We have just discovered that for one of our plans, the 1999 5500 filing did not have a Schedule P at all, and the 2000 and 2001 filings had a Schedule P from the wrong Trustee.

It seems to me that we should file amended returns for all three years--that it is not very much work, and we want to get the statute of limitations started for all three years.

Comments?

RCK

Anyone have any thoughts on whether someone who was a named beneficiary for life insurance but then later removed as a beneficiary (by the insured prior to his death) has a right to know who the life insurance benefit was paid to? Any privacy concerns? Thanks.

Forgive me for not posting in the plan termination forum but this forum seems to be more active. I have an non-PBGC covered plan where the employer wants to terminate and pay out only "to the extent funded". I'm aware of the need to allocate asets under PBGC priority categories under ERISA 4044, and IRC 411(d)(3) and Rev. Ruling 80-229 have comments on the subject I believe, but I'm still a little unsure if a participant elects an annuity (vs. lump sum to extent funded) is the plan only obligated to use the priority amounts allocated under ERISA 4044 to purchase as much of an annuity as the priority categories can buy ? or is the annuity benefit a protected 411(d)(6) benefit and only the lump sum is eligible for a reduced payout ? Thanks in advance for any thoughts or opinions on the matter.

The notice of merger required to be filed with the PBGC at least 120 days prior the the proposed merger date spells out requirements that pertain to DB plans. What if 2 DC plans were to be merged? What would go into the notice? Would one simply submit a letter indicating the intent to merge?

Thanks.

I'm having a brain cloud (remember the movie "Joe vs. The Volcano"?).

Please help me recall the reg. cite that tells us a DB accrued benefit (for example in an excess plan) cannot decrease solely due to the increase in the SS wage base.

Thanks.

Company A is 100% owned by Owner 1 and Company B is 50% owned by Company A and 50% owned by Owner 2. Owner 1 and Owner 2 are not related, there is no ownership attribution. Is this a controlled group?? and if not, is there a way to have a multi-employer plan where only one company is top heavy and therefore only the participants for the top heavy company must receive the top heavy minimum allocation?? Thanks.

Consider the following:

Company sponsors two plans:

Plan A) Money Purchase Plan with 2-year eligibility, end of year requirement. Flat % of Comp is over 5%.

Plan B) 401(k) Profit Sharing Plan; PS component has 1-year eligibility, end of year requirement, and is cross-tested with two Classes (Partners and non Partners). 401(k) component has immediate entry.

Oh, and by the way, these plans are top heavy. Client has been "topping up" the PS contribution for those participants who haven't yet satisfied eligibility for Plan A by making additional PS deposit for them under Plan B's PS component.

My question concerns the Gateway for 2002. Ignoring the Gateway requirement, the desired result to get partners to $40k is a Profit Sharing contribution of approximately 6% for Partners and 1% for non-Partners. If Plan A didn't exist, clearly the non-Partner PS contribution would have to be 2% to the non-Partner class.

How does the Plan A contribution fit in to satisfying the Gateway (if even allowed)? I'm a little concerned in that there exists a certain segment (non-Partners with 1, but not 2 years of service) that isn't getting the MP contribution. Document just states that the contribution is allocated among classes by compensation; don't see where there would be flexibility to "top up" this segment to 2%.

Any suggestions?

The top heavy regulations are a 'little' vague with respect to what happens to a participant who keeps working after retirement.

A participant has a $24,000 average compensation at 65. The plan has always been top heavy and therefore he is entitled to 2% for 10 years (assuming a life annuity). Therefore, the minimum benefit is $400 per month.

Now, let's say, he continues to work until 70. The final year he gets a huge bonus which pushes his average at 70 to $30,000.

What benefit is he entitled to at 70 and why???

The Q&As state that the top heavy benefit is ALWAYS at normal retirement age and that it should be adjusted to later retirement age.

Does this mean:

a)The greater of $400 per month adjusted to age 70 OR $500 (20% of $30,000)

This follows the postponed benefit rules but not necessarity the 416 rules????

b)$500 per month (which is assumed to be payable at normal retirement date) and this is then further adjusted to age 70

This appears to be overly generous but follows what 416 appears to say and I thought there was an old question from a conference regarding this but have not found it - Mike will probably find it in a 1989 memo somewhere <GGGGGG>.

Specifically looking at M3 for the rationale behind option (b)

Thanks for any and all comments in advance.

Let me preface this with the fact that I am coming from 6 years of DC experience, and no DB experience.....

I'm having a hard time conceptually with the rule that you can not keep someone out of a plan more than 6 months after they have satisfied eligibility; combined with a begining of year valuation.

An example:

Calendar year. Employee hires on 2/11/02, works the required year of service and is age 21, they would enter the plan on 7/1/03. Because the plan has a beginning of year valuation, what happens? Does she not receive an accrual for the 2003 plan year?

