Plan A is a traditional DB plan with a Final Average Earnings (FAE) formula. It defines FAE as the average compensation for the 60 months of Employee's last 120 months before retirement that produce the highest average. Plan A counts post-severance payouts of accumulated vacation pay in FAE. Typically, it's paid in the month after the Employee terminates. E.g., if Employee terminates on 1/15/15, the vacation payout will be made around 2/15/15.

Is there a legal impediment to counting that February payout as part of January's comp (the last month for which Employee received a regular paycheck)? This would be more favorable to Employee's FAE because it would spike January's comp, rather than marooning it in February. I can't find any authority one way or the other.

Thanks for any replies.

A local union wants to establish/sponsor a medical plan for its members as an alternative to the high cost medical plan being offered by the multiemployer welfare plan that the union members are participating in. The plan will not be collectively bargained.

1. Is this a MEWA? And, if so, what exactly are the ramifications of that? (I know almost nothing about MEWAs!)

2. If they can sponsor the medical plan, will it be considered a group health plan that can be integrated with the HRA being offered under the multiemployer plan?

Any insights are appreciated!

I'm just looking for a recommendation on a national conference for non-attorney consultants working in the area of wrap plan documents, 5500's, notices, and other general compliance for welfare benefits topics.

Employer offers coverage to everyone regardless of hours worked. If you work 20hr/week, you get coverage. If you work 40hrs/week, you get coverage.

Because of this, the employer isn't applying a measurement period. But is a measurement period and a stability period applying in the background?

So, if an employee works in year one and goes on leave of absence in year two, is the employee entitled to an offer of coverage throughout the entire period of absence because an imputed stability period requires it?

Is there a measurement period/stability period operating in the background even though the employer isn't using this for plan eligibility purposes?

Employer doesn't want to give benefits on an extended leave of absence.

If a small non-profit starts a 403(b) and has no intention of making employer contributions is it subject to 5500 filing? I looked at 29CFR2510.3-2(f) and I am guessing they are exempt, but wanted to get a second opinion.

Prudential administers our physician office's 401(k) plan. However, we have some physicians who have “self-directed” accounts which are an off-shoot of the company 401(k) plan and those funds are held at another brokerage firm such as Charles Schwab. We have a physician who is retired and wants to roll over his 401(k) to an IRA, but Prudential is telling us that this physician must first move his money from his self-directed account back into Prudential in order for Prudential to process the roll-over. The physician is questioning whether that is a legal requirement as he prefers not to move his money from Charles Schwab back to Prudential because the physician will not be able to replicate his Bond portfolio with Prudential. The physician would prefer to move his money directly from Charles Schwab to his IRA.

Can anyone shed light on this? Is it possible to rollover directly from the self-directed 401(k) account to an IRA? Or must the self-directed account first be moved back to Prudential before the rollover can be processed?

Thanks.

In what might become a common situation for insurance reasons:

Medical practice (A) with two doctors and 5 regular employees has a SH 401(k) plan where the doctors maximize.

As of 2/1/15 the 5 regular employees of A will be on the payroll of an ASG (B) which has about 100 other arrangements like this with other medical practices. B maintains a 401(k)-only plan.

Questions:

1) Can practice A continue their plan if they include those 5 employees going on company B payroll?

2) Any other issues?

Thank you.

Does anyone have recent experience with this? In filing VCP will I need all of the amendments for each law change or can I just restate for EGTRRA and PPA?

Does a person who has a self employed 401-k (This is the term Fidelity uses) have to file a form 5500 if the assets are less than $250,000? Is this rule different than if a person has a traditional 401-k with multiple participants?

I have a plan where the Plan Administrator is the Trustee - common enough. However, this person is not the plan sponsor, as he does not own the company sponsoring the plan.

The plan sponsor entered into an agreement with a management company (MCO) to take over operations of the company (and eventually purchase it sometime in 2015 if all goes according to plan) back in November 2014. MCO then decided that effective 1/1/15, all plan contributions would be made into their plan (which is a MEP).

The Trustee heard about it when the fund platform for the "old plan" asked why they hadn't received a payroll deposit yet in 2015. Suddenly all this was uncovered.

