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!

When an overpayment is made from a plan, the EPCRS rev. proc. says that the employer must make reasonable efforts to collect the overpayment and, to the extent it cannot be recovered, then the employer or another person must contribute the difference to the plan. In the defined benefit multiemployer context, who makes the payment to make the plan whole when the recipient does not repay the entire amount? Any thoughts would be appreciated!

When an overpayment is made from a plan, the EPCRS rev. proc. says that the employer must make reasonable efforts to collect the overpayment and, to the extent it cannot be recovered, then the employer or another person must contribute the difference to the plan. In the defined benefit multiemployer context, who makes the payment to make the plan whole? Any thoughts would be appreciated!

A multiemployer employer welfare plan maintains a "Value Bank" that members can use to pay for dental claims, prescription co-pays, etc. There have been several fraudulent claims sent in by members trying to get "their money." The reimbursements are, of course, funded by the agreed upon employer contributions to the plan, but the members do not actually have any "money" in an "account." If they don't have valid claims, they don't get any money. The trustees would like to amend the plan to impose a penalty upon anyone they find sending in fraudulent claims. A possible penalty would be loss of all funds credited to their Value Bank "account." Does anyone see any problems with this? Does this need to be collectively bargained?

I could really use some opinions on this! Here's the situation: Employer A is part of a controlled group of employers with Employer B and Employer C. All three employers contribute to a multiemployer welfare plan on behalf of their employees. Employer A does not have collectively bargained employees, but is allowed to participate in the plan. Employer A sells its assets to Company X and most of its employees are employed by Company X and enrolled in Company X's health plan (any remaining employees are terminated). Employer A stops making contributions to the multiemployer plan because it no longer has any employees; however, Employers B and C continue to contribute on behalf of their employees. Who is required to provide COBRA coverage for the people who were on COBRA with the multiemployer plan before the asset sale and for the people who are terminated because of the asset sale?? Is the multiemployer welfare plan responsible for COBRA for these people under 54.4980B-9, Q&A-10 (which says that if an employer stops contributing to a multiemployer group health plan, the multiemployer group health plan has the obligation to make COBRA continuation coverage avaible to a qualified beneficiary who was receiving coverage under the multiemployer plan on the day before the cessation of contributions, UNLESS the employer that stopped contributing makes group health plan coverage available to the employees formerly covered by the multiemployer plan)? Or is Company X responsible for COBRA for these people under 54.4980B-9, Q&A-8 (which says that in the case of an asset sale, if the selling group ceases to provide any group health plan to any employee in connection with the sale and if the buying group continues the business operations associated with the assets purchased from the selling group without interruption or substantial change, the buying group is a successor employer to the selling group, and therefore responsible for COBRA)? Or is there some other authority that addresses this issue??

I need some opinions on this please! I have a plan that wants to refuse coverage for spouses of active employees who have coverage available "elsewhere." What if the "elsewhere" is Medicare coverage? I am aware of the Medicare rules that say you cannot drop an employee, spouse, or dependent from your plan just because they are eligible for Medicare. However, I came across another provision that says you have to provide Medicare-eligible individuals with coverage under the same terms and conditions as non-Medicare eligible individuals. If the spousal carve-out rule applies to all individuals, and not just Medicare-eligible individuals, does the MSP rule still apply?

I need a little help with this one! A company currently has a MERP that pays the first $750 of the participant's $1000 deductible in the health plan. They want to keep the deductible at $1,000, but now require the participant to pay his $250 first and then the MERP will pay the remaining $750. There is no change in the deductible or the amount that the employer pays through the MERP, so does the health plan (and the MERP) keep its grandfathered status? Or do you have to consider the possibility that some participants may now be paying more (since they may not have incurred more than $750 in deductibles in the past)?

Do you see any issue with the plan specifying that the plan covering the person as a dependent child is primary over the plan covering the person as a dependent spouse?

Anyone have any thoughts on this? Plan A covers a 24-year old employee and his 24-year old spouse. Both the employee and the spouse are also covered on their parents' group health plans. Assume that the plans do not address the COB issue in the documentation. I believe that for the employee, Plan A would be primary since plans covering a person as an employee are primary over plans covering the person as a dependent. But what about for the spouse? I've seen rules regarding COB when the plans of the parents both cover the child, but what about the case where the spouse and the parent both cover the person?

My issue is with the exception in 432(f)(2)(B) (relating to distributions of $5,000 or less). The language says the restriction on lump sums "shall not apply to a benefit which under section 411(a)(11) may be immediately distributed without the consent of the participant." The reguations say that the consent requirements of section 411(a)(11) do not apply after the death of the participant. So, since 411(a)(11) does not apply in the case of death benefits, does that mean the exception in 432(f)(2)(B) does not apply to death benefits? Am I reading into this too much??!!

Ohio City, Did you ever resolve this issue? We have the same question.