In designing a welfare plan I am trying to assess the level of benefits.

For example regarding pre-retirement death benefits, they can be funded by life insurance and of course require annual premiums.

However, any suggestions regarding a value for the level of benefits for post-retirement medical or long term care insurance.

For example say normal retirement is age 55 and I want to establish a reserve by the employee's normal retirement age. How can I determine a reasonable level of reserve to target for post-retirement medical costs (inclusive of an insurance policy), or long term care costs (inclusive of an insurance policy).

For example if post retirement medical costs consist of health insurance and other out of pocket costs, then there must be a target dollar reserve that would cover these expenses over the course of the retiree's life time. For example perhaps $300,000 might cover the life time expense. So an annual deduction to accumulate to $300,000 would be necessary. Likewise for long term care.

Any help or reference to statistical data resources would be appreciated.

Thank you.

Folks:

I came across a case today in which an organization named Coalition America was mentioned. Apparently, CA functions as some type of clearinghouse (sort of like The Connector in MA) in which it has various insurers as clients. For example, assume CA does business with insurers A and B. Then every provider who has a contract with insurer A also has a contract with insurer B, and vice versa.

Anyone familiar with this type of practice?

Don Levit

I have a client that has a 401(k) Cross-tested Safe harbor plan. They just informed us this week that they decided not to do the safe harbor and they elected not to send out the safe harbor notice last year for the 2006 plan year. I think they thought it would save them $$. In any event, they are failing the ADP/ACP with hefty ($4,000+) refunds to all 8 of the HCE's and I was wondering what if anything could be done. Historically they have allocated an 8% employer contribution with the 3% non-elective and an additional 5%. As the safe harbor is the 3% NE and would have no effect on whether the employees deferred (as opposed to the SH Match), is there ANY way they can opt for the SH for 2006 now even thought they did not notice the employees back in December? Any assistance/guidance would be greatly appreciated.

These darn pesky clients, you can't educate them and you can't bury them in your back yard and say they went out of business.

what do you think about the following:

there is a CBA in effect that expires 12.31.2007. the CBA covers EE that were employed by a company that, subsequently, has merged with a new company.

the new company does not want to participate in the CBA, as it is currently drafted. the acquiring corp would prefer to integrate all NEW EE entering the union into an already-existing profit sharing plan, which it has been administering for several years, to minimize book-keeping headaches. so, in effect, you would have a union that has "grandfathered" EE under the old 12.31.2007 CBA and new employees hired subsequent to the corporate restructuring in a profit sharing plan.

can we "bifurcate" members of a single union? is there a famous case out there involving Central States Pension Plan?

thanks in advance for any insight you might be able to provide.

Would an employer that was established on Sept. 15 be able to set up a Safe Harbor 401(k) plan?

Plan participant dies and plan sopnsor cannot locate beneficiary form. He was single with no children. The plan doc says beneficiary without a form is parents and then estate. Parents are still living.

The plan sonsor received a letter from an attorney asking for the participant's balance to be made payable to his estate. She attached the Probate of Will from the court naming his sisters as executrix's of his estate. Does this document override the plan doc so that the distribution to the estate can be done? And is there a time frame that this must be done within (the participant just died this summer)?

Thanks for any help.

Can someone tell me if Box 5 on the Form W-2 includes Section 125 deferrals?

Thank you!

Is there anything that would prohibit a VEBA from paying premiums on a fiduciary insurance policy? ERISA Section 410(b) allows a plan to purchase insurance for its fiduciaries as long as the insurance permits recourse against the fiduciary, so it appears to be OK under ERISA. Just wondering if there is anything under the Code's VEBA rules that would prohibit this.

I have a controlled group where the owner is thinking of making a matching contribution for one company but perhaps not the others. I assume this is possible as long as it can pass the nondiscrimination and coverage tests. Please help me understand specifically what I need to know about how we would make sure I know what testing guidelines I should be paying attention to. I'm not even sure I'm asking the question in the right way.

