Miner88

Thanks for your comments - I just wanted to make sure I wasn't missing anything! I guess we'll just have to wait.

Thanks for your comments! I am concerned mostly with the fiduciary risks since marijuana is still illegal at the federal level.

It is my understanding that plan sponsors will be reimbursed for the COBRA subsidy through a credit against quarterly payroll taxes. With a multiemployer plan that uses a TPA, there are no payroll taxes against which to take a credit. How does the plan gets reimbursed? Do they need to fill out the tax form and just put 0 for the payroll taxes owed?

What are your thoughts on whether an ERISA plan can participate in a private equity fund that invests in a medical marijuana processing company?

A 403(b) plan incorrectly excluded some employees from participating in the plan over several years. To correct the error under VCP, a contribution must be made for the missed deferrals and the missed matching contributions. How are those corrective contributions made when the employees no longer participate in the plan (and don't have accounts anymore)?

Thanks XTitan - that was my original thought when this first came up, but someone steered me down the other path thinking it may be a stronger argument. So, I think we're OK here!

I'm reviewing a deferred compensation program that has the pay-out based upon the value of the service recipient's stock. There are several 409A permissible payment triggering events (separation from service, disability, change in control). In the payout section, it says that upon a triggering event, 1/3 of the deferred comp will be paid out over each of the next three years. Then, there is a provision that says in the case of a Change in Control, if the terms of the payout for the shareholders under the CIC are more favorable than the standard payout above, then the payout will occur in accordance with the terms applicable to the shareholders in general. 1.409A-3(i)(5)(iv) says: "Payments of compensation related to a change in control event...that occur because...the service recipient or a third party purchases a stock right held by a service provider, or that are calculated by reference to the value of stock of the service recipient (collectively, transaction-based compensation), may be treated as paid at a designated date or pursuant to a payment schedule that complies with the requirements of section 409A if the transaction-based compensation is paid on the same schedule and under the same terms and conditions as apply to payments to shareholders generally with respect to stock of the service recipient pursuant to a change in control event...." I don't see this as an impermissible toggle - there is only one payout schedule in the case of a CIC- in accordance with the terms of the general shareholders agreement if they are more favorable than the standard terms; otherwise the standard terms apply. Does that interpretation seem reasonable, or am I way off base?

I have this same issue - did you figure out how to handle it?

Thanks for the responses. The in-house administrator, through system/process error, did not realize that the benefits were 10-year certains and continued to pay the surviving spouses as if the benefits were J&S benefits. I'm not sure how the error was caught. Legal counsel is pursuing collection efforts against the surviving spouses and is in the process of settling some of the claims where there is no hope of recovering the full amount. I'm trying to figure out whether, after all reasonable collection efforts have been made, the fund can just move on, or must it try to get the remaining amounts from some other party (the Board of Trustees, the union, the employer association, the insurance carrier)? From my standpoint, the "responsible party" (other than the surviving spouses who may/should have known that they weren't entitled to the money) is the in-house administrator. But, they are just employees of the Plan and don't have assets to reimburse the plan for its errors.

In this particular situation, the in-house administrator of a multiemployer pension fund erroneously neglected to stop payments for several beneficiaries on a 10-year certain and life pension. Overpayments range from $5,000 to $125,000. Legal counsel has tried to pursue the beneficiaries to recoup the overpayments, but they just don't have the assets to repay the fund (most are widows in their 70's and 80's). Some have offered to repay a portion of the amount owed. If the money can't be recouped from the beneficiaries or the in-house administrator, and can't be corrected by amendment, must some other party (e.g., the Board of Trustees via their fiduciary liability insurance) make up for the missing assets in the plan?

If overpayments in pension benefits are mistakenly made to participants/beneficiaries, and the full amount cannot be recouped from the participant (for example, if there are no future payments to be made from the plan and the participant cannot repay the full amount), is the balance of the amount required to be paid back by the "plan sponsor?" I can understand this approach in a single employer plan where the company is the plan sponsor, but how does this work in the multiemployer world where a Board of Trustees is the plan sponsor? Should they file a fiduciary liability claim with the insurance company to recoup the overpayment? Any thoughts?

The MPRA changed the definition of "funding improvement plan" to require that the plan's funding percentage at the close of the funding improvement period equal or exceed the sum of (i) such percentage at the beginning of the first plan year for which the plan is certified to be in endangered status, plus (ii) 33% of the difference between 100% and the percentage in (i). Prior to MPRA, clause (i) was the plan's funded percentage at the beginning of the funding improvement period. Does this mean that plans that are half way through their funding improvement period need to comply with the new target? Or is this just for new funding improvement plans? In our situation, this change causes the plan to have a significantly higher funding target. Any thoughts?

A local union wants to establish/sponsor a medical plan for its members as an alternative to the high cost medical plan being offered by the multiemployer welfare plan that the union members are participating in. The plan will not be collectively bargained. 1. Is this a MEWA? And, if so, what exactly are the ramifications of that? (I know almost nothing about MEWAs!) 2. If they can sponsor the medical plan, will it be considered a group health plan that can be integrated with the HRA being offered under the multiemployer plan? Any insights are appreciated!

Several unrelated colleges contribute money to a trust to pay for health insurance benefits. Each college has its own plan document and contract with the insurance company. They each file 5500s separately. They pay a funding rate into the "consortium's" trust account, and claims and expenses are paid from the trust. They also maintain a reserve in the trust account. A single TPA handles claims for the consortium. Is this a MEWA that requires filing of the Form M-1? Does the consortium itself (as opposed to each college) have to file a form 5500? Any thoughts would be appreciated!

Thanks for your reply Effen. In this case, the plan was not notified that a beneficiary had died, so continued to send payments to the account held jointly by the beneficiary and her son. When the plan found out that the beneficiary had died (after about $5,000 was overpaid), it requested repayment from the son. He paid half back, but cannot/will not pay the rest. In this case, I'd love to just have the plan absorb it and not have to pay VCP fees to have the IRS approve that solution!