We have a participant who is the beneficiary of his wife’s qualified Plan. His wife has passed away and he is asking if he can roll the death benefit (from the deceased qualified plan) into his qualified plan. His plan does allow rollovers but I thought there were regs about death benefits being rollover eligible.

Any help would be great!

418(b)(7) states that the Unfunded Vested Benefit is the difference of the value of the vested benefit, less "the value of the assets of the plan".

I couldn't find anything else defining "value of assets". Is this actuarial value or market value?

P.S. I know this probably belongs on the mult-employer board, but it wasn't seeing much action over there.

I have a client who has a population of EE's who are strictly commission who are eligible to participate in the plan.

Question is, if the monthly commission is not enough to cover deductions can the employee be switched to a direct bill status and not lose their pre-tax benefit?

Also, any other advice that anyone has on administering this population in the most effective manner would be greatly appreciated.

Thanks!

Facts: Client has about 7,000 employees at 28 different companies, all in a controlled group. All but 1,000 employees are covered by fully-insured health/dental plan. The remaining 1,000 employees, who are all employed at one of the subs., have a choice among 3 self-insured health/dental plans. There are HCEs in both the fully-insured plan and the self-insured plans.

105(h)(8) states that the 105(h) discrimination rules apply on a controlled group basis. The benefits test in 105(h) states that any benefit provided to a HCE must be provided to a NHCE, and the regulations tell us that we look at both the type and value of benefits. The regulations also tell us that we can aggregate plans for purposes of satisfying the 105 non-discrimination tests. Further, the regulations tell us that we can offset benefits provided in other plans for purposes of satisfying the tests. There seems to be little guidance out there on how to practically apply these rules.

What if there are some components/benefits in the self-insured plans that are more favorable than the fully-insured plans? In comparing the plans, some of the benefits in the fully-insured plan are better than the self-insured plan(s) and vice-versa. Also, what is a "benefit"? What if a copay or deductible in the self-insured plan is lower than a copay or deductible in the fully-insured plan - is the amount of a copay/deductible a benefit? What if some surgery is covered in the self-insured plan(s) that is not covered in the fully-insured plan?

There is certainly no intent to discriminate and the differences in the plans, from a practical standpoint, seem that they should be ok. However, the benefits test in 105(h) is strict in that it says every benefit offered to HCEs has to be offered to NHCEs. So, if cosmetic surgery is covered in a self-insured plan (which would cover an HCE) and is not covered in the fully-insured plan at another subsidiary which has NHCEs participating, 105 is violated because there are NHCEs out there who cannot get this benefit? Surely this can't be the outcome . . .

Any thoughts on this would be appreciated!

A DB plan had employee contributions which were suspended over 20 years ago. A participant over 65 is now retiring. Assuming the participant leaves the accumulated value of the employee contributions in the plan...the plan document says that the employee portion is ADDED to the accrued benefit under the plan. This is done by taking a certain percentage of the accumulated value of the employee contributions. Does the accumulated value of the ee contributions at late retirement date need to be compared to the actuarial equivalent of the accumulated value at normal retirement date? The plan document does not specifically say to treat the additional employee contribution portion like so, but the accumulated value at Late Retirement is less than the actuarially adjust value from normal retirement date.

Thanks.

Assume 401(a) plan has operational defect for a few years or maybe even only one year. Employer discovers the error and corrects it prospectively only, but not to take advantage of any of the available EPCRS alternatives. Assume timely and accurate 5500s with Schedule Ps filed every year.

I believe the IRS' position is that the plan remains subject to disqualification FOREVER. In other words, even if IRS examines the plan AFTER the SOL has closed on the last year in which the defect occurred, it can still disqualify the plan currently and assess back taxes, etc., for all open years. However, I'm not sure where this position is stated specifically (other than the inference from the EPCRS Rev. Procs.). Can anyone provide a citation?

What testing requirements does a Safe Harbor Enhanced Match subject to when they made an additional pro rata $25k contribution to the plan? Do they lose their safe harbor status?

In order to give the otherwise excludables a minimum of 3% should the plan have a separate group for otherwise excludables so as to not give them the gateway minimum (5% in this case)? Or is it okay to to just leave them as part of the NHCE group(s) they are in?

We are a 3rd party TPA firm that handles "vanilla" db and dc plans. We have been approached to do the admin for 412(i) plans and told they are very easy to do. What are the are the reporting requirements? Same as the DB except no B?

