casey72

i would tend to think that if the mortgage they're getting is for a principal residence then the plan should be comfortable with that designation as well.

Thanks for the follow up! FYI, I looked into this and that language in the 1998 PLR was verbatim the language in the regs at the time in 1998. That reg has since been removed.

Thanks. I'm not sure EIN is dispositive as to whether the buyer is a new "employer." The target's EIN could easily stay the same post-closing, too, and it's considered a new "employer."

Thanks Artie M. Whether that reg applies depends on whether pre-closing buyer (ABC) is the same "employer" as post-closing buyer (ABCDEF) for purposes of the rule. We are all comfortable that DEF is a new "employer" when it joins ABC, which is why it can terminate its plan pre-closing and join ABC's plan post-closing. Is there a reason that we are not comfortable that the same is true for ABC when it acquires DEF (such that it can likewise terminate its plan pre-closing and join DEF's plan post-closing)? There may be a reason, but I was hopeful someone would have a citation/support.

The question is not why a buyer would terminate their plan or whether they should. The question is whether a buyer can avoid the successor plan rule in the same way that a target can by terminating its plan pre-closing. If Group ABC (buyer, which sponsors a plan) buys Group DEF (target, which also sponsors a plan), forming Group ABCDEF, why would this new group be viewed as a new "employer" with respect to DEF, but not a new "employer" with respect to ABC? We all agree that the rules say Group DEF can terminate its group's plan pre-closing and join the ABC plan post-closing without creating a successor plan issue. But where do the rules say that ABC cannot terminate its plan pre-closing (and distribute funds) and join the DEF plan post-closing due to the successor plan rules?

Exactly, perhaps buyer's plan has lots of issues.... is there an argument that the pre-closing controlled group of buyer is different than the post-closing controlled group of buyer (bc now target is in it), such that the capital "E" employer has changed?

In a stock acquisition, often a buyer requires target/seller to terminate target's 401k plan pre-closing. Can a buyer instead choose to terminate its own (buyer's) plan pre-closing and join the target's plan post-closing? Or does this run afoul of the successor employer / alternative defined contribution plan rules?

Has anyone received IRS approval of a correction in VCP that was less participant-friendly than EPCRS guidelines would have required? (For example, IRS approved a 25% QNEC when EPCRS guidelines would have required 50%?) For anyone who has filed a VCP application in the last couple of years, how long is it taking the IRS to get back to you? Thanks!

There is a common practice of companies filing a 5500 without a financial statement (generally because it's not ready yet), and then re-filing an "amended" return with the financial statement attached. I've always wondered if IRS/DOL would at some point crack down on that and treat such filings as late.

I agree with brian. I think offering coverage to surrogates (some of whom are presumably employees of other entities) is effectively offering coverage to employees of two or more employers. it technically meets the definition of a MEWA.

I have. Usually the response is to consult with ERISA counsel! Thanks for the sanity check.

Let's say an employee enrolls in an HDHP with family coverage and contributes to an HSA. Their spouse contributes to a general purpose health FSA, which we know is disqualifying coverage for purposes of the HSA. But how would the IRS know this? It doesn't seem that health FSAs are reported to the IRS (whereas dependent care benefits, like dependent care FSA contributions, are reported on W-2). What am I missing?

Hi Brian, Have you seen any providers that structure their programs in this way (where an employee is offered a flat taxable amount and can use that amount to cover surrogacy-related expenses, including a surrogate's medical expenses)? The only providers I've seen tie reimbursement directly to a surrogate's medical expenses (e.g., they want to see the receipts for such medical expenses in order to reimburse employee).

Is there reasonable argument for treating the LTD premiums as a taxable fringe benefit? Not a ton of guidance out there on fringe benefits, but 1.414(s)-1 suggests that fringe benefits and welfare benefits are separate items, and I would think of LTD premiums as being a welfare benefit.

Likewise, if considering the retroactive amendment, keep in mind that you would need to make sure that the plan was operated that way with respect to all participants (immediate entry rather than first of January/July).