How is an employer required to handle unsubstantiated claims at year-end? Does a W-2 adjustment need to be done to reverse the pre-tax benefit of the unsubstantiated amount?

Our TPA is telling us that this is not the case - that employers can just "write it off", and I'm not sure what that means.

Thanks.

I am new to the forum and was wondering if anyone was familiar with the military's thrift savings plan? I am a new investor and wondering if that would be a good choice or if I should start a Roth IRA or something else? Anybody have any advice?

Thanks

We have a participant who used a false name and social security number for several years. The employee was recently fired when the employer discovered this. Question now is about the plan.

What happens to the employee's accrued benefit? Plan is silent on this issue.

Seems to me that the employee accrued the benefit so should receive it when he becomes eligible for benefits. I'd like to go on more than my gut reaction.

Anyone ever have this problem? Thanks.

Can a sponsor put the SPD on the company's intranet site and/or send it via e-mail? I thought e-mail was good, but not sure about intranet site.

Employee age-60 enrolls for for family high-deductioble health plan (HDHP) coverage (EE+Spouse). Spouse is age 66. EE enrolls in employer's health savings account (HSA) under IRC section 223. For 2004, may EE make the maximum HSA contribution permitted for a taxpayer with family HDHP coverage (i.e., lesser of family deductible under HDHP or $5,150) or, must the EE's tax-favored HSA contribution be reduced due to the Medicare entitlement of the spouse?

A TPA firm is being told by a client that the applicable premium for COBRA purpposes must be determined on an actuarial basis for each possible COBRA election scenario. For instance, suppose an employee has family coverage, but has a qualifying event and elects COBRA for only the child for whatever reason. The TPA firm is being told that it must determine what the cost is of providing coverage to that child on an actuarial basis. The TPA firm currently just provides that the cost will be that of individual coverage. However, based on this information, they will have to determine the actuarial cost of providing coverage to a child. Back to the above example, if individual coverage under the plan is only $50, but actuarially, the cost to the plan of providing coverage to a child is $30, COBRA is based on $30... any thoughts? I know that 4980B(f)(4) provides that for self-insured plans, the COBRA premium is based on actuarial assumptions, but I have never seen this before.

What is the penalty for not withholding the mandatory 20%. A client did not withhold the mandatory 20% for a distribution that occured in 2003. The accoutant is blaming me for not being more communicative. We just found out about it.

If a spouse's employer of an employee enrolled in a 125 Plan (opting out of medical) imposes a plan design change eff. 3/1/04 and also imposes additional contributions of its employees, can the employees spouse drop coverage and enroll in the employee Plan? What if the spouses employer does not implement the cost increases until a later date? Are there two qualifying events (1) the plan design change - curtailment and (2) cost change? Is it of any importance if the spouses employer has a 125 Plan?

New PLR May 10 2004 request on behalf of Federal Credit Union references an April 9,2004 PLR made it clear that a federal credit union, as an instrumentality of the Federal Government , was not eligible to establish a nonqualified deferred compensation plan under Code 457, it was silent on what code section does apply for nonqualified plan of federal credit unions.

Any ideas on nonqualified deferred copensation plans for Federal Credit Unions?

Schedule Attachment for Line 4a- DOL suggests we reports late deposits and

the "Total that Constitute Nonexempt PT"- should we report that late

contributions not corrected by VFCP or the "amount involved in the PT" as shown in a 5330?

Am having difficulty understand the issue. How do you know if early retirement benefit and lump sum are "subsidized" or not? Have been asked many questions regarding this and honestly don't understand it myself.

Can someone give me an explanation and example?

A DB plan defines average compensation as the high 5 consecutive years. If in one of those years a participant did not work 1,000 and receives no credit for service can you still use the compensation in the average? It seems that the rule regarding double proration deals with plans that require more than 1,000 hours for benefit credit and give credit for a partial year. I know many documents allow you to exclude from compensation any year that you do not receive credit or have a break in service. This document does not address this.

I am having a harder than expected time trying to figure out how a safe harbor plan with additional nonelective contributions completes the Schedule T. If the 3% safe harbor is treated like any other nonelective contribution how would you test if 1) all employees are eligible for the safe harbor but 2) only employees with 2 YOS, 1000 hours and employed on last day of year are eligible for the additional nonelective. The coverage percentages is quite different under 2) than 1)

Please help.

Thanks

When the company deposited their required Top Heavy contribution- the investment company labelled it as a QNEC? Should it be done this way? Or is it ok to leave it this way?

I'm wondering if I should move the money from the QNEC account into the discretionary account. From my experience, only ADP/ACP corrections were called QNEC's.

Any insight for me?

Thanks,

Rachel

A company owns five different firms throughout the US. All are independently run, have different names, etc. The CFO of one of the firms wants to offer a 401(k) plan to his employees. Would it be required that the other 4 firms also offer a 401(k)? Is the answer different if the CFO of each of the five firms owns 25% of their respective company? Thanks in advance for any insight....

There really isnt a proper topic on the boards for this, but I was wondering if anyone had suggestions for where I could check out TPA companies (for competence/repuatation). I am going to start looking in North Carolina for a new position. Because I am out of state its tough to "know" the firms like I know the TPA firms around here. Right now I am working at a great small TPA that really knows its stuff! I am not sure how to know a quality TPA from a bad one in another state. (and i know there are lots of bad ones out there!)

I know in Plan Sponsor magazine one group in Charlotte was rated #1 this year, so I am going to check them out...but I really like working for small firms. Its a little harder to check out smaller firms and how they run things.

If anyone has any suggestions, I would appreciate it! (aside from the BBB, that is obvious but not that reliable).

Thanks!

Client (owner) wants to segregate his account in DB plan and he is beyond NRA and plan allows for post-NRA distributions. He does not want to terminate plan due to various illiquid investments in plan that an IRA would not easily hold. Is there any legitimate argument that I can apply 415 limit check only at time of segregation vs. at future distribution date (from segregated account), or must I apply the 415 limit check even on the segregated account when it eventually is paid. I have some concerns that the trust investments might grow enough to exceed his 415 limit sometime down the road.

I have a governmental target plan that is decreasing the interest rate from 5.5% to 5%. I am taking the PV based on 5% pre & Post retirement and subtracting the Theoretical Reserve which was based up to this point on 5.5%. This is producing a higher normal cost than the client was prepared for. Am I missing something?

Contigent Beneficiaries are his children. If Participant died first, benefit goes to his kids. If not, it would go to her estate. Both parties agree that time of death was at the same time and are willing to split benefit. Benefit in excess of $1 mil. They want to keep tax deferred status. Any opinion or cites on legality of this and tax options they may have??

Client failed the ADP test. There is only one HCE (owner) who took a hardship distribution in 2003 for all that he could. After the year end testing was completed it was determined the HCE does not have enough money in the plan to cover the ADP correction.

What are our options here? It seems pointless to contact the HCE to have him "give back the money" - when he was in a hardship situation to begin with, just so we can turn around and complete the correction the right way?

I would rather correct the 1099. However, I read that when it is not a full distribution from the plan (in the case of a terminated HCE) then it is not that clear.

Any advice would greatly appreciated.