I do not work often with VEBAs but have recently been contacted by an existing VEBA set up by a professional association that provides benefits to professionals who are employers operating within one state. Based on their limitation of eligibility to employer members in a single state, they previously obtained a favorable determination letter of their tax-exempt VEBA status and have been operating in this manner for a few years. They have been requested by professional employers in a contiguous state to consider expanding benefits to same group of professionals in the border state.

Based on the current VEBA regulations, the expansion beyond the single state would appear to be a potential threat to the "geographic locale" restrictions for the VEBA. What they are considering, however, would appear to be within the scope of the proposed three-state safe harbor standard set forth in Treasury's Proposed Regs. 1.501©(9)-2(d) from August 1992.

Does anyone have experience with how the IRS generally handles VEBA requests for providing benefits where the geographic locale stretches across a single state along the lines of the proposed three-state safe harbor? Are there other VEBAs that have been granted a favorable determination along these lines even though the regulations have been in proposed form for 23 years? Am assuming an existing VEBA wishing to expand along the lines of the three-state safe harbor would need to seek a new / updated determination letter from the IRS in order to do so safely?

Thanks

402(k) Plan contains a life insurance policy for one of the HCE. The policy is in the name of the plan. The participant for whom the policy exists has been paying the insurance premiums himself. Is this allowed? If so, how do you account for the payments within the Trust Accounting for the plan?

Understood that 1 person plans can file the SF and mark it as such so that it will not be accessible via efast2. The benefit is to file electronicially.

My question is what about a one-person plan that would otherwise not qualify for the SF due to the composition of its assets that are not qualifying plan assets, can they still file SF (not should they, but can they)?

I have a fiscal plan that I just took over at my new employer. I discovered that a participant who terminated in the 2012 PY was rehired late in the 2013 PY. This rehire was not reported on the 2013 PY census, and she was subsequently reported on the 2013 8955-SSA because she still had a balance. So now she is an active participant, how do I report her on the 2014 SSA? She was never paid out while terminated.

The instructions for this form indicate that she should NOT be reported under Code D merely because she return to the service of the plan sponsor. So do we just leave it go or report her each year as a "b" with updated data? The summary report I ran out of Relius indicates that she should be a "D," but that is contrary to the instructions....

Hi. The plan sponsor has both a 403(b) and a profit sharing plan. To reduce admin costs, we want to consolidate to one plan, so we are terminating the profit sharing plan and implementing an employer contribution in the 403(b) plan (it was already an ERISA plan, so no big deal).

The plan sponsor is concerned that not everyone will return their distribution forms. Normally, we include a form that notes that participants who don't return their form will be sent to a rollover IRA custodian. But in this case, can we force the rollover to the new plan? Or, even better, can we bifurcate the instructions to say that if you are a terminated participant, it will go to a rollover IRA custodian and if you are an active participant it will go to the new 403(b) plan?

Thanks.

Let's say an employee is getting a signing bonus for $1,000 if he/she agrees to take a position with Company A. The employee is getting the bonus in their first paycheck, and eligibility is immediate. Assuming the document does not specifically exclude any form of bonus, is there any reason not to treat sign-on bonus as eligible wages for purposes of calculating the 401k payroll deduction?

For example, the bonus is not related to services provided. So, similar to severance only the complete opposite. Biazaaro Severance if you're a Seinfeld fan!

Personally I think it is clearly eligible but I am trying to explore this fully and hear other opinions.

We have a plan with excluded classes (a DB, but not sure that makes a difference). One participant was benefitting until mid 2014, at which points a job change moved her into an excluded class.

How do we treat her for 2014:

1) excluded (not benefitting) based on her position at PYE

2) benefitting based on the fact that she was eligible at some point in the year, and if so:

a) Do we base benefit on hours and comp for the ENTIRE year, or

b) Hours and comp only for that period during which she was in an eligible class?

I'm a city manager that has been working 4 years at a city with its own pension plan. I came in under a 457/401a defined contribution benefit which is fairly typical for cms. I recently renegotiated my contract that allows me to effectively participate in the pension and receive past service credits and then if I hit vesting (10 years) I transfer over my 457 balance to the pension.

My Questions:

1) How do I "buy" the past service credits? Can the City cut the pension a check directly; or can they gross up my wages and then deduct it from me on a payroll deduction; or do they need to make additional contributions to my 401a/457b equal to the purchase amount and then I purchase it as a rollover/transfer? The way my contract reads; the prior service credits are a part of my compensation.

2) If I reach vesting and rollover my 457 and/or 401a to the pension, is this done on a pretax basis?

3) Do I need to amend the plan to help facilitate the above? The pension buy in language is pretty vague, suggesting just that an employee can buy back any number of years of service with the city and up to 5 years from other governmental experience; nothing really in there about 457 rollovers or payroll deduction or anything; it just says you can do it.

Any insight or direction would be greatly appreciated.

The IRS released HOU-05-2015 granting tax relief for victims of storms, tornadoes, etc. in Texas. We are clear that the relief includes the Form 5500 and grants a postponement under Rev. Proc. 2007-56 Section 8 & Code Section 7508. Any thoughts on if this relief ALSO includes contributions under 404(a) also included in Sec.8? On one hand, the contributions are tied to the annual return so if it is extended, then perhaps the contributions are too by default. On the other hand the IRS relief doc doesn't specify contributions, only the 5500 itself. We've found no guidance to make it clear either way.

