Can anyone help me with the following?

My client has a fringe benefit plan (i.e. Section 125 plan) that covers more than 100 participants. The TPA completed a Form 5500 and told the client that since they received service fees in excess of $5,000, that the Form 5500 was required to be filed.

This plan has no welfare feature - it is a medical reimbursement account only. Am I misunderstanding the filing requirements or is a 5500 required to be filed?

Thanks

I am working on our wrap SPD. How much COBRA information is required under ERISA to be in there? Is it ok to give a brief explanation and reference to the Initial Notice that is also provided separately? If the info is fully explained in the booklets provided with the wrap, is it necessary at all?

Thank you!

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We just received auditor info for a plan today. The plan sponsor wants the 5500 filed today and does not want to extend. The trust officer for the plan is about 2 hours away and would like me to e-mail the form. However, he does not have the software on his end.

Does anyone know of a way to print an e-mailed 5500 (Relius software) without having the software?

I would appreciate any ideas.

It has been a long time since I submitted a Plan and I was hoping someone could offer their list of items that go to the IRS with a submission of a Volume Submitter or Prototype Plan. I would like to avoid the IRS requesting additional information and slowing down the process. Thanks for all input!

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We have a DB plan that terminated in 2002. The actuary determined that the client needed to fund appx $300,000. The client did so. Distributions were made during 2002 and the plan assets are at -0-.

Problem- the CPA says with Corporation only had a $115,000 profit. He can't use the $300,000 contribution as a deduction.

This is out of my area but does anyone know-- can the CPA carry forward part of the contribution? All contributions were made during 2002. PYE 12/31/02 Corp YE 12/31/02.

Thanks for any thoughts.

I seem to remember a directive (many moons ago) that the IRS or DOL came out with saying that plans can't exclude specifically part-time employees. Can anyone give me the number. And a link to it, too, would be awesome!

Thanks in advance.

A participant took a loan in 9/02 and then went on workman's comp. The loan term was for 3 years. The regs allow for a one year leave of absence on loan repayments with installments and loan terms equal to the intial loan at the time the loan repayments start again. Is it possible to extend the loan repayments to the 5 year maximum as long as the repayments begin after one year and installments remain the same? Does anyone have experience with this? Can the one year leave of absense be extended for cases under FMLA?

I had a question asked by an associate that I can't answer.

If a plan has life insurance and the plan is being terminated, what options do the participants that hold insurance in the plan have? Can they keep the insurance outside the plan? How do they do this?

Help

As a side note, I was just told the plan never reported the Insurance when filing with the IRS This makes my head spin! Fortunately the plan is NOT one of ours!

Any suggestions??????

I have a client who utilizes the automatic enrollment feature; recently this sponsor was told that this increases the fiduciary's liability. I thought they were covered by ERISA? Are they truly more liable than if they did not use automatic enrollment? Any articles that I can share with them to ease their pains would be appreciated.

Thanks in advance for your thoughts.

I have an Employer with 3 different classes of employees:

Salaried Employees

Hourly Union Employees

Hourly Non-Union Employees

The salaried employees are all covered under the Employer's DB and 401(k) Plans.

All of the hourly employees (union and non-union) are covered by a collective bargaining agreement.

When testing for coverage I know we can exclude the hourly union employees. But, how about the hourly non-union employees? I think 1.410(b)-(6)(d)(2)(i) allows us to exclude them but would like confirmation.

Also, I do not know if this matters or not, but this is in Virginia which is a ‘right to work’ state.

Thanks.

My ailing Dad has an estate valued at 1.4 mil., 3 adult benes. 800,000 in qualified plan. He has been given 2 options-a) leave as is, pay IRS 154,000 in Federal Estate Tax and the estate to pay remaining taxes due($270,000+) or b) sign an intent to rollover the 800,000 into a Roth IRA. . . if he dies administer the paper and pay the tax liability of 275,000 for the conversion with the sale of his home and gift an add't 95,000. He is very uncomfortable with B as he doesn't want to pay the taxes, should he make it through this illness and he wants to make sure all his children have the flexiblity to do what their individual needs are. Are there any other options available? IF he signed the intent to rollover, is it ethical to hold this until the outcome is determined and also if he signed will all three children be flexible to invest as they wish-if one wanted to specify education, one wanted to cash out and one wanted retirement. Would there be any penalties to withdraw? Thank you kindly for any advice.

Are top hat benefit plans preempted by ERISA? In other words, if employee has a claim for benefits under a top hat plan, does he have to bring it under ERISA? or can he bring it under state law causes of action?

