t.haley

457(f) plan had phyisicans who did not want to participate in plan sign a waiver. The waiver does not state that it is irrevocable, but does state that it can be revoked at any time within 14 days after execution. The plan sponsor has changed benefit provisions of the plan to make it more attractive. The physicians that signed the waiver of participation now want to participate. Given the way the waiver is drafted I think the client is comfortable with allowing these physicians to revoke their waiver. My thought is to treat it more like an election not to defer. My issue is when can these physicians join the plan? I interpret the 409A regs to require an election to defer prior to the first day of the year in which the compensation is to be earned. Therefore, these physicians cannot make a deferral election for compensation to be earned in 2010 and must wait until 2011 to participate. Any thoughts?

Client wants to terminate ESOP that has been frozen as to new participants and benefits as of 12/1/05. We did not represent plan at that time but have been told that participants were given notice of plan freezing. We would like the effective date of termination to be 12/31/09. What notice to the participants is required? If notice is required what is the required notice period? I have found a lot of discussion about 204(h) notices for DB and MPP plans and plans subject to PBGC rules, but nothing for DC and ESOPs. I was going to just prepare a SMM with the PPA, HEART and WRERA changes and include a notice of plan termination date on 12/15 (15 days notice prior to termination date). Is this sufficient?

I am trying to find information on terminating a leveraged ESOP where the ESOP loan from the LLC has been "forgiven" and the stock has a FMV of zero. I think the shares still need to be distributed to the participants even though they have no monetary value; they still have voting rights associated with them. However, I cannot find any guidance on treating the "forgiveness" of the ESOP loan. Is it still treated as a leveraged ESOP? Presumably the loan was forgiven sometime in 2008 (still tracking that down). The 5500 for 2008 shows income to the plan in the amount of the loan balance that was forgiven. Any ideas?

I am trying to understand Section 17.04 of Rev Proc 2007-44 regarding intended adopters. It states that if the employer's 5 year remedial cyle ends "during or after" the 6 year pre-approved cycle, the employer should adopt the newly approved version of the pre-approved plan instead of executing a Form 8905. My client adopted a GUST plan on April 1, 2005 so is not a "prior adopter". They are on the 5 year Cycle D which ends January 31, 2010. Is this considered "during" the 6 year cycle, so they don't have to execute a Form 8905 prior to 1/31/10? And if so, what is their deadline for adopting the new pre-approved plan - 4/30/2010 or 1/31/2010? I am considering having them sign the Form 8905 and adopting the new plan by 4/30/2010. Any guidance will be greatly appreciated!

My client has a fully insured health plan. insurer changed co-pays in prescription drug plan but has not issued any document to be distributed to participants notifying them of the change. The participants did not find out about the change until they went to have prescriptions filled at pharmacy or through mail order service. My question is - in a fully insured plan, who has the duty to inform participants of changes in plan specifics, such as co-pays and when does such notice have to be given (i.e. before the effective date of the change?)? Thanks.

My client has three "cafeteria" plans currently in place: a POP plan, health FSA and dependent care reimb. plan. Each plan says it is intended to be a cafeteria plan under section 125. These plans were already in place when we took on the client. The plans need to be updated and restated. Normally, we would use our cafeteria plan format which includes a cafeteria plan document, adoption agreement and summary plan description which incorporates terms from a separate health FSA and separate dependent care reimb. plan docs. My question is in this case will it be too much trouble to move the client to our platform? I think this would entail "restating" the POP plan to a straight cafeteria plan with an adoption agreement listing the premium reimbursement, FSA and DCAP as benefits under the plan, and then restating the FSA and DCAP to our base plan documents. We also need to change the plan numbers for the FSA and DCAP because they are in a "wrap" document. My boss would prefer them to be on our plan document so I am trying to accomplish this in the easiest and cleanest way possible. Any ideas/pitfalls/things to be careful of?

Thanks for the replay. That's what I was thinking also. Of course I can't find anything "official" to substantiate it.

I have a client that was on a pre-approved VS plan effective 1 August 2003. Subsequently they changed administrators and went to another pre-approved VS plan effective 1 April 2005. Can they be a "prior adopter" since they had adopted a pre-approved plan prior to 17 February 2005? I don't think they can use the 6-year cycle by signing an 8905 because the requirements for an "intended adopter" require the employer to have a qualified individually designed plan. Any thoughts?

I have a client with a 401k plan originally effective in 2001. Problem is they are a governmental entity and doesn't meet the requirements for a "grandfathered" governmental 401k plan. I have reviewed the correction procedure in the EPCRS and just want to confirm my understanding of it. It appears that the correction procedure under VCP is to cease all contributions and "distribute" the assets in the form of rollovers to the new plan (I am guessing a 457(b) plan). Is this correct? Has anyone else filed a VCP submssion for this type of failure? Thanks in advance for your comments.

Thanks! That is exactly how I interpreting that language in the Revenue Ruling.

Can anyone tell me whether former employees/participants or beneficiaries receiving benefits under a plan are included in the "total participant" number in calculating the turnover rate? I have found discussion about whether you include both vested and nonvested participants in the calculation, but nothing on whether former employees are included. My instinct tells me that they should not be included - only active employee participants should be included. I would welcome any of your thoughts.

Thank you for all of your responses. They were very helpful.

Client has a 401k plan and several welfare plans. The plan sponsor has changed its name (from "Inc." to "LLC"). EIN stays the same. Does this require a plan amendment changing the name of the plan sponsor for all its benefit plans?

I have a client that would like to establish a multiple employer plan as follows. My client leases staff to professional corporations and pays the leased staff via a W-2; they enter into a leasing agreement with the recipient corporation. As a marketing tool (in addition to providing staff and payroll), my client would like to offer a retirement plan service in which there is a "base" safe harbor plan document that may be adopted by the employer; however, the employer also has the flexibility to change the contribution from a safe harbor to something else suited to them. my job is to determine whether this is allowed under the IRC and ERISA. I have been unable to find anything directly on point. Any suggestions or insight would be greatly appreciated!!!!