When is the last day that an existing plan can adopt a 3% safe harbor plan? for example, for plan year 2003 is the last day December 1, 2002?

How is the DB PVAB typically calculated when attempting to put a value on the DB benefit when the plan does not offer lump sums? The couple is just attempting to ascertain the value of their estate at this time.

sorry AP is referring to a 100% contigent Annuitant Option Plan

paritcipant became sick with cancer and requested pension. his intent was to select a 100% Annity option for his wife. While waiting for the materials he passed away. Subsequenty his widow was only granted the default 50%AP she now seeks equitable relief for the 100% AP.

Can a delay in delivery and proof of P's intent be used to show that survivor is entilited to the 100%AP?

If yes or no does anyone know any cases on point with similarties?

thanks in advanced

desperate summer associate

I am work for a non-profit organization which is starting to provide financial planning for it's clients. We need examples compliance manual and policy and procedure manuals in order to create our own. Can anyone help me with this?

I have a client who for the first time has over 100 participants (101 to be exact) in their Health FSA. Do I have to file a Form 5500?

The facts...

DB Plan. Unmarried active participant X, a resident of CA, dies with no beneficiary designation on file. Plan defaults payment to X's estate. X's representative claims the death benefit would be X's only asset in the estate. Std practice for estate pmts is to request letters testamentary/administration, death cert, and TIN of estate.

However, under CA Probate Code s 13100, gross estates < $100k can avoid probate. The decedent's successor(s) may collect the decedent's personal property via notarized affidavits sent to each holder. It's not necessary to obtain letters of administration either.

X's rep has submitted a duly executed affidavit and wants direct payment. It's not entirely clear from the CA code whether "collection" means direct payment to successor or simply a release of the property to the successor, such as a check payable to the estate. Furthermore, X's rep claims that no estate is going to be established, thus no TIN.

The "right" thing to do?...

ERISA pre-emption...pay the estate and report it to the IRS under the estate's TIN, which must be obtained. Payment is > $600, so X's rep would also have to file Form 1041 for 2004.

Another pitfall is that without letters of administration, the plan is not protected from a fraudulent successor. Sure there's some protection under the CA statute (fraudulent payee is personally liable 3x amount to true payee), but ERISA pre-emption can be a double-edged sword: hold the plan to its terms and demand payment as true representative of the estate. Again, it would seem to me that the right thing to do is require letters of administration too.

Right result? I'd be interested in hearing how others handle this situation, as this is becoming more and more common.

We just took over the admin of what appeared to be a nice, clean cross-test 401(k). However, we just discovered over $60,000 in unallocated forfeitures that apparently have been building over the years. Document says to reduce plan expenses, then contributions, then reallocate. According to prior administrator, these forfeitures were held in suspense "for future plan expenses". Although it appears they have been deducting quarterly fees as well!

Looking for opinions here....due to the multitude of plan years involved, it would cost a fortune to go back and reallocate, make distributions, etc. Not to mention time I don't have. Appears that the most practical solution is to use the forfeitures to fund the $50,000 contribution for 2003 that hasn't been funded yet and reallocate the rest. Of course, I would bring this to the attention of the client and let them know of the potential problem upon audit.

Refusing to take the case is not an option, so please don't offer that opinion! Thanks for any input.

If you had the option to chose between either the DB or DC plan, what information would you need to be able to determine the best option? We are allowing our current employees a one time option to switch to the new DC plan (other wise they would remain in the DB plan). I already have some ideas for projecting pension benefits at their normal retirement date, but it can be like comparing apples to oranges.

I only know of one type of Retirement Plan Certification and that is CEBS. Are there any other programs that offer certifications with retirement benefits for HR professionals. If you can provide links, that would be very beneficial. Thank you!

I am not very familiar with the rules related to 403(b) plans but I recently had a hospital client ask us to prepare 5500s for their 403(b) plans. During our discussion, he laid out the following:

They currently have 4 wholly owned subsidiaries. Three of the four have 403(b) plans. Two of those three 403(b) s are exactly alike, but all are under different contracts w/ TIA CREFF. They have been filing separate 5500s. Each of the three contain both employer and employee contributions.

It seems to me that they might have a problem under 403(b)(12)(A) since the 403(b) is not available to one of their subs. Do they have to offer the same plan to each of their subs? Apparently TIA told them they had to have separate plans, but he wasn't sure why. Also, do they need to test the employer contribution under 401(a)(4) or 410(b)?

Any guidance would be appreciated. I just want to be able to alert them that they may have a problem, before I potentially become party to their problem.

Is Catch-up within last three years of retirement based only on the NRA?

Or is there any other trigering event available?

For example: A participant wants to retire at age 67, but plans' NRA is 70 1/2.

How can a 457b participant age 64 use ('Last 3 Years' type) catch-up contributions for his last 3 years?

(Assume that he was not able to use catch-up based on undercontributing.)

