Consider the following:

CB = $0

Reconciliation account = $126,000 (due to LY AFC)

PUC NC = $0

412 charges = $12,000

412 credits = $0

AFC = $61,000

ERISA FFL = $0 (UC AL slightly > assets)

90% RPA FFL = $170,000

Min. Req = $73,000 (AFC + 412 charges)

Max Ded = $300,000 (100% of RPA)

Even though I don't get a FF credit, should I wipe my bases out next year due to the application of the ERISA FFL?

If not, assuming all other assumptions are met, wouldn't I need to force a loss bases each year to keep the balancing equation = $0 (since my UAL will be negative?) I guess that once the plan was well funded the AFC would no longer apply and I would get my ffc and all would be wiped out, but the process would look pretty strange to the sponsor.

Or just let the balancing equation go out of balance since my UAL is < $0.

Does anyone know of any companies that may offer some basic fiduciary training or any good articles that address fiduciary responsibilities?

Since there seems to be no reason to have the two plans anymore, I wanted to simplify life and merge the two plans into one profit sharing plan. However, I didn't set up the plan and have no idea about where the original documents are.

What steps would one need to take to: (1) Get plan origination information, if it ever existed; (2) Since it probably didn't, are there remedial steps to take ala communicating with the IRS, etc.; and (3) go merge the two plans once I'm confident they both are above board?

Any help would be greatly appreciated!

Ottrose

Are Employers required to allow for suspension of participant loan payments during military or non-military leaves of absence? Much of the language I have read refers to “if a plan permits” so does this imply that the suspension may be an optional provision in the loan policy? The final loan regulations stipulate that re-payments may be suspended without violating 72(p) but what if an employer's intent is for a person on LOA to continue making the payments while they're out?

Our loan policy addresses both types of leaves and allows an employer to choose whether or not payments can be suspended in either situation. I haven't been able to locate any specific language in the Regs. that says it must be done or if it is clearly optional.

Thanks!

We use the FDP document and in the prototype plan under the 4-step integration section it states, "the first step is 3% of a participants total compensation" whereas the remaining 3 steps use "included compensation". The problem it has created is that we have a number of plans that use the 4 step integration but also use compensation since entry date. So if a participant entered the plan mid-year, can you think of anyway to get Relius to calculate the 1st step on the participant's total compensation and the remainder on compensation since their entry date?

Tim

I will be 59 I/2 0n dec. 30 2005.I started 72t distrib. in Aug. 1999.Will I have to take a full distrib. between 8/05 and 8/06 since my fiscal year ended before dec.?

My head is swimming from all the HIPAA lately... I should know these things but I just can't think anymore...

Does the SPD for a self-insured plan need to be changed to reflect the plan amendment? Or is sending the NPP all you need to do? Can you incorporate the NPP into the SPD, instead of sending both?

Thanks!

We are terminating an underfunded DB plan (< 100 ees) which the ER will make sufficient. Under IRC 404(a)(1)(D)(i), we can deduct up to the unfunded current liability.

My question is whether the deluxe option under 404(a)(1)(D)(iv), where the entire unfunded amount, can be applied if the plan is not subject to the PBGC.

On the surface, the code seems to indicate that a plan must be covered by the PBGC for this to be allowed. However, a co-worker clearly recalls some post-EGTRRA discussion where people felt that a plan need not be PBGC-covered for (iv) to apply.

Any ideas w/b appreciated!!

If a participant takes a distribution for an unforseen emergency, is there any law that says he is obligated to suspend contributions for a certain period? If so, please advise where it can be found. Also, please advise how long the suspension period should be. Thanks.

I have a client that allows employees to opt out of their health coverage if their spouse covers them under another plan.

If an employee opts out, they receive $150/mo.

The TPA administering this plan provided the individuals who opted out of the plan with a 1099-misc indicating the amount they received for opting out in box 6, medical and healthcare payments.

Is this in anyway correct?

Shouldn't the client have included these amounts in box 1 of form w-2 as earned income?

Any enlightenment would be greatly appreciated.

Thanks.

Can anyone provide a cite or a reference that would detail how to handle a error where the participant's # of outstanding loans exceed the terms of the loan policy? For example, loan policy allows 2 loans, participant recevies 3.

I am trying to type up acceptable correction methods for various scenarios, but would like to provide cites and/or PLR or something to support my policies.

I have posted about this issue in a prior post and in that situation decided to deem the third loan. Would you view each scenario differently and either consolidate, allow the participant to pay off the extra loan, or deem the loan? Or, is there one correction method that should apply in all circumstances?