Now complicate this with the fact that the employer also has a profit sharing plan. The employees are eligibile for either the DB or the DC but not both depending on job classification. The example employee is covered in the DB plan. If she was covered in the DC plan, she would receive a contribution for the 2003 plan year.

I definitely know that I just don't understand how things work yet, and the pension answer book just doesn't seem to be answering this question for me.

I am a 19-year old full-time college student and a dependent on my parents' tax forms. During the summers I take odd jobs around the community, such as painting houses, mowing lawns, etc. This summer I am on track to make approximately $3000. All of the money I make is being paid to me out of my clients' pockets. If I understand correctly, because I'm making less than $4700 a year, I do not have to file for taxes. However, I would like to contribute $2500 (out of the $3000 I will make total) to my Roth IRA. To put it simply, can I do this? And if I do contribute, do I need to file for taxes, even though I'm under the $4700 limit? My main concern is that the $3000 I'm making might not be recognized by the government as "earned income" or whatever. I'm basically clueless when it comes to tax issues and I was hoping someone could help me out.

I have an old SAR-SEP plan that has 1 year eligibility requirement. Is the definition for 1 year in a SEP the same as in a qualified plan?

Cut and paste:

http://www.sgiusa.com/actuaryjokes.htm

Consider the collective bargaining process. If the union agrees to freeze a plan, it does not happen until the agreement is ratified. But then according to the union, the plan is frozen as of the contract date.

The CBA is distributed to the union members with the freeze in it.

The question is, does the CBA count as a 204(h) notice?

The PBGC thinks not, I think does.

If an Educational Assistance plan and STD are funded solely out of the assets of the employer (no insurance contract, although an insurance company helps administer the STD), would including these benefits in a wrap-around plan make them subject to ERISA?

I do not normally prepare 5500s, but I often get questions when things go wrong.

Client maintains a wrap-around document covering all of its welfare benefits (except for the cafeteria plan). The document provides for group health insurance, but does not specifically name an ins company or policy. The SPD only refers to BCBS which provides insurance for the vast majority of employees. However, I found out recently that the client also keeps an HMO for employees in one division in one state (left over from an acquisition and may only be open to employees who were there when the acquisition took place). It appears that this HMO has not been included in the audits nor has it been reported on the Form 5500 for the last several years.

The client and I felt that the audits and the prior years' 5500s should be amended to include the HMO. The auditor doesn't agree - they think that separate 5500s should be filed, but haven't given a good explanation except that the plan's SPD only talked about BCBS. The SPD covers all employees of the client, most of whom weren't eligible for the HMO.

Any thoughts?

We had a ps plan (not part directed) that terminated, holding company sold business to another company but the holding company (2 ee's) is still around. We just received a small check for the plan (under $100) from the state.

the plan has been closed for over a year and if I try to open up the account and mail check out, I would guess that of the 100 checks at less than $1.00 each, that I would have 70 outstanding checks because the other 30 were rollovers.

Advice??? Can I send the check to the holding company?

We have a provider that prepares our 5500, they have just completed it and sent it over but there is not a schedule P. I questioned this with them and they replied that it is not needed due to the fact there are no loans (the plan does allow for loans).

Is it OK to file without schedule P? I thought it was always submitted?

Any comments would be appreciated

Thanks

I have a group that have a Flex Plan including the pre-tax Premium portion. They have 2 open enrollments a year for their health insurance. Their consultant want the specific regs that state an employer can have two open enrollments for their employees who are under the premium portion of the Flex Plan. Does anyone know where I can find the specific regs?

Under Ch 94 of the Texas Human Resources Code which is under the auspices of Title 20 of the USC, the state of Texas "licenses" handicapped people (with preference for blind people) to manage vending machine sales at government (state and federal) buildings. Under these rules, the state can provide retirement programs for these folks out of the proceeds of the sales.

Can anyone point me to cites that would provide further guidance on what types of plans are allowed under these rules and any other special rules under which they must operate? What about Social Security taxes?

Based on what I've read in the above cites, it sounds like the licensees are a mix of independent contractor and employee. They receive "commissions" but the state highly regulates how they operate their "business". The state government can set up a retirement program for these folks only if a majority of the licensed vendors approve the program. Then the state can fund the retirement program with part of the proceeds from the vending machines.

Any help would be greatly appreciated.

Can an employer have two retirement plans. We are a small non-profit that currently has a 403(b). We recently entered into an employee leasing arrangement that offers a 401k. The employee leasing company has a strict company match that is not the same as our more generous match. Can employee's still have contributions taken from their pay via the leasing company and put into the 401k while at the same time contributing the company match into the old 403(b)?