A 501© 3 has come to us and are maintaining both a 401k and 403b. It appears there are a few employees deferring to both plans in same year. I thought you could not sponsor both plans but had to choose one or the other.

Our company uses the company Intranet to communicate company news and announcements to participants. May we post the safe harbor notice and the Summary Annual Report on the Intranet as an effective means of providing the notices?

If you have a plan that covers only salaried employees and the employer does not track hours worked, must you state an equivalency for hours in the document? Is it sufficient to know that all employees are paid for x hours per week (e.g. 37 1/2) without actually tracking the hours?

May an employer sponsoring a self funded health plan mandate as a condition of continuing participation in the self funded medical plan a blood test for all employees coincident with open enrollment (please respond with citations)?

Can anyone tell me where I could find industry standards report for TPA fees?

We had a DOL person tell us our distribution fees ($80) are "exhorbitant". Would like to study.

thanks

Does anyone know of any authority on how years before 1988 (the first year of DFVC) would be treated under the program?

We have a client whose QDRO procedures (for their DB plan) specify that alternate payees can elect to receive a lump sum distribution of their assigned benefit but only if they make the election for the lump sum within 30 days of the date the DRO is determined to be qualified. A lump sum distribution is not otherwise provided under the terms of the plan (other than for a cash out). Does anyone see any issues with this? Could this be considered a significant detriment issue (although the lump sum availability could simiply be removed and A.P.s forced to wait until earliest retirement age)?

I've got several clients that want to allow HCEs to maximize deferrals, but avoid any refunds. Some of the HCEs are catchup eligible. I'm strugling to find sensible ways to formulate "Plan Imposed Limits" that will allow us to define the exact point at which catchup contributions will kick in. Two Questions:

1. Has anyone seen any software (e.g., relius, datair, etc.) that can predict ideal levels at which plans should impose limits???

2. Do you think there is anything that would prevent the following plan imposed limit (based on dates and names)?:

Facts: There are 5 HCEs. None of them will hit maximum ($220k) comp this year. 3 of the HCEs are non-owners. These three have been allowed to defer until this point, but have now been ordered to stop due to testing limits. 2 owner-HCEs have not yet deferred anything. One of them is catchup eligible (as is one of the 3 non-owner HCEs.)

Projection: I'm projecting that (on an annualized basis) there is room for aggregate HCE deferrals to increase by another 5%. I'd like to allow the young HCE-owner to use up that 5 percent. I'd like to allow the other owner to defer (only) the $5k catchup.

Plan Limit: Do you think it's feasible to draft a plan resolutions that limits as follows for 2006 only:

a. Non-owner HCEs cannot make any further deferrals after October 31 - other than catchup.

b. Younger owner-HCE can make deferrals, but only up to 5% of pay;

c. Older owner-HCE can make no deferalls in 2006 other than catchup.

It seems insanely fine-tuned, but permissable, to me. Do you have any thoughts as to alternatives?

Thanks very much.

Employer has cafeteria plan with an employer paid FSA and health insurance premium. After year end, an employee (who elected health premiums but not FSA at open enrollment) submits a run-off FSA claim to TPA. TPA notifies employer. Employer responds by saying they forgot to notify TPA that in middle of year, employee becomes eligible for Medicare and no longer needs health insurance, hence elected to stop health insurance and enroll in FSA all in the name of change in status. Any thoughts?

Wondering if anyone uses the Relius function of having the plan sponsor process distributions themselves from the plan sponsor web (instead of sending participant's form to TPA). How does this work and have there been any issues?

Hi. Just looking for some opinions on this.

Let's say a plan uses auto enrollment, and has an escalator of 1% each year. Participants who do not respond with any elections are enrolled at 3%. The plan has one appropriate default fund, "Fund A".

The participant is auto enrolled. He makes an election to change his ongoing contributions from the default fund to Fund B. Does this election take him out of the group of auto enrolled participants subject to the escalator? Or when the escalator is applied, does his additional 1% need to be invested in Fund A?

We are not sure if only the election of changing the deferral percentage (either opting out or increasing) is the action that will take them out of auto enrollment status, or if changing the investment fund (but not changing the deferral amount) will also take them out of auto enrollment status.

Thank you very much for any input.

My husband and I lived in separate households for 1 year and 10 months. He died 10 days ago. I was still named as a beneficiary on his IRA. Since, at one time we contemplated a legal separation, a division of property was completed and signed by the both of us. On the division of property form I gave up interest in the IRA. However, we later learned that he could not stay on my health insurance plan if we were legally separated, so the legal separation document including the division of property was never filed with the court. Since my husband's death, his children have come across this document and are taking me to court to disallow my receiving a percentage of the IRA. It was verbally agreed upon by my husband and myself that if I kept him on the health insurance plan, that I would remain as a partial beneficiary of his IRA and continue as a surviving spouse on his pension plan. My question is since the separation document and division of property document was never filed with the court, and I am still his legal spouse and I never signed off as a beneficiary on a new beneficiary designation change form, am I still entitled to my beneficiary status? Is a document that was never filed in court and was never acted upon legal and binding? Thanks for any assistance anyone can give to me.

