If an employer sponsors a 403(b) with a match, do the deferral deposits fall under the same DOL timing as 401(k) plans?

Are these notices required for 403b plan?

Are SEP plans subject to the PPA 06 quarterly benefit statement requirements?

Does anyone have any info on possible ways to avoid sanctions arising out of the IRS crackdown on 412(i) plans? For example, we want to argue that the plan sponsor operated the plan as it was approved in the prototype opinion letter, and thus sanctions should be N/A. I have heard that some sponsors have been successful in getting sanctions waived based on that type of argument, but we cannot find anything helpful. Any leads, articles, etc. would be appreciated.

Am I correct to say that if an employee terminated in 2006 with less than 500 hours, that they should not be included in the New Comp Nondiscrimination Testing?

Thank you, AJM

It appears Eli Lilly has found yet another application for prescription drug Prozac (yes, the anti-depressant), and is hawking it to dog owners. Somewhere out there an employer probably provides veterinary benefits for employees, and now its costs will go up.

-- Dave Baker

---

Apr 25, 2007 08:00 ET

Eli Lilly and Company Introduces Reconcile™ for Separation Anxiety in Dogs

At-Home BOND™ Behavior Modification Training Plan Complements Drug's Efficacy

INDIANAPOLIS, April 25 /PRNewswire-FirstCall/ -- Eli Lilly and Company (NYSE:LLY) announced today it has received approval from the FDA to market Reconcile™ (fluoxetine hydrochloride), the first selective serotonin reuptake inhibitor (SSRI) class of antidepressants approved by the FDA for treatment of canine separation anxiety in conjunction with behavior modification training. Reconcile™ is the first Lilly product approved by the FDA for dogs and is now available to U.S. veterinarians.

"Lilly research shows that 10.7 million, or up to 17 percent of U.S. dogs(1) suffer from separation anxiety," said Steve Connell, D.V.M., manager of technical, academic and consumer services for companion animal health at Lilly. "We're thrilled that our first product for dogs can help restore the human-pet bond, which can be compromised when dogs suffer from separation anxiety."

Reconcile™ is a once-daily, chewable, flavored tablet that may be prescribed by a veterinarian in weight-specific doses for use in conjunction with behavior modification training to treat canine separation anxiety. The drug is proven safe for dogs and puppies 6 months or older.

In field studies of approximately 600 dogs, 73 percent of dogs receiving Reconcile™ showed improvement in separation anxiety-related behavior within eight weeks when compared with dogs receiving behavior modification training alone. Within one week of starting Reconcile™ treatment and behavior modification training, 42 percent of dogs showed improvement. During trials, the most common adverse reactions to Reconcile™ were calm or lethargy, reduced appetite, vomiting, shaking, diarrhea, restlessness, excessive vocalization, aggression and -- in infrequent cases -- seizures.

Reconcile™ allows dogs to be more receptive to your training to help with anxiety

Canine separation anxiety is a prevalent and often misunderstood behavior problem, according to Connell. It amounts to undesirable behavior that occurs when the dog is left alone even for short periods of time. The resulting anxiety may cause the dog to engage in inappropriate behavior, such as destruction, excess vocalization and inappropriate elimination. Anorexia and depression also may be observed in some cases. "Your family veterinarian may recommend certain tests before diagnosing separation anxiety," Connell added. "Such tests are used to rule out other potential physiological causes of inappropriate behavior."

For dogs affected by separation anxiety, Reconcile™ reduces inappropriate behaviors, minimizes the pet's distress and increases receptivity to a simple training plan called the BOND™ modification training plan.

The BOND™ behavior modification program is an easy-to-implement, at-home training plan developed by Lilly and a team of veterinary behaviorists as well as veterinarians. The simple plan allows dog owners to take an active role in the treatment of their pet's separation anxiety to help restore the human-pet bond. Dog owners whose veterinarians have prescribed Reconcile™ receive educational materials to enable them to follow an easy four-step training plan to reinforce positive pet behavior which helps to reduce or eliminate inappropriate responses to anxiety. Components include a take-home DVD, printed materials and in-home reminders so the whole family can reinforce behavior modification training for the dog.

Debra F. Horwitz, D.V.M., and a diplomate of the American College of Veterinary Behaviorists, was among the veterinary behaviorists involved in developing the BOND™ program. "Learning and memory are important in the formation and maintenance of anxieties," said Horwitz. "Decreasing anxiety can help pets learn and, through training, they can learn new responses to stimuli that have triggered separation anxiety in the past. The development of the BOND™ behavior modification plan is an important complement to Reconcile™ in the treatment of separation anxiety."

For more information about Reconcile™ and the BOND™ behavior modification program, which are available only through veterinarians, visit http://www.reconcile.com/ . Important safety information and the product label also can be found at http://www.reconcile.com/ .

