GBurns

The issue hangs on the term "set up". Although the "trust" has corpus even if not yet funded, Is there a "trust" or is there "corpus" if there is no intent, plan, plan document or any other thing that establishes the "trust" prior to the end of the year? In the described scenario, everything from conceiving the idea to the funding occurs after the end of the year. But then again, who will know if documents are backdated?

I tried finding that Topic but did not. I wish that you had posted this AO there.

For a better understanding of your situation I suggest that you do pro-forma returns. In other words run the various scenarios through an actual tax return program or forms. As JanetM points out you still would have to fund the IRA and also pay the remaining taxes. Adding these together might come to more than the taxes that you think that you might owe. You will not know for sure without doing some actual calculations.

How do you determine that the participant is eligible for "catch up" and how do you determine the amount?

Note the term "secret arrangement". I do not see where we know if there was proper or adequate disclosure. Should disclosure be to the employer only or should disclosure also include other parties such as the plan participants who paid the fees? When should such disclosures be made? Prior to participation or after the fact ? Since I did not know sufficient details of the proposed transaction I used " " when referring to "kick back" arrangement. Note that 1 of the proposed options is to give the money to the client. Even if adequately and timely disclosed, Was the decision to use the particular investment vehicles conditioned, influenced or colored by this "revenue sharing" and/or client sharing?

There really is no such thing as "not likely to be called back into active duty". It is an is or is not situation. Since it depends on some facts and circumstances (including when and how the debt was incurred) and possibly whether his check is VA or not etc, I suggest that you run the facts etc through the DFAS system for a definitive answer as to whether or not they would accept a garnishment etc. There might also be state law implications, so I would also see what obtains there.

I am saying that any treatment by any licensed, qualified, expereienced practitioner should be questioned in the same manner. It makes no difference whether it is by a holistic practitioner or by an allopathic practitioner. You do not reimburse cosmetic surgery just because it is done by a surgeon after a referral from a primary M.D. do you?

RTF I really cannot believe that you think that the term "Prohibited Transaction" relates to only the IRS? That "Revenue Sharing" comes in many forms is a given, and since we do not know which form is involved here it is only prudent that a TPA find out if the particular forms that they use have any negative legal implications. Are you saying that no legal advice should be sought to determine exposure? As Locust implies, we have to address the scenario given by and in the OP. Can a TPA legally do that? I say seek legal advice now.

Who said anything about the IRS? Why would the IRS be of such primary concern, anyhow? I do not know if it is the idea that revenue sharing can be questionable, or that there are disclosure requirements, that is apparently news to you, but it would take too much time to bring you up to speed on what has been published etc in the mass media etc over the last few years so I suggest that you do some simple Google research, plus look at the issues raised by Mr. Spitzer and some state AGs. Also read the DOL link re ABN that a previous poster gave. Here are somethings to start with: http://www.fpanet.org/journal/BetweenTheIs...ays/110104A.cfm http://registeredrep.com/news/ag-dispute-lawsuits/ http://www.edgarsnyder.com/invrecovery/sec...ue-sharing.html

ehs Chances are your health plan does not require a referral from a primary in order for a plan participant to see an Ob-GYN or a Chiropractor? Do you question what they do in the same manner as you are now doing with this holistic practitioner? I bet no. So Why now? Is the holistic practitioner not properly state licensed, experienced and qualified as required by the IRC? What other purpose could a thermogram of the thyroid serve other than as a tool for diagnosis etc?

You did not say when your uncle died and whether or not his final personal return has been filed. I do not understand why you would be giving any information to the IRA custodian other than a copy of the tax returns and I wonder why that would be necessary? Is the IRA in the estate although your mother is the named beneficiary or did you mean that she is the beneficiary through a will? If the final return has not been filed as yet, it might be best to make corrections there, so see a tax advisor. If the final return has been filed and, as mjb suggested, the statute of limitations has run, then you would have a different issue, but again see a tax advisor. A tax advisor will tell you what is the best approach, either correcting or leaving it alone, but don't go giving stuff when it might not be required.

The TPA gets a revenue share from the Mutual Fund and wants to share that with the employer but the TPA does not want it to go into the general assets of the employer but into the Plan preferably the "forfeiture account" so that it might possibly be used to reduce future employer contributions to the Plan. I hope that now I understand. If I understand you correctly, I suggest that the TPA immediately seek competent legal advice regarding the revenue share, the "kick back" arrangement to the employer, ERISA etc fee and other disclosures made (not made) to the participants, prohibited transactions and breach of fiduciary duties issues.

anne1 Can you also expand a bit? Are you saying that the fees are charged initially to the participant accounts but the TPA wants the employer to reimburse the participants? If that is the case, How and Why would the reimbursement not go to the intended participants but instead go to some account held by and for the employer? To me, this would not be a reimbursement, so I am wondering if I am missing something?

