Can a one-man DB plan use the VFC program to receive an exemption from excise tax on a prohibited transaction of contributing stock rather than cash to the DB plan?

I am attempting to add another employee, but am being told by management that my income per FTE does not justify another employee. Management, a non-TPA business, knows little about the TPA business, and after 26 years in the business I know what my needs are. However, hard data would help.

Is information available that would give me an idea what the average income per FTE is in the TPA business, and where would I find it?

If anyone wants to offer this information on their own firm, it would be appreciated. I don't need income or number of FTE's, just gross income per FTE.

Thanks.

I was contacted by a co-trustee who can not find the document of her husband's plan. American funds will not allow her to gain access to the funds because they do not have her listed as a trustee. They want to see the doc. She is not a client (not yet)... What are her options?

Plan was established in 1998 and he was the only participant.... FYI

Prior record keeper did not provide hardship amounts available for participants. The plan has gone through several service providers in the past. The plan sponsor is also unable to provide this information. Is there any way to process a hardship distribution without the exact amounts?

Does an employer have to offer FSA under their COBRA coverage?

I'm trying to determine if a health plan is self-funded by looking at the 5500 information. The benefits provided are noted at Line 8b as 4A (health), 4B (life) and 4H (disability). Line 9a notes the funding arrangement and benefit arrangement (9b) as (1) 'X' Insurance and (4) 'X' General assets of the sponsor. Is the response in Line 9(a) and 9(b) generally determinative as to whether a plan is "self-funded" or not. Any help would be greatly appreciated. Thanks......

Can someone give me the regulation or code that restricts distributions until separation from service or age 59 1/2 for defined contribution plans like a money purchase plan?

I thought I knew this until someone asked me directly...

If you count the receivables in the BOY amount to determine the 20% threshhold, then (usually) you'll get a higher amount and thus a higher limit, so you may have less assets to report. But it seems sort of disingenuous to inflate the number that way, and so maybe that calculation is meant to be done on the actual cash assets at BOY.

I can't find anything definitive to support it either way, so any direction is appreciated!

I am currently researching Paid Time Off Banks and would like to come up with a cost analysis that shows the difference between the current cost to my company when employees use vacation, sick and personal time versus what our costs would be under a Paid Time Off Bank.

Has anyone handled a similar project, and if so, what resources did you use and how did you proceed with the costs analysis. Did you calculate the greatest exposure under your existing policy (i.e., did you assume that all employees used all vacation, sick and personal and then total the costs) and then did you do a similar calculation for the total number of days alloted under the Paid Time Off Bank?

If for whatever reason an employer wants to no longer allow elective deferrals in their Plan, does a plan amendment have to be signed before those deferrals are no longer taken from an employee's compensation? Or would a notice to the employees telling them deferrals will no longer be accepted suffice, with a plan amendment signed by the end of the plan year.

We have a 2 person plan that terminated. The assets were distributed completely, the DB account was closed, and we filed the final 5500-EZ. Residual interest of about $750 was credited to the plan's investments, so the investment house re-opened the account.

To get the money out, does this really count as a distribution? or is it just an interest credit?

Do I have to revise the final 5500?

Thanks!

Dennis

We believe that we are overthinking this:

5 individuals, Including father and his 2 adult children (this family owns 81%), and 2 unrelated individuals (who, together, own 19%) own 100% of corp. X.

Corp X owns 59% of Corp. Y.

2 individuals unrelated or connected to Corp. X or any of its owners own the remaining 41% in Corp. Y

Is there a controlled group existing here?

Would it make any difference if all the owners of Corp X were parent and children?

Thank you. We believe there is a parent/subsidiary relationship here, but the facts presented to us have changed so many times over the past few days, our thinking is getting muddled and we are being to quarrel amongst ourselves.

Are elective deferrals made as a result of automatic enrollment to be treated strictly as pre-tax contributions or, in 2006, will a participant be allowed to have an option to treat them as "designated Roth contributions."

