I have some general administrative questions about NQDC Plans, since I have never actually seen one accounted for on a recordkeeping system:

1. Can anyone give me an example of how a NQDC Account Title should appear on a recordkeeping system(e.g. ABC Trust Co., TTEE for the XYZ company NQDC Plan)?

2. Can an NQDC account be labelled as "for the benefit of" ("FBO") a particular participant without actually considering the account as funded for that participant? It would seem to me that, as long as the Trustee retains control over the account for the purposes of paying corporate creditors, then this would be acceptable. Please comment.

3. As far as I can see, because the nature of the underlying investments are at the ultimate discretion of the trustee, these accounts could be maintained on almost any type of financial recordkeeping system (e.g. retail brokerage account, retail mutual fund, retirement plan r/k like Trustmark, etc.) It seems the only limitation exists with service provider and their access to investments that the trustee might want. Any necessary internal reporting could be assembled by a CPA, in theory. Any comments?

4. Can the plan be Trusteed by person or entity other than a benefitting employee? Are there any restrictions as to who may be the trustee?

Thanks

I would be interested in hearing any opinions on a strategy for preserving plan assets. If a self-funded client were to maintain fully-insured policies on the side, and move people into them as large charges were received, could this be construed as discrimination based on health status?

The usual example I see for that type of discrimination is someone denied entry into a plan because they are expected to incur major charges. In this case they are already in the plan and incurring those charges. No one is being denied entry into a plan, it is just a question of where they end up.

It is possible some new members have been shuttled straight into the fully-insured plan, but I believe most are moved after enrollment into the self-insured plan, when the major charges start rolling in.

To my knowledge the fully-insured plan is on the whole at least as generous as the self-insured one, but I suppose it is possible that on a specific benefit the self-insured might be richer.

My obvious concern is the appearance of discrimination, since the plan you end up in is determined by your health status. These plan changes are not member elections, and happen at all times in the plan year. I don't think the member has much choice in the matter.

Has anyone seen this before?

Does anyone have a policy for fiduciary review of mortgages held in plans? We have acquired a book of business that has some plans and IRAs that hold mortgages and we aren't quite sure what responsibilities we have or what we could be liable for. We are named (directed) trustee.

Pension equity plan permits lump sum distributions at termination. EE terminates and is rehired within 60 days, but before EE receives lump sum cashout (more than $5,000). May plan be amended to restrict cash outs if EE returns to employment within a certain number of days, and no distribution occurred?

Can the 100% owner of an LLC have Schedule C income?? or since it is a corporation, must he have W-2 income???

If an employer maintains a money purchase plan and a profit sharing plan and a terminated participant is due to recieve less than $5000 from each plan, but more than $5000 total, is spousal consent required if plans provide for immediate distribution if less than $5000???

A plan does not allow rollovers into it. However, a participant was allowed a rollover into this plan. What remedies (i.e. amending the plan to allow rollovers) are recommended and what consequences are there for this plan?

Another question concerning the 457 DCP that my employer offers. Again I work for a municipal fire department of which the city contributes 4% of top step firefighter toward our 457 deferred comp plan. I have called several entities and have been given several answers to this question. Does the 8k maximum contribution as afforded by a 457 DCP include the employer match? Or can the employee contribute 8k and also have the 4% match invested? It should be known that the city's 4% match is not includable in our annual gross income as defined in section 457.

Is there any guidance on how the "facts and circumstances" test for whether an employee is "highly compensated" under Q&A-13 of Prop. Reg 1.125-1 is to be applied?

In particular, I'm faced with a company in which all employees would be viewed has "well compensated" earning more than $100,000 per year. Most of the employees are NOT owners and therefore are not "key employees" and do not fall into the other categories for being "highly compensated." For example, does a concept similar to the "top-paid group" under 414(q) apply to allow such a company to establish a 125 plan? Or, does the IRS have a dollar threshold that is applied regardless of the fact that the employees could be classified in groups of well compensated employees and very well compensated employees (and owners)?

