When I read the Form 5500 instructions, I don't see an exemption for 457 plans, but something in the back of my mind says that they don't need to file a 5500. Can someone confirm that for me?

2 questions:

1) if 457(b) non-gov't plan has NRA of 65 and does not allow election of different retirement age, and employee presently is older than NRA, is employee unable to take advantage of the catch-up?

2) if plan is retroactively amended to increase deferral limit in accordance with EGTRRA for years prior to current plan year, can contributions be made retroactively (in addition to current year deferral amount) to make up for contributions not made in prior years b/c of lower limit? I suspect no, but worth checking.

Thanks.

Hoping someone can help me out. I've reviewed as much of the regs as I possibly can and I continue to be at a loss on this issue.

Scenario:

We have a fully-insured medical plan via a local insurance carrier.

We also have a contract with a COBRA administrator, who handles all COBRA roles/responsibilities associated with that same fully-insured medical plan.

While we receive no PHI from the fully-insured carrier and thus are out of the loop for most of HIPAA Privacy Requirements, our COBRA administrator is saying that the employer/plan needs to have a signed business associate agreement between us --the employer/covered entity (they are saying) and our COBRA administrator (business associate).

I just don't see where this is required?? If it were, that could mean that we are on the hook for coming into compliance with all HIPAA Privacy Rules by signing the BA agreement as a covered entity.

Husband has insurance for himself and for two children through his employer A, spouse has insurance with her employer B. Shortly after termination from employment due to voluntary resignation, husband and wife have a new baby. Question: Since Husband has had an "event" he is eligible for COBRA and could he add the new child to his insurance via COBRA related benefits from employer A. In addition, can't Spouse could elect to cover new child with her employer (B) since there is a change in family circumstance? To complicate the matter, Husband starts new job with Employer C 10 days after birth of new baby. What are parents options as to coverage? Who should be sent claims for new child just born? What are rules for pre-existing conditions and/or whether new employer must accept claims for new child? Thanks in advance

Proposed CB regs have apparently been withdrawn

http://www.treas.gov/press/releases/report...ement200457.pdf

The definition of alternate payee includes a spouse, a former spouse, or a child or other dependant of the participant.

So an alternate payee can be a current spouse right? When would this happen?

Can the same company sponsor more than one 401(k) plan to benefit certain segments of its employees? For example:

One 401(k) plan excludes all office workers and has a profit sharing contribution.

Another 401(k) plan excludes all but office workers and has a match.

Assuming coverage requirements are met, are there any issues?

We have an IRA customer living abroad. He wants to make his 2003 contribution today because that is when he files his 1040. However, in looking at the regulations it appears that June 15 is an automatic extension granted by the Treasury for filing of his return, not the return's due date, and thus he would have to make IRA contributions by April 15 for it to be treated as made in the prior year. Am I correct in this analysis? Has anyone else had to deal with this issue?

I have a client who had a late salary deferral deposit in September 2003 that was corrected in February 2004. The plan year is the calendar year but the employer's fiscal year is July 1 to June 30. Because the late deposit spanned 2 plan years (2003 and 2004) but only 1 fiscal year (7/1/03-6/30/04), I am a little confused on how to complete the Form 5330.

I was thinking of filing one 5330 with the transaction listed twice in Section VII, once with the date of the late transaction and the tax on the amount involved in 2003 ($209 in lost earnings) and a second time with a date of 1/1/04 with the amount involved in 2004 ($92 in lost earnings). Does that sound reasonable?

Any advice on this would be appreciated. I can't seem to find very much guidance in situations where the fiscal year is different from the plan year.

A tax exempt entity buys a taxable entity. Tax exempt entity maintains a 403(b) program with a matching contribution made to a qualified plan established by the tax exempt entity. I read the coverage rules that I can set up a 401(k) plan for the taxable entity with matching contributions provided that all employees of the tax exempt entitly are not in the 401(k) plan and that the 401(k) plan covers 95% of the employees of the taxable entity. Is this correct?

Is there also an issue if the matching contributions for the taxable entity goes to the tax exempt entity's qualified plan?

I'm considering a re-do of a 1/1/2003 DB valuation using 90% of the weighted average 30-year Treasury to create my Supermax.

An Additional Funding Charge is avoided since my funded % is over 90% using the "gateway" rate.

