Moe Howard

veba, Belgarath's earlier post in my defense contains sufficient cites. Some of you folks are just down right rude to Moe. What's the big deal ? Why all the negative attitude? Have any of you ever heard of professiona politeness?l

veb, ok you got me. IRC 79 & IRC 106 can relate to fully insured ....life (79)... and fully insured medical (106), which are both welfare benefit plans.

mming, the person who told you that the deduction has to be split between the two companies based on the salary that each company paid her .... is correct. Let me apologize for the jump-the-gun method taken by Blinky in this message board. He tries to answer every question posted. I guess he thinks he's on a TV Game Show. Little does he realize that no answer is better than a guessed wrong answer, unless he qualifies his answer with the words "I think". mjb is also a borderline Game Show contestant with an attitude. vebaguru is knowledgeable most of the time but I doubt that he is a veba attorney. I would rate his level of correctness as that of a first rate TPA supervisor. Pen is a follower, who takes things way too serious. I won't rate my own level of knowledge, I too modest. Glad I could help. I really enjoy this message board. I look forward to getting along with everyone and trading thoughts & ideas about employee benefits.

mjb, I agree with you when you say that you "can't see the basis ..." The reason that you "can't see" it is because you "don't have" knowledge of the US Tax Code. Keep in mind that controlled groups are not required to file a consolidated tax return. They do so at their own choosing. If member's of a controlled group choose not to file a consolidated return .... then each member will file it's own sepatate tax return. The tax liability of the consolidated return as compared to the combined tax liability of the separate tax returns will be the same, because of the limitation on corporate tax brackets. So, trying to justify your belief that expenses incurred by one corp can be deducted by another corp because allocation is not clearly stated on a consolidated tax return is nonsense. mjb, please don't try to enter the realm of income tax law. Don't go there until you have a little knowledge under your belt. The tax code has nothing to do with common sense. It has everything to do with knowledge.

Blinky, your lack of knowledge about the US Tax Code is obvious. Your credibility has diminished greatly. Your comments are fishy!

Rob, the TPA will also charge to convert the nonstandardized plan document content into such a format that contains provisions that are not normally in the nonstandardized adoption agreement. It other words, it's expensive to convert a pigs ear into a silk purse.

"Controlled medical plans" are self insured medical plans (not fully insured). The term "controlled plans" is usually used by labor unions to describe the self-insured plan that their employer maintains. Another term used to mean the same thing is "employer controlled plan". The phrase is also used in the field of workers compensation coverage to refer to associations of employers that maitain a self insured workers compenation fund (plan).

tin, the instructuions you read are wrong. Defined contribution plans (a pension plan) have to file a 990, if the plan invests in a limited partnership.

The TPA administrative fees are cheaper for standardized plan, because a non-standardized plan requires more discrimination testing.

The answer lies in the word "pubic" of public university. Are the employees of the university "state employees" (ie: Are they allowed to participate in the state's retirement plan?) ...If yes, then the university is not subject to ERISA on any level because the university is a instrumentality of the state. Thus the university's employee benefits plans are all govermental plans. A 5500 is mot required.

Arch, you sure about that? I thought you have until the extended due date of the employer's income tax return, but not later than 10/15/05. So, the cont could have been made by 10/15/05 and deducted on the employer's 2004 income tax return.

Blinky is wrong. Company A must pay & deduct the "contribution" that's based on her $100.000 compensation from A and Company B must pay & deduct the "contribution" that's based on her $50,000 compensation from B. mming, your question is an income tax question (not an employee benefits question). Corp A & Corp B are separate legal entities. Even if the two corps file a consolidated income tax return, on which the total consolidated contribution is deducted, each must pay their contribution separately and the Retained Earnings account for each corp must reflect each corp's contribution. Blinky, there are hard and fast rules on this matter .... it's called the US Tax Code.

Becky is correct. Do the subs have the same plan as the parent? It's easy to determine. Just compare each Summary Plan Description that each of the three corps uses. If each of the three SPDs all state the same "plan name" then there is only one plan. In which case. the 5500 must include all three corporations. Although a controlled group exists, that won't be your basis for determining if the subs' insurane policy info has to be reported on a 5500. The controlled group rules for pension plans don't apply to fully insured welfare benefit plans.