Thanks for any thoughts or direction.

Am currently working with two separate trust companies. One has Sungard series 7 and the other has Sungard Charlette Navigator. Is there anyone who is connecting to these systems and Quantech 5.0 for trade instructions?

A corporation is the sole member in an LLC. The corporation wants to include in the operating agreement a provision that would allow it to pass along options (profit interests) in the LLC to employees of the corporation. Any thoughts on this?

Is a company obligated to make a SIMPLE contribution for the entire year once they elect to adopt one? Can they terminate it prior to year end? Are there any caveats to doing this? Thanks in advance for your responses.

Can a rabbi trust that provides payment to the employee be amended to allow the employer to be reimbursed in the event the employer makes the benefit payment to the employee? The trust is revocable and provides for amendment with the employee's consent. The purpose of having the employer pay the employee the deferred comp is to run the amount through the payroll system.

When calculating the 404(a)(7) limitation (25% limit), are 410(k) employee deferrals considered compensation? In other words, is gross comp reduced by deferrals before applying the 25%? If so, is comp reduced by deferrals before or after applying the $170,000 comp limit?

Also, regarding the 15% max ER PS contribution, is comp reduced by deferrals before or after applyng the $170,000 limit?

With regard to an employer that is utilizing a PEO for employee benefits, should that employer decide to leave the PEO and take the benefits in house, how does that affect the PEO's 401(k) plan? Are the employers employees considered having "Terminated Service" in which case they could remove money from the PEO as a rollover or have the employees not terminated service in which case the employer could spin off a new plan from the PEO?

I am looking for some guidance on the minimum distribution requirements for qualified retirement plans. If a plan owner dies prior to required beginning date and before distribution of the plan assets, and the beneficiary elects to take the distribution over a 5 year period, is there a statute of limitations for that decision? Is that decision irrevocable, and does it pass on to subsequent beneficiaries?

An Auditor friend of mine is working on a 401(k) Plan Audit. This is a non-standardized Plan with 1000 hour requirement for match contribution. The sponsors were told by the TPA/Account manager/Whatever that in order for a person to get a match, they must work 1000 hours to be a participant and 1000 more for the match. (A total of 2000 hours for the match contribution).

Is there a limit as to the maximum hours of service a Plan can impose to receive a match contribution? I have never seen more than 1000 hours and never questioned it. Please respond with a code section or site that says the limit. (also the TPA said they passed 410(B) with that 2000 hour requirement. (right))

Probably a stupid question. Thanks for your help.

I would be interested in any opinions on the following problem:

A self-funded health plan decides to change the cap on inpatient substance abuse benefits halfway through the plan year. They start with a $10,000 Calendar Year benefit, then switch to 15 days a year.

If you have a member incurring these types of charges in both the first and second half of the year, how do you apply the maximums? I've seen this done a number of ways, but know of no legal guideline.

Hi,

I have a question about my 401K rollover.

I quit my last job about 4 months ago and

I had to take my 401K out.. so what I did was

I put it in my existing Roth IRA account.

Is that legal?? I just read somewhere

that a 401K rollover can only be put in a traditional

IRA and then convert to a Roth IRA.

So for my case, what can I do to take my

401K money out of my Roth IRA and put it

in a Traditional IRA instead??

thanks a lot.

An employer automatically enrolls it employees in its self-funded group health plan. The plan is a bundled plan that offers health, dental, and vision coverage, and employees are not charged a premium. Now that employers no longer are required to offer core coverage only, can the employer charge one premium for COBRA coverage. Would the answer change if the plan was not bundled (i.e., separate plan documents, etc.)? My thought is that one premium could be charged, since employees and actives are treated the same (i.e., they have automatic coverage in all of the plans).

Any thoughts are appreciated (as there is no clear DOL/IRS guidance on this issue)?