namealreadyinuse

I don't think you should have to go back to a pre-GUST document unless you are going EPCRS. If you are going to file a 5330 or 5307, you should have a document with a GUST letter, right?

Typically I understand that the plan adminsitrator picks the TPA, but that sometimes is bundled with the investment funds. Shouldn't trustees be the ones ultimately signing off on the investment fund arrangement or am I overthinking things? The specific question is who needs to actually sign off on a change in the investment arrangement, the plan administrator or trustees? The document has pretty "typical" language about trustees being responsible for investments.

We are considering extending health plan coverage to those "former" employees on LTD. Fully-insured plan. It will require keeping them on the books as a special category or part-time/consulting status, but apparently the insurance co is on board. Does anyone do this? We are beginning to think it is unwise for several reasons, but one of which is that it is so far outside the box.

That is very helpful. Do you specify any limits on types of massages or require specific licenses for the therapist?

Our plan does not currently permit many dual purpose items, but we are going to open it up for massages. What types of requirements are normally imposed? Licensed massage therapist? Doctor's note? Should that include Chiropractor?

I understood that the replacement option has to be a new grant essentially with a FMV on the the replacement date. Are you suggesting that it can be a backdated option as long as the grant date is = FMV on the retro date? I do not believe that is possible.

No, just the opposite. No legal right to payment = No 409A. When the risk of forfeiture lapses, it is deferred comp. Pay it out quickly and you can meet the short term deferral exception. Is there any potential for rapid appreciation of the stock? If so, you should think about restricted stock so that the executive can make an 83(b) election.

Check Notice 2006-79. I don't think 409A lets you replace options for insiders at reporting companies. Also, maybe post this on the 409A board.

The only time it really happens is when it is intentional to unwind a bad deal. It is so rare because it will always be cheaper to fix the problem (at about 20% of the overall disqualification cost). That is still a HUGE amount of money and should really be your motivation. You should strive for compliance to avoid the 20% MPA the IRS requires to fix problems it catches.

Is it vested (does he get it in 4 years if he leaves tomorrow)? If yes, it is 409A. It could be structured to be distributed on a set date in four years and pass with flying colors unless you try and get fancy. If no, you should be able to avoid 409A by paying it out soon after vesting under the short term deferral rules or it may fit the restriced stock exception.

The PPA is huge. An article on the historical problems with providing investment advice and how that is impacted by the PPA is a suggestion. Also, mutual fund mapping is affected by the PPA and that is pretty interesting.

You need a new "financial advisor" . . . If the post tax is traditional (not Roth), all that means is you get basis for your original contributions. The question is too easy if you assume a total distribution. You will take the total account balance, subtract the post tax contributions, and report the net as taxable distribution (also potentially subject to early distribution tax).

We would correct any changes to the financial schedules and include the audit.

Yes, that is the plan. We assumed that we would not get a letter from the IRS immediately, but that it would take the IRS/DOL some time to sort it out.

Form 5500 for a 401(k) won't be ready by Monday (audit and valuation not finished). Should we send what we have and then amend ASAP or wait and file DFVC? Any suggestions?

PATA, Who is purchasing the balance of the property? The plan? Sponsor? Participant? Neither the sponsor nor the participant can use the plan as collateral. The plan should be able to purchase the property if it could get the mortgage.

One thought was that the IRS would back off of good reason terminations. If that happens, the agreement will not be 409A and we wouldn't want to reference 409A terms.

Assuming agreements are subject to 409A to be safe (good reason termination is included), but the agreements use "termination" instead of "separation from service." It means the same thing, but is use of terminology that is different from the statute/regs going to be an issue here like it is (was) for 401(k) plans?

It means that all employer contributions must be subject to the same vesting schedule requirements of the Code. Not that

Nope.

Ok, I'll bite - sure it is a CODA. He has a choice between taxable compensation or a tax qualified deferral. Can it really be a voluntary waiver if the debt is hanging over his head?

It sounds like the "proposed" date of termination was in '05. If that holds up, you just have to amend the plan to be current through that date even if the last assets are distrubted in '06. You can lose the ability to use the "proposed" date of termination if you don't wind down the plan ASAP (a determination letter buys more time). The IRS concept is wasting trust I believe. The final regs are option in '05, so if any of these provisions were used, the amendment would be needed. The regs are mandatory in '06 so you won't have to amend for these unless you lose your proposed date.

The chances that the IRS will take that position are 100% if assets are titled in the name of the plan sponsor my friend. They have no choice. That is what happened. But . . . I am sure that your intent will save the day on audit. Look, legally, all 5500s are wrong, all participant statements are wrong, corporate deductions are wrong, etc. Were any of those assets paid for with salary reduction? That is not pretty. BTW, the DOL would enforce the plan asset and trust requirements, not theIRS.

The ramifications are catastrophic. The asset will be treated as a distribution or (worse) a reversion to the employer. Everett is correct - you need to "find" different facts.

Don't the HRA funds rollover from year to year? If not, that is your easiest fix. Can a profit-sharing contribution for one person pass nondiscrimination testing in their world? You do have a lot of flexibility to make PS contributions if you can pass nondiscrimination testing.