Pen, you sure do laugh a lot. It's good that you find humor in employee benefits. You seem to be a happy person. I suggest you watch the David Letterman show (you'll get a lot of laughs and it will get your mind off employee benefits for a little while).

Pen, the blurp you burped is correct and does not contridict anything I have posted. I never said that the DOL issues advisory opinions on the qualification status of a domestic relations order. The PA determines if a DRO is qualified. The DOL determines the requirements of what info a DRO must contain in order for the DRO to be qualified. In other words the DOL sets one rule (and one rule only) that the PA must obide by in the PAs determining if a DRO is qualified. That rule is ... if the DRO contains the five items required by DOL, then the DRO is qualified. It's that simple. Your belief that only a federal court can overrule a PA is nonsense. I can tell that you have never been involved in a DOL audit of a pension plan. The DOL may not offer an advisory opinion to anyone who request one, but they sure do send letters of notification to plans when plan participants file complaints to DOL. That is usually how DOL audits and DOL inquiries arise. If the DOL determines (from its its audit or limited inquiry) that a DRO is qualified, which the PA determined was not qualified, the DOL will assist the alternate payee in having the plan correct its error. Sometimes its resolved in court and sometimes it is resolved without filing in court. Keep in mind that ERISA was enacted for the benefit plan participants, not plan employees or plan service providers. I know why my threatening to call the DOL made you laugh ..... it's because you are not aware of how the DOL operates and the investigation procedures the DOL follow when a participant reqisters a complaint with the DOL.

mjb, What kind of QDRO am I talking about? Well there is only one kind. It's the kind described in DOL 206(d)(3). Read that code section and you'll see the only five things a QDRO must contain. You say that plan administrators require QDROs because ..... That is nonsense. The reason that PA require a QDRO is because the DOL requires that the PA be furnished the QDRO. "QDRO procedures established by the plan" .... What does that mean? mjb, keep in mind that neither a PA or plan can supercede ERISA. A alternate payee can ignore any plan requirement that is not required by ERISA or allowed by ERISA. I made no statement that "reg agencies don't care what terms a QDRO contain". mjb, are you drunk?

I use marital settlement agreements all the time as QDROs. A settlement agreement is part of a divorce decree. It lays out how the marital assets will be divided. The agreement is signed by a state court official. There are only about 5 sentences that a QDRO must contain. Who cares if those 5 things are buried in a ten-page settlement agreement. What I usually do is highlight the 5 sentences that are scattered throughtout the settlement agreement. And send the entire settlement agreement to the TPA. (The TPA has to review the agreement and decide if it is or is not a QDRO). I've had many TPAs call me to say that they have rejected the settlement agreement as a QDRO. Their reasons are always nonsense. That's when I tell them that ERISA and IRS (not a TPA) determines what a court order must contain in order for it to create a QDRO. ERISA & IRS don't care what the QDRO looks like, just that the required info is there. Many TPAs want a QDRO to be a separate document, not a ten-page account of evertyhing but the kitchen sink (ie: who gets the car and who will pay for the kids college tuition someday, etc). I would never send the TPA a agreement if it did not contain the ERISA & IRS requirements of a QDRO. When a TPA representative balks, I simply ask them to have someone from their legal dept call me ... to which I always remind them that I'll call the DOL toll free number and request the DOL call the TPA to remind TPA that ERISA & IRS (not TPA) determines the form and content of a QDRO. That's one thing that TPA s hate (a call or letter from DOL). I always win. The TPA suddenly sees things my way and no call to DOL is necessary. Locust is correct.

You folks sound knowledgeable. So, I'll ask my question. My question is about DOL requirement that a welfare benefit plan be audited by a CPA. I have read that a "funded" medical plan (with more than 100 participants) has to be audited. It's my understanding that there are two types of "funded" medical plans. 1. A VEBA. 2. Any plan in which employee participants' money is used to pay (or help pay) for the medical coverage. Example: A medical plan of a C-corporationis not insured. The participants' medical bills are paid by employer (corporation), directly to the medical provider. However, the employer withholds $10 from each participant's bi-weekly paychek (the employer uses the $10 to help pay the medical bills). The employer pays (from its general assets) the lion's share of the medical bills. The $10 withholding is minute compared to the overall amount disbursed by employer. This seems to be an unfunded plan because benefits are paid from the general assets of the employer. There is no VEBA, so at first glance it appers that the plan is not a funded plan. But, the fact that participant's money is also used to help pay the medical bills means to me that the plan is funded (just as if the employer had kept those employee provided monies in a segregated account until needed by employer to pay medical bills). It's like a hybrid unfunded & funded plan. Questions: If the above plan has 1,000 employee participants .... does the plan have to audited ? Does the $10 withholding from participants cause the plan to be funded ?

