I was wondering if anyone has any experience with outsourcing/offshoring any of their data processing work. If so what kind of benefits do you see and what pit falls? It seems that this is an unused area in the industry and i'm wondering why. Thanks

I'm an advisor to a non-profit who currently has a 403(b), employee contributions only with a mutual fund co. I believe the arrangement is done on an employee level whereby they simply fill out some forms. I believe you refer that to a non-ERISA 403(b)?

Now they want to add some Employer contributions, so here are my questions.

They are having a plan document drafted with all the provisions. Does that make this an ERISA plan now?

They want to add the employer money to the existing employee 403(b) accounts. Is that advisable?

If they do comingle the employer with the employee, does that become a problem. Like vesting issues and distributions. I think the employee would be able to liquidate the funds under current arrangement and that would be a problem if they are not vested.

Can anyone offer some suggestions with the above scenerio. Perhaps you have had this sitiuation already.

Thanks.

I have an employee who stopped participating in our medical FSA due to qualified change in status. He has a balance remaining in the account and no pre-termination medical costs to see reimbursement for. He did have pre-approval for medical care from his physician before terminating, but was unable to actually receive the medical treatment before he terminated participation in the FSA. Can he seek reimbursement under the FSA for the pre-approved treatment he received after his participation stopped?

About 18 months ago, the company I worked for at the time was acquired or bought out by another. I now work for a different employer with a new 401 plan.

The old plan has not been terminated yet but since I am no longer employed with the company shouldn't I be allowed to take a lump sum distribution? They have the ERISA compliance department looking at this for me. I can't figure out what the hold up is - I am no longer an employee under the old plan!!

Any help would be appreciated!

I know that there are several cases out there where scrivener's error was used as a defense to ERISA claims for benefits. I have yet to see a case or other guidance where scrivener's error was raised in the context of correcting plan qualification failures. Does anyone know of any?

Maybe I'm wrong, but it seems like the traditional doctrine of scrivener's error does not have a place in the context of qualified plans when plan document failures can be corrected under EPCRS. Any thoughts?

My brain has decided to take a break, so I figured I'd post this. New PS plan started for 2005. To determine HCE for 2005, I need to get comp for 2004 to see who earned $90,000 because it is not a new company, just a new plan? Thanks.

I have a Defined Benefit plan that covers bargaining employees only.

I'm completing Form 5300 for a favorable determination letter.

I'm confused on how I should answer Line 14, which asks "Is this a request for a determination regarding a design-based safe haror under section 401(a)(4)?"

Does anyone know how I would determine how to answer this? Thanks much.

I understand that for single-employer plans for 2006 and 2007, the maximum deduction limit under unfunded current liability is changed to 150% of the plan's current liability, less the plan's assets.

Let's assume no amendments in the past two years and that we're not talking about a terminating PBGC-covered plan.

I'm stumbling on the interest rate that can be used to determine the current liability for this purpose. For 2004 and 2005, we could use the lowest interest rate in the old OBRA current liability range (so 4.59% for PYB 1/1/05). My reading of the PPA leads me to conclude that for 2006 and 2007, the lowest interest rate we can use for this purpose is now 90% of the weighted average of the corporate bond interest rate (so this would have been 5.49% for PYB 1/1/05 if in effect then and will be somewhere close to 5.15% for PYB 1/1/06). I arrive at this based on the fact that PPA removed IRC 404(a)(1)(F).

Does anybody else agree? Thanks much.

Folks;

I am curious about any conflicts you may see between these 2 entities.

According to Sec. 2791(d)(3) of the Public Health Service Act, a bona fide association, with respect to health insurance coverage offered in a state, must meet the following requirements:

1. Must have existed for 5 years.

2. Been formed for purposes other than obtaining insurance.

3. A person must not have to prove health to join.

4. Must be a member of the association to obtain insurance.

5. Meets any additional state requirements .

A VEBA is formed in order to obtain insurance for the participants.