For 457 I will just requote QDROphile "Does not fit the deferral limits of 457(b) and does not fit the risk of forfeiture required for 457(f). " For 403 I will first quote you "assuming the employer is eligible to sponsor a 403(b) plan" which is something we do not yet know, then point out that according to the OP this will not be a salary deferral but an employer contribution being made " to a book-keeping account " and not to either an annuity contract or a custodial account etc and that "this arrangement is nothing more than an unsecured promise by the employer to pay benefits to the employee in the future". I do not think that anyone would need a cite to say that this could not be done for a 403(b) plan. Are you saying that what was proposed in the OP can be done in either?

There should be. Some states require the actual signing of insurance applications and all forms. As a result, many companies require an actual signature, even if the agent keeps it on file and sends the application electronically to the insurance company. But for prudence, How would you protect yourself against a claim of error or a dispute, if you do not have an actual signature? What does your state insurance law require?

As a general rule retirement benefits are protected from most attaching/garnishing, exceptions being divorce settlements, child support, alimony and taxes. The Defense Finance and Accounting Service handles claims and should have published guidelines regarding what else they will accept. Check thier website also and see this: http://www.dod.mil/dfas/money/garnish/commqa.htm General Creditors can attach/garnish active pay if the debt is incurred while on active duty. Your problem is not that the debt was incurred while on active duty but whether you can collect from retirement benefits rather than active pay. Still read this: http://www.armytimes.com/story.php?f=1-292243-912723.php If the debt was incurred while on active duty, it is possible to still get DFAS to attach/garnish retirement benefits. It seems to be a case by case determination.

Quite often the Board Resolutions and any Adoption Agreement etc are kept with and incorporated as part of the Plan Document. So if you are really curious, maybe the employee can get what you need fairly easily. Long ago, I had a fairly similar case, when HR figured out why the employee was asking, I got called by the HR Director and a VP who both wanted me to pursue it for them, as individuals, because they would do almost anything to ensure that they too did not lose. It turned out that the CEO thought that everyone else was looking after it, while everyone else thought he or someone else was. With staff and legal counsel turnover, there was no one who even remebered that there was an issue. It might be that this company does not know that the issue fell by the wayside nor that there could be consequences. Maybe you can turn this to your advantage, render some service and get a new client.

Doesn't the salary/compensation matter? Isn't this Executive Director an HCE ? You should not be able to do it under 457 in any case and probably not under 403 either.

Who imposed the surrender charge and Who paid it? Where is this money being "transferred" from and by Whom? If the surrender charge was imposed under either an annuity contract or a custodial account, shouldn't the surrender charge have been imposed by either the insurance company or the mutual fund etc against the individual accounts as an administrative charge by the insurance company or mutual fund? If so how come you have this money to re-allocate?

Who cancelled him? The employer or the insurance company? Who prevented him from enrolling and How? Have they issued him anything in writing? Have they issued him a Certificate of Creditable Coverage? Has he been offered COBRA? While the group health plan itself is subject to ERISA and therefore DOL EBSA, there is still the issue of state law regulating the insurance policy itself and the insurance company. Check with your state regulator (Dept of Insurance) regarding coverage issues and state version of HIPAA. Get beyond telephone Customer Service. Try to get someone in Market Conduct.

If it were me or my client, the "worst case" would not be that it reverts to the employer and the employees get nothing, it would more be that it reverts to the employer and the employees get nothing so they sue. Are there any FLSA issues in this situation if there is revert to the employer? This was "reasonably expected" and "promised" money beyond the "their" money issue. Could it possibly end up being regarded in the same light as "bonus" money and used in the calculation of OT etc?

Is there any vesting within this 4 or 5 years? Even if the Plan is deemed to never have existed, this might only be for IRS purpose. There might still be conditions of employment, contractual or other obligations. Some might be addressed in the PD, some might not.

"Why not just reduce the HCEs comp to pay for the family coverage and avoid the issue? Emplooyee does not have to make an election for employer to cover dependents." If the employer gives the HCEs the choice between Individual coverage and Family coverage and some HCEs who have families opt for Individual coverage and so get more salary than another HCE who opted for Family coverage, that seems to be a clear choice between cash and a qualified benefit. This should need a section 125 cafeteria Plan to take care of the constructive receipt issue etc. In any case a reduction in comp should need a salary reduction agreement. It is possible that the solution would be 2 separate health plans. 1 for HCE with employer paid coverage as selected, no employee contribution for anything not even Dependent Care, and a separate health plan for NHCEs with a section 125 cafeteria plan so that they can pre-tax for Family or supplemental coverages.

I do not know anything about this from a 401(k) reporting etc angle, but I cannot see the IRS allowing an entity to use a Tax ID# that belongs to a different entity. I shudder at the complications that it could cause with other reporting such as 940, 941, W2 and W3. I wonder why there would not be similar problems with reporting 401(k) items. After all, the entities are legally different with different state corporate IDs, different articles, different charter, different state Sales& Use tax # etc. The entities exist because of state law and the state law says that they are different entities. If the state did not allow them to exist, Would they be able to have a FEIN etc and could they have a 401(k) any at all?

Isn't the family coverage available to all employees? Isn't the "extra" premium, that is needed, paid by the employee who chooses to get family coverage? Is the employer contribution the same for all employees who choose the same coverage, regardless of whether or not that employee is HCE or NHCE?