E as in ERISA

I don't think that technically this is a new requirement. The auditors have always had procedures for reviewing related party transactions and have been required to make sure that the footnotes to the client's financial statements include appropriate disclosure of any related party transactions (including exempt ones) and that the attached schedules show any nonexempt transactions. (A late deposit would be a loan from the plan to the sponsor, which would be a nonexempt related party transaction). They are also required to compare the financial statements to the Form 5500 and make sure that they agree (or that there is a footnote explaining why they don't agree). A lot of the items on the Form 5500 can't be compared to anything in the audited financials (and vice versa). So in the past, I think that they have primarily compared the financial information on both -- and not much else. I think that the DOL is just clarifying that one of the items that they must specifically compare is the reporting on late deposits -- that the answer on Line 4a of Schedule H agrees with what they found in the audit and what is disclosed in the footnote/schedules. I don't think that there are any other changes. http://www.dol.gov/EBSA/PDF/2003-5500inst.pdf (p. 42)

Under Reg. Sec. 1.162-27(e)(2)(vi) stock options are automatically deemed to satisfy 162(m) if, among other requirements, the amount of compensation is based SOLELY on increases in the value of stock. If you have performance vesting, then you don't meet the exception. The performance goals would be something that have to be disclosed to shareholders so that they could take their impact into consideration before deciding whether or not to give approval.

What kind of benefits are in it? I think that most let the VEBA stay in place long enough to run out, in order to avoid the issue altogether.

I've seen the premiums collected retro, but as you say I don't know that the IRS would agree with that. I have heard that some insurers have arrangements where they don't charge for that initial period, so there is no retro premium to collect but they provide the coverage. (I think that it was in the context of large employer so somewhere it was probably built into the cost, but they didn't want the administration).

Tax exempts are generally subject to ERISA. So a 457 plan is subject to ERISA funding requirements (trust for the benefit of employees). There is an exception for top hat plans. But that only applies if the participation is limited to a select group of management and highly compensated employees. If it if not a top hat plan, then there must be a trust for the benefit of employees. That would make the amounts taxable to employees, which defeats the purpose of setting up a 457 plan. Governmentals are generally not subject to ERISA. Therefore no ERISA funding requirement. 457 not defeated. (457 may have some of its own trust requirements for governmentals, but they don't ruin the tax benefit).

Also see Section M of the Form 990 instructions regarding how to get copies -- from the IRS or directly from a particular organization.

It looks like guidestar.org now charges for some of the info. But it looks like at least some compensation information is available if you sign up for free. (I didn't bother...but you can try).

A public charity is generally required to provide a copy of its Form 990 upon request -- and that includes information about compensation of directors and the Board -- including retirement and other benefits. If they don't report the information on the Form 990, that compensation can potentially be subject to intermediate sanctions. There have been several articles on Benefits Buzz recently, because the IRS has confirmed that position. Many are now posting forms on the internet. Or see www.guidestar.org for copies of Forms 990.

I would expect an ERISA paralegal to work in a law firm or legal division and work with plan documents and policies & procedures and determination letter filings. A person with those other designations may not necessarily have much hands-on experience with with those documents. However, the practical knowledge might be much more helpful in understanding what the provisions and questions mean. If you can sell the fact that your knowledge and experience in working with plan operations is more valuable than the paralegal designation, you might not need the certification.

"LLC" does not have significance for tax purposes. They would have to "check the box" to be taxed as a corporation, partnership, etc. You need to know what their tax status is.

What is the concern? In my experience, they are used for "golden handcuffs" for key executives, etc. -- e.g., to get them to stay an extra few years with the promise of supplemental retirement benefits, etc.

If you get more than one job offer and are comparing alternatives, its a good idea to get an idea of the total compensation and benefits package. E.g., what benefits they provide, what the cost is, the eligibility and vesting requirements for retirement plans, etc. It sounds like you are on your way.

The Senate incorporated the NESTEG provisions into its JOBS bill. So now both versions of the international bills have deferred compensation provisions.

Do they have a high-deductible health plan? What about facilitating the new health savings accounts, which are individual accounts similar to IRAs so there is not the liability for the employer.

Its not clear from the facts how and when you got the Dissolution of Marriage and whether by its terms the decree included an order regardng the pension.

I know some plans where the employees cannot participate in the health plan without also enrolling in the cafeteria plan and paying the premiums pretax. The employer doesn't want the hassles related to that choice -- whether it is having twice as many boxes on the form and fielding questions from employees about which box to put their election in -- or the need to pay to have more buckets within the payroll system to handle pretax v. aftertax contributions and have them appropriately coded -- and make sure that the elections flow to the correct box, etc. And/or they don't want to have to deal with the administration of people going in and out during the year -- which may be allowable if they contributions don't go through a cafeteria plan. I.e., it is a choice made based on administrative convenience, expense, etc. Their plan documents may or may not always be clear on this. I also know of employers that allow the choice of pre tax or after tax. This is usually in an industry where the wages are lower and the employees are living paycheck to paycheck and may need to cancel their health insurance if their old truck breaks down and they need to buy a new one in order to get to work. I assume that the employee's election was in the form of a combined health insurance/125 plan election? So he can't change it? I would make sure that the plan documents and SPD are clear on this going forward.

How did the LLC elect to be treated for tax purposes? Under the check the box rules, it could be treated as a corporation, partnership, disregarded entity (division of a company), etc. My understanding is that you should generally respect that status for all tax purposes. I would apply 414(b)/© and 1563 accordingly.

In the limited cases that I've seen, the client has sent the late returns with a letter to the IRS detailing all the relevant facts that would potentially justify waiver of the penalties (not only the reasons why the problem occurred in the first place but also a description of the procedures that the client has instituted in order to ensure that the problem will not recur in the future). The IRS has always waived the penalties.

I assume that you'd want to comply with the rule that only allows you to charge for direct expenses -- so the employer would have to substantiate that it costs him $3 per payment.

I.e., you might now have a pending DRO. Not necessarily qualified. But you should consider following your QDRO process, including making sure that you don't distribute the full amount to the estate before the issue is settled.

The Dissolution of Marriage doesn't qualify as a domestic relations order? Or is the problem that it doesn't contain the necessary terms to be qualified?

I think that its a combination of the controlled group rules that say that A and B are considered one employer (414(b)/©) and the 401(k) distribution rules that restrict distributions to an active employee. If the employee can't take a distribution, then he can't roll it either. The employer could transfer it if the plans provide. But the employee can't control the transaction.

Why do you think that you still need spousal consent when the participant is divorced?

A merger is typically considered a continuation of both entities -- in a different form. So I would generally assume that the merged entity continues to sponsor both plans. Of course, it depends on the form of entity and the actual legal form of combination. But I wouldn't necessarily assume that the plans were orphaned on March 31.

The legal basis for the above answer: Internal Revenue Code 72(p) prescribes a limit on the amount of a loan equal to the lesser of (a) $50,000 reduced by…., or (b) the greater of (i) half of the account balance or (ii) $10,000. However, ERISA 408(b) requires that loans must adequately secured. And the Labor regulations provide that only 50% of the participant’s account balance can be used for security. If there is no security other than the account balance, then the ERISA "adequate security" rules will trump the IRC loan limit.