J Simmons

Bonus points to BG5150. I thought the intended irony was going to go unmentioned.

A person may have benefits in both an IRA and a money purchase pension plan at the same time. A person who accrues a money purchase pension plan benefit in a tax year may be prohibited from making a tax-deductible (or Roth) contribution to an IRA that same year. That depends on the AGI (adjusted gross income) level of the person (and perhaps spouse). See IRC section 219 for more details.

Sorry to hear about the theft you are the victim of, Below Ground. I've much admired the quad in the picture you have with your name. I hope your homeowner's will cover it. When ATV's are recovered and returned to the rightful owners, they often are the worse for wear and tear.

I do not see the use of a common investment platform affecting the ability to keep each plan eligible for the small plan audit exemption.

My understanding is that strategy works.

It was discovered by a f5500 preparer after 10/15 that on 10/15 (under extension) the employer simply mailed the f5500 to EBSA without having signed it. What to do? 1-Wait til EBSA rejects it for lack of signature, or sends it back for one 2-Employer signs an identical copy now and mails to EBSA 3-An identical f5500 is marked "amended" then signed and mailed to EBSA

Look at item #a in this recent post

Employees, as such, are as you note not 'disqualified persons', but if the plan investments are participant-directed (and that is an assumption), then they can be disqualified persons with respect to the plan.

Rev Rul 89-87, 1989-2 CB 81.

It might have been a more useful approach for the Time reporter simply to have based his piece on the fact that while we are living longer (i.e., longer periods post productive work lives), there is a greater need for retirement resources both for basic living expenses and rising medical costs for geriatrics. And given the current economic downturn, there is less in 401k accounts than there was a 15 months ago, less in DB funds, and less in corporate coffers, and governments are collecting less tax money--reducing the resources needed for longer and longer retirements. It seems the answer is for people to work longer.

That's a lot of information requested. Take a look at 1-ERISA § 105(a)(1) and (2) (29 US Code § 1025(a)(1) and (2)) as amended by P.L. 109-280 (Pension Protection Act of 2006), Act § 501(a)(1) 2-EBSA Field Assistance Bulletin 2006-03, December 20, 2006 3-EBSA Field Assistance Bulletin No. 2007-03, October 12, 2007

Safe harbor means you don't have to pass the ADP and ACP tests that would apply but for the safe harbor applying. So the ADP and ACP numbers would not necessarily have to fail for the safe harbor to apply. If the plan is not safe harbored, then the plan needs to pass the ADP and ACP tests.

29 CFR § 2510.3-102

Since the HDHP (high deductible health plan--insurance coverage) that is required to render the employee eligible to make tax-deductible contributions to an HSA for a month cannot, if it is single coverage, have an annual deductible for 2009 that is less than $1,150, the simultaneous MERP must not cover that first $1,150 of medical expenses for the year.

You can have an HSA at the time you also have MERP coverage. However, EEs may only be eligible for contributions (by the ER or themselves) to the HSA for months when they have MERP coverage if the MERP imposes the necessary 'high' annual deductible on expenses that it will cover.

Situation. ER has 45 employees and a $500 annual deductible group health insurance policy, with 20% co-insurance responsibility of the covered EE and $10,000 maximum out of pocket. The ER is switching to a $10,000 annual deductible group health insurance policy. So that the EE is in the 'same position, the ER will be instituting a buy-down MERP that has a $500 annual dedutible. ER will pay 80% of dollars $501-$9,999 for the year. Then the insurance kicks in. Once the EE hits $10,000 paid out of pocket under the MERP and the insurance, the ER will then pay any additional co-insurance for the EE. The new, $10,000 annual deductible group health insurance coverage is subject to COBRA, and will be administered by the insurance company. Two questions: 1-Inasmuch as COBRA applies to the $10,000 annual deductible group health insurance policy, does COBRA also apply to the buy-down MERP? 2-If COBRA does apply to the buy-down MERP, how would the 'premium' cost for COBRA-continued coverage under the buy-down MERP be determined?

Situation: A 2-ER control group situation where the plan is for only EEs of one ER. An EE of both ERs is plan eligible. In determining that EE's EBARs, do you use her compensation just from the ER for which the plan is established and benefiting EEs or her combined compensation from both ERs in the control group? In determining that EE's 'gateway' minimum, do you use her compensation just from the ER for which the plan is established and benefiting EEs or her combined compensation from both ERs in the control group?

Does anyone know of a listing of available managed, balanced and target-date funds that satisfy the QDIA requirements, such as no back end loads or other surrender charges if within 90 days of the first deposit the employee gives an investment directive outside of the QDIA?

Maybe the contribution by the TPA was the 'correction' of a prohibited transaction--the use of Plan assets by party-in-interest, the participants to the extent that they were overpaid. The TPA was perhaps acting on their behalf in making the corrective payment. Maybe that's a stretch. Off the top, I do not know if the corrective action has to be taken by the party-in-interest, or could be made by someone (here the TPA) for the party-in-interest's benefit. Next time there is an overpayment, instead of the TPA making up the overpayment the plan might consider reporting such as prohibited transactions on its Form 5500, and notifying each of the overpaid participants that if he or she promptly returns the overpayment (i.e. correct the prohibited transaction) such as within 30 days, the TPA will prepare the Form 5330 and pay the penalty for them. If not, the overpaid participant is on his or her own with respect to the prohibited transaction issue, but that the plan is reporting it to the IRS as part of its Form 5500 annual report.

Time magazine here takes aim at 401k plans. Apparently, 401k plans are the problem to all of America's retirement woes. 401k plans are apparentently a 'lousy idea'. And the "idea that we could ever save enough to pay for 30 years of leisure is a relatively recent invention." No mention in the article how lengthening durations of retirement (unproductive years) at the end of life due to retirement in mid-60s but life expectancies growing to mid-80s impacts DB plans and the companies that sponsor them.

Larry, It's one thing to disagree with an IRS PLR, but a court case...

Chaos, It would sound like then the post-death QDRO was entered per a state domestic relations law, and given the 3/2007 regulations, post-death entered QDROs may be valid. If the plan paid out per its terms and death beneficiary designation before it had hint of possible QDRO coming, then I think the plan is on terra firma and the now imminent QDRO is too late. However, as David Rigby points out, if plan administrator had reason to know that the QDRO was in coming at the time it paid out as if there was no QDRO, there could be problems for the plan administrator.

What's the cite for the case you found? I think the purpose of 513(b)(2) is to resolve the dilemma of whether all active business are related or all are unrelated to the purpose of retirement savings. I.e., the type of trade or business. I think a purpose of 512(a) is as you quote, "carried on by" the otherwise tax-free entity. I.e., the proximity of the tax-free entity to the active business.

Certainly not a divorce lawyer, but I suppose that in many states the death of a spouse in the midst of a divorce proceeding and before the marriage has been ended by a decree of divorce would moot the remaining divorce proceeding.

I would recommend the plan administrator consider filing for habeas corpus relief in federal court for protection from what appears to be an improper effort by a state court (acting more as a probate court than a divorce court regardless of how it began) to override federal law and the provisions of the plan. You might want to look at the US Supreme Court's 1/26/2009 ruling in Kennedy v Plan Administrator of the DuPont Savings Plan, that gives the plan administrator cover from state law machinations if the plan administrator follows the terms of its plan.