My parents divorced back in 1999 after 20 years of marriage.

In the divorce settlement it states that my mother is to receive 50% of my father's retirement benefits. Its one sentence, nothing more. He worked for Foster Farms and Safeway (Teamster) during their marriage.

I was a little kid at the time but even I knew the importance of getting a good attorney; when they told us they were getting a divorce I handed them the phonebook and told them to find attorneys.

Well here we are 16 years later with my father about to retire and I find out that my parents used the same $750 flat rate divorce attorney.

My mother had no idea what a QDRO was and now needs 2 apparently. One for Foster Farms and one for Safeway/Teamsters. There is no wording in the divorce settlement about a QDRO or who needs to pay for it to be drawn up.

My mother gave up her right to alimony because after the divorce was final he started playing games, stopped working and tried to get the child support and alimony reduced. Looking at all the numbers now, how much he was earning and how little he was supposed to pay her in comparison I can't believe he did that. Because of this I want my mother to get every penny she is entitled to from his retirement plans.

Father is retiring 10/31. We contacted the PA for Foster Farms and he sent a sample QDRO. It seems very simple to fill in the missing information but I want to be sure we do this right. We haven't contacted the PA for Safeway because I'm afraid he will find out and do something awful again. From what I've read on the internet the longer she waits the more likely it is she will lose out on receiving anything.

What does my mother need to do now? Who does she need to contact? Is this something she can do on her own or at the Self Help Center at the Court House? If not can anyone recommend an attorney in the Modesto, CA area?

Also, he is remarried now. What happens if he passes away before my mother. Does his new wife get all his retirement benefits? Or does my mother still have a right to receive her share? I know he has his new wife listed as alternate payee on everything now.

Hi there!

I am soon 50, and pay into a 401(k). I am not very good at all this investing & saving knowledge.

I have a old well performing SEP IRA at vanguard. I was advised to roll it into my current 401(k).

I can't figure out why I would want to do it. I get good returns on that SEP.

thank you for your thoughts -

Mike

Re HRAs without a group health insurance plan; is that allowed under the Affordable Care Act (ACA)? My (limited) understanding is that standalone HRAs were not permitted under ACA.

Are there exceptions for complying with ACA; e.g., employers with fewer than 10 employees are not required to comply with Regulations under ACA and; therefore, could sponsor a standalone HRA?

This question came up, and I wasn't sure if perhaps the answer might vary by state?

Thanks.

I had a TPA call and said he has 2 plans that had made their MRC by 9/15 but they were overlooked for their 9/30 certification letter.They were both 1/1/2014 new plans with 12/31/2014 EOY vals.Both are small CB plans and are fully funded.

I personally have never had this problem and want to proceed cautiously -- but I assume they are deemed < 60% and must issue a ee notice freezing everything until 12/31/2015...

Seems awfully harsh. Is there any relief for this?

With 401(k)s, there have been many new laws that required the plan document be amended. And the whole document needs to be restated every 5 or 6 years.

When was the last time an amendment or restatement was required of a SEP or SARSEP document?

I'm a contracted management employee whose organization has a buy in provision to the pension for any number of years with the organization and up to 5 years for service from other organizations. When I came in I was put under a defined contribution benefit. I've got about 4 years in and I recently renegotiated my contract to where I participate in the pension while also receiving my defined contribution; if I reach vesting after 10 years I turn over my 401 contributions back to the organization. As a part of the agreement, the organization buys my past service credits into the pension as a part of my compensation, the 4 years I've been here plus 3 years from a prior organization that would qualify per the pension rules. The actuary will have to calculate the cost of what that buy in would be.

My question is how should I setup the "buy in." If the amount is $50k can the organization just cut the pension a check or does it have to be routed through payroll? If it goes through payroll is the contribution made on a pretax basis? I'm protected with a gross up provision if it is post tax but that would balloon the payment for the organanization by 40%+ so I'm really hoping it doesn't have to be post tax. Any insight would be appreciated.

Specifically, does an employee's 90-day wait period begin again if they switch between employers (client organizations) of a common PEO?

Thanks!

I picked up a new comp plan. Previous TPA calculated PS contribution which ends up failing the general test. I understand I can still fix it with an amendment. My question relates to any penalties or excise tax associated with it.

I seem to remember that if we the sponsor makes the additional contribution by 10/15 and wants to take the deduction for the previous year, it will be associated with a 10% excise tax.

What if the sponsors takes the deduction in 2015. Is it just a 415 issue and as long as I don't have one, there's no penalties?

What protections does a participant have that his or her 401k information (in this case their balance) will be handled with discretion and kept private. I don't want to get into the specifics but suffice it to say I received a question from a participant (not of a client of mine) who is outraged that his information was shared with a third-party without his consent.

It was NOT disclosed in the context of services necessary to the administration of the Plan.

For a calendar year plan ADP excess contributions were identified after 3/15, however, when the excess was attempted to be cut it was discovered that the participant had already taken a full distribution of assets due to termination.

Please note: this situation is a single Adopting Employer within a Multiple Employer Plan.

The question is...what is the appropriate recourse particular to the Form 5330 reporting? Do you report the excise tax amount that would have otherwise been distributed if the assets had not already been moved out of the plan? Something else? Thank you in advance for any comments.

Regarding SEP-IRA, as an employer can you Set up and Contribute to multiple sep-ira accounts for a single employee?