In the past, a 401(k) plan had a one-year service requirement for eligibility for all employees (i.e., 1,000 hours within 12-month period). Years ago, plan document was amended to change to immediate eligibility with no service requirement. However, since the amendment, the SPD has said that there is immediate eligibility for full timers, but part timers must complete one-year of service. I am told that the SPD reflects the employer's intent, but there is nothing to back that up, so I don't think the "scrivener's error" theory works here, assuming that theory is ever viable.

There is a nice match, but no other employer contributions.

Assuming for the sake of argument that no part timer ever questioned the Company about this, has there been an operational error for tax-qualification purposes simply because the SPD and the other promotional literature were wrong? I realize I'm drawing at straws here, but I'm wondering if there is even an operational error if no first year part timer ever made a request to participate.

Assuming it is an operational error, do you think the IRS would consider allowing a VCP correction via a retroactive amendment and WITHOUT corrective contributions? (The retroactive amendment would conform the plan to the SPD.) The cost of correction per EPCRS (i.e., QNECs equal to the ADP and ACP percentages for all affected part timers, plus earnings) would be so huge as to bankrupt or nearly bankrupt the company. Also, the part timers in question are come-and-go employees who almost never satisfy the one-year service requirement, and those who have completed a year of service do not contribute (with some very minor exceptions). Thus, I think we could demonstrate that this would be a ridiculous windfall for the affected part timers.

Does anyone have any potential issues with the following situation:

Client has Plan A, which is a 401(k) plan (calendar year plan year) with discretionary matching contributions. Client also has Plan B, which is an ESOP (also calendar year plan year).

Prior to 1/1/04, client wants to merge Plan A with and into Plan B and create a safe harbor KSOP (they're not yet sure which safe harbor contribution method to use). We're preparing a transition memo describing the applicable steps, and I was just hoping someone might be able to come up with some issues I've not yet covered.

So far, I've covered (1) corporate action (i.e., merger resolutions, removal of 401(k) plan trustees, etc.), (2) plan amendments and drafting (re: service crediting and protected benefits issues), (3) testing, (4) notice requirements (safe harbor and blackout notice), (5) safe harbor alternatives, and (5) Form 5500 filings.

Is anyone aware of authority that permits a cash balance plan to index the amount of interest credits annually allocated to participants' "accounts" to the performance of the plan's investments? (e.g., the better the plan's investments do, the higher the interest credits; if the investments lose money, zero interest credits) Thanks, SF.

I am having a problem researching my current situation. (Background) I worked for a company that has a retirement plan and is based on number of years worked and the retirement payout is based on a formula that uses your last 12 months of compensation. I also had available to me a SERP plan, which is a non-qualified plan. During my last 3 years of employment I contributed to the SERP on a monthly basis and also deposited bonus awards that I received for departmental performance.

My situation is as follows: In 1999 I was diagnosed with Multiple Sclerosis and shortly there after had to go on permanent disability. A couple months later I was forced to take distribution of my SERP savings, which were taxed as ordinary income. I am now getting ready to turn 65 and have recently inquired about my retirement benefits. All the compensation numbers that the company had supplied me with in the past included my regular salary and bonuses when calculating the last 12 months of companion for retirement purposes. Now all of a sudden the company says - that they have made a mistake and by ERISA ruling they cannot included my bonuses as compensation because I deposited them in my SERP which is a non-qualified plan, and the fact that I had to take mandatory distribution because of my Multiple Sclerosis did not matter.

My question is - The VP of the HR department referred me to the following IRS definition of "compensation"

which he is using to disqualify my bonuses as compensation in my retirement benefit calculation, they are "Code Sections 414 and 415. I have looked for several days and have had absolutely no success in finding these sections, has anyone out there had a similar experience or is familiar with these two sections?

Any help or a point in the right direction would be appreciated.

Thanks in advance,

gordonhs

I have NEVER filed a 5500 for a DB plan but one was just plopped on my desk... due tomorrow!!

I would like to try to get it out right away but am not sure what is all involved. Do I need a Schedule B from the actuary even though the actual termination date of the plan was 12/31/01? No contributions were made past that date- just assets waiting to be distributed (which now have been).

Any insight for me?

Thanks,

Rachel

What issues or concerns should I have if I want to add and then general test a new DB plan (either cash-balance or traditional) for an employer who already sponsors and will continue to maintain a cross-tested PS plan. Let's assume I don't need to combine plans for testing and will general test each plan separately using the Average Benefits Test for each plan, assuming I can utilize the ABT for each plan without issue.

I realize I must consider 404(a)(7) combined plan deduction limits, and I take into account benefits from all plans in determining ABP for each average benefits test, but are there other concerns or issues to consider that I may be missing ? are additional facts needed ? Thanks for any thoughts.