Hello all. Happy 2014!

Since I have received a few e-mails asking about whether the Excel add-in I uploaded at the link below has been updated, I thought I would just post this message.

The add-in has been updated with the 2014 and 2015 mortality tables issued in IRS Notice 2013-49, and there are now 66 mortality tables available in it. These tables are documented in the first sheet of the attached sample applications Excel file.

As before, the add-in is distributed “as is” and with no warranties. However, for what it’s worth, the add-in has been in use by many different users since 2009, and I have yet to encounter or be informed of any errors or unhappy users.

http://benefitslink.com/boards/index.php?/topic/44228-excel-custom-functions-for-ppa-annuity-factors/

If you happen to have been using the add-in and are interested in the updated version (or just have questions about it), please e-mail me at doug.goelz@phoenix-benefits.com.

Best,

Doug

PENPROG Functions - Sample Applications 2013-1.xls

My understanding is that this box should be checked if an employee is an active participant in a 401k plan, meaning if they have employee or employer contributions are allocated to their account for the plan year. If the only contribution is a year-end employer contribution, then employee would be considered an active participant for the year.

In the case where a person is not contributing but receives a discretionary company contribution (i.e., QNEC), what if the company elects not to make a contribution after the year end earnings are calculated? If we have already checked the box and then the company ends up not contributing a match it would seem to create a problem.

What to do in this situation?

Does anyone know if a 1099 is required for the transfer of surplus assets from a terminating DB plan to a qualifying replacement plan?

Any help would be appreciated!

Does anyone know if a 1099 is required for the transfer of surplus assets from a terminating DB plan to a qualifying replacement plan?

Any help would be appreciated!

A participant took a hardship distribution from Roth money. The hardship was just the basis for the Roth deferrals. The participant is not 59.5, so it is a nonqualified distribution. When doing the 1099R, do you still prorate the distribution to find the taxable and nontaxable amount or is the whole amount nontaxable, since it was a hardship and only the basis was taken?

Client told me that they received:

IRS Notice of Insufficient ERISA Bond for 401k Profit Sharing Plan

Ever heard of such a thing? I don't have the notice yet.

Maybe its a marketing piece since if was the first year and the 5500 showed no bond in place?

Who loves the fact that you have to scroll way off to the right to see the plan year end now?? Couldn't they make it fit in the window??

Unbelievable...

Can an employer automatically enroll terminated employees in COBRA?

The employer wants to automatically enroll severed employees - the employer will pay for the COBRA coverage for a limited period. At the end of the period, participants could either opt-out or just not pay for continued coverage (at which point, the COBRA coverage would terminate).

The employer's COBRA vendor has said they do this frequently with other clients, I can find no authority to permit this.

Thank you in advance for any help!

This is my first time dealing with a S/H 401(k) Plan when the sponsor also has a DB plan.

Is there any special or combined testing that needs to be done?

I have very little knowledge of DB plans. (Our firm handles the DC...another firm handles the DB).

I do know that it is NOT a cash balance plan and the DB does NOT contain floor offset.

Thanks in advance for any help you can give me.

A corporation is starting a new plan. There are two 50% owners. One does not want to participate. Is there a problem with excluding that owner by name under the definition of Eligible Employee? (As opposed to finding a way to not name names.)

I know we have to restate the plan, but what about the accompanying trust agreement?

My first time with Fiscal Year rather than Calendar year plans...

We have a fiscal year based plan (July to June). Employee starts work in August 2012 and elects $5000 for dependent care account, which is pro-rated across the balance of the plan year. For new Plan Year starting 7/1/13, employee again elects $5000 which is pro-rated across the whole year. Net result is that calendar year 2013 W-2 shows a dependent care deduction in excess of $5000. However, $5000 maximum deduction for each plan year has been properly limited.

Anybody have experience with how the IRS might regard this?

Thanks!

What makes a company a successor employer? It is a 100% stock purchase or a change in entity only?