Lilly, a leading innovation-driven corporation, is developing a growing portfolio of first-in-class and best-in-class pharmaceutical products by applying the latest research from its own worldwide laboratories and from collaborations with eminent scientific organizations. Headquartered in Indianapolis, Lilly provides answers -- through medicines and information -- for some of the world's most urgent medical needs. Additional information about Lilly is available at http://www.lilly.com/ . Information about Lilly products for pets is available at http://www.lillypet.com/ .

™ Reconcile and BOND are registered trademarks of Eli Lilly and

Company.

(1) Lilly Research 2006

Source: Eli Lilly and Company

CONTACT: Joan Todd of Eli Lilly and Company, +1-317-433-0121; or John

Dutcher of McCormick Co., +1-515-238-5051, for Eli Lilly and Company

Web site: http://www.lilly.com/

http://www.lillypet.com/

http://www.reconcile.com/

What's the general approach for offering the Social Security Leveling option to terminated employees who want to start receving their benefits?

Can it only be offered to participants retiring directly from employment (between ages 55 and 62)? That way we can base the calculation on their final compensation.

Or can it be offered to any participant who terminated after age 55, and later came back to start receiving benefits prior to age 62?

I'm not very familiar with this option in general.

I need help with a question. A QDRO assigned 50% of a participant's vested accrued benefit to an alternate payee (the "AP") using the separate interest approach. The participant ("P") retired a few years ago and took his 50% as a lump sum payment. The AP has decided to leave her 50% in the plan.

The AP is quickly approaching age 70-1/2. The P doesn't turn 70-1/2 for another few years. The AP wants to leave her benefit in the plan as long as possible and only begin drawing it out as required under the MINDI rules.

Does the AP have to commence distribution of her benefit by April 1st of the CY following the CY in which (1) SHE turns age 70-1/2 or (2) P turns age 70-1/2?

P is very sick and likely will die before he turns 70-1/2. If he dies before he turns 70-1/2, does the AP have to commence distribution of her benefit by April 1st of the CY following the CY in which (1) SHE turns age 70-1/2 or (2) P would have turned 70-1/2 had he survived?

Thanks in advance for your help.

I'm reviewing a DRO for a plan. The DRO awards a percent to the AP as a separate interest. The DRO also specifies that the AP is to be treated as the 'spouse' of the portion awarded to the AP (rather than the benefits retained by the participant).

There is no significance to DRO specifying that the AP is the 'spouse' of the awarded benefits, because no QPSA/QJSA rights apply to awarded benefits.

It would seem that since the QDRO concept is an exception to the general rule of anti-alienation from the participant, that the QDRO ought not be interpreted expansively. So on top of the literal reading, there's reason that the plan would also not presume to apply this 'spouse' treatment for the AP to the benefits retained by the participant. Does this general rule of legal interpretation apply to QDROs?

This provision in the DRO does not preclude it from being a QDRO.

Since the plan merely reviews the DRO to determine if it qualifies as a QDRO, it would seem that it is not the place of the plan to bring this error to the attention of the alternate payee and the participant--the participant may not be too happy about the plan doing so and thus setting in motion a course of events that might lead to the participant's rights to the retained benefits being encumbered by the AP fixing the QDRO and being the 'spouse' as to those retained benefits.

Is there a duty on the plan to bring the error to the attention of the AP?

can you give a 3% safe harbor profit sharing to NHCE's and a 3% regular non elective to HCE's and still pass coveraqe. you do this under a cross tested plan document with each employee as his own rate group.

Hello.

I have 2 employees who have taken hardship withdrawals and while on suspension have taken a second hardship withdrawal. Do I tack another 6 months on the end of the first 6 month suspension period (i.e., suspend contributions for a year), or can I start the 6 months over at the point of the second withdrawal? If there is IRS guidance on this issue, I'd love to know where to find it.

Thanks!

An employee's spouse will begin teleworking shortly and we were asked whether contributions to the Dependent Care FSA can be reduced as a result of this change. Our SPD identifies a qualifying event as an employment status change that affects eligibility which I do not believe this situation fits. However I think it is a valid question especially in today's working environment as often times working at home is the only way one can retain a job and this might not have been predictable. I assume that we are not the only employer that has been asked this question. Thoughts and comments based on the regs??

I have never done a loan refinance in all the years I have done distributions. We have taken over a plan recently that allows for 2 loans at a time and this person has requested a new loan of $2500 plus his outstanding balance on loan #1, $1500. He has plenty of money in the account, so the limit is not an issue. My question has to do with the due date of the loan. Loan #1 is due 12/26/07. He is requesting 2 years on his new loan, and the date he wrote on the Handcock form is 12/26/09. He is adding that additional 2 years of the end of loan #1. Is that ok to do? My thoughts would be that the 2 year period has to start from now, not December. Loan #1 was taken out last December and was for a period of one year.

So what should the lenght of his loan be?

