this situation?

Thanks for comments