I am trying to advise a friend of mine. Her husband was a middle manager (NHCE) in a large company. They are both 57 years old. Two years ago the company's pension plan was converted to a cash balance plan.

His position was eliminated, but he is due a $496,000 lump sum or a $3,300 J and 100% SS immediate annuity.

I searched the open annuity marketplace and could not find a better deal for him. There are two questions that I could think of, though. First, if he took the LSD, rolled it over and took the hit in an annuity purchase, would any of the LSD be subject to recapture by the PBGC if the plan terminated. How long is this exposure out there? Second, what is the maximum monthly J and 100% SS monthly pension that the PBGC would guarantee at age 57? He did receive significant salary increases in his final two years of employment. The question is how to minimize his exposure.

Any thoughts would be appreciated. Thanks in advance.

Is an ERISA 403(b) plan required to prepare a Summary Annual Report? Since the Summary Annual Report summarizes the Form 5500, and the Form 5500 for a 403(b) plan does not include any financial schedules, what exactly would a Summary Annual Report summarize for the participants?

Also, does an ERISA 403(b) require a named Trustee to the plan document?

We are considering consolidation of three companies with common ownership, but not a controlled group. Each of the three employers would participate in the Plan and could raise the plan's eligible employee number to 120+. If we exceed 120 on a plan basis, but no single employer has 100 eligible, must the Plan attach an audit and do we still file the Long Form? Under the old format (multiple 5500's with only Sch. T) that was clear. Anyone have any experience with this scenario yet? I realize we file one Form 5500 and a Schedule T for all participating employers, but how does the audit requirement change?

The beneficiary lives in England and doesn't have a US tax ID number. Cigna won't do anything without a tax id number and the beneficiary says she doesn't want to go through the trouble of getting one for the amount (which is $190). What do we do to close out this account?

Thanks

Can anyone tell me what a RMD formula might look like for a participant with a TEFRA 242(b) election? Could the participant choose whatever formulat they wanted at the time of the election?

For example, 2004 distribution amount is based on 1/2 of the balance as of 12/31/02. Could that be possible?

Notice 98-52, Section VIII.F seems to require continued current year ACP testing for any after tax contributions made to a safe harbor 401(k) Plan. Is this correct ?

The plan will use the basic matching contribution formula to pass the safe harbor. I have never dealt with a safe harbor 401(k) plan with A T $ and just found this requirement to be odd.

Any comments are appreciated.

Thanks.

Controlled group has 3 plans, each of which contains the following vesting schedules:

Plan A - 3 year cliff

Plan B - 3 year graded - Year 1 - 33% - Year 2 - 66% - Year 3 - 100%

Plan C - 3 year graded - Year 2 - 25% - Year 2 - 50% - Year 3 - 100%

Since all employees fully vest after 3 years of service, does anyone see any problems with keeping these schedules? If one of the plans had a 6 year graded schedule (e.g. -2/20), would this make a difference, and if so, would you be testing how many participants would have the right to fully vest after 6 years?

My thinking has always been to look at the maximum time period someone can become fully vested, in determining whether there would be a potential for discrimination.

Thanks for any reply.

An employer purchased a security for $100,000 with corporate money and now wants to transfer this security into their pension plan to meet the minimum funding requirement of $100,000.

My understanding is that cash must be used to meet the minimum funding and that the above is a prohibited transaction.

Does anyone have concrete evidence on the above issue?

Thanks.

GAry

What distributions are required to be made under a tax-qualified plan (DC) during the determination letter process for a terminated plan. How long can an employer wait to receive a letter from the Service before being required to distribute all of the terminated plan assets?

I have a technical question that I have received mixed information from other practitioners and lawyers. I would like to contact the IRS directly to ask for an interpretation.

Unfortunately, trying to get through the maze of automated operators and finding someone knowledgeable enough to assist is proving futile. Does anyone have a number for specific departments or divisions of the IRS to ask a fairly technical employee benefit plan related question (or any other suggestions)?

Is plan amendment bringing in the affected ee's under 2003-44 the only remedy?

Could you take the position, for example, that plan def. of comp is from date of participation and this ee does not have a DOP so does not have elig comp so he/she has a 415 excess and therefore the plan returns the deferrals? It is a corbel prototype doc and i didn't see this addressed.

I have been asked to run a DB proposal for the following situation:

Husband and wife partners in an LLC. Husband K-1 at 200K, wife K-1 at 50K. No employees.

Husband also receives other consulting income, directors fees, and non-qualified stock options that his CPA has been showing as "Other Income" on line 21 of the 1040.

My question: Can the "Other Income" be used for pension purposes and how? Is it necessary to start another business to accept those various sources of other income and have both companies adopt the plan? Is it possible to use the "Other Income based on how they report it now (I don't see how but I am not sure). Any other thoughts?

Let's just say for this discussion that all of the sources of income can be used for comp per 3401(a). In other words, none of it is rent from rental properties, etc.

Any help or input is appreciated.

We have a client who does COBRA administration for themselves. They are about 130 employees and this is how she is doing it:

Employee terminates, HR Mgr. has the employee complete a COBRA election form at the exit interview, if there's a spouse or dependents she DOES NOT send a seperate one, then only gives the QB 30 days to pay the first premium and if she doesn't receive it in 30 days she terminates the employee for non-payment of premium and sends a letter to him stating so.

There are so many COBRA rules broken here but I cannot convince her of that. I have given her written information on several occasions, time-frame charts, notice listings, etc. My hope is that someone will reply for me and I can print this out and send it to her!

Please help!

I believe if a plan offers a lump sum distribution option before retirement age (e.g., upon termination of employment), and the lump sum amount is over $5,000, then an immediate J&S annuity must be determined/offered at the current age.

If the lump sum is base upon GATT (plan provides for lump sum equal to greater value of (a) actuarial equiv or (b) Gatt mortality/rates) does the GATT PVAB at the current age get divided by an immediate annuity factor based on plan's normal actuarial equivalence (used for alternative forms of annuity distributions) - OR - by an immediate GATT annuity factor using the Gatt table/required interest rate ?

Thanks !

Treasury and IRS Propose Retirement Annuity Regulations

http://www.treas.gov/press/releases/js2099.htm

Who do my husband and I talk to about his pension benefits. We are in New Jersey.

Does anyone happen to be familiar with the program ACT? I am currently using version 6.0 and I have to sychronize a database and am having trouble. I have called tech support and no can cen seem to help. I know this is a random question to throw out, but I am desperate for assistance. Thanks!

A bank client's owner died. He left a large account balance. His beneficiaries are non-spousal. The beneficiaries are younger and wish to be paid on a life expectancy basis. The plan allows investment in insurance products, so is there any reason why an annuity couldn't be purchased as a mechanism for the plan to make these payments?

Thanks,

Dan

I want to see if I've got this right - without going blind figuring out original case, vacated decisions, remands, etc... maybe some of you legal types are more conversant with it.

With the latest decision, are we now, for the moment at least, at the stage where vested participants are counted? Have I got that right?

Would it be possible for an employer to use an HRA to fund the gap between the HSA balance and the catastrophic deductible?

Assume an employer believes that 7% of his employees will exceed their deductibles.

A group HRA is set up to fund this gap, which could be easily determined once a year.

Reinsurance is bought to fund the gaps in years which exceed this 7% estimate.

Also, for COBRA purposes, could the former employee continue to self fund his HRA?

If so, how would that amount be determined?

Don Levit