PensionPro

The language of the Revenue Ruling makes the PPT calculation dependent on employer-initiated terminations with no exceptions for termination for cause. By the way, when employers believe an employee was terminated for cause, state law or a judge do not always agree with this conclusion. We include terminations for cause in our PPT calculation and inform the employer that there is a presumption of PPT if the ratio is 20% or more. If the employer is able and willing to demonstrate to the IRS that some of the terminations were not employer-initiated then those terminations may be excluded from the calculation. However, we clearly outline the risk on audit.

sec. 10.11 of rev proc 2013-12

The Pension Assistance List (PAL) is an American Academy of Actuaries program that serves the public. It is intended to provide professional services to consumers who have questions about their pension plans. When a request is received, the PAL coordinator selects an actuary from the PAL volunteer list who has appropriate expertise. The PAL actuary contacts the consumer and offers up to four hours of free help. Soon after the initial contact, the PAL actuary and the consumer each receive a form from the Academy that solicits feedback. The PAL program has been featured in a number of publications, including AARP's Modern Maturity in 2002 and Contingencies magazine in 1999. Questions? Contact Gabriel Swee at 202-223-8196, the PAL coordinator. http://www.actuary.org/content/pension-assistance-list-pal There is also a Find An Actuary quicklink on the same site. I know ASPPA's FSPA and MSPA designations denote pension actuaries, but maybe there are other designations as well.

If participant wants enough to make a 20% down payment to purchase principal residence it would qualify, imo.

once you make a non elective contribution (apart from the SH) you lose your TH exemption The TH min is based on 415 comp for entire plan year SH contributions may be based on 414(s) comp and may excl pre-participation comp gateway 1/3rd is based on 414(s) comp and may excl pre-participation comp gateway 5% is based on 415 comp and may excl pre-participation comp rate group testing is based on 414(s) comp and may excl pre-participation comp Also check your plan doc for any additional restrictions.

What are you testing?

Similar but not same situation. One NHCE was allowed to rollover AT money into plan even though doc does not permit it. It seems they can self-correct by removing the money from the Plan or file VCP and do a retro amendment. VCP is too expensive in this situation given the participant count. Any ideas?

IRC Section 415(c )(3) compensation can, but is not required, to include "deemed Section 125 compensation." "Deemed 125 compensation" is defined as an excludable amount that is not available to an employee in cash in lieu of group health coverage under an IRC Section 125 arrangement because that employee is not able to certify that he or she has other health coverage. An amount is only "deemed 125 compensation" if the employer does not otherwise request or collect information regarding the employee's other health coverage as part of the enrollment process for the health plan.

If employee contributions are made through a cafeteria plan, those amounts are not included in box 1 of the W-2 but are added to plan compensation if, as is the case here, the plan's definition of compensation includes 125 deferrals. Employer contributions made through a cafeteria plan would be included in the plan's definition of compensation as well in my view.

The IRS will not go back to the inception of the plan. You should be okay with GUST docs. Check out the QAB dated Sept 8, 2006. There might be a newer QAB but this will give you an idea.

A.

From pg 9 of w-2 instructions: An employee's contributions to an HSA (unless made through a cafeteria plan) are includible in income as wages and are subject to federal income tax withholding and social security and Medicare taxes (or railroad retirement taxes, if applicable).

No never seen a 1099-R with participant as payer.

HSA contributions by employer not taxable to the employee are excluded from plan compensation.

My understanding of ERISA's anti-alienation rules are that while IRS federal tax liens may attach ERISA pension plans, state tax liens may not.

Check Rev Rulings 2009-31 and 2009-32.

And from the preamble to the final 401k regs ... One commentator asked for clarification of the interaction between these timing rules and the rule under the regulations that treats a self-employed individual’s earned income as being currently available on the last day of the individual’s taxable year and whether this last day rule precludes a partner from making elective contributions during the year through a reduction in the partner’s draw. The restriction on the timing of contributions is not intended to prevent a partner from deferring amounts that are paid to the partner throughout the year on account of services performed by the partner during the year, and the final regulations have been modified to clarify this point. However, self-employed individuals who take advantage of this opportunity to defer amounts during the year must make sure that the amount contributed during the year will not exceed the limits (such as the limits of section 415) that will apply to the individual, based on the individual’s actual earned income for the relevant period.

Deleted. Thank you.

Based on 213(d) I don't see how this could be considered medical expense.

see 514©(9)

My understanding is the UBTI rules do not apply here unless the real estate is incidental to the running of a business such as a hotel or a motel.

see discussion here esp post 9: http://benefitslink.com/boards/index.php?showtopic=50202

What about returns and exchanges? Let's say salary deferral increased by SaverNation by $50 in December. Employee returns the purchase for a credit. Does SaverNation then REDUCE deferrals by $50 in January of following year? And what if employee terminated by then? Or if SaverNation is going to wait till the return period has expired what if the employee terminates before the deferral increase is processed? Also curious about the amendment. Is it a model amendment and who pays for the cost of amending the plan - SaverNation or employer? Something substantial from ASPPA such as an ASAP would be in order since according to the article, SaverNation advisory board member, ASPPA’s Brian Graff, echoes that: “In an era of cutbacks and freezes, SaverNation provides a no-fee way to provide real value to employers. I encourage everyone to try it, because it really works.”

Firstly, to me this arrangement seems to primarily benefit SaverNation and its agents. The benefit to the employee is questionable. Most online purchases come with some form of rebate esp if you are a smart shopper. This does encourage the concept of spending to save. It might be a fiduciary issue if Savernation's cashback rebate levels were not competitive. Who is going to monitor this? Essentially the plan is indirectly recommending that employees shop at SaverNation rather than other online retailers. Secondly, how much is the plan being compensated for providing this type of marketing access? Would a similarly situated entity be compensated for providing exclusive access to a group of employees/consumers? Thirdly, would it be a BRF discrimination issue if the type of industry resulted in an inordinate number of HCEs using this feature? Fourthly, there is a deferral timing issue. If the plan only allows quarterly changes then the deferral increases would need to be accumulated for each quarter. Practically speaking there may be recordkeeping issues. Just thinking out loud but it seems to create additional fiduciary duties.

MoJo - since you/your firm looked at this concept - were any concerns raised regarding fiduciary duties or the existence of improper compensation arrangements? Thanks for any words of wisdom!