jessgaines

From what I understand, IDP can receive a LOD if they have never applied for one. From the IRS website: "You may only submit an application if your individually designed plan is: A plan seeking an initial favorable determination letter A terminating plan A plan that meets certain circumstances to be announced in IRS guidance (no additional circumstances apply for applications in calendar year 2017)" My real question is, if you restate to a preapproved plan from an IDP that never received a determination letter, can you not apply for a letter on the original plan? Must you rely on the opinion letter for the preapproved plan?

Has anyone been denied a determination letter for an IDP cash balance plan? I have a client that restated an IDP to a preapproved plan. The original IDP had never obtained a DL, so they wanted to get a DL for the original plan. We sent in the application last May (2019) and just received a letter stating that due to Rev Proc 2019-4, section 12 they are not able to issue a determination. Has anyone heard this before? The IRS agent stated that they are notifying a lot of applications of this. Any input would be appreciated, even if you just let me know it happened to you.

How does the Cadillac tax apply to an EGWP plan? Under the ACA, there is a 40% tax on the excess cost of health insurance. A Part D Employer Group Waiver Plan ("EGWP") provides insurance that supplements Medicare. How do the Medicare reimbursements get treated for Cadillac tax purposes? Example: Assume monthly cost of EGWP plan is $1,000 and that Medicare pays for $750 and employer/insurer pays for $250. Is the total $1,000 considered the cost of health insurance or just the $250 paid by the employer/insurer?

The trust document says nothing about assets left over after payment of benefits to Participants. The reason for the excess/overage is due to an error regarding a participant who was not eligible to participate, but contributions were made none the less. So, the plan is not terminating, it just needs to be amended to include the reversion clause in order for this participant to be paid out by the sponsor, not the trust. Confusing, right?

I have a client with an NQDC plan funded by an irrevocable Rabbi Trust. The sponsor did not draft the trust to include reversion of excess funds back to sponsor. Can they amend the plan to add the clause?