Does anyone know anything about new state regulations that go into effect Jan 1, 2004 which say that financial institutions (maybe not exclusively, but inclusively) cannot mail anything out with ssn's on them? I need to find out which states adopted this but i dont know where to start looking.

thanks Lisa

...Is National Talk Like a Pirate Day.

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Arrrrr.

I know you can’t designate your will as your beneficiary. But what if you designate the trustee of your will… is that the same as designating your will as your beneficiary?

Also, given that you can’t designate your will, doe sit mean that is you did put your will on the document, you really do not have a beneficiary designation and the IRA agreement provisions must apply?

Thanks in advance.

This is not something we generally deal with, due to handling only small plans. However, we recently encountered the following:

Corporation A maintains a profit sharing plan. Corporation A has all of its assets (not stock) purchased by corporation B. The terms of the deal are such that all of the employees of corporation A, except for 2, will be employed by corporation B. They intend to do a "partial merger" of the plans - corporation B's PS plan will accept the transfer of all assets and liabilities of the corporation A plan, with respect to those employees of corporation A who will now be employees of corporation B. After this "partial merger" corporation A will terminate the corporation A plan.

First, it appears that a 5310-A is not required in this situation, where 100% of the account balances in a DC plan for the affected employees are transferred. Agree/disagree?

Second, are there any tips on specific issues to watch/avoid? This "partial merger" appears to me to actually be a "spin-off." Is the process really as simple as doing a valuation of the account balances, and transferring those balances directly to corporation B's plan, then processing a normal termination of A's plan? Other thoughts? Appreciate any input.

I am conducting an audit of a 401k plan and during the course of the audit discovered that the Plan sponser has failed to transmit contributions timely.

This problem was unique to the beginning of the year. The plan Sponsor changed TPAs in effective March 1st.

When the sponsor went to remit its contirbutions in March for February, the new TPA refused to take the contributions until they were transmitted in the format that the TPA is a customed to.

The client uses ADP spent 2 months trying to get the necessary reports and encrypted files the TPA required.

My position that these are late transmittals and need a schedule G and 5330 filed for excise tax and make up of lost earnigs for the 2 months.

Is there any way to get the exise tax waived? This was due to the transation of TPAs and not the sponsor.

Thanks

I am a CPA who recently has come across in the course of performing different audits missed salary deferrals on Manual Checks, Special Payolls, Commission Checks, etc.

Who is liable for the missed deferrals? Does it fall back to the plan sponsor as a prohibited transaction? Does the plan sponsor have to recalculate the payroll taxes and social secruity for that period missing the salary deferral? These are all 2002 transactions all the necessary fillings should have been done by the EE and ER. I am want to make sure the W-2s, 941s etc don't need to be amended.

Would I now need a Sch G and 5330 for excise tax?

Thank you in advance,

Need a gut check. Anything wrong with this?

CY plan year, val date at BOY. Aggregate funding method. Sponsor gasps when told of the 2003 minimum funindg requirement and asks to freeze the plan, as of the end of current year. As of 10/1, we amend the plan as of 12/31 and re-do the valuation results, using only one year of future service. (Assume the 204(h) notice is adequately distributed.)

The IRS has stated (see Gray Book 99-6) that the method must be changed from aggregate to an individual method if the plan is frozen. However, that statement clearly is focusing on the year(s) after the freeze is effective, not the previous year. Any problem with using the Aggregate method for the 2003 year? Does Rev. Ruling 77-2 inhibit my process?

We have a retiree health plan that covers employees with 15 years or more of service for life. Periods of unpaid leave are excluded from credited service. We want to make sure that we don't inadvertantly cause any problems with the ADA, FMLA, etc. I haven't been able to find much guidance since vesting in retiree health isn't required the same way as with retirement plans.

A group member becomes disabled. The employer assures the employee that all group health and life benefits will continue thoughout long term disablility.

The employee and employer continue to make premium payments to the carrier and all written communications with the "ee" indicates coverage is in place.

Mean while, after a year, the group life carrier is changed to a new carrier. "Living" benefits are eventually claimed from the new carrier. The claim is denied citing a provision in the company SPD that the employee must be working 30 hours or more per week. The work requirment is satisfied with the old carrier, not the new one.

Employer made a mistake in not informing the new carrier that several disabled employees were on the old plan and had been promissed continous coverage.

Meanwhile the "er" files for chapter 11 and the assests are sold to a competitor.