The NJ decision requiring equal rights for same sex couples (although not the right to be "married") has drawn comments that it will increase the rights to benefits and tax deductions for NJ residents. Since NJ already provides state income tax and estate tax benefits to domesic partners and spousal benefits to domestic partners of NJ state employees what additional benefits will be available? The only new state benefits apears to be that municipal govts will be required to provide spousal health and retirement benefits to domestic partners (it is optional now) and that the NJ Family leave law will cover DP. Under DOMA (1 USC Sect 7) same sex partners are not eligible for any spousal benefits under SS, fed income, fed estate tax or plans covered by ERISA. Other states (except for CA) are not required to accept civil unions or marriages of same sex couples entered into in another state (VT, MA).

Our client A currently has a 1,000 hours and last day of the year requirement to receive an allocation of the profit sharing contribution. Those requirements are waived if a participant retires at or beyond normal retirement age. The plan document also has new comparability language that says that each participant constitutes his or her own class.

Now client A comes to us and says that a partner who is retiring prior to age 59-1/2, which is the retirement age of the plan, wants to receive a profit sharing contribution in the final year.

Could we remove the last day requirement in the plan document, but still give a 0% allocation to any terminated participant OTHER than the partner who is leaving?

Terminated NHCE employees need not be given a top-heavy minimum contribution, and without a top-heavy minimum allocation, all NHCE terminees do not benefit for the year. (Due to mandatory disaggregation, I believe that this is true even if those NHCEs defer salary during the year.) Therefore, they need not be given the 5% minimum gateway contribution.

If we include those NHCE terminees as zeros in the 401(a)(4) test, and if we still pass, are we home free? Or have we somehow invoked "discrimination in operation" by giving, among terminees, only an HCE an allocation?

A husband and wife company with a pension plan froze their pensions at the end of 2002.

They are terminating their plan and have a surplus of about 200k.

The husband is already at the 415 limit, but the wife only had three years of service and participation at the time of plan freeze.

At the time of plan freeze the wife had an accrued benefit of $60,000 (60% of 3 yr avg comp), but the 415 limit was $30,000 (3 years of service or 30% of avg comp of 100k).

In order to absorb the surplus, if the wife could receive a lump sum based on an accrued benefit of $50,000, instead of $30,000, the surplus could be absorbed.

The goal would be to keep her accrued benefit, exclusive of 415 at 60,000, but to add two years of plan participation and plan credited service to increase her 415 limit to 50k. This could be accomplished by providing that service and participation accrue for 2003 and 2004, with no additional monetary accruals.

This seems like a feasible and allowable amendment, even if the formula is reduced (but includes service through 2004), and preserves the prior accrued benefit.

Any opinion on the above approach or accomplishing such an objective?

When does a vactaion or sick day policy cross the line from a "payroll practice" to a welfare plan? Is it based strictly on whether benefits are paid from the employer's general assets, or will the complexity of the policy come into play?

Would there be any reason under the regs that an employer could not exclude Partners in a Partnership from sharing in a safe harobr non-elective contribuiton - while allowing all other HCE's and NHCE's to share in the safe harbor non-elective. The partners want to contribute to the 401(k) but do not want to be included in the safe harbor.

This is a prototype plan and the exclusion options are

__ Highly Comp. - but they don't want to exclude ALL HCE's

__ Employee who have not met max age service ... - they don't want this

__ Other:_____________________________________________

(must be a category that could be excluded under permissive or mandatory disaggregation rules of

Regulation 1.401(k)-1(b)(3) or 1.401(m)-(b)(3))

Would listing "Partners" under other not suffice - as they would not be in a category that could be excluded.....

The loan policy and the prom note I drafted for a participant who recently requested a $50,000 loan states that they need to make repayments thru the payroll. This guy wants to write a personla check for each payment. I have never had anything but loan repayments made thru payroll (one exception was a termined ee making payments on 2 o/s loans - don't even get me started on that guy...)

I have told this client and the advisor/broker that he needs to follow the prom note (and the loan policy) and make the payments thru payroll. The loan policy is in the SPD - wouldn't they need to amend the doc if they want to allow him to write a personal check to repay the loan?

According to the ERISA Outline Book, "once the participant reaches normal retirement age (or age 62, if later), the plan is permitted to require that distribution be taken. In that case, only the form of payment might be left to the participant's election. The plan may permit the participant to postpone distribution beyond normal retirement age, subject to the minimum distribution requirements."

Participant has passed the NRA and is terminated. He is now requesting his RMD. The only form of payment allowed in the plan is lump-sum distribution, defined as one lump-sum payment in cash or property. May the plan require that the participant take a total distribution since he has requested a RMD?

Thank you.

We have a potential new client that would like to have the following match in their plan:

They want to have a tiered match in which there is no match up to 8%. Anything over 8% is matched at 2%.

Is there any non-discrimination issue with having no match up to 8%? Other than having to pass ACP of course.

We've never been asked for such a match. Anyone have any plans with a similar type of match?

Thanks.