Thanks.

In researching COBRA, it states that ERs with 20+ EEs that are private sector and MOST state and local governments fall under COBRA regulations.

I can not find out information on what the MOST state and local government entails? Do basically all state and local agencies fall under COBRA?

I would appreciate any input.

I have a calendar year Profit Sharing 401k plan, 3% non-elective Safe Harbor, and a last day rule. We have several participants that terminated 12/31/05. Each of these participants received a full contribution for 2005.

Since they worked through 12/31/05, they each received a substantial paycheck in January 2006 which included vacation pay.

Even though these participants didn't actually work any hours during 2006, wouldn't they be entitled to at least the 3% Safe Harbor contribution on their 2006 compensation? This usually causes us to have to do a second distribution if they have already been paid out their 12/31/05 balance.

Now if they had a Cross-Tested contribution formula with no last day rule, wouldn't these terminated participants have to receive the Gateway Allocation for 2006 along with the Safe Harbor contribution?

Thanks.

Is anyone aware of any legislation passed recently, either at the state or federal level, that would allow plan participants to withdraw funds to cover flood damage costs? Participant has major expenses from the June flooding here in Upstate NY which are not being covered thru insurance or FEMA. Plan document only allows for safe harbor hardship distributions. If there is such legislation does it waive the taxation and/or early withdrawal penalties?

Does anyone have information on a top hat self funded medical plan for the exclusive benefit of highly compensated employees?

I have a plan that is being acquired in stock sale and is going to terminate the plan formally. Typically we have had clients wait until the positive determination letter on the plan termination is received until processing the distributions. The client would like to distribute the balances of the employees who will not retain there employment and wait and distribute the remaining balances after the letter received.

Any advice is appreciated.

MEWA will be established as a single self-funded ERISA plan (an association of bona fide group of employers is the sponsor).

Association needs to pre-fund to get it going. State insurance laws require certain reserves, etc. Association would like to loan the funds directly to the MEWA trust.

My feeling is that we need to follow the requirements of PTE 80-26 as amended and do this as an interest-free loan to the plan.

But, I was thinking, the plan does not exist yet so could the contribution merely be viewed as a setllor function.

Multiple employers contribute to a single trust established and maintained by an outside third party. Each employer determines which health and welfare benefits it needs for its employees. The individual employers have access to, but might not chose all the same benefits for their employees. This master trust has been filing 5500s as a DFE, and the participating employers have been filing their own 5500s as well. Now someone has asked if it's a MEWA.

Apparently, if it's a MEWA, it can't be a DFE. How do we determine if it's a MEWA or a DFE? And if it is a MEWA, what is the significance (other than it needs to file Form M-1)?

Mom dies in 2005 as the owner of a Qualified Plan. Adult daughter is designated beneficiary of the QP. No RMD has been made to Daughter for 2006 yet. QP Admin. is telling Daughter she must take a lump sum distribution or take distributions over 5 years. What are people doing to get the most benefit out of the new non-spousal rollover provisions in cases like these? After all, the new rules aren't effective for distributions made until after December 31, 2006.

It's likely that a plan offering health and welfare benefits to multiple employers is a MEWA. I see that they must file a Form M-1 annually.

It's an ERISA plan and files 5500s, as do the underlying employers.

My boss just asked me what the significance of being a MEWA is, and I realized that I don't know the answer. Help!

Hi all,

We are new to Relius Admin and are beginning to work our way through compliance testing. Does anyone have any guides/checklists or anything that might help someone that is new to the system work through the compliance tests? Its not that we are trying to avoid doing the dirty work by not developing on our own, we are looking for a little help to get us going in the right direction.

Thanks!

BCJ

Help! I have no had success determining which states assess a tax on the earnings portion of a roth 401k distribution? I would appreciate if someone could provide a list of states that assess the tax or a website that would provide this information.

Thank you