GBurns

You posted that there are "12 employees on he plan" which suggests that there is a Plan Document or agreement in writing. Usually I see the required forms attached as either Exhibit or Addendum. Have you looked to the document package itself? Otherwise do a Google search and you will get some sample documents usually with forms attached. You could also develop your own from the wording used on the Forms for your Cafeteria Plan FSA if those were provided with that forms package.

That is the big problem .. Who is the employer? Are you the common law employer? Are you a "co-employer"? What is "leased"? Some people have different meanings to the term "leased". Are these through a "temp" agency such as Kelly or are they through a PEO? How long are they/have they been "leased"? Who issues the W2? You might need some more clarification as to what their status is, so as to make a better decision.

Thank you. I wonder if this has passed muster with the IRS and the various states?

I clearly posted in the last sentence "In other words as long as you know or should have known or suspected that the data is false, you can be liable if you use it, condone or advise for its use." That definitely means that the falsity is known upfront and is NOT "later determined to be incorrect" I did not think that I could have been clearer. As to where I get my info, I will address that at a later date and give you the authoritative sources. I notice that you did not give any authoritative sources to support your opinion. Do you have any? In the meantime, I hope that someone with actual IRS audit knowledge such as an EA or tax attorney will also weigh in by then.

Everett. Can you provide any information on this "commercially marketed VEBA "? I doubt that it could be regarded as deferred compensation since it is reimbursing an expense that was either incurred or made and is not otherwise available as cash, no different from either an employer paid FSA (or 105 MERP) or employer provide benefits credit in an FSA, but sometimes truth is stranger than fiction. Don, If "retiree liabilities are to be paid over a period of time" these are amortized expenses. You cannot do as you said and "amortize as current". What is paid now is current. What is to be paid in the future is amortized. In general, an expense is either current, deferred or amortized.

That was an excellent idea to start this as a topic. It will be much easier to find and I am sure that it will be needed a number of times each year. While the PLR is good, your Union analogy deals with work that could in some cases be viewed as Union work being done by the employee but paid for by the employer, it would be good and helpful if we could also have some PLRs that dealt with a different arrangement. Why I do not regard this particular analogy as ample is because many employers pay employees while they are seconded to or doing union activities. So the employer pays salary and also pays for the time spent doing union work. I would prefer an example where a Warehouse supervisor, for example, also provides janitorial services for which a 1099 is issued. Or a Marketing & Promotions person does chauffeuring of executives and clients at nights and on weekends etc. Something where the 1099 job is one that could have been done by an employee even if on OT. I hope that someone will have such a cite. It seems that this is a very popular situation.

That "Medical benefits can be changed, or even terminated, once a year" is not necessarily correct, it depends on the contractual agreement with the retirees and the terms of that Plan. That "There is no binding obligation for future benefits" also depends on the agreement, promises and terms. I thought that to amortize meant that it was spread over a number of periods/years, whereas current meant taken as an expense in this accounting period. How can you "amortize as current " ?

A builder or developer usually gets an estimate of the cost to build before building is commenced. That is how financing need is determined and that is how selling price is determined. If there was no cost known nothing would happen. This estimate is usually obtained from someone like a Quantity Surveyor, a Building Estimator or Consulting Architect. I am not sure what the professional designation for Quantity Surveyors is in the US but the function is the same, namely estimating the cost of a building. I would expect that a private individual would also find out how much something will cost before they start. How do they know if they can afford it or can afford to finish it? How else would they know how much is neede as a hardship ? A private individual should get a similar cost estimate. Estimates are all that will be possible since the job is not yet done. Home Depot can and will supply an estimate of the cost of the materials, but some one would have to first create the list of needed items from the blueprint. I hope that this person is not thinking of building without a blueprint and I hope that they already have one otherwise they have bigger problems than a hardship.

An examiner doing an audit invariably does fact finding. The lack of the filing of a joint return does not matter, since there are many other factors that will come up in fact finding. Looking at supporting documents and records can trigger the possibility of a relationship thereby leading the examiner to follow the trail. This is even easier if the examination is of a business entity. As long as someone gets a benefit from that relationship, there will be a trail that most likely can be followed, after all they had to get the benefit somehow. To follow up on the excellent observation by Locust. If a return preparer or accountant takes figures from work done by someone else previously (whether tax return or books of account) and uses them in a subsequent return or report, they can be held liable for aiding in tax evasion. In other words as long as you know or should have known or suspected that the data is false, you can be liable if you use it, condone or advise for its use.

JanetM Re your option that you think might take 20 years. Isn't the turnover in the trucking industry exceptionally high? A high rate should accelerate the process. I looked have looked over a couple trucking companies in the last few years and it seems that if there really was the desire, a company could accomplish this in about 5 years. I see as much as 10% turnover some months frequently. These companies mainly in Illinois, Michigan, Indiana and New Jersey, so I do not know if the same situation exist elsewhere. This was natural attrition. I suspect that if a company wanted it could easily accelerate this rate by changing working conditions etc.

