GMK

I'm with oriecat, leevena, and Chaz. Basically, on COBRA, you get the same coverages, options, etc. as employees, except you pay the full premium. Of course, an employer can choose to contribute to the premiums for COBRA's, but it's not required.

From an an administrator's point of view, I like the idea very much. But I would use the insurance company forms. I know it's just a beneficiary designation form, but it's still possible for a generic form not to cover everything the insurance company wants covered in its form. Now, if the insurance companies would come up with a standardized form, that would be sweet. On the plus side, the new forms remind the insureds to review their beneficiary designations regularly to keep them up to date. Even in obvious situations, too many people forget or ignore the importance of designation updates.

Peter has outlined well what loopholes to look for, but most, if not all, plans define compensation pretty precisely, leaving no room for the employer and participant to modify it. Regardless of what side agreements the employer and participant make, you still have to run the plan according to the Plan Document. In this case, I prefer BG5150's direct approach; make the correction. And I would first ask the payroll service why they shouldn't take responsibility for determining and funding the correction. (I doubt that a "well known" payroll service would be ignorant of their need to know the plan's definition of compensation for deferrals.)

Unless a factor that has not been reported here or the Plan Document gives the Trustee veto power over document-authorized distributions, the Plan Administrator should not delay in getting the Trustee to sign or getting a different Trustee. Probably best to do both.

For what it's worth, perhaps intent is a key player in such cases. If the company did not have adequate resources to keep the business going AND pay the owner and spouse during the lean years (something one could determine by looking at the company's books), then you probably have a case to grant years of service. The intent was to pay them, but the money was not available yet. In the OP, the doctor did not forgo his salary to keep the business alive, and it sounds like they chose not to pay the wife but could have paid her. Even ignoring the possibility that maybe the intent was to avoid SS, this sounds more like the gifting example.

"ERISA riders" can do the job, but the coverage must be for the plan, not the company. And no deductibles. Following Belgarath's "easiest thing" advice will get you to the answer.

Good for you. (Some of us should have been so wise as to start early.) Here's a link to a previous discussion of getting started that might help you (again with good advice from masteff): http://benefitslink.com/boards/index.php?showtopic=38508

No problem, Mr. Poje. Everybody knows who they are.

For (probably superfluous) emphasis, as Chaz notes in post #8, this is true for COBRA's if it is true for current employees. COBRA's are treated the same as similarly situated current employees, but they don't get something extra.

True, true, true, true, etc. I wouldn't suggest an audit fee per se. Just saying that if you have a maintenance fee for loans (which have other costs besides audit fees), it should be based on reasonable estimates, for example, as opposed to being a sneaky cash cow for the plan. Even with an annual fee, the plan may or may not end up paying some extra audit costs or record keeping costs or whatever, but we're all trying to be clear about the fee policies and fair to all the participants.

Any chance that someone might not like this idea? "Please explain to me again why I get charged more in fees just because That Guy took out a loan and those extra fees I'm paying are because of That Guy's loan." Just sayin'. An annual loan maintenance fee sounds like a workable solution if it's based on some reasonable cost estimates. And I agree with Kevin C that the timing could be an issue.

As noted here: http://www.dol.gov/ebsa/regs/fab2008-4.html "ERISA section 412 and related regulations (29 C.F.R. § 2550.412-1 and 29 C.F.R. Part 2580) generally require that every fiduciary of an employee benefit plan and every person who handles funds or other property of such a plan shall be bonded. ERISA’s bonding requirements are intended to protect employee benefit plans from risk of loss due to fraud or dishonesty on the part of persons who ”handle” plan funds or other property. ERISA refers to persons who handle funds or other property of an employee benefit plan as “plan officials.” A plan official must be bonded for at least 10% of the amount of funds he or she handles, subject to a minimum bond amount of $1,000 per plan with respect to which the plan official has handling functions. In most instances, the maximum bond amount that can be required under ERISA with respect to any one plan official is $500,000 per plan. Effective for plan years beginning on or after January 1, 2008, however, the maximum required bond amount is $1,000,000 for plan officials of plans that hold employer securities."

This is cool. I like it. Hmm. I think I'll ask our people if they can work it into our payroll software.

That's B as in Y, right?

Here's a post mostly from 2006 and ending with an unanswered request like yours for updates: http://benefitslink.com/boards/index.php?s...31537&st=15 May have to go to each state's dept. of revenue site to get the info.

Thanks for adding that, Q. I needed a smile on this grey, overcast day.

I agree with Mr. Sieve. My understanding is that the first money distributed during an RMD year is deemed to be RMD money (until the RMD amount is satisfied), and RMD money is not eligible for rollover. This even if the distribution occurred before the "70-1/2 day" but during the year in which the 70-1/2 day falls.

Generally, this is the case, and it usually applies to a few HCE's. Just as an example, however, true-up can also benefit non-HCE's. For example (in a plan with a 100% match up to 3% deferral and 50% on 3%-5% deferral), a non-HCE bumps up her/his deferral in April from say 3% (which received a 3% match for 3 months) to say 7% (matched at 4% for the rest of the year). The annualized deferral rate (total deferrals/total comp) ends up at over 5%, but the sum of the per-pay-period matches is under 4%, so she/he gets trued-up to a full 4% match for the year.

Some you lose. Some you don't win. It's beginning to look like a cleverly orchestrated scam, and I'm upset that in the end you guys got hosed.

Totally agree. May all the BenefitsLinkers and Dave Baker have the BEST YEAR EVER in the new year, which begins on 1/1/11. (Won't see that in a hundred years!)

This (from 2006): http://www.ab-d.com/Releases/401k%20guide%...06%20final1.pdf says (page 97) that a Notice to Interested Parties is required if form 5310 is filed with the IRS with respect to the plan termination (page 96). This Notice must be provided in the 10 to 24 day window before the determination is requested. If no determination letter is being requested, it says to replace the Notice to Interested Parties with a notice to participants that the plan is being terminated. The only other reference to a notice deadline I found was that it be "timely." I guess it would be appropriate to ask the auditor for the cite that specifies a 60 day notice.

Should fee rebate requests be sent to the same address as the fee checks, or is that jumping the gun here?

I agree. RMD's are not eligible for rollover. He needs to take the RMD and associated earnings out of the rollover Roth, e.g., see: http://www.irahelp.com/forum/viewtopic.php?f=1&t=4661 Edit to add: http://www.irs.gov/retirement/article/0,,id=96989,00.html#12 and of course, Publication 590. He could put the RMD payment in a personal Roth if he meets the usual Roth requirements, like earned income.

That's good information (as usual), Peter. Makes me wonder, though, ... did they also announce that, to the extent one's underwithholding results from the state's not enforcing withholding on the imputed income for overage dependent coverage, they would waive the interest on and/or penalty for the underwithholding? I'm guessing not, because of their suggestion that employees may wish to increase withholding. Looks like a revenue generating gotcha to me, but I'm in a grumpy mood about this whole issue.

Even if it doesn't increase the premium (already paying family premiums), the cost of the added coverage is imputed income for state purposes. That cost is not specifically defined. It may be the single coverage premium or a selected cost differential or a cost determined by the coverage provider's actuaries or maybe something else. Whatever you use, apply it consistently. Sorry, don't have references off hand. We are dealing with this (in a coverage-to-age-27 state), and it's extra administrative overhead and fairly costly to employees. But the state is determined to generate revenue.