Wouldn't this conflict directly with the first 2 requirements of a bona fide association?

Don Levit

Maybe I missed this - but was the Roth 401(k) feature extended?

The participant completed a beneficiary form naming his separated spouse as his primary beneficiary. They become officially divorced. No new bene form was completed. He passes away. Is the ex spouse still the primary beneficiary? Does the divorce cancel the beneficiary form? Based on the current plan forms, a new marriage would cancel a beneficiary form. Does the benefit go to the contingent beneficiary, his mother, or to his biological children?

I looked at the plan document. Looks like a spousal consent was necessary. But, by the time he passed away, they were legally divorced.

Thanks.

I just wanted to alert everyone to situation here in our office. We prepared a Safe harbor 401(k) for a client. The clients attorney made some changes to our volume submitter plan and it was submitted to the IRS as an ind doc.

The IRS has said that all non-safe-harbor language must come out. For example the IRS agent wants us to remove all of the language that relates to the ADP/ACP test, as a SH 401(k) is not required to be tested. The IRS said that they do not want employers defaulting to the testing if they dont follow the SH matching.

We called our doc provider and they said that they were told by the IRS Volume Submitter agents that this was not true.

They said that they are going to fight this and I thought every should be aware.

this would cause a real admin problem for people who in a particular year, don't follow the SH rules.

Does anyone know whether a participant in an ERISA welfare benefit plan who has validly assigned his benefits to a health care provider would be able to bring an action for benefits under 502(a)(1)(B) after the provider unsuccessfully did the same (in a case decided on the merits) (and within the time limit for bringing suit)? It would be a rare circumstance, and I imagine that the claim would be precluded (res judicata) on account of the provider/plan litigation. But I don't seem to be able to find any authority on this point.

OK. The new bill (once it is signed) has set the interest rates back to PFEA levels in many cases.

Current liability uses PFEA for 2006 and 2007.

Minimum lump values use 30 year Treasury rates for 2006 / 2007???

PBGC uses what??

415 lump sums use the greater of 5.5% or the plan rate (with one additional kicker about the rate that would have provided a lump sum of not more than 105% OF THE 417(e) numbers - not sure where this one came from)

Is my understanding of the current situation correct?

I asked the following question in the Cafeteria Plan board but have not received a definitive response, so I figured I'd try here:

Can a multiemployer fund sponsor a cafeteria plan for the benefit of the employees of its member employers? Q-3 of the proposed 125 regulations seem to indicate not because a "cafeteria plan is a plan maintained by an employer for the benefit of its employees." Is there any way that a cafeteria plan (with premium payment, FSA, and DCAP features) can be structured to be located at the fund level and with only one Form 5500 filing for the FSA feature? Any suggestions are welcome.

The only "distributions" for my plan are ADP refunds.

Do I need to file the "R"? (Plan is on a standardized prototype, so I'm not answering question 9).

Related: Would I need to file an "R" if all we had were deemed distributions?

Can a SMM which includes all of the information required by the regulation be included on the participant's quarterly DC plan statement (i.e., not as a separate attachment/enclosure with the statement)? The statement includes a "bulletin board" section and the information could be "posted" there.

If there is only one broker who receives TPA Fees of only 694.38, does this need to be reported on the Schedule C? And if so, is it only reported on Line 1 and not broken down? The instructions say anyone who receives over $5000.

Do employers have to offer COBRA to terminated employees who have not overspent their account ?

How do you determine if an employer is eligible NOT to offer COBRA ?

The Multiemployer Pension Plan requires a Participant to provide the Plan with a Social Security Disability Award before that Participant can be eligible for Disability Retirement. In that a majority, if not all, Social Security Awards are retroactive, can a Participant elect to take an Early Retirement until they get their Social Security Disability Award and then come back and change their election to a Disability Retirement? My thoughts are that this practice, if it is legal, should be discouraged, if possible, in that it would cause additional administration and cost to the Plan.

Thanks.