A prospect has a partnership that will dissolved on 1/31. The have a SARSEP. One of the partners is retiring. The other partner wants to form a new company on 2/1. They will have the same employees, line of work, and client's. I was not told that this would be a stock or asset sale. Would the new company be considerred a successor employer and able to adopt the SARSEP? I am thinking no, but maybe I am missing something.

I was conversing with an attorney and lamenting how the affordable care act really hurts lower wage working families. Consider the average family premium costs $14K per year, and most companies require a very large payroll deduction for family coverage.

A family of 4 making 55K per year with a payroll deduction of $11K per year, is harmed by the ACA because if they were allowed to get subsidies, they would pay far less on the Federal Exchange (about 4.1K per year for a silver plan).

So she said, why not just change the plan document to alter eligibility. And she of course qualified it as just a thought and an off the cuff one at that.

So, how about if we change the plan document to be: "If one is a full time employee and has a household income of less than 200% of FPL and has a household size of 3 or more, they are ineligible for the group health plan". The point of this is to make that employee eligible for the subsidies via the public exchanges. Most employees would be left in a better situation as a result of this.... except single mothers with free CHIP in many instances.

So how about: "If an employee would enroll into Company ABC's health plan as a family, and has a household income of less than 300% of FPL, they are ineligible fore the group health plan."

Since there is no 105(h) non-discrimination testing for fully insured plans right now, that isn't a factor. The group would have only a few people effected by it, so they still meet the insurance company's participation criteria. Thoughts? This is discrimination in favor of lower income earners IMO.

First RMD year is 2013. Participant takes an amount less than the RMD by 12/31/2013. Can he take the balance by 4/1/2014 and be ok?

I'm going to demonstrate a lot of ignorance but here's what I "think" the rules are:

1. Governmental plans are exempt from ERISA

2. State and local governmental plans can (and usually do) obtain a DL saying they are qualified under 401(a) so their employees have some certainty as to their tax consequences

If OK so far now to my question: do Federal government plans also have DLs or is there something somewhere that says they're 401(a) qualified?

Question is coming up under the new section 1411 Net Investment Income Tax where the regs are exempting distributions from plans qualified under 401(a).

Thanks

Here is an odd situation. I tried to find a similar situation on the boards, but no luck.

Our company with 51 employees sponsors a conventional group health insurance plan through a major carrier, for which we pay 85% of the premium. We have one employee who lives in Dallas, Texas (we are in Kansas). Our carrier has no group business in Texas except an HMO in the San Antonio area. Coverage through the carrier's national network is only available for employees who are traveling in Texas, not those who are Texas residents. Consequently, he is not eligible for coverage under our group plan, so he was forced to go to the exchange to purchase individual coverage that is roughly equivalent to that of our group plan.

We would like put him in the same position as if he worked at headquarters. My question is whether we can set up an HRA for just him so the employer portion of the premiums can be reimbursed on a tax-free basis, or will we have to report the premiums paid as taxable income and gross up his wages? We have a number of other employees who are out of state, but they are covered under our plan, and he would be too if he didn't live in Texas.

Thanks!

Hypothetical: Employee elects to contribute $500 to her health FSA for 2014 and $0 for future years. Employee does not submit requests for reimbursement in 2014 or 2015 so the balance in her account remains $500 at the end of 2015.

As I read Notice 2013-71, the employee could theoretically rollover the $500 indefinitely if she remains employed at the employer (and even if she terminates and elects COBRA) to the extent that she does not submit any requests for reimbursement.

My question is can the employer amend its plan to adopt the rollover provision but state that, in specified circumstances such as this, an employee will forfeit the $500 at the end of (in my example) 2015?

It has been suggested that if a plan is Safe Harbor and does not allow loans and subsequently the trustee decides within that plan year to add a loan provision you would have to wait until the next year. Any truth to this?

Thanks,

Hal

This is probably an easy question, but I just want to make sure. Had a participant pass away and his spouse (beneficiary) took a full distribution.

The question is, how is the 1099 completed? Is it with the participants name/SSN or the beneficiaries?

Thanks in advance!