Does this bill include local government employers?

I am comparing two formulas that calculate EBARs (I'm a beginner).

1. ERCTBN * 1.085^(NRA-AA)/95.382/AVG Monthly compensation

2. ERCTBN * 1.085^(NRA-AA)/7.9486/ANNUAL Compensation

I'm using the UP-84 mortality table and 8.5% interest.

My understanding is that the APR of 95.382 in formula #1 = 7.9486 multiplied by 12. I'm assuming the 7.9486 is a monthly annuity rate and multiplying it by 12 converts it to an annual rate. Please correct me if I'm wrong.

The software program that uses the first formula #1 takes into account compensation from plan entry for a mid-year entrant if I want it to. For instance, if an employee enters the plan 7/1/2003 and has compensation from 7/1/2003-12/31/2003 for 120,000, the system calculated the avg monthly compensation to be 20000.

The second formula is used in a spreadsheet. If I want to use full year compensation for everyone in the plan, then I see no problem. If I want to use compensation from plan entry, I don't think the formula can handle that. If I enter compensation from plan entry as Annual Compensation, then the formula assumes the compensation I input was for a 12 period. Does this make sense? Can anyone tell me how to adjust the formula for mid-year entrants? Would I prorate the annuity factor?

Any help would be greatly appreciated!

The trustee of a defined benefit plan makes an investment in what seems to be a legitimate investment but is later revealed to be a Ponzi (pyramid) scheme. The plan was an early investor in the scheme and realizes a gain of over $30,000 in the investment.

The investment is revealed to be a Ponzi scheme and later investors bring a class action against to recoup their investments. Can they obtain recovery from the DB plan? Can the DB plan participants sue the trustee for fiduciary breach, even thought the plan made money on the investment?

If (1) a participant forfeits unvested benefits, (2) as a result the AP forfeits some benefits, (3) the participant is re-hired and restores his or her unvested benefits, then must the plan (4) allow the AP to restore the forfeited benefits?

I would like to know if there are any circumstances where a participant can limit the amount of reportable income to the amount that is paid as an installment. Example: NQ Plan is a 457(f) plan. Substantial risk of forfeiture is 10 years of future service. The funding vehicle is an annuity payable over the lifetime of the participant. The first payment commences at the first of the month following the 10th anniversary of future service.

Is a present value calculation of the annuity determined as of the 10th year of service (and the taxability determined), or can the reportable income be limited to the amount of installments received dueing the 1st tax year, then the 2nd tax year, etc.?

Thanks for any guidance.

Company blows 415 limit because RK "forgot" there were three plans. Plan goes through VCR and gets IRS approval to correct. RK, instead of allocating excess matching contributions to suspense account, distributes to participants. Full amounts reported on 1099-R. Transaction was also not reported properly on 5500.

Sometimes I wonder why I love my job.....

Is is permissible to invest in separate accounts and exchange traded funds?

I have a plan that would like to force a distribution of a death benefit. However, the amount is over $5,000 and the surviving spouse does not want to take the money right now. I recently read the following sentence in the 2004 Pension Answer Book under Q 10:55, "A surviving spouse can demand the surviving portion of the QPSA not become payable following the participant's death until such time as the participant would have attained age 62 if the amount of the benefit exceeds $5,000." Does this mean that if they spouse's benefit is still in the Plan 2 years from now when the participant would have turned 62 the benfit can be paid (forced) out without the spouse's approval and signiture?

Please help!

Are 412(i) defined benefit plans required to file a schedule B with the 5500?

A Safe Harbor 401(k) plan that only has the non-elective or the match, and no profit sharing contributions, is deemed a non-topheavy plan. If the employer also maintains a SEP with a 3-year wait, does this still hold true?

I have a question regarding FSA's when employees are laid off and receive salary continuance for their severence payout. (During salary continuance, the FSA contribution would still be taken out.)

What is the cutoff date for claims that can be reimbursed? Is it the last date of active employment or when the coverage ends? (To clarify, I'm asking about the date of the claim - not the timeframe to reimburse the claim.)

From what I read in the earlier post, as long as the ee is making deposits then they can incur claims. I couldn't find the regs on this situation.

Thanks, Greta

The 5307 form & instructions refer to both "opinion letter" and "determination letter." I have always thought these terms referred to the same document- the letter issued by the IRS to confirm the "qualified" status of a plan's written document.

Is there actually a distinction? Does anyone know why both terms are used?

Participant Terminates receives a distrib. @ 20% vesting. Forfeits the other 80% at payout. Rehired the same year; works 1,000 hours in the plan year, gets a profit share contrib. but no forfeiture restoration. Obviously the 1,000 hours bumps his vested % to 40%. In calculating the vested balance Relius is including in additional 20% from the forfeited amount.

Example:

Balance @ 01/01 is $4,000, 20% vested. Payout at 05/01 is $800. Rehired 07/01, works 1,000 hours from 01/01-12/31; gets contrib. of $2,000. At 12/31 participant is 40% vested. Relius says vested balance is $1,600 ($800 of the $2,000 plus an additional 20% on the $4,000 ($800)). Is that correct? At first blush it seems nonsensical that participant would get additional vesting on amounts previously forfeited & not restored.

I am trying to figure out if an employer can pay the employee directly for individual insurance (or insurance the employee gets through a spouse's group health plan) without it being taxable compensation. I tried several searches and came up with a lot about using a cafeteria plan of one employer to pay premiums to another employer, but my question does not involve a cafeteria plan. Does the taxation depend on whether the husband gets a check made out to him or whether his employer pays the insurance company directly?

Thank you in advance for any help you can provide.

Governmental employer offers employees a choice between health insurance or an employer contribution to a 457 plan for the employee. Is a cafeteria plan required?

Is this legal? If it is, where might I find some official documentation that addresses this. Also if it is, could a Flex participant be reimbursed from their Health FSA for this expense?

Thanks so much for your help.

I have a client that provides retiree medical coverage to certain officers through a fully insured medical plan at no cost to the officer. As you would expect the premium for those under age 65 is astronomical. For those over 65 the company buys a medicare supplement.

The company has asked if they to keep these individuals in their self-insured plan for at least 18 months (presumably under COBRA) without charging them the COBRA premium.

My reaction was no, but I am having trouble identifying specific authority. The non-discrimination rules under 125 or 105(h) would not seem to apply. Any thought?

Thanks for any assistance.

We currently have our accountants perform financial audits of our church plans, but due to the recent increase in the cost associated with these audits, we are trying to determine whether we should cease the audits (since we are not required to have the plans audited in the first place). Is there any benefit to performing an audit? Does an audit in any way afford us any protection against possible law suits? Any guidance on this matter would be appreciated.

thanks

Just wondered if most everyone is updating to 9.0 now or waiting. In the past, we've usually held off on updating to a major release until the bugs have been worked out. 9.0 seems more like some of the interim releases we see, so wasn't sure if there was any downside to updating now. Would be interested in opinions.