The Trustee claims that he had no knowledge of this happening, and is demanding that the 2015 contributions go back to the "old plan" because as Trustee and Plan Administrator, he is still responsible for that money and he didn't authorize it. MCO says that they are in the right (well, of course they say that) and that it was part of the responsibilities they assumed when they took over management in 2014 - they let it continue as it was through the end of 2014 and then switched it at the beginning of the new year.

My first reaction was that as long as the actual original owners of the company signed a resolution to allow the company to adopt MCO's plan effective 1/1/5, then this is OK, and it even makes for easy testing. But then what exactly is the role of the Trustee/Plan Administrator? All responsibility but no power?

Thanks for your advice. Any links would be greatly appreciated (not that I don't trust your responses, but so I can provide them to the players involved).

Any thoughts on whether or not excess revenue can be used to offset employer match? I'm assuming no; I know the DOL prohibits the use of excess revenue for settlor expenses, but can't find anything definitive regarding the use of the money for match. Thanks...

Does anyone know when the Federal or State exchanges will be sending out notices to Employers that an Employee received a premium tax? The employer is given 90 days to reply that they offered affordable and minimum value health coverage.

How should the reporting be done on a 1099-R when the participant takes a distribution of corrective deferrals (over the 402g limit) after 12/31 and the deferrals had a net loss? I understand that only one 1099-R is issued and that the total amount (net of losses) is distributed to the participant with a separate statement noting that the participant will be taxed on the entire excess deferral amount in the previous year and he can take a tax deducation for the losses for the year in which distributed. However, which code should be used on the form? Should it just be code "P"? It doesn't make sense to me because the amount taxable in the previous year (which is the excess deferral amount) is greater than the amount actually distributed. Could someone please clarify?

A plan sponsor of a calendar year plan is insisting on 2014 being the final plan year and wants the 5500 to reflect that. However, all the plan assets were not distributed until the second week of the current plan year. I am of the opinion this would be a red flag since participants would be receiving 2015 1099's on a plan that did not file a 2015 Form 5500. The sponsor is just not wanting to pay another year of admin fees.

I know there are only a few reasons a Safe Harbor Plan can be amended mid year. But, could an amendment to remove a Participating Employer who has closed the company be made mid year?

Company fiscal years were 9-1-12 to 8-31-13 and 9-1-13 to 12-31-13.

Plan fiscal years were 9-1-13 to 8-31-14 and 9-1-14 to 12-31-14.

With the prorated 415 limit, the owners are really held down for this 4 month year. Can they still make a contribution for the Plan year ending 8-31-14?

Hi. Employer has a Dependent Care FSA. Employee signed up in 2014, thinking that this was for a dependent's medical expenses. Thus, no child care was used and Employee does not have any dependents at an eligible age for dependent care FSA dollars. Is there any way to refund the 2014 dollars to Employee and tax them? Or is Employee out of the luck and the money is forfeited to Employer just like any unused portions would be?

Thanks.

Say an ER failed to allocate a matching and profit sharing contribution to an EE. Would the corrective allocation be subject to earnings?

I think that it would be as Section 6.02(4) in EPCRS says that correcive allocations are adjusted for earnings.

Another argument i have to support this is that the whole purpose of a correction is to put the EE in a position to where they would be had the error not occured.

Thanks!

I just want to confrim that a partner hired in late 2013 (did not reach $115k in wages) would not be considered HCE in 2015 if they received gauranteed payments in 2014 over $115k. This partner is entiitled to less than 5% of the company profits and capital.

Suppose that in 2016 or 2017 the IRS decides to mandate the use, for minimum funding and for lump sum calculations, mortality tables based in some fashion on the new Society of Actuaries mortality tables. Does anybody have any comments, yes or no, on what they expect with respect to the following?

1. Will the IRS tables include mortality improvements up to the year to which they apply, with no further mortality improvements for subsequent years (i.e., project mortality for 2018 to 2018 but static thereafter)? Or will the mandated mortality rates involve projected mortality improvements all the way out? The currently mandated tables do not require future mortality improvements for funding and do not involve future mortality improvements for lump sum determinations.

2. Is it safe to assume that the mandated lump sum mortality table will be a 50/50 unisex version of exactly the same sex-distinct mortality tables mandated for minimum funding? That is, both with assumed mortality improvements stopped at the current year or both with assumed mortality improvements all the way out?

Any other thoughts on the subject?