Effen

I'm not so sure I agree. Yes there is a lot of PPA work related to multi's, but the singles have a fair amount as well. Most importantly, a multiemployer plan doesn't need to fund based on the new method and doesn't need to use the yield curve as a funding assumption. Therefore, required contributions will generally be lower. I have heard of a number of employers who are trying to change their plans from singles to multi's in order to take advantage of the differences. If you don't work on other multi's or if you haven't in the past, you probably shouldn't be bidding. Multi's are different animal. Can you split them? I think it can be done but I don't know. You would need to assign each participant's liability to one of the remaining employers which sounds like a political nightmare. Seems like you would spend a ton in legal and actuarial fees to do it.

One way might be through a VCP filing. Explain everything to the IRS, tell them what you would like to do and see what they say. The solution may require you to provide everyone who worked over 1000 hours with a full year of service, but you never know. I have seen the IRS let some things go that I never thought they would.

I agree with Mike, get the money back into the Plan ASAP. You might consider an Option 4 - assuming the VCP has been filed, prepare the 2005 Sch B using the assets in the IRA as the assets of the Trust. Add an attachment to the Sch B stating that your signature is based on the approval of a VCP filing filed on _____ and if the VCP is not approved your signiture is revoked. Make sure the PA also signs this attachment so they are aware. I also strongly recommend you contact ABCD and ask their opinion. I found them to be very helpful in situations like this.

I don't think so, but it has never been an issue. The few we have done with them the assets = liabilities.

I work with an attorney who has merged DB's into a PS several times and the IRS has never questioned them. I'm not sure it is 100% kosher, but they do it and no one seems to say boo. They use 1.411(d)-4 Q&A-3 as the basis & file a 5310-A reporting the merger to the IRS. These are generally very small plans (1 life, or husband/wife). I'm not sure if they would do it with anything bigger.

Dazed, I admire your desire to learn and make yourself into a better benefits consultant, but honestly, it seems like you are in way over your head. The fact you don't even know where to start looking for the answers to these questions tells me you are either in a shop where you don't get a lot of support, or you are just the type of person who likes to ask first and look second. These are the types of issues that can lead to law suits if your advice to the client is not correct, so be careful. You seem like you are at a stage in your career where you don't know what you don't know and that can be very dangerous. You should be asking these questions to those inside your office, and if you don't have anyone in the office who knows, you probably shouldn't be taking this assignment.

I googled "controled group" and got about a billion hits. This first one looked pretty good. http://www.employerbook.com/CGCode.html Pension Answer Book is good, CCH, RIA, BNA all have summaries I'm sure.

Any pension service will give you lots of information about controlled groups. It's a fairly major topic. Basically, if it is a controlled group, you treat the entire group as if it is one employer. Do you have a specific question?

We use ASC. Like Belgarath I'm not really the biggest user, but it seems to do the trick. They had some issues w/ most valuable accruals, but they have recently made the proper adjustments. We use it for our DCs, small DBs, cash balance, & DB/DC testing.

Do you have any HCEs?

Is there a definitive answer to this question? I have a client with a 403(b), with employer match. The investments are all mutual funds. The money is transfered to the 403(b) carrier with each payroll. Do they need a fidelity bond?

I guess I stand corrected, even the unions are now drinking the 401(k) Cool-Aid!

A multi-employer 401(k) would be extremely rare. Are you sure it is a 401(k)? Often they have DC plans that they think is a 401(k). The contribution rate is negotiated, or even set by the membership. They think it as "employee" contributions since it is "their" money, but in reality it is an employer contribuiton. If is is a 401(k), how do you track employee money from so many different employers? It has to be an adminstrative nightmare. I have seen several cases where the union guys have no real understanding of their plan and they assume it is a 401(k) and they solicite quotes based on what they thought. Sometimes even the attorney doesn't really know what it is if they are not strong in ERISA. If it is a 401(k), I'm curious what union it is and what part of the country? (Don't be too specific.) Good luck

I would say they have contributed 25K and they still owe another 5K to satisify min. funding requirements. This assumes that when the 30K was determined there was no explicit expense assumption, but even then, since the 5K wasn't actually contributed to the Trust, I don't see how they can call it a contribution. They should be able to deduct 3K fee and the 2K premium as business expenses, but not as employer contribution. I think they still owe the plan another 5K. When you say you "believe that the PBGC Premium isn't deductible", I assume you mean as an ER contribution. Is that right? Why would the client challange your conclusion? Just tell them if they don't put in another 5K, then you will show a deficiency on the Sch. B and they can explain their position to the IRS. Also, with the new deduction rules applicable in 2006, the max may be much higher.

Can't the plan pay its administrative fees? - yes, generally the "Trust" can pay most admin fees - see DOL guidelines for more info. Can't the plan pay the pbgc fees? - yes, the Trust can pay the PBGC "premium". (not sure about PBGC "fee" - the PBGC can charge penalties that can not be paid by the Trust) Can't fees paid on behalf of the plan by the er be considered contributions? No, a fee paid directly by the employer is not a contribution. It may be deducted as a plan expense, but it is not considered a contribution. Why is this important to treat it as an employer contribution and not an general expense? It is deductible either way. Are you trying to avoid a funding deficiency?

thank you!

Thanks Pax, do you have a link to that worksheet? I searched the SOA site and couldn't find anything.

If anyone has been doing projections beyond 2008, what are you using for estimated segment rates for Current Liability? At first, I was just using the RPA rate (5.78%) for all 3 segments, but I think that is a little low. An actuary at another firm recommended 5%, 5.6%, 6.1% for the 3 rates. Anyone have any idea? What would the segments be based on current market conditions?

Did it go through the Trust? If not, then it isn't a contribution.

You are correct sir

"Unregistered tROHPYwIFE" - is that sort of like a free agent?

SoCal, I'm not arguing your point, but we were involved in a situation where the IRS applied to tax to a "normal" employee in this same type of fact pattern. We were hired after the fact, but I know the IRS collected the tax because the employer paid it for her. This was 10+ years ago so maybe things have changed or maybe she just didn't argue the point since the employer was paying.

Then your plan may have a disqualifying defect... but then again, so do some of the most popular national prototypes on the same issue. If you didn't provide a Suspension of Benefits, then you must provide a roll-up (since you also said your plan didn't allow retro payments until now.) This is a 411(d)(6) issue. You can't just not pay the benefit. You may want to consider VCP if you want to be safe. Since you are amending now for the retro payments, why not make sure the amendment clearly defines how the retro payment will be determined. That way you will control what form it will be based on. Are you also planning on paying the significant excise tax on the missed MRD's the participant will incur when he files his 1040? This plan has some real issues.

You probably should look at what hospital A employees were told in 1994. There probably isn't anything legally wrong with what they did, although you do point out a potential HR problem. Chances are the merged hospital was well aware of the issue and still chose to do what they did. They way you perceived what happen in 1994 ("merger of equals") may have been the way it was presented to the employees, but behind closed doors it may have been B purchasing A and therefore B didn't want to pay for A's past service in B's plan. It sounds like you have properly identified a "problem". I'm not saying they did anything wrong, assuming everyone was given the proper notices. What they did was / is very common. It can be easily "fixed" with $$ if the hospital wants to fix it.

They are generally free and clear after the one-time payment. The one noted exception is if there is a mass withdrawal in the near future. I believe the Trustees can come back and reasses them a higher liability based on the mass withdrawal liabilities.