Employers losing lawsuits to Plans is not the issue. How to calculate or understand the technical issues of withdrawal liability is not the issue either. The issue is how to get out from under a Plan without the withdrawal liability and without union action. While the withdrawal liability makes it impractical to withdraw from the Fund, What else can the employer do but to gradually reduce its number of union truckers? If the employer does not like the actions, management, performance etc of the Fund, What else can the employer do but reduce involvement with the Fund by reducing the number of participating employees until it become too minimal to worry about?

Are you saying that Trust is always necessary for a Cafeteria Plan? Or are you saying that non enforcement of a provision means that it will be prosecuted?

Never seen or heard of such a thing anywhere in any of the very many reports, summaries and analyses etc put out. I thought that it was the concensus in other threads, that a non compete could not be deferred compensation. A non-compete does not defer any income that could be currently received etc. Many are only signed at termination and the employee is only vested after termination. It is acondition of unemployment not a benefit of employment. I remember mbozek in particular pointing these things out. I also thought that there was a notice at the end of 2004 or very early in 2005 that addressed part of the issue and exempting NCAs from 409A because of something related to substantial (or lack of) risk of forfeiture.

Kirk, It was never suggested or even implied that the employer should withdraw from anything. I suggested that there are ways to reduce the use of union employees thereby reducing the involvement with and the impact of any mismanagement etc. of the Pension Fund. gaham, Think for a while. If the Google search gives you the names of employees and where they work, you therefore know who the employers are. If the search also tells you of employers who have had disputes such as lawsuits then you know has a gripe. Only employers who have gripes would be forming or would already be members of the association/groups that you are looking for. How do you find out if they have formed or joined such an association/group? You simply call and ask. The search result gives you the name of the employer and in many cases a spokesperson's or contact's name. Also if you read the websites given in the search results you will also find out who else might be organizing what. For example, the left side of the www.tdu.org website gives you links for certian categories, UPS, Freight, Carhaul etc. These links take you to stories about what is happening with disputes etc. You will see names like Convoy Dispatch, ABF, allied, Auto Truck etc etc. These are employers with gripes. These are the employers who would be forming and joining the associations/group that you are looking for. Help yourself or get someone to help you.

The Trucking industry has a different sort of labor agreement, so it does not seem as restrictive regarding replacement as might occur elsewhere. I have not heard of that geographical restriction before and wonder whether such is applicable to the Trucking industry any at all. After all the very nature and structure of Interstate Trucking is that it covers all geographical areas. Any agreement that is that restrictive would probably be null. But you are right, the withdrawal liability is a killer. gaham, I don't know how you search but my Google search brings up many from which I could easily find out who has grouped with whom and which employer have had court disputes etc etc, for example: http://www.nopensionfreeze.org/ http://www.tdu.org/Pension/CSPF_heat/cspf_heat.html

The non enforcement will apply. In other words there will be no enforcement. A Trust was never necessary, anyhow since remittance of moneys is almost immediate. In the case of a self insured plan where the employer is funding claims on an as made/needed basis from general assets, I think that was further exempted from the Trust requirement even before that Technical Release. Have you ever seen a Trust in use for health plan (insured or self insured) outside a VEBA and MET?

The medical enrollment form should not be used to authorize salary deductions or salary reductions. A separate form should be used. Does your medical form really authorize or does it just state how the premiums will be paid? Saying that $X will be paid through payroll deduction is not necessarily an authorization. Aside from QDROphile's point, there are some who might opine that state law might be applicable. Most state laws require written consent etc. For those who will point out that Federal law preempts state law, bear in mind that the relevant guidance from the IRS is still mainly Proposed Treasury Regulations. Proposed Regs have no effect of law according to many courts. "No effect of law" will not preempt state law. In any case, this is usually moot since either coverage or premiums do change almost every year, thereby rendering the old form obsolete anyhow.

All you have to do is do a Google search on "Central States Pension Fund". There you will find a number of such groups. However, there are 2 very different issues, the management of the Funds and the laws (and pending laws) that govern the Funds. Your client will have to decide which is it that is not liked. The groups have different agendas. If your client does not like being in the fund, they would have to either stop using Union truckers or reduce the number of union truckers. There is no law that says you have to be a union shop. There are many firms that are not union shops.

