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?

We are reviewing a plan document that has four or five "slap-on" amendments. I recall seing something somewhere that a plan sponsor must restate a plan in its entirety after the plan has been amended a certain number of times. Can anyone confirm this with a cite?

Has anyone heard that these regs have been postponed to be effective for annuity starting dates in early 2006 instead of 10/1/2004? I've been told by an attorney that this is the case but can not find anything concrete online or otherwise.

Question:

What is an employer to do if they made a rollover distribution for an terminated employee over the age of 70 1/2 instead of making the Required Minimum Distribution????

Thanks in advance for your comments.

Fred

If a qualified plan has frozen their assets (no more contributions), but is not forcing the participants to remove their funds, is the answer to Schedule H, 5a yes or no?

Employer in a controlled group sponsors a 401(k) plan. The (k) plan is the only plan in the controlled group and the employer is the only participating er. The only contributions being made to the plan for the testing year are (k) before tax deferrals.

The plan fails the ratio test under 410(b). So we move on to the nondiscrim. classification test / average benefit test. The plan satisfies the nondiscrim. classification safe harbor but we are having trouble determining the average benefit percentage for each EE.

1.410(b)-5(d)(2) says only employer provided contributions are taken into account in determining the avg. ben. % and "employee contribution" are not taken into account. What is an "employee contribution" for purposes of this section ?

If employee contributions include (k) deferrals, it seems to me the plan satisfies the avg. benefits test because all ee's would have a 0 avg. benefit %, and 70% of 0 is 0. If "employee contributions" has the traditional definition of after-tax deferrals we have a problem.

Any help is appreciated and sorry for long post, but the facts always help.

Can anyone share, from a practical standpoint, how they handle COBRA continuation coverage in connection with an EAP? For example, do you send a former employee a notice and require the employee to elect coverage under the EAP? If the former employee wants to be covered under the EAP, do you collect the premium amount from the employee? Because of the manner in which most employers pay for their employees to receive the benefits from an EAP, I'm not sure how practical it is to collect premiums from former employees who want to be covered. I appreciate anyone's thoughts!

I've always understood that a restricted HCE in an under funded DB plan could obtain/post a bond to cover his benefit in the event of a "pre-mature" plan termination so the plan would have recourse (presumably against the bonding company) if under funded at plan term date. Is this a realistic avenue ? Does anyone know of any insurance coverage that would offer such a specialized bond. I've seen some type of IRA-escrow account used in a situation like this, and also a segregated account (within the same plan), but have never pursued the bond option until now. Any thoughts or opinions are appreciated.