A NQDC plan is funded entirely through the purchase of life insurance policies. The plan is to provide a benefit at 65 equal to 20% of average compensation (w/o regard to the 401(a)(17) and 415 limits). Is such a plan subject to FAS 87?

A missionary organization has been putting monies into what is described as a Section 72 plan. The organization is chartered as a church.

The monies are contributed after tax and apparently grow tax deferred.

Advantageous because of the overseas exclusion allowance.

I am not familiar with this type of plan and am wondering if it is part of old deferred comp approaches, etc.

Also, what can be done with the monies other than indivisual distribution? Rollover to IRA, 403b, etc.

Thanks for your help.

Bruce

In an Erisa plan, are employers required to set aside funds to pay for benefits?

I know that employees have a right to see statements about their benefits, but do they have the right to obtain information regarding benefits provided to other participants under the plan?

A CBA provides for a Taft-Hartley health fund and monthly deductions by the employer to fund the plan. The CBA also has a provision that allows for an employee to opt out and receive some cash from the employer if the employee can demonstrate that he/she is covered by another plan. The Plan itself does not mention the opt-out rights. Is there a cause of action under ERISA against an employer who has stopped paying the opt out cash? I see this is an issue in Cafeterial plans, but what about Taft-Hartley health plans?

thanks.

A participant took a regular 5 year loan and used the proceeds to acquire a principal residence. subsequently the participant decides he wants to extend the repayment terms. can he modify or refinance this existing loan so that it is a home loan at some time after the purchase of the residence? what would be the procedure for this. ie does he have to take a new loan or can you just modify the terms of the existing loan?

I have read several strings that generally allude to the provision of severance benefits through a qualified defined benefit plan. I am curious as to how these benefits are structured given the prohibitions of IRS Reg. 1.401-1(b)(1)(i) and the discussion in GCM 39869. Are the severance benefits discussed truly severance benefits, i.e., temporary benefits (for example, a % of pay for 6 or 12 months following termination) that end prior to retirement which cannot be characterized as a social security supplement? Any thoughts would be greatly appreciated.

I have another issue, isn't life wonderful. We have debit cards for some of our participants, one of the higher ups used his card for amounts which require substantion. He wrote to the broker on the account and complained. The manager of our company now wants us to just go ahead and substantiante the card swipes without receipts to make the participant happy and to keep our relationship with the client even though we have told them that the IRS requires substantion of the receipts. I was so mad about this this morning, I was crying. Any suggestions? Please help.

:angry: :angry: :angry: :angry:

Is a non-prescribed defibrillator an eligible FSA UME expense? I know that Code Section 213(d) defines what is considered “medical care” for the purposes of the Section 125 plan. Section 213(d) provides that an item is medical care if it is “for the diagnosis, cure, mitigation, treatment, or prevention of disease or for the purpose of affecting any structure of function of the body….” I do not believe that it is because it was not prescribed by a physician. Do you agree?

I have a TIAA-CREF contract that permits no loans. It was issued in the early 1970s. Is it possible for the assets in such a 403(b) to be used as collateral for a loan from another source either before retirement or after initiating distributions from the assets? Possible sources of information about this would be most welcome.

Thanks.

I've got a p/s plan where the owner is over age 50. Owner is very generous to the participants and has provided 15% p/s contribution from year to year. None of participants are near age 50 however. Owner would like to take advantage of the catchup provisions.

I've got another plan where i've set the plan limit to zero and thus only those eligible for catchup can defer, but all of the participants in that plan are HCE's.

Can I do the same here even though the only person who can take advantage is the HCE?

I'm creating an amendment to modify an integrated plan into a new comp plan. Each participant is going to be in their own group. Of course I don't want use names in the plan document.

Can anyone provide me some sample language that I can use in this amendment?

Or is it as simple as saying "each participant shall be considered members of seperate groups" ?