katie, sounds to me like you've got a small self-administered medical plan. Small = less than 50 participants. If so, then your plan is not required to follow any of the HIPPA privacy rules.

gnappi, is the employer's plan fully-insured or self-insured? Do those participants that did not opt out ... have $amounts withheld from their wages to help pay for the medical benefits ? Are those withholdings pretax ?

Katherine, thanks, but do you know if a 5500 is required? If not, then why not? What exeption does this plan meet that exempts it from having to file a 5500?

Medical plan is self-insured. It has only 5 participants. Monthy $amounts are withheld from each participant's salary ... which are kept in employer's checking account to help pay future medical bills for participants. The withholdings are small compared to the medical bills that the employer pays. I would think that the plan has to file a 5500 for this welfare benefit plan, because although the plan has fewer than 100 participants ... the plan is NOT unfunded. According to 5500 instructions ... "NOT unfunded" also means when the plan receives contributions from participants. It is just hard for me to believe that ERISA requires a medical plan with just 5 participants to file a 5500, no matter what the circumstances are. What am I missing here ? How can the plan prepare/file a Schedule I, if the plan has no assets? The medical bills are paid directly from the employer's checking account.

A partnership has two partners and five employees. Partner #1 wants the partnership to establish a retirement plan, partner #2 wants no retirement plan. Partner #1 has been told that he and partner #2 should dissolve the partnership and each of them should establish their own sole-proprietorship. The two sole-proprietorships would continue to operate the business as usual at the same location, same five employees, they would establish a joint checking account to collect fee income and pay operating expense, all income and expenses would be split 50/50, each would file an annual Form 1040 Schedule C. However, since the two sole-proprietorships would share the five employees and each would pay one-half of the employees' annual salary.... then each employee would be receive two W-2s each year (one from each of the two sole-proprietorships). This would then allow the former Partner #1 to establish a plan for himself and the employees, but the eligible compensation for those employees would only be the salary that his sole-proprietorship pays them. Will this work? Does IRS and ERISA allow such a "shared employee" arrangement ? It would make things a lot easier if the partnership remained in place and Partner #2 simply elected out of any plan. Does IRS and ERISA allow a plan document to state that someone who meets the eligibilty requirements of a plan ... can elect-out of participation ? I guess it depends on the type of plan. This plan would be a PSP(discrtionary contributions) with a 401(k) feature.

iguazza, I read you load and clear ... thanks. But what if both plan administrators say that their plans are not required to distribute any excess deferral because there is nothing in their plan documents that says anything about distributing excess deferrals that result from an employee's participation in another separate unrelated 401(k) plan ?

During 2003, Mr X defers a total of $ 22,000 into two separate employer 401(k) plans. The two employers are unrelated. The $22,000 is comprised of $12,000 into one plan and $10,000 into the other plan. It is my understanding that since the two employers are unrelated, then there is no IRS nor ERISA rule which requires either plan document to have any wording regarding distributing excess deferrals in such a situation like this. So am I correct in thinking that the employee has the full responsibility for dealing with this excess dereral matter (in other words he cannot force either employer to distribute the excess now, nor issue him a corrected W-2, nor detemine the amount of investment income attached to the excess deferral when the excess deferral is distributed to him upon retirement) ? So the employee has to report the $10,000 as taxable income on his 2003 Form 1040 without the support of a corrected W-2 and when the employer(s) do distribute the $10,000 to him (say 10 years from now) then the employee wil have the duty to report the $10,000 again as taxable income (wihhout the assistance of an employer provided Form 1099-R that shows the $10,000 as taxable) and determine, on his own, the amount of investment income attached to the $10,000. Any thoughts ?? ...... thanks !