Which HCE's have to be picked?

Top Paid Group in effect, I understand rules regarding Rounding to be consistent and don't be discriminatory.

However, what about this situation:

Lookback year comp $200,000 - defers in limitation year $13,000

Lookback year comp $200,000 - defers in limitation year $0

Lookback year comp $200,000 - defers in limitation year $13,000

Lookback year comp $120,000 - defers in limitation year $13,000

Lookback year comp $80,000 - defers in limitation year $0

Lookback year comp $70,000 - defers in limitation year $0

Lookback year comp $60,000 - defers in limitation year $0

Employer establishes policy to consistently round up to whole number if 20% falls on a fraction - they reason that you cannot have a fraction of a person so they will just always include one additional person in the Top Paid Group if 20% is not a whole number.

Above information would yield 1.4 so they need to pick 2 HCE's to include in the Top Paid Group.

Which two of the three $200,000 earners should they pick?

Example in Sal Tripodi's book only address's fraction scenario for how many to include in the TPG.

I'm wondering what you other practicioners are doing to choose identically paid HCE's that have varying deferral rates?

Any help much appreciated.

Client failed ADP testing. HCEs took refunds, but they weren't processed until October. HCEs had losses on their accounts, so refunded $ was actually less than original amount. Does the Employer pay the 10% excise tax on the 5330 based upon the original amount or the actual (lower) amount refunded. Any cites? Thanks in advance.

When plan was restated for GUST, a provision was included that, upon issuance of a valid QDRO, the alternate payee could elect an immediate distribution, even though the participant may not be entitled to a distribution under the plan terms.

Employer now says he never knew this provision was in there and does not want to operate under it.

May this be eliminated now? We have a valid QDRO to be filed.

I have a feeling the answer is NO, it may not be eliminated, but any alternatives would be appreciated.

I am doing some research into public retirement systems that have self-directed brokeraeg account and are therefore able to invest monies in alternative investments, such as private equity and/or hedge funds. As many PERS are holding a specific percentage of assets for alternative investments, the trend is an interesting one to research.

I am looking for suggestions of which systems have such accounts and are therefore able to make alternative investments.

I appreciate any/all help.

I have an employee with a 401k loan. Yesterday I received a withholding order for a Chap 13 bankruptcy. The notice says "No deductions should be made or permitted for any wage garnishment, wage assignment, credit union or any other indebtedness.... [snip] deductions required by [snip] insurance, pension, or union dues agreement are not intended to be disturbed."

So I am not sure if the 401k loan payment should be stopped. Is it considered an indebtedness? Or would it be seen as a pension agreement? I called the trustee for direction, but have not heard back yet and wanted to get some opinions. I read some previous threads on the subject, but they were confusing and unclear to me, with no concensus among respondents. Has there been any clarification on these points?

Thank you.

Does anyone have any resources our references on acquiring a TPA or a book of business? I have been presented with some interesting opportunities to potentially purchase a TPA or blocks of business from TPAs exiting the business. However, I am not sure exactly what format is traditionally used in purchasing such an entity. I inquired with ASPA, but they do not have any resources available. Any assistance would be greatly appreciated.

I am evaluating proposal software for my new firm and am checking into Relius (as that is our Admin Software) and Pension Online. Should I be evaluating others as well?

I am not sure of the cost of Relius or if it is integrated into their administration software. I am printing the information to read through and have requested for a representative to call me to view a demo.

The Pension Online proposal software costs $995 per year. However, there are some flexibility issues per their website. For example, you cannot enter family relationships (you have to code everyone as 100% owner), deferral % have to be entered (not dollar amounts), matching amounts are calculated not entered, at a maximum you can designate two HCE rate groups for cross testing (the system default is one group for all HCE's - if you want an additional group you have to code each person in the census, you cannot allow an HCE to waive participation, ...

Thanks for your input,

Stephen

There's a debate going on about a question to which I don't know the answer, so I'm staying out of it. But curious. Thought some of you may have an opinion...

Corporation with 2003 fiscal year makes contribution in February of 2004, intended to be a deduction for 2003. Accountant files 2003 tax return and forgets to take the deduction. Question is, can they file an amended return for 2003 to claim the deduction?

1 faction says yes, don't be ridiculous, of course you can. 1 faction says no, the corporate return can't be amended to claim the deduction for 2003. Neither faction is presenting any cites or anything to reinforce their opinion.

I have no firm opinion, although I went on the IRS forms and publications website and gave a quick scan through the 1120 and 1120x instructions. There was nothing that jumped out at me that appeared to prohibit filing an amended return to claim the deduction for 2003. And frankly, I can't see any common sense reason why you couldn't. Anybody know the answer to this? Thanks.

It doesn't look to me like the delayed effective date applies to the QPSA changes? The announcement doesn't mention QPSA at all. And it says that 1.417(a)(3)-1 is delayed "with respect to QJSA". Does anyone have an opinion?