Let's assume we have an S-corporation (if that matters) with a single owner-employee and a solo 401(k) plan. Let's further assume, for simplicity, the owner-employee pays himself a salary of e.g. $20,000 in April of a given tax (= calendar = plan) year, say 2007, and $80,000 in December 2007.

The owner-employee defers $15,500 of his 2007 April's salary as EE contribution.

He further contributes $25,000 (25% of this year's total salary) in January 2007 as profit sharing contribution.

Questions:

After reading the "final regulations" on timing of contributions, prefunding, etc., does everybody agree that

(1) there's nothing to object to paying salary twice a year, say in Aptil and December; i.e. no regular payroll but irregular payroll;

(2) there's nothing to object to deferring the maximum yearly amount of $15,500 on the first payroll date;

(3) there's nothing to object to contributing the 2007 profit sharing contributions (not "matching contributions") any time during the year, like e.g. in early January 2007.

It looks like most folks belive that the prefunding "final regulations" don't apply to timing of profit sharing contributions (but only matching contributions; and we would just define all contributions as profit-sharing rather than matching), but I wanted to check if this assumption can be taken for granted, and if there might be anything wrong with the above setup. Even though obviously no well-defined payroll period exists in this case, I would think that it can be assumed that the $20,000 salary in April would relate to Jan-March's service. (Must it be defined somewhere what period a payroll payment relates to??) Also, the rule that contributions must not precede related payments or draws seems to apply only to sole proprietors, not to (single shareholder) S-corporations?

Of course we shall assume for the moment that the plan document does not contradict this setup.

Thanks,

Equity comp plan provides for accelerated vesting upon participant's retirement (age 65 or older). Over age 65 participant receives restricted stock award with three year vesting. As such, despite the three-year vesting provision, because the participant is over age 65 participant can retire at any time and the restricted award will vest. Therefore the three year provision is essentially meaningless except to the extent that the participant cannot transfer the shares while remaining in employment before three years is up.

Is there a "substantial risk of forfeiture" under 409A because the award is not "conditioned on the performance of substantial future services" such that the award must comply with 409A's requirements? I think that the answer is different than it would be merely under Section 83 but I don't know what the answer is.

This seems to be a basic question but I can't find any authority that discusses it. I only find discussion stating that restricted stock subject to a SRF does not constitute deferred compensation. But I know that already. See page 41 of the final regs.

Any thoughts are appreciated.

I have a plan with a participant who has worked the required hours for accrual but has received no compensation ( a spouse of course...). The plan provides a de minimis benefit of $10,000 per year. Now the plan is terminating. The participant has accrued 4/10 of the de minimis benefit which is a $4000 annual benefit payable at age 65. The present value of this benefit is approximately $26,000.

When I read 1.415(b)-1(f)(2) of the final regulations, I believe that although I cannot pay this amount out as a lump sum, since the payment in a particular limitation year would exceed $10,000, I can pay it out over any fixed period, for example over 3 years. Any disagreement?

Part 1:

I would like to check my interpretation of Testing Age in 1.401(a)(4)-12.

Combining plans for 410(b) and 401(a)(4).

DB Plan NRA = Later 62 or 5 YOP (NRD is first of mo. following)

DC Plan NRA = 65 (NRD is first of mo. following)

No EE is at or past either plan's NRA. No EE comes under the 5 YOP NRA provision.

EE1 is in the DB Plan Only

EE2 is in the DC Plan Only

EE3 is in both plans.

Testing Age:

EE1 = 65

EE2 = 65

EE3 = 65

Agree/Disagree????

Part 2:

What if the NRD in the DC plan is the last day of the plan year NRA is attained (the DB NRD is first of month following NRA). Therefore, in the DC plan, some particpants actually retire at age 66 based on age nearest birthday. Would that change anything? The regs only use the term "normal retirement age" not "normal retirement date". I can add that my software vendor uses age nearest at NRD. If age nearest at NRD is applicable, would everyone's testing age be 66 or just those that are actually 66 at NRD (the rest would have an age 65 testing age)?

This is the first year an auditor asked for a SAS 73 report.

I don't ever recall providing this report to an autditor, and after reading a summary of this, it appears that the auditor would be the one who is required to disclose this report if the auditor enganges a specialist, such as an actuary to review the valuation.

We are the TPA that prepares the valuation.

Are we responsible for this report?

Thank you.

We have a 401K Plan with participant investment direction that is valued quarterly using "balance forward" calculation methodology. A bit old fashioned, but there are still some of these left.

Would you agree that we need to add to the quarterly statement by describing the "investment limitations" i.e., that they can only change their investment allocations once per quarter and that any such change will be effective as of the first day of the following quarter? Or do you think I am reading too much into this PPA requirement?

Does anyone know of a good write-up regarding the impact of FMLA on retirement plan administration? I know they must be treated as active on the last day of the Plan Year, but I'm curious if they need to be credited with any hours of service?