J Simmons

There is a taxation issue. A live-in boyfriend's child is not the employee's qualifying child under IRC § 152. The child might be a 'qualifying relative' under IRC § 152(d)(2)(H). You'll need to vet out if the requirements of IRC §§ 152(d)(1)(B), © and (D) are also met. If not a qualifying relative, the value of the coverage to the boyfriend's child should be added to taxable income reported on the employee's Forms W-2.

If the $3,000/mo = $36,000 per year is a guaranteed payment rather than just some type of advance, yes, it is my understanding that he'd have $16,000 ($36,000 - $20,000) as net income from the partnership.

BruceM, For the sole proprietorship situation, you are correct. For the partnership situation, are any of the partners entitled to guaranteed payments? If a partner has a net after his share of losses are subtracted from the amount of his guaranteed payments, he has net income for the year.

In an October 15, 2007 letter from the National Coordinating Committee for Multiemployer Plans, Washington DC, to EBSA's Office of Regulations and Interpretations, the following definition was suggested: "'Sensitivity testing' means a report, which may be part of the regular actuarial report, reviewing the impact of future experience that deviates from the actuarial assumptions used by the plan's actuary."

I think you can file concurrently. The VCP application will hold-up the issuance of a D-letter, however. See Rev Proc 2008-50, section 10.06.

1. I think for the exemption you must meet both: (a) the present value of assets spun off is not less than the present value of benefits spun off, and (b) the 3% de minimis rule. 2. If you have to file the F5310-A, I think to be timely you should file at least 30 days before either the document specified effective date or the transfer of any assets to effectuate the spin-off.

Often the same entity will serve as trustee with regards to assets of more than one QRP. This does not necessarily mean that all the assets belong to a single, master trust simply because they use the same trustee. Where the assets are not pooled and each QRP has a percentage, but are separately accounted, what differentiates a situation of two separate trusts from a single, master trust situation? Factors I would look for include whether there are different trust instruments (governing documents that outline the terms by which the trustee holds the assets) for the two plans, or just one trust instrument for the two QRPs? Are all the assets--despite being separately accounted for--obligated to meet each benefits obligation under both QRPs? Are the the assets titled differently along the lines of the separate accountings for the two QRPs? You may not have a master trust, but simply the same trustee with respect to two trusts.

In Rowell v CIR, TC Memo 1988-410, 56 TCM 11 (1988), the Tax Court found insufficient the taxpayer's offered proof that payment was made by the due date in that situation of August 15. That evidence was a transmittal letter from one bank to another "instructing that the accompanying check for $4,000 be deposited into Mr. Rowell's Keogh account". The check was not credited to the Keogh account ledger sheet until September 30. There, the offered proof was a letter that mentioned the $4,000 contribution. That wasn't enough. Postmarks are great if you have them and have proof of what was sent in the mailing. If challenged, you will need proof that the certified mail receipt, for example, relates to a mailing that in fact included the payment. K2retire and mjb make excellent points, in their different ways, about whose agent was the TPA? If the employer could have pulled the payment back after September 15 by asking its agent, the TPA, to return the unprocessed check to the employer, the payment certainly was not made by September 15. If the TPA was under a legal compunction not to return the check even if requested by the employer, then it would likely have been made--if it could be proven, see above.

My 2 cents? Just a new amortization schedule will do. On bi-weekly, some months you have 3 paydays rather than just 2 (the difference between bi-weekly and semi-monthly). If you wanted to strictly adhere to the terms of the existing documents, I think you would take the equivalent of 2 bi-weekly payments for some months, 3 for the other months--depending on how many paydays there would have been had the employer stayed with bi-weekly paydays.

Larry, If the plan used the safe harbor definitions of hardship but paid out a hardship in a situation not quite meeting any of those 6 defined categories, would VCP correction include an amendment (retroactive) that relaxed at least that category to the point it picks up the questionable situation? The reason I ask is a few years back a TPA administering a grandfather, pre-1974 money purchase pension plan with a 401k provisions assumed that in-service hardship distributions were okay--in all 401k plans--and made the distribution. The plan, by its terms, did not. We VCP'd it, and our correction was to allow after-tax employee contributions (without adjustment for investment earnings) to be the source of in-service hardship distributions in this plan. There's an old Rev Rul that allows for such even in a money purchase pension plan. We cited that as part of our VCP application and submitted a proposed amendment along those lines. The IRS accepted that amendment as the fix in that situation. Just curious as to your thoughts and comments on whether you might be able to fix a lax hardship situation by amending (retro) to the lesser standard.

I have had the uneasy feeling that there are non-professional posters not only seeking advice but giving the impression they will run with it. The probabilities are small that the fans in my house could start smelling but why not with (at this point) no effort, take measures to mitigate this risk? What does it hurt? In any event, feel free to adopt my signature verbatim or with wordsmithing to your posts. I believe others may be following with my CYA posture. Thanks, ATA. I did!

Schedule C, Service Provider Information, only calls for information about PLAN payments to service providers. The sole source of funding for a self-funded health plan in the context of a cafeteria plan (per the DoL exemption to the trust requirement) is the employer's general assets. Service providers to the plan are also paid out of that same source, the employer's general assets. Is a Schedule C to the F5500 for the plan required to report the payments to the service providers since they were made out of the same funding source as health claims, albeit the employer's general assets? Or may a Schedule C be omitted from the F5500 filing taking the position that the employer, not the plan per se, paid those service providers?

