Here is an odd situation - but was hoping for some opinions....

Plan sponsor forgot to do their 2001 ADP/ACP testing. They are currently doing it now.

When the plan document was signed for GUST, the prior year testing method was chosen. The GUST document was signed in 2002.

In doing the 2001 ADP/ACP testing, are they limited to using the prior year method (since that's what the plan document indicates)? Or, can they use the current year method since 2001 was during the GUST remedial period?

I suppose this is an interpretation issue - as I can see it both ways.

Any opinions?

We have a broker who is trying to introduce a "minimum premium payment" health plan. This is a fully insurance plan with self insured characteristics. Specifially, 80% of the premium goes to the health care vendor and 20% is held in a reserve (in our bank). At year end, when we "true up" the plan, based on our experience rating, we may be able to keep a certain portion of the reserve money to use for future medical plan expenses.

Has anyone had any experience with this type of plan? What are your thoughts? Any red flags we need to look for? This one is new to me.

If an employer wants to charge terminated employees for maintaining a balance in the plan, can the employer bill the ex employee? Or does the bill have to come from the plan? Can the employer keep the money that they receive for the bill or must it go into the plan?

A union would like to offer its members a legal services plan (LSP). The plan is to be funded from employee contributions only (through dues check off) and the employers will not have any involvement other than turning over the dues money which it does anyway.

1. If the amount of dues being collected by the employer through check off and turned over to the union is to increase due to the LSP, are there any legal issues which would prevent the union from moving forward with this plan?

2. Does there need to be a participation agreement of some sort between the union, employee and employer regarding this?

Please advise.

A union would like to offer its members a legal services plan (LSP). The plan is to be funded from employee contributions only (through dues check off) and the employers will not have any involvement other than turning over the dues money which it does anyway.

1. If the amount of dues being collected by the employer through check off and turned over to the union is to increase due to the LSP, are there any legal issues which would prevent the union from moving forward with this plan?

2. Does there need to be a participation agreement of some sort between the union, employee and employer regarding this?

Please advise.

The Transition Rule under 410(b)(6)© gives a free pass on coverage testing for the Transition Period. Does that mean you still have to pass ADP/ACP testing during that period based on employer wide data?

Can anyone suggest a prototype plan sponsor for a small (under 100 employees) employer that primarily is interested in the plan document, but manages its own investments and recordkeeping?

Client had a Simple IRA but is moving to a 401k s/h plan. They want to roll some of the SIMPLE IRA money into the new 401k. If they do this, do those rollover monies get counted toward TH determination in the new 401k plan?

My employer has a nonqualified deferred comp plan for executives that utilizes the 1983 Group Annuity Mortality Table (83 GAM). My question is the following: Does ERISA or some other regulation require that the Plan be amended to use the 1994 Group Annuity Reserving Table (94 GAR)? Or is it up to the employer if it wants to change from using the 83 GAM to the 94 GAR?

My employer has a nonqualified deferred comp plan for executives that utilizes the 1983 Group Annuity Mortality Table (83 GAM). My question is the following: Does ERISA or some other regulation require that the Plan be amended to use the 1994 Group Annuity Reserving Table (94 GAR)? Or is it up to the employer if it wants to change from using the 83 GAM to the 94 GAR?

DB Plan wants to buy a building for approx 1M (which will be almost 90% of the plan assets)in which a portion will actually house the plan sponsor of the DB plan. We are sure this would be a PT – however client would like actual sites. Comments?

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Assume the following - Orthodontic services began in 11/05.

1. Participant begins participation in health fsa 01/01/06 and continues to receive orthodontia treatement throughout 2006 - can these expenses be reimbursed from the health fsa?

2. Again, participant begins participation in the health fsa 01/01/06, however, paid orthodontist in full in 2005 through a financial institution and continuing those payments in 2006 and continuing treatment in 2006. Are those payments being made to the financial institution reimbursable under the health fsa?

Most of the guidance on orthodontia is informal - just wondering how others have dealt with this.

If you know of any written guidance, please provide link.

Thanks for any help provided!

A proposed regulation was going to change the mortality table used to a pre/post RP-2000 table with improvements. Was this regulation ever finalized to anyone's knowledge??

The proposed regulation indicated that the improvements would be 15 years for nonannuitants and 7 years for annuitants. However, when looking at the factors in the proposed regulations it appears to be using 22 years and 14 years.

I am attempting to contact IRS and determine whether there is a glitch or I am just performing the calculations (and matching their numbers by the way) in a fashion not intended.

Thanks for any and all comments.

With the recent passage of the PPA 2006 and the sweeping changes to corporate plans, has anybody seen an analysis outlining the changes to government pension plans? I have seen a review by NCPERS, but it only outlined 6 areas. Could the changes to government plans be that limited?

Can we deem a loan for a participant who has filed for bankruptcy and her loan is in default?

I'm wondering if anyone has encountered similar situations with medical providers.

A plan participant was injured by a third party over a year ago. Most of the medical providers submitted claims on behalf of the participant. The plan has a provision which states that it has a subrogation interest in any payments it makes for injuries from the above third party accident.

The participant's personal injury attorney has settled with the third party and is in the process of settling the subrogation claim and the medical liens. The settlement (the full amount of the third party's insurance) is rather small compared to the claims.

Here's the kicker- one of the medical providers has never submitted its bill to the plan. It has a policy of waiting until the personal injury attorney files a motion/petition to adjudicate the medical liens. Rumor has it that the medical providers do this in an effort to obtain the full amount of their claims and not the discounted ppo amount. If the settlement does not provide for the full payment, THEN they will submit their bill to the plan. Unfortunately, under the terms of the plan, this bill will be late and the plan will deny the claims pursuant to the terms of the plan.

The attorney has filed a motion to adjudicate this provider's bill for well above the settled amount and the plan's subrogation interest. It seems unfair and unethical that the participant and the plan should have to incur additional legal fees, etc. because the provider has a policy of waiting to submit bills.

I have a current group insurance client that we do cost containment services for. They are going into the workers' compensation market and state they will still use our services but need to go through a TPA and are going to consider one from our recommendation.

To capatilize on this, we're looking into purchasing a TPA but are aware that this may take some time. In the meantime, we are considering private labeling with someone else's TPA. Which brings me to this question; when private labeling a TPA, does this require for us to create a new license with the state and additional bonding?

Attorney drafted an order had it signed by all parties and approved by court. It contains a formula requiring benefits to be calculated based on date of marriage to date of separation (September 3, 1998 to June 4, 2004). I explained the problem with this and he is having a CPA do the calcs. OK with me.

When the CPA comes up with the number, my recommendation will be that all parties sign off on the number and how the assets are to be separated (order calls for the administrator to make a determination).

I think this second agreement should be incorporated into the QDRO. Should it go back to the court for approval as a addendum to the original QDRO?

If a Profit Sharing plan uses a points method for allocation (points for compensation increments of $100 plus point for YOS) of employer contribution, is that considered a safe harbor for 401a4 purposes? If not, can it be designed in a way that it would be considered safe harbor?