Ron Snyder

Exactly.

Contact any of the IRS people who wrote the HRA guidance. See Revenue Procedure 2002-41 and Notice 2002-45. In fact, I'd suggest going one step further and simply complying with those (and related subsequent) rulings.

mb: Top hat NQDC are subject to ERISA but they are exempt from all requirements except filing of a notice with the DOL, QDROs and claims procedures. You are correct. mb: A funded NQDC plan is subject to all of ERISA's requirements. State laws are preempted including state labor laws. Your question had to do with whether there was "no plan", not whether a plan was funded or not.

Members of an LLC are self-employed and are not employees. They may be covered under a Top Hat plan not subject to ERISA. Such a plan need not cover all Keys or HCEs.

I believe that you may be overthinking this. Why are you concerned with RAG? Because you are concerned with having to provide T-H min benefits? There is no way out of that.

So you're client wants to take a $41,000 tax deduction on $40,000 of compensation? What about the 25% limit under IRC 404(a)?

2 choices: (1) Sign the return to toll the statute of limitations, or (2) don't bother to file the return and the statute will not run.

katieinny- Other issues raised are relevant and should be addressed. The administrator of the group insurance plan should be doing the nondiscrimination testing under Section 79. However no one has answered your question directly. Q: "If an employee terminates service and is then reemployed 3 years later, would the prior service count so that he gets the higher death benefit, or would he have to start accumulating years of service again before getting the higher benefit?" A: It depends on the plan document or policy.

Questions are posted to no one in particular. So no one in particular will take a stab at them. To GBurns: No. What would a Rabbi Trust be used for if there were no plan? To QDROphile: ERISA doesn't apply to NQDC and formal SPDs are not required. But even under common law and statutes that apply to employment relationships a description of benefit programs would be required. Such a description, presumably shorter than the full-blown plan, would normally range from a one-page announcement letter to a complete SPD comparable to those under qualified plans.

Options available include: (1) Cancel (cash in?) insurance policy; (2) Turn the policy into "key participant" insurance as a plan investment. Plan documents need to reflect decisions made.

I would think that the problem could occur in providing the information through means other than a public forum. Many firms, such as my own, post their fees on their websites, so they are public information. I know of no such benchmarks of DB fees. However the fee schedule posted by Dougsbpc seem quite high to me (45-52% higher than ours).

1. Yes, since the Trust potentially takes away ownership of the assets from the company on conditions provided. 2. R&D items and employee rights remain the same. However, disclosure of the Rabbi Trust in the plan summary would be required. Whether any other requirements will exist may be affected by pending legislation.

We is the TPA firm I own. Since I don't believe in advertising on these threads, anyone who desires information may email me through the board.

Technically the invoice is for the employer's COBRA premium. However, if the HRA is de-coupled from the group health plan, the HRA premium is the employer's HRA contribution.

My husband and I each have variable life annuities for 7 years now. We would like to cash these in due to high costs and poor performance. Would we suffer a tax penalty and if so, could we roll these over to Roth IRA in order to avoid such penalties? You don't mention whether the annuities are owned personally, by an IRA or otherwise. Presumably they are IRAs. Rolling them over into any IRA account and changing them into another investment would not subject you to a tax penalty. However, if you roll them to a Roth IRA you would be required to pay the taxes on the proceeds and hold onto the Roth IRA for at least 5 years to avoid penalty.

The foregoing response is correct. I believe that 666 is more appropriate for welfare benefit plans than 777. They are a real beast.

There have been several threads discussing this topic since 2000. I suggest that you search under 125 and read through those threads. Then ask you questions.

Yes, if the employee elects COBRA continuation coverage. Of course the employer will invoice the employee for 102% of the $2,000. The plan should be drafted in a way that the premium/contribution (as well as the benefit) is annual, not monthly. In the alternative, the premium/contribution could be 1/12th of $2,000 per month with a corresponding monthly benefit amount.

Most people use the acronym "ISOP" to refer to Incentive Stock (or "Share") Option Plans. The Retirement Capital Group uses the term to refer to their proprietary "Insured Security Option Plan". They are trying to sell their model, products and services in a one-stop "we can make money on you three different ways". A press release from RCG is located at PressRelease. It states, "The ISOP® is a secure, funded alternative to non-qualified deferred compensation plans that allows business owners and executives to contribute unlimited amounts to an ERISA protected retirement plan. The ISOP® uses a combination of after-tax contributions and a third party loan to maximize retirement income." Their plan is a supplemental executive retirement plan or ("SERP"). We administer a SERP that uses a similar but notably different model: (i) contributions to our SERP are not unlimited; (ii) we do not place ERISA funds off-shore; and (iii) their plan "defers the impact of the taxes" (they pay income taxes with borrowed funds), while ours provides a tax deduction to the employer.

After looking at several contact managers, we elected to have someone write us one that addressed our specific needs.

This is confusing. (1) A rank and file "employee" of an LLC also has an S corporation that contracts with the LLC to provide services? or (2) The owner of an S corporation has a contract with an LLC to provide personal services to the LLC for which the S corporation is paid? Which is it? This sounds a little fishy, like a special deal was made for a principal in a business so that he/she would not have ownership and could establish his/her personal retirement plan without covering other employees. If so it is likely to be deemed to be a management company under 414(m)(5) (no overlapping ownership required).

7b

A written plan is required. But a policy can function as a plan depending on type type of benefit to be provided and how the policy is drafted. Is this an insured medical plan, a life insurance plan, a disability plan or some other type of welfare plan? Each has different rules to live by. Are you concerned with ERISA only or also with deductibility and imputation of income under the Internal Revenue Code?

Don- You are mistaken: Since ERISA doesn't pre-empt state regulation of MEWAs, states may ban them if desired, whether or not they are self funded. Read the 10th Amendent to the Constitution. You are also mistaken: VEBA is a federal income tax concept and has nothing to do with state or DOL regulation, state law or ERISA. There is no "supremacy clause" that applies to VEBAs or MEWAs. And there is no federal common law; the existence of VEBAs as trusts or non-profit corporations is pursuant to state law, not federal.

Of course it works, just not to avoid taxes. (1) S corporation dividend allocations are not earned income and cannot be counted for benefit purposes. Executive bonuses are earned income and can be used to increase plan benefits or to reduce allocations to non-HCEs. (2) Some corporations elect S status because they wish to avoid IRS's challenge of compensation as unreasonable. A bonus can be used to establish reasonableness of compensation. This will primarily be important after opting back to C corporation status.