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.

Correct, but under the Elgibility Test heading, it lists 3 requirements to pass the eligibility test. On page 2, #3 says the same benefits in the same amounts must be offered to NHCEs and HCEs?

Thanks, From your link on page 3: "Even if the same accident and health plan is offered to all employees, but unequal premium contribution amounts are established for each group, the cafeteria plan would not pass the eligibility test." The eligibility test is what POP plans have to pass for the safe harbor. So how could it possibly pass eligibility even if it has 10 HCEs and 200 NHCEs? (I'm not saying leevena is wrong, I would just like to understand the reasoning/law as to how this would pass).

We have a client who has a POP plan in which the premiums are $4500 (single). The employer pays $3000 of the premium for NCHEs and $3750 for HCEs (officers). Thus, NHCEs can elect to pay $1500 pretax and HCEs can elect to pay $750 pretax. Does anyone know how this would pass Code 125 nondiscrimination testing?

I wanted to ask what would be a ballpark estimate of the time it takes to draft and prepare a streamlined EPCRS submission (generally speaking to predict an attoney's fees). I know there are a few that take much longer due to getting information from an employer of investment manager...., but what is a range for most of them? Also, what is the longest one it took you to prepare? Thanks.

Hello, We have a client with fewer than 10 employees that currently has a health plan 100% paid by the employer. The employer would either like to make the plan 100% employee paid or terminate it outright. Does anyone one which one would be easier adminsitratively? Also, what employee notices/disclosures would the employer need to provide? Thanks

We have a client who has received a compliance statement from the IRS agreeing to waive the 50% excise tax on previously missed RMDs, some of which were already rolled over into IRAs. Question is, how does the participant (after taking the correction distribution) report to the IRS that his excise tax was waived? Do he simply file a 1099 and say nothing of it. Does he have to attach a copy of the Plan's compliance statement? The company would rather not provide the compliance statement to the participant, would a signed statement from the company work?

We have a client with a participant who did not receive an RMD, then 2 years later received a lump sum distribution of his entire account and rolled it over to an IRA. Client filed an EPCRS submission and requested a waiver of the 50% excise tax, and told the IRS it would notify the former participant of the missed RMD so that it can be distributed from his IRA. If the participant does not take a distribution from his IRA, what happens? The RMD amount's are gone from the client's plan so correction by that plan can't be made by a distribution. If the former participant does not take a distribution within the 150 day correction period, does the excise tax waiver go away?

The PPA provides different effective dates for providing pension benefit statements to nonunion pension plans (due for 2009 plan year) and pension plans maintained pursuant to a CBA (for this plan, the 2011 plan year). If a plan has both nonunion and union employees, can all benefit statements be provided for the 2011 plan year, or must the nonunion employees receive their benefit statements for the 2009 plan year?

I have a similar situation....a DB plan terminated 15-20 years ago and annuities were purchased for the particiapnts, however, one participant was not listed on the benefits lists so no annuity was ever bought for him. The Plan is long gone, though the former plan sponsor and the TPA still exist....who is responsible for paying the participants benefit?

Has anyone dealt with the situation where a DB plan former participant is/has turned age 70-1/2 and needs to begin to receive an RMD, is not responsive to attempts to contact him by the Plan Administrator, and his/her marriage status is unknown? They are trying to avoid having to modify the annuity form after it has begun (i.e., initially provide a single life annuity, but find out a participant is married and then have to switch to a J&S; or vice-versa). Should the Plan assume the participant is unmarried (even if records may say otherwise), provide a single-life annuity, then switch to a J&S if they find out the participant is married (kind of like deeming the modification to be on account of the participant's marriage under the 401(a)(9) regs). Do the opposite? Also thinking about providing a long-term period-certain, which could then be changed to an annuity under the regs, but what if the plan doesnt allow this? Thanks.