GMK

"metric" calendar system used mostly by people who play the wrong kind of football. and by the military (in reference to the day after the next 10/11/12) and did you mean to say the original kind of football

Cute, which is different from Like. It'll be another 10/11/12; not something different (I know you knew that). As in 10 Nov. 12. I know you knew that, too, but we want to avoid confusing someone who happened to stumble onto the Miscellany board by accident ... don't we? And look, Mr. Poje brought us one of his more popular jokes to get this day off to a smiling start.

Happy 10/11/12 (and yes, if you missed it, there's another one next month)

ESOP Guy hit the nail on the head here. Whether or not he's called, does the company keep him on the books? Other questions might be if he is counted as an eligible or ineligible person for health coverage or in the plan census, etc. COBRA's a good example, but it applies if you lose coverage due to reduced hours, too, so ...

You have that in writing, yes?

Fastest way to an answer is to ask counsel and the plan provider for a cite from either the plan doc or the law and regs that explains why you should have paid out that late June request.

Check the plan document. For example, some plan docs say you cannot receive your distribution until next year (after the end of the plan year in which you terminated) unless you qualify for early, normal, or late retirement, in which case you are eligible to receive the distribution as of the first of the month next following or coinciding with your retirement date. The plan doc may specify that the distribution in each case will be based on the most recent end of year share price valuation.

In case you missed this in the 5500 forum, if you have a small welfare plan, you now have to either have an SPD or file a 5500 for the plan. Thanks again to SLuskin for posting this: http://benefitslink.com/boards/index.php?showtopic=51623

On, Teb. On.

FWIW, we care. We just completed an RFP earlier in the year, so we knew what the numbers would be. Actually, with our plan provider, we already knew. It'll be interesting to see what kind of feedback we get from participants after they receive their next statements.

Some proposals we have seen quote a flat fee, which is for processing the distribution and doing the record keeping of an already Q-ed DRO. Most quote an hourly rate or a minimum fee (no max, depends on complexity) or a combination of hourly and minimum. This seems to me to be the most realistic approach when there's no way to know or estimate the amount of work involved.

I think Bird nailed it. I'd get an OK from my ERISA counsel before doing this: unless my approved Plan Doc and SPD already spell this out. Maybe it's OK, but I'd check.

Depends on if you receive the subsidy, as discussed here, for example: http://www.kbl.com/health-care-reform.html

I'd check back with the company, explaining the question about a 900- SSN and asking if they maybe sent a typo. My understanding is that people don't get 900- series SSN's, but maybe now they do.

No argument here, Mr. Bozek. I believe that Verisight provides all the ancilliary services (phone center, investment education, enrollment, presentations, plan design, etc.). With the recent change of ownership, we'll see if they continue the service and quality at a low price. (We don't use them, by the way.) Looking back at my notes, Employee Fiduciary does what it does at low cost, but there are important holes that would need to be filled.

Nothing wrong with reducing unnecessary fees. Has the client looked into either Verisight, Inc. or EmployeeFiduciary.com? (Not an endorsement of either firm, and maybe that's not what they're looking for.)

... and yet voters think it's best to send the same people back over 90% of the time. http://www.opensecrets.org/bigpicture/reelect.php

Thank you for your comments. I didn't realize that is the norm (like many things I don't know). We still try to get distributions out as early as practicable in the second quarter. And thank you for reminding me of the cite. The annual valuation is clearly acceptable for later-in-the-year distributions.

The plan document could be amended to permit the ESOP to distribute S corp stock to participants if the company immediately and automatically buys the distributed shares.

I'd be a little concerned about this approach (assuming an annual valuation), since the beginning of year share value may not reflect the October - November fair market value. There was a big discussion of this on these boards a while back, but I can't find it right now. One approach is to use the year-old valuation for the timely distribution and then do a second distribution when the applicable valuation is available. If the stock value is likely to go down, you have to be careful to not over-pay with the first distribution. As I recall, some plans give out the distribution request form and notices early to meet the deadline, but do not make the distribution until the valuation is completed. Participants are advised that they have until the valuation is completed to change their distribution requests, based their real account balance.

In this example, the short term price floor gets the deal done, to the benefit of all the participants, assuming the plan has determined that it would be good for the plan to buy the outstanding 30% of shares. In the OP, the retirees get a 3-year price floor guarantee that is not available to the other, remaining participants. FWIW, I'd look at this sort of arrangement very carefully, and, as ESOP Guy said, consult with an ESOP attorney and put the details into the plan document.

To borrow a comment from a different thread today: This whole thing seems a bit fishy to me. Maybe the plan has an approved plan document that allows the procedures you describe. I wonder if those top ERISA experts with whom they have worked are actually aware that they do this (don't ask, don't tell?). It will be interesting to learn what cites they use to justify this clever operation.

The award for insightful analysis of this plan's little maneuver goes to:

Are you talking about this stuff: http://benefitslink.com/boards/index.php?showtopic=51623

The ESOP can buy the shares. And if it's a section 1042 transaction (see link below), the employee may be able to save some on taxes. http://www.nceo.org/articles/esop-tax-ince...ribution-limits