E as in ERISA

The audit and the Form 5500 are PLAN level reporting. But as noted above, there might be some additional reporting if the assets are actually in the same trust.

What does the plan say? It should prescribe the "deemed cash out" rules. And then should provide for an immediate "repayment" and restoration upon the employee's return to employment without a five year break in service.

I think that the signer gets to decide, not the preparer.

If the plan says "actual" hours, isn't that an operational error to not track actual hours and to use "billable" hours instead? How do they justify that. Shouldn't they consider amending the plan to use equivalencies? I wonder whether this is an isolated case or whether there may be a lot of professional service firms doing this? I'm not familiar with this sector.

The plan is a non-standardized prototype. In the adoption agreement, the box is checked for "1 year of eligibility service" for the various types of contributions. They have filled in "1000" for hours of service for eligibility. The definition of hours in the prototype is "each hour for which an Employee is paid ... for the performance of duties" and "during which no duties are performed." It says that can be changed in the adoption agreement. In the adoption agreement, they've checked "actual hours ..." (There are options for "days worked" ... weeks, semi-monthly and monthly equivalencies but those aren't checked.) HR says that they use billable hours to determine eligibility. There are part time employees.

I'm reacting to the "if you must" comment and wondering if many plans are on the "actual hours" method and just treat billable hours as satisfying that method. But, if so, I'm wondering if there is any actual authority for doing so, or whether that was just the practice when most working in professional services were full time and has not been updated to reflect a lot more flexible hours arrangements.

How do you count hours for eligibility for a plan for a professional who only records billable hours (e.g., an attorney in a law firm)? Actual hours worked are generally more than billable hours. But certain types of professional services firms generally do not even collect information on the non-billable hours. And although the billable hours might be said to be what the employee is paid for, the employee's pay is not so directly tied to hours that it would be adjusted up or down specifically for differences between actual billable hours and the required ones. Are equivalencies generally used? Or do you just use the elapsed time method?

Why wouldn't a requirement of five years of service be considered an SRF under 83? Or 409A? See Section © of regulations http://a257.g.akamaitech.net/7/257/2422/10...26cfr1.83-3.htm And examples indicate that requirement to remain in employment for a period of time is a risk of forfeiture.

RSSR! (roulant sur le sol rigolant!)

En outre, considerer l'implication de 409A.

C'est vrai.

Is your company multistate? What product or service do you sell? Maybe its because many certifications and licenses are state specific. Attorney or Cpa or insurance or securities? And they don't want those on cards if they don't relate to the state in which the person is now located. So if they don't allow those, then they don't allow other professional "designations."

Remember that in an IRS audit the plan is not likely to get disqualified unless the problems are egregious or not corrected according to the IRS' satisfaction. So the audit is really a negotiation between the employer and IRS regarding the corrections and a penalty paid by the company. Everything else is just a formality.

Tell it to the IRS. It insisted the insurance company sign the consent to the extension.

If HR 2830 passes in the next couple of weeks this may no longer be an issue.

The regulations say that the first vesting period must begin before the last day of the preceding vesting computation period. But then the example in the regulations says that a plan using calendar year changes to a June 30 year end starting in 1977. Those who complete 1000 hours in both the 1/1/1977 to 12/31/1977 and 7/1/1977 to 6/30/1978 periods get two years of credit. I thought that in your example you got double credit for the 7/1/2005 to 12/31/2005 period. So your first vesting period of 7/1/2005 to 6/30/2006 begins before the last day of the period period of 1/1/2005 to 12/31/2005. But the example kind of suggests that you get double credit for the 7/1/2006 to 12/31/2006 period. Depending on what they mean by saying the plan is amended to provide for 6/30 vesting "starting in 1977".

The only purpose for which I've seen the Schedule P used is the determination of who signs the form to keep the statute of limitations open during an IRS audit. And in my experience the IRS doesn't appear to have a problem with an insurance company doing that.

409A is a rule regarding timing of taxation. I think that the question is whether there is any risk that the employee will be taxed at the end of that year even if he never ultimately receives the payment.

Is it ongoing or was it just temporary? Maybe a participant took a distribution of assets other than employer stock. But the trade didn't settle as expected so he got a larger distribution than the liquidation of the assets produced? So maybe a little stock needs to be sold to cover the negative balance?

The separate accounting rule is in 1.401(k)-1(e)(3). If you don't apply it, the employer contribution is subject to 401(k) vesting and distribution rules. The CPA is saying that they're the same already?

I don't think your facts make it clear how many plans there are. Are the cafeteria plan for the medical and the medical itself together one plan? Or is the cafeteria stand alone? So those are two separate plans? Same for LTD and insurance? You are saying the medical is insured through a carrier (not self-insured)? The filing is generally for the underlying benefit not the cafeteria plan.

Does the document in your possession have any trust provisions? Or is there a separate trust document that you haven't received?

There has to be company action of some type in order for there to be a partial termination. You don't have a partial termination if 25% of the work force hates the boss and quits. The issue on the former employee is whether his termination was related to this company action or completely indepedent.

I don't know if anyone mentioned this but at the May 2006 ABA the IRS said it might provide guidance clarifying that you use 95000 to see if someone is an HCE in 2006. http://www.abanet.org/jceb/2006/JCEBQAwithIRSfor2006.pdf Q. 41

The contribution can't precede the services. I think that's 1.401(k)-1(a)(3)(iii)©(1)?