An employer has 3 job classes:

• Drivers
• General Laborers
• Administration

They want to do the following:

• Drivers with less than 1 year of employment with the company must pay for 50% of their insurance premiums. Drivers with 1 to 2 years of employment with the company must pay for 40% of their insurance premiums. Drivers with 2 to 3 years of employment with the company must pay for 30% of their insurance premiums. Drivers with 3 or more years of employment with the company must pay for 20% of their insurance premiums.
• General Laborers with less than 1 year of employment with the company must pay for 60% of their insurance premiums. General Laborers with 1 to 2 years of employment with the company must pay for 50% of their insurance premiums. General Laborers with 2 to 3 years of employment with the company must pay for430% of their insurance premiums. General Laborers with 3 or more years of employment with the company must pay for 30% of their insurance premiums.
• Admins with less than 1 year of employment with the company must pay for 40% of their insurance premiums. Admins with 1 to 2 years of employment with the company must pay for 30% of their insurance premiums. Admins with 2 to 3 years of employment with the company must pay for 20% of their insurance premiums. Admins with 3 or more years of employment with the company must pay for 10% of their insurance premiums.

Besides having to test for Section 125 discrimination... what must we consider?

Can you start a new HSA after starting a new job if your previous job included an FSA?

I'm having a hard time teasing out the details but it appears to me that once you have a (non-limited use) FSA in a calendar year, it prevents you from having any form of HSA later in that calendar year, even if you switch jobs. Is this correct?

Suppose you work for company A from January until June. Company A provides a standard PPO and employee uses a standard (non-limited use) FSA to defer $500. Entire $500 is spent in March on medical care.

Employee leaves company A on June 30 and then joins company B on July 1. Company B provides HDHP, including company paid HSA contributions of $1K. Employee wants to contribute an additional $2K to HSA.

Is this possible? Can the employee contribute the $2K? Can the employee even sign up for the HDHP given that it includes the company paid HSA contribution of $1K? Does it matter that the FSA from company A is gone by the time the HSA starts?

TIA.

A plan is being amended to remove the auto enrollment feature. Is a notice required to go to the participant that auto enroll feature is being removed? If so, what is the timing of the notice. 30 days?

hello

a participant, who met eligibility then entered the plan then terminated enters the plan upon their date of rehire. Is there a 5 year break in service rule that says if you terminated employment longer than 5 years you have to meet eligibility again? I think I am confusing that with another reg.

thanks

Anyone have knowledge of whether John Hancock is providing a PPA plan document.

We (TPA) have a letter from John Hancock dated Sept 2013 indicating NO and clients will need to make other arrangements.

Today I have an email from a John Hancock sales rep to a financial advisor that starts off "restatement sales idea" and discusses the requirement of the PPA document and that most restatements costs between $1,000 - $1,500. He implies that the restatement fee can be avoided by bringing plan over to John Hancock. He says the client would be "saving money by not having to pay the restatement fee".

???

Apparently option 1 below will wipe out all existing elections, so if Johnny is contributing 8%, he gets dropped down to 3%. Can anyone explain to me why you would ever use option 1? Option 2 would leave anyone contributing more than 3% alone.

1. [X] All Participants. All Participants, regardless of any prior Salary Deferral Agreement.

2. [ ] Affirmative Election of at least Automatic Deferral amount. All Participants, except those who have an Affirmative Election in effect on the effective date of the Automatic Deferral provisions that is at least equal to the Automatic Deferral amount and except as otherwise provided below with respect to the escalation of deferral provisions.

3 plans are members of a control group.

Plans A and B are Safe Harbor Basic Match plans.

Plan C is only a 401(k) Plan with no Safe Harbor feature.

Can someone describe the compliance tests that I need to run for this control group situation.

If I can pass the Ratio % test with Plans A,B, and C combined and with Plan C not benefiting, does this satisfy compliance testing?

Any assistance is greatly appreciated.

Sponsor provides an annual Christmas bonus to all employees. The plan document includes bonus pay in the definition of compensation. The plan sponsor has never withheld deferrals (and therefore never matched) on bonus compensation. This has been going on for more than 10 years.

What is the correction method?

If I remember correctly a statute of limitations does not apply to benefit calculations.

Is filing a VCP submission asking for relief by retroactive/corrective amendment to exclude bonuses reasonable or even possible? The error applied to all employees HCE and NHCE alike. There was no separate communication given to employees that said bonuses would be excluded. Employees were only given the SPD which said bonuses were included.

Thank you

For safe harbor I know you need to go back and make up for the contributions, however this is a non-safe harbor discretionary Match:

Eligible - 1/1/14

Starts Deferrig - 7/1/14

The client is matchin on the salary from 7/1 moving forward and not going back to "make up" since the deferrals are in excess of the 3% match.

Just confirming no issues? Thanks, having a mental block for some reason...lol

In correcting a loan through VCP for missed payments beyond the cure period, does the accrued interest calculation require the interest to be compounded?