You are asking for a citation to a negative proposition--for a citation that HCE-NHCE nondiscrimination does not apply to employer-provided long-term care insurance. Maybe your question could be turned around to what citation is there to HCE-NHCE nondiscrimination applying to employer-provided long-term care insurance. Check section 106(a) and 106©. You'll see that nowhere is HCE-NHCE nondiscrimination made a requirement. Generalized discrimination principles, race, gender, disability, pregnancy, etc. must however not be the basis of your cut between employees for whom it will be provided and those for whom it will not.

Andy the Actuary, What prompted you to add your red post disclaimer: The material provided and the opinions expressed in this post are for general informational purposes only and should not be used or relied upon as the basis for any action. You should obtain appropriate tax, legal, or other professional advice. Should we all be adding the disclaimer?

I'm not sure I agree with ERISAnut. The basic plan document, as described in the OP, gives the choice of % or $ amount to the participant. If the adoption agreement does not give the employer the option of just one, % or $, I do not think that employer may effectively deny, through what is presented in the Salary Reduction Agreement, the option the BPD gives to the participants. If the adoption agreement does not allow the employer to specify, then the plan would need to be amended to limit the election to either % or $ or the plan administrator would not be administering the plan as written. If the plan is amended beyond switching options presented to the employer in the adoption agreement, you'd be migrating from a prototype into individually designed.

I'll weigh in on the side of caution, espoused by K2retire and Sieve. In the past year I've spent a great deal of time advising business managers for school districts that simply cannot get their head around why the IRS is imposing new regs on 403b plans now. When I've explained that the universal availability rule has long been in the statute, why is the IRS just now pushing its enforcement? is the comeback. I'd rather have a client tell me that a rule I've just advised him or her about is ridiculous than to have him or her later ask why I didn't warn about the risk being taken.

What? Doesn't an S corporation mean I have a "Get out of RULES Free" card? I've heard the claim in the context of contol and affiliated service groups time and again from one-trick ponies all of whose clients are in S corporations (or, alternatively, all in LLCs).

I agree with Lori's suggestion. I know of several situations where that approach was taken without so much as a hiccup from the DoL.

Another way of saying it is: 1-no minimum age and service requirements may be imposed on salary deferrals. Just the minimum schedule requirement (20 hours or less per week, alternatively met by a 1,000-hour year of service) and/or the $200/year minimum, but 2-410(b) minimum age and service requirements may be imposed for employer contributions.

With H&W plans, one document has often done double duty as both the governing document and the SPD. Given the volume of issues that need to be addressed in an H&W plan, however, it is difficult in 2008 to do so and at the same time meet the readability requirement for an SPD. More and more, H&W plans are having the two document structure that pension plans do. I've not seen one comprehensive listing compiled outside of proprietary, in-house information by document providers. I do suspect that you could find (Google) one, but you'd have to be confident in the source to rely on it rather than culling your own list from the various laws and regulations that might apply. You might also check this part of BenefitsLink for publications you can purchase on topic. Welfare Plan Admin.

Hi, RTK, Your post is thought provoking. Contingency perhaps being "... an attempt to provide a death benefit not otherwise provided by the plan for an accrued benefit". Couched as a contingency, the awarded benefit is subject to a condition precedent. As a reversion, it is a condition subsequent. The difference has substance, not just form. The implementation I've seen is, on your example numbers, $400 if the participant begins taking before the alternate payee, bumped up on the alternate payee's death.

Actually, QDROphile, it's reassuring. That you will give the securities response whenever a MEP and 401k intersect is one of the more predictable things in the ERISA world. If you did not, we'd wonder if you were okay. For what it's worth, after my own analysis (pretty extensive) of both SEC Release Nos. 33-6188 and 33-6281, I have reached a different conclusion than that which I understand Kirk Maldonado reached. I agree that it is not enough that the MEP has no Employer Securities. I also agree that the SEC and securities practitioners speak their own lingo and have their unique approach (at least that's been my experience in getting a couple of filings through the SEC). But I do not think that SEC Release Nos. 33-6188 and 33-6281 require all MEP 401k's to have SEC filings--and I don't know of the SEC having asserted such, through enforcement or comments.

Take a look at Treas Reg § 401(k)-2(a)3(ii)(A). I think you test the employer's employees, both the time in the MEP and the time part of another plan, together for the year, 2007.

I think you may be StarTrekking--boldly going where no IRS official guidance has gone before. I've not understood why a Roth 401k plan cannot accept rollovers from Roth IRAs. Maybe it is due to difficulties tracking the 5-year rule. Whatever the logic, in this day and age of traditional IRA dollars (even those directly contributed to the IRA) being able to be rolled into a traditional 401k, but there being that prohibition of Roth IRA to Roth 401k, I suspect the reasons for that prohibition would apply and prohibit the rollover you are considering.

To be entitled to forfeiture restoration, she must contribute to the plan following re-hire the full amount that was paid out to her, unadjusted by investment earnings (losses). Is she repays the full amount that was paid out to her, it should be tagged as 'the original sources of money' rather than 'Rollover'. Make sure that she does so timely--5 years of rehire. Also, when making the restoration of the forfeited sums, it should come from sources specified in the plan document.