I have a plan where the owner is the only participant with a balance. There are 3 others who are "eligible participants" because they meet the age and service requirements. However, the owner is never going to put any more contributions into the plan, so they will never have a balance. Is it allowable to file Form 5500-EZ and forego the bonding requirements? Or does he still need a bond?

An HCE and his spouse both participate in the same DB plan, which is underfunded. Plan does not pay lump sums. Both are restricted employees under 1.401(a)(4)-5(b).

Spouse recently died. Participant is entitled to the QPSA commencing at the deceased spouse's NRA. The participant will reach his NRA at about the same time. 1.401(a)(4)-5(b)(3) says "...the payment of benefits to or on behalf of a restricted employee...."

Because of the "on behalf of" phrase, I believe the participant can receive his full life annuity amount annually, as well as the survivor portion of his spouse's benefit. The combined amounts would exceed his unrestricted amount alone. But I think he can get his unrestricted amount plus an amount not to exceed his spouse's unrestricted amount (which the QPSA would obviously not exceed). Is this correct?

Thanks in advance for all responses.

When a company purchases a small company with terminated employees on state continuation (with a lesser maximum period of coverage than COBRA), should the buyer extend the state continuation to COBRA?

An plan stated a forfeiture did not occur until 5 consecutive breaks.

The Plan was amended to our Prototype effective 1-1-02 which states a forfeiture will occur at the earlier of distribution, or 5 consecutive breaks.

As of the date of our takeover (1-1-02) there are several terminated participants (prior to 1-1-02) that received a distribution but no forfeiture occurred because they didn't incur 5 consecutive breaks.

Is it reasonable to continue to treat those participants as not having incurred a forfeiture until they do have 5 consec. breaks, or because the plan has been amended effective 1-1-02 to state forfeitures NOW occur at the earlier of distribution or 5 consec. breaks, they must immediately treat those participants as having incurred a forfeiture?

A small ER (husband and wife only) did not realize that they needed to file 5500s. What address is used for the letter they are preparing to request an abatement of the penalties? I'm quite sure it's not the usual address for filing a 5500 form.

Has anyone reached an opinion on whether or not FAS Statement 150 applies to ESOPs? The statement itself appears to offer conflicting messages.

Opinions please or requirements.

There is a qualifying event. An election notice is prepared. Do I include an SPD with the election notice or just send one if the person elects coverage?

Thanks.

Does anybody have a cite to a sample pension equity plan and/or where I can find some general information regarding such plans (how they work, etc.)?

TAG-

Is there any way of establishing a Safe Harbor 401(k) Plan during the year, if the employer already sponsors a SIMPLE Plan? From my reading, if an employer sponsors a SIMPLE Plan then this is the only plan that can be maintained during the year. What are consequences of sponsoring both plans during the same calendar year? Hopefully, the IRS will change their position on this situtation, such as being able to convert a SIMPLE Plan to a Safe Harbor 401(k) Plan during the year.

Thanks, Joe

What is protocol for calculating the excise tax amount when a portion of a persons ADP refund is being reclassified as a catch up contribution?? Do you take into consideration the original amount or the amount after earnings/losses.

Right before we took over this plan, a restricted employee took $600k+ lump sum distribution. The prior actuary did not advise the plan administrator that a secured repayment agreement was required before the RE could be paid. They now have another terminated RE wanting a lump sum, and we are telling them he has to secure a bond/escrow/letter of credit. When asked why they have to have it with the one and not the other, we informed them that they should also have had one in place when the last RE took a lump sum. They now want to know if they have any recourse with the prior actuary. Has anyone else encountered a problem like this? What did you do, if anything?

We have found an error in a benefit certification. Is is our mistake. The participant (non-highly compensated) is receiving too much. What is your experience with correcting something like this?

Are prepaid dental plans covered under COBRA?