We have a Dr with a medical practice (Dr. owns 100%) and approximately 30 employees. The Dr. also owns 3 hotels (100%) that collectively have more than 50 employees. The employees of the hotels are paid through a management company. The Dr. does not want to cover hotel employees in his medical practice plan. Is there a way to do this?

A self funded plan is offering a HDHP as of May 1 which coincides with their

annual open enrollment period. They have a section 125 plan.

They wish to have two open enrollments in the future; one at the normal time of

May, and one in Dec to allow employees to enroll in the HDHP for the next tax year

if they choose to do so.

I know that elections to an FSA must be for 12 months, but is there a similar requirement for premium only 125 plans?

Can an employee maintain 2 open enrollment periods without jeopardizing the 125 status?

Thanks!

We currently offer a Medical Expense Reimbursement Plan for ee's who "opt out" of our health insurance plan, as well as a Medical Expense Reimbursement Plan for retirees. The plan docs for these two plans state that they are intended to meet the requirements for qualification under Section 105 of the Internal Revenue Code.

These plans were established long before I came to my position here and I haven't been able to track down much history as to how or who provided guidance on their establishment...

Here's are my questions:

Is a Medical Expense Reimbursement Plan under Section 105 the same thing as a Health Reimbursement Arrangement (HRA) under section 105?

Secondly, if yes. The plans I have are currently set up as "use-it or lose-it" plans. I recently read that under a HRA it IS permissable for the plan to carry over un-used funds to the next year. Is this a requirement of the internal revenue code? I'm trying to determine if I need to amend my plans as such.

When must catch-up contributions for 2003 be made to an IRA?

401(k) contributions have to be made from compensation currently available. They can also be made from year end bonuses, paid up to 2-1/2 months after PYE. Other than this "exception", a sole prop could not make 401(k) contributions to his 12/31/2003 plan (which covers his other 2 ee's) in 2004.

Can anyone confirm some or all of the above and if possible, provide a section/reg site that I can reference? A new client was told that as a sole prop, he had up until 4/15 to make his own 401(k) contributions to his plan, and have it count towards the previous year. I do not think he is right, and may need to show him the code section/reg to convince him.

Thanks

It is my understanding that this act does not change the 417e minimum lump sums. For example, if the plan's act eq is 5% and the 417e rate is 4.37%, the minimum lump sum would still be based on the 4.37%. My question is regarding maximum 415 lump sums. Would the 5.5% rate override the other rates for 415 or would the 417e lump sum take precedence since that would provide a larger lump sum than the 415 (if the participant's accreued benefit was at the 415 lmt.)?? Thanks.

This might have been asked before, but I can't find it so...

In attempting to pass 401(a)(26), what would preclude a DB offset plan being set up where the owners' benefits are not subject to being offset, but the ancillary employees' benefits are? Note that all of the ancillaries' DB amounts would be completely offset by their DC nonelective balances.

I have procrastinated on my taxes (again) and will be paying for it shortly.

My question is on my husband's W-2. During 2003, he had some money withheld during the year for a flex medical reimbursement account. Now that I am preparing our taxes, I noticed that the amount withheld for reimbursement is reported in box 10 of his W-2 as dependent care benefits. Problem is, we shouldn't have had dependent care benefits for 2003 since we have no dependents--no kids, no disabled persons, no one who would fit the definition of a qualifying person. Our household consists of two working adults--my husband and I--and a very spoiled kitty cat.

The instructions for Form 1040 say that amounts listed in Box 10 of the W-2 should be included in the income line (along with wages, etc. from Box 1 of the W-2), but I don't feel that the Box 10 entry is correct in our case. Am I way off base? Are we better off filing everything as it is, or should we wait for a corrected W-2 (if I'm not off base) and extend our taxes? The amount in question is only $300, but we already have to write a big check to the government, so I'd rather not increase our payment or do anything to trigger a question on our return.

By the way, I'm not an accountant. This is the deepest I've EVER had to dig into the instructions.

Thanks for all replies.

Can someone tell me whether an employer can make matching contributions from an employee's compensation? Here are the facts:

Employees are permitted to make elective deferrals under the plan. There is a discretionary matching contribution and the source of the match is the employees' compensation (pre tax). The employees earn a salary and a % of gross revenues as their compensation. If the match is not made, the employer simply pays those amounts to the employee as compensation.

This is how the employer was operating before we got involved, so we are not sure what authority they are relying on. Would this situation change at all if the employees were owners of a partnership?