Probably very very rare for a number of reasons. 1. Sole props tend to be small and it is very unlikely that a small entity would find it practical or economical to be self insured. I would hate to think that someone advised a sole prop with less than 100 lives to be self insured. 2. I do not think that there are many cafeteria PDs that make any provision for after tax contributions. after all the sole purpose of a Cafeteria Plan is so as to allow pre-tax contributions. If there are after tax contributions they would not be under the Cafeteria Plan anyhow, would they? 3. That Sole props just like self employed persons do not participate in cafeteria plans is very well known and so many PDs sepecifically exclude them and so would the enrollers and the Plan Adminstrator. If it is missed on enrollment, it should be picked up on testing soon enough. 4. In a Sole Prop or an S -Corp there would be no purpose in having a premium split with the business paying a share and the sole prop or more than 2%shareholder paying a share (even after tax). I still do not see why you are hung up on this Trust issue. I doubt that you can find anyone with a Trust for their cafeteria plan money, and I doubt that you can find anyone with a Trust for the health insurance premiums (other than those with a VEBA). What people REALLY do is to just pay premiums and claims expeditiously. A Trust is not needed. By the way, you posted "Pretty common (very common?) situation we believe " which suggests that there is some basis for the belief. If so, the source of that basis should very easily answer the question for you and also should have given you a good explanation regarding the purpose and use of Cafeteria Plans.

That depends on how the agreement is worded and the source of the funds. If it is a reduction of what would otherwise be paid as current commissions, then it is deferred compensation. If it is not derived from current sales compensation, but is "trailer" commission payable each subsequent year for each year that the business stays on the books, then it is not deferred compensation. Then again depending on the wording, it could be a purchase of rights of ownership of the book of business, which would not be deferred compensation. If it is for the purpose of keeping this person from replacing the business with that of a competitor, or for working for a competitor, it is not deferred compensation and should be in a NCA. There were a few recent cases involving agents from a few different insurance companies and 1 from a real estate company that touched on this issue, such as what comprises the sale of such a book of business and how such payments should categorized, commission or capital gains. Many related issues were also touched. I think that Allstate and Nationwide were 2 of the companies.

That depends. Although ERISA disclosure does not apply to Governmental Plans that does not mean that there are no disclosure rules that have to be complied with. Assuming that this is not a federal entity plan, then state law and possibly local ordinance rules will apply. The rules that apply most likely mirror ERISA in requiring disclosures and so a SAR might very well be required. I suggest that you look to the Plan Documents and whatever laws apply, to see what is required. Where did you se this "page 43"?

I have not gone and looked up any Trust agreements so this off the top of my head. I recall that the Adoption Agreement and the Initial Trust documents state the purpose of the Plan. That purpose is, in a nutshell, to provide retirement benefits by creating and maintaining a Plan. There is no mention of contribution rates. In my experience, usually when a Plan is initially established it is during a CBA period and so is not addressed in the CBA but in a Memo of Understanding. This MOU usually restates the Adoption Agreement and requires that the Plan be maintained until the retirement dates of the participants. There is no mention in the MOU of contribution rates. At the next and subsequent CB, contribution rates are argued and agreed on for the covered period. So , to me the employer is contractually obligated by the MOU and Trust agreements etc to maintain the Plan (including its viability) regardless of the contribution rate set by any of the CBAs that will be signed over the years.

If self employed persons cannot participate in a cafeteria plan, How do you get contributions from them? Why does the self insured health plan even need a Trust? Is a union requiring it?

From what you yourself posted, you did not offer the money, you placed conditions on them getting the money, A BIG difference. I do not know why you think that they should ask for the money. You were ordered to pay the money. They were not ordered to receive under conditions or in any manner set by you. Payment of money or of a settlement does not need nor does it require any special account or a transfer. It simply requires payment. Payment by cash or an acceptable negotiable order (preferably a cashiers check). Big deal about an incorrect SS#. What problems would that have caused you? If you are getting screwed, as you say, it seems that it is being caused more by your actions than anything else. Possibly the judge might not be too harsh on you. Hopefully, your ex will not complain or say anything.

Being up to the law with government pensions is irrelevant. Government pensions is not an issue nor do they get any different treatment. Something confuses me, you say that the divorce is over and done with and you also mention a stipulation, yet there you are having debates with your ex about paying her. First, you have a lawyer representing you, so why are you in discussions with your ex? Second, the stipulation apparently requires that you pay her some money which you have not paid. Why do you think that the stipulation allows you to dictate when and how the money must be paid? Did you make your own interpretation that there is no date or time, or did your lawyer advise you that this was the case? An Order that you shall pay $X does not need a date, it means that you shall pay NOW. The next time a judge fines you walk away and do not pay asap and see what he does to you. I expect that the lawyer for your ex will take action to force you to comply with the stipulation and probably will ask for penalties beyond the interest that you mentioned. In every settlement (divorce or otherwise) that I have seen interest and penalties were ordered by the court for such non compliance. I suugest that you stop trying to handle this matter yourself and seek competent legal counsel. Maybe you need better counsel.