The plan has no charge for preventive and cavities and set dollar fees that the member pays to the participating dentist for other nonpreventive procedures

Could someone provide me with the address to file a late 5500 under the dfvc program? I know it is in Atlanta but I dont have the full address.

I am completing the 5500 for a MPP Plan which is in the process of being merged with the PSP. The merger was effective December 27, 2002, but the assets themselves weren't reclassified/transferred until 2003.

For reporting purposes, do I consider the MPP a "frozen" plan for 2002? We did not go through a plan termination, we passed a merger resolution, so I assume we do not report that a resolution to terminate the plan was passed . . . ?

I'm just feeling like we need to make note somewhere in the 5500 that something's happening, because, of course, we are reporting no contribution on the Schedule R.

Thanks.

Medicare paid out as primary for union member and his wife in 1995 when the Health Fund was supposed to pay as primary. The overpayment "debt" was supposedly referred to a collection agency by HHS in 1997, however, the Health Fund has no documentation showing notice until 2003.

Regardless of the notice issue, what, if any, is the Statute of Limitations for Medicare/HHS to commence a lawsuit/seek a judgment against the Health Fund? If the statue of limitations has expired, what exposure does the Fund face?

Any help is appreciated.

FACTS: Employer presumably failed to timely amend for 401(a)(17) and 401(a)(31). (This was before we were involved.) The plan was amended retroactively for these purposes when it was also restated for GUST in late 1998. The Service has discovered this alleged failure in the determination letter process and is proposing Audit Cap with a sizable sanction as the only alternative to disqualification.

ARGUMENT: We have initially argued that while the plan may have been subject to disqualification for the years following the failure to amend, it was corrected pursuant to the GUST amendment citing as authority Internal Revenue Manual 4.72.12.2.1 and Rev. Rul. 73-79 (a qualified trust may lose its qualified status and then regain it by amendment) and that the years in which the plan was not qualified are now closed. IMPORTANT NOTE: The plan operationally complied with (a)(17) and (31) throughout this time so there was no operational correction needed. IRS says plan is disqualified immediately upon lapse of remedial amendment period and remains so unless requalified under its correction program (i.e., later amendment is meaningless.

QUERY: Is our argument worth pursuing?

Just got off the phone with EBSA over a bounced return. We filed a 2000 Form 5500 for a defined benefit pension plan on a timely basis back in 2001. We then had to amend the Schedule I to reflect corrected asset information received by the client. This only affected Schedule I, so we filed an amended Form 5500 (only change was to check the box that this was an amended return) and the amended Schedule I with corrected items circled in red.

Client just received a letter from EBSA stating that the Schedule B was not filed. After discussion with EBSA representative, the following was concluded:

Form was bounced because the amended Form 5500 did not have a Schedule B attached, based on responses to item 10 (which indicates which schedules are enclosed with return).

He did verify that Schedule B was received and in the system.

What you should do on an amended Form 5500 is blank out your prior responses to item 10 and then only complete the amended schedules that are attached (which seems a little counterintuitive to me since one could argue that you are then "amending" item 10 to show that these unaffected schedules are not part of the filing).

Just a word for the wise (not sure why the EBSA software didn't also issue a letter that schedules P, R, and T weren't included - but who knows).

I have a client who started a new plan effective 10-15-02, within several weeks the company took over a competitor. At this time the plan was amended to allow immediate rollovers. Several weeks later another take over and another amendment now allowing 2 loans, rather than 1. Within a week there was another amendment to the plan, and yet another. To summarize the plan has had 4 amendments and the provider has not yet distributed the SPD.

I know the ruling is the SPD is due 120 days from the plan effective date, but, are there any provisions allowing the SPD to be delayed?

If an IRA owner names their Trust as beneficiary of the IRA, can the custodian require a copy of the trust be provided? Can an IRA owner provide the pertinent details of the trust instead without having to provide a full copy of the trust? If just the pertinent details can be provided, which details are considered pertinent for IRA use?