The Sales company would do the doc, compute the amount of inurance needed and we would only prepare the 5500. I am not sure if we would need to do any testing or not.

Anybody have any thoughts about this?

Do do purely admin, do you need to fully understand these 412(i)??

Any guidance would be apreciated.

The doctor has recommeded a tutor to help the child out the disorder. Would this expense be reimbursable under the medical reimbursement account? I can't seem to find information anywhere. any help would be appreciated.

A plan was amended in 1995 to say that distributions could not occur for terminated participants until NRA. Am I correct in telling the ER that the pre-95 money must always be available to a terminated participant?

I need to prepare a Wrap document for a union's health/welfare plan which includes: medical (insured); life insurance (insured) ; prescription (self-insured).

I have never done this before. Does anyone have any samples or suggestions where I can find some.

Any help would be greatly appreciated.

Thank you.

418(b)(7) states that the Unfunded Vested Benefit is the difference of the value of the vested benefit, less "the value of the assets of the plan".

I couldn't find anything else defining "value of assets". Is this actuarial value or market value?

I have a client who has a nonleveraged ESOP and they currently have individual trustees. They are changing recordkeepers and are considering acting as custodian of the stock certificates held by the ESOP themselves. I wanted to try and explain the ramifications of safeguarding the assets themselves. Does anyone know of any good articles that discuss this or can you give me a brief outline of the issues they would be running up against?

I am trying to run a couple of scenarios on a plan that has 3 HC's (two owners and the son of one of the owners) and 6 NHCE's. The two owners want to defer the max and then receive enough in the PS piece to get them to $40,000. Prior to this the plan was run as a standard 401(k) plan with a integrated profits sharing contribution amount that maxed the HC's (usually was over 17%)

They want to see two scenarios"

1. 401(k) safe Harbor plan with a 3% non-elective contribution allowing all three to get to 12,000 and then making a profit sharing contribution to get them to the max. When I try to do this and include the son for a share of the profit sharing, I start failing 410b and the Average Benefits Tests. Am I still subject to these tests?

Do I have to include the son in on the ps piece or can I just leave him with the deferral amount. (he is only 26 and makes less than $50,000)

2. The other scenario they want to see is what will happen in a cross tested plan. Can they still defer and be subject to the ADP test and then spread the profit sharig on a cross tested basis? Am I still subject to Average Benefits test and 410b?

Sorry if I am confusing everyone.

Hello,

Hoping someone might be able to provide some insight.

A plan converts from one recordkeeping vendor to another. In setting up the existing loans that are being converted, the amortization schedules do not identically match the initial schedules probably due to a minor difference in calculators in the two systems. The result is that interest credited is a small difference each period (from $.01 to $1.00). This results in an underpayment or overpayment by (for the most part) a few dollars of interest at the end of the loan.

Has anyone ever run into this?

Although I have found nothing to support it, do you think the IRS would be overly concerned in this instance of a participant paying themselves a few dollars more or less in total interest due to the system differentials in converting the loan?

Any feedback will be greatly appreciated.

Sincerely,

Andmik

How would you withhold (20% mandatory tax) for the the following scenario?

Total account balance = $38,000

After tax basis = $3,000

Loan Balance = $5,000 (to be offset at distribution).

The participant chooses to receive his after tax basis in a check payable to him, offset the loan, and rollover the remainder.

Would you send the participant a check for $2000 (basis - $1,000 tax liablity), or send him a check for the $3,000 (basis) and withhold the tax liability from the rollover portion?

What if we replace the $5,000 loan offset with a distribution of employer securities to the participant. Does that change anything?

Thanks!

How long should records be retained related to the 401(k) Plan?

I'm not asking about the reporting stuff, which I know is 6 years, but the information used to calculate contribuions:

1) Payroll records

2) Employee Election Forms

3) Quarterly valuation reports

4) You get the idea.

Thanks,

Does a Schedule C need to be filed with the 5500 in each of these cases:

1. A different Enrolled Actuary (EA) within the same firm signs the Schedule B this year vs. last year, either because prior EA is unavailable (due to vacation etc) or case loads are reshuffled within firm. Prior EA is still at firm.

2. The EA that signed Sch B last year leaves firm. The Sch B this year is being signed by another EA within the firm.

Thanks.

Regarding the limits for 2003, did :

$185 go up to $190?

$100 go up to $105?