Also, the lookback rules of PFEA 2004 seem to indicate that I can recalculate using weighted corporate to see if quarterlies are necessary for 2004 - the funded % is over 100% and so quarterlies are not required.

Two questions : (1) Is my read on the lookback rules correct for 2004 quarterlies ? and (2) will using the low end of the range for max purposes force me to use this same rate for some other purpose ?

Thanks in advance for your time.

The final 401a9 regs were issued today (Monday), and my quick speed read indicates there is still no "account balance" method for determining the RMD in a DB plan (unless there is a single sum distribution). Does anyone come to a different conclusion? I know that some feel that the account balance method was never allowed unless there was a lump-sum distribution, but my impression is that it was common practice. For many of my clients, this will increase the RMD by a factor of 2 or 3 times, prompting them perhaps to terminate their plans and start a new DB plan. It doesn't seem like the IRS was concerned with equity between DB and DC plans on this issue. The regs state that employers do not have to comply with the final regs immediately, they can use a reasonable interpretation of 401a9 for the years 2003, 2004, and 2005. Does this mean we can continue with the account balance method until 2006? I suppose the answer is shades of gray based on a risk comfort level, unless it is in the plan doc and one has a favorable letter.

I'm a little confused on the issue of a business being able to take advantage of the tax credit for starting a new plan. For example, if an employer starts up a 401(k) plan, never had any other plans before, and the plan covers NHCE's, it is eligible for the tax credit. 50% of start-up admin costs, up to $500 for each of the first 3 years of the plans operation.

My confusion is that the credit seems to apply only to start-up costs. Is this true? If so, how could an employer, say in year 3, still be paying start-up costs? Also, would this mean that an employer would have to be charged at least $3,000 for start up costs (wishful think document providers:) in order to achieve full tax credit deductions of $1,500 over 3 years? I guess if the credit applies to on going admin costs, the answer is easy to figure out, as new admin costs apply year to year. But it seems to me that the credit is just for startup costs, which is baffling me as to how to apply the credit(s).

thanks

I have a rehired participant who would like to "buy back" his forfeiture. Does he have to repay his employee deferral in addition to his employer monies to buy back the forfeiture? The document doesn't seem to make a distinction between the money types, so I would assume the answer is yes.

A public school teacher's association has a VEBA for medical expense reimbursements. The plan is funded by the school district as part of the union contract.

Some teachers are letting the assets accumulate in the plan under the assumption that the balance will simply be distributed to their heirs or the estate at death.

To my way of thinking, the VEBA wasn't established to provide a death benefit to heirs. Is this permissible? If not, is there a regulation I can refer to?

If an insurance company pays claims on 12-31 and bills the client on 1-1, for Schedule A purposes, are the claims paid on 12-31 included? The 5500 workbook provides that most Schedule A information is provided on a cash basis method. Additionally, the workbook provides that for line 8b(1), to report actual claims paid, incurred, or charged. Based on the above, the information provided by the insurance company should include the claims paid on 12-31. Does anybody have any thoughts?

How do you report a mutual fund that was sold when there have been years of monthly buys and occasional sells (for participants cashing out). Purchase Price? Cost of Asset? Net gain (loss)? Is it just for the current year or since inception?

Thanks.

Kris

Ok... is this a first? I need some $ to grow my business.... I have a client that has a pension... if he invests in my company would that be a prohibited transaction? If it is pension assets I am sure it will be... but personal $$?

I have been asked a question on a 401(k) plan.

A plan has 1,000 eligible employees BUT only 60 defer. Does this plan require an audit because they have over 100 eligible OR can they bypass the audit due to the limited number participating.

My uninformed opinion is that the audit is required.

Thanks for any and all opinions.

Is anyone familiar with the rules relating to participation and/or accrual in a DB plan in this situation:

An employer has maintained a union shop, and was contributing to a collectively bargained plan for his union employees. The employer has never had a plan of his own.

This business is no longer "unionized" and he wants to start a qualified plan of his own. The employees are still the same people (ie they are no longer in a union). Can the plan, for eligibility/vesting purposes, assume that these ex-union employees have a date of hire as of their exit from the union?

Likewise, if the new DB plan is a unit credit plan with past service credits, for accrual purposes, can the plan ignore the union employees' service while they were in the union?

Thanks for your thoughts.