I'm a union rep and we are considering starting a healthcare plan for our members. Instead of the various employers having their own healthcare plans for our members, the employers are going to give us the money and we will provide the healthcare plan for our own members. I believe we will need to start a VEBA and a MEWA, but I am uncertain as to how much we will need to allocate for start-up costs (e.g. legal advice, documents, etc.). We have 10-15k local union members. I'm assuming it will cost $500-$1mm to start up and at least 1.5 years before we can go live. Am I even in the ballpark? Anyone know how much it will cost us to get this started?

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I'm trying to fix a coverage problem and will have to go through EPCRS because of the multiple years involved. Two employers, two separate 401(k) plans. For the deferrals component using the ratio percentage test, Plan A passes coverage (safe harbor plan), and Plan B fails (not a safe harbor plan). I cannot permissively aggregate because Plan A is a safe harbor plan. Average benefits test is less than 50%. No language in plan documents about how to fix this coverage issue. Question: To pass the average benefits test, the Plan B employer needs to make QNECs but to which NHCEs? Employees who are eligible to participate in Plan B but made no deferrals? In the controlled group, I have 192 NHCEs (172 in Plan A plus 20 in Plan B) and 11 HCEs (8 in Plan A plus 3 in Plan B).

A large profit sharing plan with pooled account overpaid a distribution in 2018. The participant reimbursed the plan for the appropriate amount (in March 2019), the year-end reports/participant statements correctly reflect that, and the 5500 shows a receivable for that amount that was reimbursed subsequent to year end. Lost earnings were paid by plan sponsor to the plan in April 2019, but those lost earnings were not accounted for by the TPA for 2018. The TPA for the plan agrees that those lost earnings will need to be accrued on the 5500, but asked whether or not they have to re-do the year-end work -- participant statements, nondiscrimination testing, etc -- for the accrued lost earnings that should have been allocated to participant accounts. Is it an acceptable practice to allocate the lost earnings in a subsequent year?

I have a pension plan with a $300,000 minimum funding requirement for 2018. Plan and fiscal year are the calendar year. The client funded $125,000 in Jan 2019 and filed his corporate return without extension. The balance of $175,000 was funded in May. The issue is whether the $175,000 is deductible for 2019 fiscal year. Rev Ruling 77-82 says "the rules of this section relating to the time a contribution is made for sec 412 are independent from the rules contained in sec 404(a)(6)." 2011 Gray Book Q&A 7 raised the issue of which combinations are acceptable for a contribution made during the 2010 404 grace period (1/1/11 to 9/15/11) as follows: [1] Deduct in 2010 reflect on 2010 Sch SB [2] Deduct in 2010 reflect on 2011 sch SB [3] Deduct in 2011 reflect on 2010 sch SB [4] Deduct in 2011 reflect on 2011 sch SB. The acceptable answers were 1, 3 and 4.  Based on this, I've concluded that I will report on $175,000 on the 2018 such SB and take the deduction in 2019.

Let's say I am a one member LLC, and I have one employee. I want to create an FSA DCAP and the FSA healthcare account for the one employee. The employee gets health insurance elsewhere, so all we need is the FSA DCAP and the healthcare FSA. The DCAP and health FSA will be the only benefits available. What's the best way to do this? I am a newbie at this. Both of those accounts will be 100% employer funded (by me). Is that legal? As in, the employee will receive the same pay as they're currently receiving, plus I will 100% fund both FSA accounts. [1] Does there need to be some kind of "plan document", even if there's just one employee? [2] How do you open these accounts? Do you go to some bank and ask them to open an FSA account? I called a few banks, and they didn't even know what an "FSA" is.

Husband in his mid-’50s no longer working for his former employer. He has a defined benefit plan with them but has not yet elected to commence his benefits although he is eligible to do so. In the Judgment of Divorce, the trial court ordered that the wife will receive a fixed monthly payment from the Plan starting when the husband reaches age 65. This is incorporated into a QDRO -- shared interest allocation, and sent to the Plan Administrator for approval. There is no option in the Plan to pay an Alternate Payee prior to the Participant being in pay status. Note that the husband may decide not to elect to commence his benefits at age 65. There is nothing in the Judgment of Divorce or the QDRO requiring him to do so, and he refuses to say that he will do so, and might not. Note that neither the Judge or the two attorneys (NOT ME) had a clue what they were doing. Note that survivor annuity benefits are not involved. The parties are not amicable. The Plan Administrator, acting through its Third Party Administrator, Fidelity, says that the commencement of an Alternate Payee's benefits must coincide with the commencement of the Participants benefits and cannot be qualified if the conditioned is based on his age, or her age, or at a fixed date, because that makes the commencement date uncertain if he has not actually commenced his benefits. I have prepared QDRO where, for example, the husband is 65 and retired and the wife is 55 and still working, and both have DB retirement plans. They agree on reciprocal if, as and when payments to the other, but such payments shall not commence until the wife reaches age 65. QDROs accepted. Any thoughts, workarounds? Don't suggest alimony because husband will say no, and because the TCJA of 2017 has made the payment of alimony non-deductible by the payor and non-taxable to the payee (so there would have to be a reduction in alimony to account for his lost tax benefit).

414(c)-5 expressly provides for situations where two non-profits can be considered one employer for the purposes of sponsoring a plan together. But it does not expressly provide for a for-profit entity who most likely has control to determine 80% or more of the board at the non-profit to be in a controlled group with one another. Is this situation implied? Can the non-profit adopt the for-profit's qualified retirement plan?

Hypothetical scenario: Sole owner of a S corp is very young (under 30), unmarried and has low lifestyle requirements (~60k/yr) but has excessive amounts of income (600k+/yr). He only expects this income to continue for another 3-6 years at best but could slow down sooner. He is considering forming a C corp for tax reasons because he does not qualify for 199A (specified service business) and the corporation has no value without him and will never be sold. In a perfect world, he would like to defer taxes on current income in exchange for future income payments (say between ages of 35-60 and use qualified fund contributions/accumulations for income over 60). This all assumes his effective income tax rates would stay at or below dividend tax rates due to his low lifestyle requirements (forget legislative tax risk). Is it possible to use a deferred comp and/or supplemental plan to defer current income taxes and create future income cash flow as he would like? My first concern with this arrangement would be that as the sole owner, is it even possible to have a substantial risk of forfeiture with either deferred comp or a vesting schedule on a supplemental plan? If this is not normally possible, is it possible to create a corporate resolution to introduce a substantial risk of forfeiture, for example in irrevocably requiring certain excess profits to be used for corporate philanthropy? Is there an issue with the "informal" 10% guidelines if the corporation only has 2 employees (the owner and a manager)? I know this rule normally becomes an issue with larger corps trying to include too many employees on a plan, but is this also an issue with a small company only trying to provide owner benefits? Are there other considerations that could pose problems in addition to these concerns, like accumulated earnings tax on informally funded liabilities? (assume COLI is an unusually expensive alternative due to ht/wt).