On one hand, the Code says that a qualified Roth contribution program means a program whereby an employee may elect to make designated Roth contributions, implying that the employee makes an actual election to have such contributions made; on the other hand, a designated Roth contribution means "any elective deferral" which could be pretax but which the employee designates as not being excludable.

I recogniize that a participant receiving an automatic enrollment might be the type not to get too involved in the deferral amount so s/he would not likely go to any effort to designate the type of ED (Roth or not), but there may be those who are donkeys in the path who let the employer make the election for them but who want the benefits of a Roth contribution.

I'm hoping for an obvious answer that I've just been missing. Thanks for any assistance!

If I were looking for materials on NQDC including executive compensation - what would be the best resource(s) to purchase-including the new 409A guidance and suggestions, etc.? Any help would be greatly appreciated!

I have DB plan that drafted by someone else that was not amended for EGTRRA. Would it be permissable to simply adopt the amendments the IRS issued as good faith amendments in 2001-57? There is no way i would be able to amend the plan properly since it is customized. The plan is terminating and it needs to be in compliance.

Under the SCP, if an employer has to make a corrective distribution, can they use forfeitures? The Plan provides that forfeitures are used to reduce future employer contributions. I know that I need to make the distributions, I know the amount, and I know that I have to adjust for earnings, I just want to make sure that I can use past forfeitures to do so.

Advice please: we have a 10pp company and are in the process of offering health insurance benefits for the first time. We plan to pay 70% across the board for all full time employees and their families with two options of health plans. One employee (single status) claims that offering 70% across the board would be discrimination to those without familes and is requesting equal compensation. Ideas, comments, suggestions? Many Thanks

How are disability benefits taxed from a qualified DB plan - if paid from the plan?

Is the plan considered employer paid benefits?

And lastly, can the participant opt out of federal tax withholding?

Small Profit Sharing Plan currently holds a life insurance policy (whole life, I think) for the benefit of owner (sound familiar?).

Owner is replacing the current policy with a "flexible variable" policy. First, am I correct in assuming that the "cumulative premium" is now subject to the "25% of cumulative contributions" incidental benefit rule?

Second - and here's where it gets interesting - the agent would like the participant to make a one-time "non-1035 non-repeating premium" of $10,000 to the Plan (I am a TPA - so have NO idea of what that means or entails.).

Could the participant direct $10,000 of his existing account to the new policy - in addition to the initial annual premium - subject, of course, to the "incidental benefit" rules?

[Also wonder if this approach (i.e., flexible variable policy vs. whole life) isn't a somewhat roundabout way of allowing the owner to self-direct a portion of his account (via the policy "sub-accounts")...]

Am almost completely "in the dark" here, so would appreciate any and all comments.

Thanks!

After substantial review of pension plan loans I have uncertainty as to how to administer the plan in relation to the affected plan participant after the loan is considered a deemed distribution.

Say a participant takes a $50,000 loan on 7/1/2002 and does not pay off the loan in compliance with the level amortization payment by not making his first required payment(s).

Therefore, as of 7/1/2002 the participant should be charged with a deemed distribution for $50,000.

After this occurs and the participant decides to pay back the loan say at 6/1/2005, then it would seem that the amount to pay back would be $50,000 plus interest at the loan interest rate. Say it turns out to be $75,000. Then it would appear that the participant would have basis in the benefit in the amount of $75,000.

So that if say the participant were to take a lump sum of $200,000 at termination date of 1/1/2008, then $75,000 would not be subject to tax and not be eligible for rollover, but the remaining $125,000 would be subject to tax and eligible for a direct rollover.

Is this analysis correct?

And finally say the participant never pays back the loan and terminates at 1/1/2008 with a lump sum value of his accrued benefit of $200,000.

How would this transaction be handled?

SHould the value of the deemed distribution be increased with interest until 1/1/2008 (to say an amount like $100,000 for example purposes) and then such amount be basis that is offset to the $200,000, where then $100,000 is either distributed or rolled over?

Thanks.