Who is responsible to pay this claim. 1. New carrier that is receiving premiums 2. Old carrier if the back premiums are paid 3. Agents errors and ommisions policy for not notifing the new carrier of the disabled employees 4. The "er" who is now bankrupt???

An individual wants to roll money from a prior employers retirement plan to a new solo(k).

The individual wants to use the solo(k) to be able to borrow against the funds which is not allowed in an IRA.

Individual does not have additional earned income going forward therefore cannot make additional contributions to the solo(k) in the future.

Can the individual set up a solo 401(k)? and

Is there any problem in this scenario?

Reviewing a proposal on a 412(i) plan (not prepared by us) and it appears that the salary figures used in the proposal were based on compensation excluding bonuses rather than total compensation. Is it allowed in a 412(i) plan to use a non-safe harbor definition of compensation? Obviously this lowers costs for everyone but the owners (who are both well over 200k).

Reg. 1.401(a)(4)-5(a)(3) is the 5 year safe harbor for grants of benefits for past years of service.

If one were to establish a new DB plan and not use this safe harbor (i.e. count all years of service prior to establishing the plan) the determination as to whether or not this has the effect of discriminating significantly in favor of the the HCE's is a facts and circumstances test.

Does anyone out there have any examples of successful demonstrations that granting more than the 5 years allowed under the safe harbor was not discriminatory?

Member of controlled group discovers (in 2003) that it fails 410(b) for 2002. Controlled group has 4 other members with plans. Problem is that they have different plan year ends and therefore cannot be aggregated for 2002. Two have 12/31 year ends and 2 have 3/31 year ends (why??).

Aggregating the plans that do have the same year ends does not work. Aggregating a 12/31 year end with a 3/31 would work, however.

How to fix for 2002?

1.401(a)(4)-(11)(g) says correction can be done retroactively (by 10/15) by making QNECS to expanded group equal to average NHCE deferral (and same for ACP) but that would mean bringing in large number of employees of another company who already participate in a 401(k) plan. It would also mean substantial $$$.

Is there an alternative? Anybody found a different solution?

Can it be argued with merit that the QNEC can be offset by the employee's actual deferrals/match in their 401(k) plan?

Big problem with costly solution due only to plan year ends being different (and problem discovered late). Ideas?

(The free pass for coverage change is not available.)

This may seem like a stupid question, but here goes...

If you have a certification signed on February 25, 2002, and you are just now amending for GUST, do you still enter the first day of the plan year in 2002 as the effective date of the amendment, or do you now have to enter 2003 because the adoption agreement will be signed in 2003.

Thanks for any help.

I have a radiology practice with a Non-Standardized Profit Sharing Plan. Has a 5/31 plan year with a last day rule. One of the doctors left the practice on 7/27/03 for a fellowship and will be gone over a year.

Will she not receive a contribution for 5/31/04 since she will not be an employee on that date? Or are there special rules for fellowships? I've never seen this addressed before.

Once upon a time, on a small island, there lived many people. For days, the weather forecaster announced that a fierce storm was approaching that would hit the small island on October 15 at 12:00 noon. Early that morning, most of the inhabitants left the island, that is, all except for a small group of actuaries. You see, each of those actuaries had determined that it would take exactly 5 minutes to cross the bridge. At 11:55, however, there was a traffic jam at the small bridge. At 12:00, the fierce storm came and swallowed up the actuaries.

And then everybody lived happily ever after on time.

An employee requires a kidney transplant. She notifies her supervisor, who sends an email to others within the company, asking if anyone can provide any guidance on the best doctors/hospitals for the transplant.

The questions are not being asked in the context of the health plan, and no members of the benefits department are involved in the emails.

Is this in any way related to HIPAA, or not, because the questions and information being shared is not related to the health plan?

Hi,

It's been a long time since I've worked on a NON-participant directed plan so bear with me. This is regarding the Schedule I question that asks if the plan held more than 20% of its assets in a single security.

I couldn't find any guidance in the Form 5500 instructions.

Would a mutual fund be considered a single security? Also, do you look at the beginning of year total plan value to determine the 20% figure. My recollections says yes to both but I just wanted to confirm what others are doing.

Many thanks!

Can an employer withhold any portion of its employer contributions from a former employee who was terminated for stealing? The Plan has been terminated and the funds must be distributed.

Is there any way to attach any portion of the 401(k) proceeds if a civil judgment is entered against this former employee?

We are considering terminating all employees eligible for group health plan. If we terminate our self-insured plan (w/stop loss insurance of course) for all employees and retirees do we have to give COBRA notices even though COBRA will not be available? What can we say in the notice that will be of any help to anyone?