My understanding of the new rule under the PPA permitting non-spouse beneficiaries to roll amounts out of a plan is that even though such amounts can be rolled, they are not considered "eligible rollover distributions" for purposes of the tax withholding rules. In other words, unlike where a surviving spouse decides not to roll amounts over, a designated beneficiary that elects against setting up and rolling to an IRA would not be subject to mandatory 20% withholding. (The basis for the treatment of the spouse's distribution is 402©(9), which treats spouse as if he/she was employee -- ©(11) has no such provision.) Is that correct?

Will this be an issue that will be addressed in the IRS' update of the 402(f) notice?

OK, I am trying to get the procedures for processing RMD's updated. I have been looking at the processing of these calculations for some time. I appears that the organization that I work for has been taking the RMD out of after-tax balances (when processing lump-sum withdrawals). Therefore, we are not withholding any taxes from the distribution. This seems incorrect since the whole purpose of the RMD is to force an individual to withdraw a portion of their account and pay taxes on it.

Any thoughts?

I have designed a new 401(k) plan with an initial short plan year of 9/1/06 - 12/31/06. All current employees are considered to be eligible at 9/1/06 per document. Compensation for the initial plan year I chose as, "for the 12 month period ending in the initial year of participation" thinking that it would enable to owners to defer as much as they could up to the IRS limit which is also specified in the doc.

My question is, can the owners, and any other participants for that matter, defer to the $15,000 limit in the short plan year....(being limited to the ADP test of course)? I believe they can...just wanting to check.

Thank you!

I work in client services for a retirement program sponsored by a prototype plan. There are approximately 4,000 small employers nationwide that use this prototype and retirement program. Several of these plans allow for loans. One of our clients has dissolved its business and is terminating the plan. One of the participants has an outstanding loan in the amount of $20,000 (her overall balance is about $200K). The loan was taken out several years ago for purchase of a primary residence so it amortized over a 20-year period. Since the plan is terminated, she will have to roll over her balance to her new employer's plan and, in doing so, the outstanding balance of the loan will be deemed distributed. Even if she were to do a partial rollover and take out a new loan from her new employer's plan, she would not be able to amortize it over a period longer than 5 years since she is not using it to purchase a principal residence at this time.

The client is insisting that we should be able to roll over the promissory note of the loan "in-kind" so that she does not incur a deemed distribution of the loan balance. We have pointed him to the Special Tax Notice regarding treatment of plan loans but he thinks we are being uncooperative. No one here including our legal dept. has ever heard of rolling over the prom note in kind. He states that he has outside ERISA counsel telling him he can do this.

Has anyone ever heard of this? If so, what is the procedure for doing this? Thank you for your help.

I realize plans are permitted to charge no more than 102% of the "applicable premium" for any period of continuation coverage. Generally, the applicable premium is the cost to the plan imposed by the insurer for similarly situated beneficiaries who have not had a qualifying event. Is anyone in practice carrying over surcharges such as smokers or spousal surcharges to COBRA premiums? I understand this may be risky given the lack of guidance permitting. Any thoughts?

An employee went on military leave during calendar year plan 2003 after working 1560 hours. He received a profit sharing allocation and QNEC for that py. For py 2004 he received no income however the plan made QNEC/QMAC/PS/Match contributions. 2005 py the employee came back to work, clocked in 560 hours and received a QNEC/PS allocation.

The employee was on 2 year military leave so he would have 5 years to make up any elective contributions he would have been entitled to make.

The employee received PS/QNEC/QMAC in 03 and 05 based on actual hours worked and comp received. My question is would the employer have to: 1) make additional contributions for the 2003, 2004 and 2005 plan year based on the hours the employee would have worked had military leave not occurred and 2) if the employee decides to make up deferrals within 5 years, then the employer must match those deferrals, if not he receives just a QNEC/QMAC/PS?

The PPA allows rollover of eligible distributions to an IRA for a non-spouse beneficiary. All the commentary I have seen refers to rollovers from qualified plans to an IRA. If the distribution is coming from an IRA, can it be rolled over to a non-spouse beneficiary's IRA?

Thanks.

Does anyone know where a small defined benefit plan can get an IAS 90 service? I understand this is like a FASB, but has an international scope. Unfortunately, I don't know anything more about it so any help would be appreciated.