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So I take it you also advise against having fidelity bonds?

I'll give it the old college try.. tomorrow. BTW: Yesterday we were in NYC for a Tony Party. My show WON THE FRIGGIN BEST MUSICAL REVIVAL!!!!!!!! Got home at 3:30 this morning and had a dental appt at 7:30! Once On This Island.

Chutzpah - a child murders his parents and then throws himself on the mercy of the court because he's an orphan. Or, Congress having an ethics committee.

I don't do cryptically. Or do I?

One more thing that you should note when there is insurance in the plan. There are two qualification rules that are affected when you have insurance. First, having the insurance cannot be discriminatory. So, i would be concerned if the insurance was only available to HCEs (which may be the case if no new insurance has been offered to anyone since 1904. :) Second, the amount paid for the insurance must be incidental. If there have been years with no profit sharing contribution (assuming a profit sharing plan), it is possible that the payment of insurance premiums ceased to be incidental. (n general, "incidental" for term policies means that the total premiums paid must be less than 25% of the total contribution and forfeiture allocations for all years; if it's a whole life policy, the percentage is 50%. If it's universal life, it's basically the term rules, applied to the term portion of the policy.) So, my only point here is that this is a Pandora's Box -- be sure to open it all the way or warn the client of ramifications so that it does not bite you in the proverbials. Of course, none of this should be interpreted to be legal advice ... Have a nice weekend, everyone.

You might want to read ERISA Opinion Letter 2002-02A. Unlike employee contributions, participant loan payments aren't specifically subject to Dept. of Labor Reg. Sec. 2510.3-102. DOL has advised, however, that loan payments become plan assets as soon as they can reasonably be segregated from the employer's general assets. If the employer fails to remit loan payments, the plan has extended credit to a party-in-interest (ERISA) and disqualified person (Internal Revenue Code).