I am considering a 5000.00 Deductible Plan to offer a Long Term Client. The plan will have Office Copays and a Drug Card so it is not an HSA compatible plan. The group has about 90 employees, some of which cover dependents which brings the total number of insured lives to about 120.

The employer would be comfortable in self insuring through an MERP the first 4500 of claims after applying a 500 deductible, so long as he could cap his maximum exposure to as an example 50,000 per year.

Can I find an insurer to cover the potential difference of 120 lives reaching their 4500 MERP limit?

I can envision the MERP or HRA being administered in such a way that at the end of the plan year only, any expenses that exceed the 50,000 self insured portion are submitted at a single time. In other words, the employer pays over the course of the year 75,000 in medical expense and applies their 50,000 first, and then submits the 25,000 on to the reinsurer as a single claim.

One of our clients wants to invest part of his pension in some property owned by his brother. This purely an investment, no party-in-interest transactions as no one in either family will reside there. Purely rental property.

Plan allows for individual accounts, so this is a permissible plan investment. All income will be placed in a trusted checking account, from which expenses will be debited and the rent will be credited.

Question is, how does he set this up? Obviously the property must be owned by the plan.

What kind of paperwork is involved? A standard type of loan agreement, but modified for investments?

If you remember IRS Notice 2014-35, it stated that if you wanted to take advantage of:

a). the DFVC program, with the DOL's (electronic) EFAST2 ,,

b). you had to also PAPER file any related (including delinquent) Form 8955-SSAs with the IRS within 30 days.

It was a package deal.

If you only E-file the Form 5500 Series forms with EFAST 2 under the DFVC, without going back retroactively and picking up any delinquent 8955-SSAs, and PAPER filing them timely with the IRS, the DFVC "deal" was off.

Please note, this additional step relates to retirement plans only, and not to welfare plans.

Unfortunately, the instructions under IRS Notice 2014-35, still say to PAPER file the 8955-SSA, even though the IRS now mandates the E-filing, of many if not all, the 8955-SSAs.

QUESTION: Has this IRS Notice 2014-35 been formally updated and revisited to recognize that the PAPER filing requirement for the 8955-SSA is at odds with the IRS's requirement to E-file the 8955-SSA via the IRS's "FIRE" system?

Took over a new client in late Dec 2014.

Was informed in the first half of 2015, that there was a participating ER.

Can the participating ER sign the Participation agreement in the first half of 2015, retroactive to the first day of the plan's initial year, i.e. 1/1/2014?

Lets assume the client wants/needs the participation of the EES in the participating ER.

Thanks in advance for any suggestions!

I have a cash balance plan with only a husband and wife (they have no employees).

Since there are no NHCEs, does that plan still have to be 100% funded in order for one of them to take a distribution?

My mind is going blank on this, as i thought i knew this.

1. When an employee has an FSA and is on Leave of absence without pay, are they required to make their FSA contributions to keep "current"? Can they if they choose?

2. When the employee returns from unpaid leave, is the employer permitted to "catch-up" the amounts the employee missed?

3. If an employee is going on a leave at the beginning of the month, is the employer permitted to double up the contributions on the employee's pay in order to get the current month's complete deduction?

Thank you,

I am involved in a DB plan termination. A couple of participants are non-spouse beneficiaries who are receiving the remaining portion of a period certain annuity. If there choose to rollover the lump sum value of their annuity, would it need to be to an inherited IRA? Would they be able to roll it over to the company's 401k profit sharing plan?

Any help would be appreciated!

Plan owns $200,000 life insurance policy on participant with $50,000 CSV.

Participant dies and surviving spouse makes a direct IRA rollover of $50,000 and receives $150,000 cash distribution.

Does the plan issue 2 1099-Rs, one for the direct rollover and another for the pure life insurance proceeds?

If so what code do we use on the one for $150,000?

Many thanks in advance.

Let's say a participant contribution a total of $100 in a 401k plan in Roth contributions. The participant takes out a distribution and is charged with $50 distribution fee. How should the Roth basis be reported on 1099-R? Is it the total $100? Does the $50 distribution fee count as a loss?

A plan has the following elections in the adoption agreement:

- Employer elects to match actual elective deferrals made on a payroll basis.

- The employer elects to true up safe harbor matching contributions made to the plan on the above basis.

The Matching Formula is: Matching contributions will be made on behalf of participants in an amount equal to 100% of the amount of the eligible participant's elective deferrals that do not exceed 3% of compensation and 50% of the amount of the participant's elective deferrals that exceed 2% of the participant's compensation but that do not exceed 4% of the participant's compensation

In the case of a participant who had a hardship withdrawal and was not eligible to contribute for 6 months of the year, how is this to be handled? The rk is calculating the match and says the participant's true-up needs to be calculated based on his total compensation for the entire year. That doesn't seem right since he wasn't eligible to contribute for the first 6 months. Can anyone shed any light?