JRG

A 401(k) plan limits partiicpants to 1 plan loan at a time. It was discovered last year that a participant took out 2 plan loans. Is this an operational failure? How is this corrected? VCP?

If a person is employed by 2 seperate entities offering 403(b) plans (she has no ownership/control in either, nos is an HCE) and has negotiated nonelective employer contributions with both, is the 54,000 annual additions limit seperate for each plan or is it a combined limit?

With the new opinion/advisory letters being sent out, do public school 403(b) plans have to restate their plan documents onto the new pre-approved plan documents, or can they still rely on the model language in rev. proc. 2007-71?

Are 403(b) plans sponsored by a public school required to perform a financial audit? I think the answer is no (not subject to ERISA) but wanted to confirm that I wasn't missing something.

A company is looking to reduce its workforce through voluntary retirements. Their current pension plan offers early retirement benefits before age 65, with a 1/20th reduction in the NRB for each year a person retires before age 65. Is there any problem with offering employees who are over age 60 that retire during a 90-day window (e.g., June-Aug 2017) that their retirement benefit will not be reduced? Example - an employee age 61 could normally retire, but the NRB would be reduced 4/20ths. If they were to retire between June-August this year they would receive their full benefit.

Non-governmental entity created a 457(b) plan 5 years ago, but did not ever tell some employees who were eligible for it that they were in fact eligible. There are no employer contributions, only elective deferrals. Is there anything to correct? If so, what would the correction be? I am not sure about following 401k correction procedures for missed deferrals. Basically a few higher up employees could have made elective deferrals, but werent aware that they could.

Thanks, A forgot to state this but to be eligible for the HRA benefits an employees does have to be enrolled in the employer's health coverage. Would that change your thinking?

We have an employer who wants to pool fund an HRA for select services, i.e., they are putting in $20,000 for their employees to pay for seeing a nurse practitioner on a first-come, first serve basis. If the $20,000 gets used up by June and some employees have not taken advantage of it then they would not receive a reimbursement for seeing a nurse practitioner later in the year. It is available to all employees. Has anyone seen this kind of arrangement before? I think there would be some nondiscrimination issues if many HCEs used a lot of the benefits early, but I can't determine if this runs afoul of those rules.

How far back should a sponsor go to correct a nonamender in EPCRS? Example, if the sponsor finds out in 2013 that a plan didnt execute a GUST amendment, or amendment for 401(a)(9) regulations, etc. do they have to correct in EPCRS? The plans in question were prototypes and volume submitters and did restate the plans before the April 30, 2010 deadline.

Is there any reason why someone who participates in an HDHP would choose to participate in a general health FSA instead of an HSA? Are there any specific expenses that a general health FSA would pay for that an HSA would not? Due to the $2,500 cap and use it or lose it rules I don't think there would be benefit in choosing an FSA, but wanted to see if anyone was aware of a reason to do so? Thanks

Thanks, This is the issue I am confused about. Under 105, the pre-tax employee contributions are considered employer contributions, which means that the total employer contributions (and thus benefits provided) for HCEs and NHCEs would be the same. Thus, it seems like this is an easy way to get around the 105 nondiscrimination rules?

Came across the following situation: A self-insured health plan provides $7000 in employer contributions towards the "premium" for NHCEs, and $10,000 (100%) for HCEs (officers). The NHCEs can elect to make a $3000 pre-tax contribution for the rest under a cafeteria plan. In reading the 105 nondiscirmination rules, it says that pre-tax contributions under a 125 plan are treated as employer contributions..thus, for testing purposes it looks like the employer is providing $10,000 to all participants. If this correct? On its face it looks like this plan is discriminatory. Also, if the Cafeteria plan was found to be discriminatory, the HCEs pre-tax contributions would become after-tax. However, there are none in this situation, so there seems to be no penalty. Has anyone ever looked at this type of situation before? Am I reading one of the rules incorrectly?

A client recently discovered an error involving the calculation of an employee's benefit under its NQDC plan. For example, an employee was paid 30,000 in 2008 (full account balance), but recently it was discovered that the employee should have received 30,200. Has anyone tried to correct this type of administrative error? 2008-113 limits corrections to 2 years. What is the penalty? Would this type of adminstrative error cause the employee to owe the 20% 409A tax on the entire 30,200?

I have run across this situation and cannot find a definitive answer. Can a profit sharing plan have employees who are "eligible" to participate in a profit sharing plan and receive an allocation for a nonelective (profit sharing) contribution, but then also be in a group under which the document provides that group with a 0% contribution. For example, to be eligible for the PS plan and to receive an allocation, an employee must be 21 years old and complete 1 year of service. However, the plan provides that the profit sharing allocation will be as follows: Employees with 1-3 years of service 0% (of compensation). 4-10 Years - 3%, 11+ years of service - 4%. Assume that due to the demographics of the company, nondiscrimination testing is not an issue. An employee with 1 or 2 years of service is "eligible to participate" in the plan (and is a participant), but isn't getting a contribution/allocation (thus, technically not eligble to receive a contribution). Is this permitted?

How was her account $0? When she took a loan, the $200k note should have been an asset of the plan/her account? She didn't take a $200k distribution, but rather invested her $200k in an interest bearning loan (to herself). Oh, not to mention you can only take a $50k loan from a plan.