I'm posting this again in hopes someone will answer:

A client authorized his retirement plan to payout a terminated participant who terminated in early 2005. The document calls for payout to occur as soon as administratively possible AFTER plan year end (12/31 for this client's doc). The payout was made in May 2005. Discovery was made by the TPA once the 12/31/2005 valuation was being completed. The plan had earnings for 2005 (not losses). The TPA feels 2005 earnings should not be paid as the distribution was already made. The participant is still due a small payment of the 2005 contribution.

What type of possible problems exist and what type of correction can be made, if any at this point. Should the participant be made "whole" receiving 2005 earnings on his 12/31/2004 balance?

401(k) Plan moves from group annuity to another platform. All terminated participants with funds still in the plan were sent enrollment kits, blackout notice, website instructions, etc. to home addresses.

One particular employee who had been terminated for some time filled out the enrollment form and returned it to the employer. Employer misplaced it and did not send it to the TPA with the other enrollment forms. (Employer admits having received the form). TPA has no enrollment form for this employee and therefore "defaults" the employee to the plan default investment.

Nine months later, employee finally logs on to their account and realizes that the funds have been invested in default account, not according to his requested investments.

Is there any idea out there what responsibility the plan has to this former employee in terms of lost earnings? What time period would the employer be responsible for making up these earnings?

thanks

Hi. We have an employee with an outstanding loan whose status is changing from full time to part time. She is worried that some payperiods she may not have enough in her check to make the loan payments. She would like to be able to make up what she owes once every quarter by writing a personal check. I am trying to find out if this would be allowed.

Thank you.

A very small non-profit org wants to put in a DB plan but limit coverage to its director. There are only 2 other employees besides the director. The director will only be paid 60k per year and never likely much more than that and of course is not an owner of a non-profit org. I know for Key Employee def'n a person can be "deemed" a Key Employee based upon the specific facts of their position. Anyone know if there is a similar requirement in defining who is an HCE ? Can she be "deemed" an HCE by virtue of her position of power (Director) even though her comp is not sufficient and she has no ownership ?

The 401(k) plan sponsor wants to pass the investment advisory account fees onto the plan participants. Investments are self-directed, but pooled, so the TPA will prepare quarterly statements for the participants. Do the fees have to be shown separately on the participant statement, or can it be "netted" against the earnings?

Thanks

Can't believe the creativity people have when designing 401(k) plans. Here's a new one: Can a company establish a 401(k) plan such that participants can only make elective deferrals once a quarter? They have bi-monthly payroll and I assume participants would have $0.00 deferrals in 5 out of the 6 quarterly payrolls. Then, with payroll #6, they would have a set amount withheld. Participants choice as to whether they want to have 3 months worth of contributions taken out in that last payroll, or have some other fixed amount withheld.

I really don't know why they would want to do this, but I assume the employer thinks it will cut down on admin time for his HR person. Despite the nonsense of the whole idea, do you see anything "wrong" with it?

Can anyone recommend some sort of reference material regarding welfare plans? Like an "answer book". I looked on Panel Publisher's website, but did not see anything specific to welfare plans. Would that information be contained in another publication? Thanks.

The owner of a business with a DB plan is past normal retirement age. He received a lump sum of $2 mil based on the maximum 415 benefit limit on 12/31/05. The lump sum was calculated using 5.5% and 94 GAR.

The owner has continued to work. His compensation is 250,000. He is entitled to an accrual for 2006. The plan is being terminated as of 12/31/2006.

Question: How is the owner's accrued benefit as of the end of 2006 determined?

1. Profit sharing and/or 401(k) funds are rolled over into a DB or MP pension plan that includes a 401(h) feature. This apparently is not a Section 420 transfer of funds. Under these circumstances is a share of such funds allowed to become 401(h) account funds? Is it required?

2. Funds from a DB or MP plan are directly transferred into a profit sharing plan through merger. Are such funds still considered to be "pension" funds making them eligible to be transferred into a 401(h) account?

Not much guidance out there on these issues.

I am a TPA for a defined benefit plan that has only a husband and wife (owners and trustees of the plan) as participants. Well, apparently in 2005 they decided that they would take all but $134 out of the plan, unbeknownst to me of course. No termination paperwork was completed. No withholding was done. No 1099s were done. At this point, how do I even proceed?

I'm looking for a copy of Prop. Treas. Reg. 1.414(m)-5. These are the proposed regulations relating to management organization affilliated service groups that were repealed in April of 1993. Unfortunately, internet CFR and IRB resources don't go back far enough to accomodate so anyone with the ability to send a .pdf file of same would be a huge help. Anyone out there with time to kill, a scanner and a copy of the regs from no later than 1993?

As we all know, the Mental Health Parity Act requires that group health plans, insurance companies and HMOs offering mental heatlh benefits may not set annual or lifetime dollar limits that are lower than any such dollar limits for medical and surgical benefits. However, a plan may limit the number of visits covered or the number of days of coverage. The DOL has taken the position in an audit of an employer's health plan that the plan cannot impose constructive dollar limits on mental health coverage through a combined limit on the number of visits allowed with a fixed dollar reimbursement cap per visit. I believe this is consistent with the position taken by the DOL on its website. It is my understanding that the New York State Insurance Department reads MHPA to only prevent stated annual or lifetime dollar limits and that a per-visit dollar maximum coupled with a limit on the number of allowed visists is permissible. Has anyone had to deal with the DOL on this issue and if so, what was the result? Thanks for your input.

Hello all,

I'm studying for my DC-3 exam and came across the mandatory distribution exception for those participant who have reached the later of age of 62 or NRA.

I was wondering if anyone could explain what options you are allowed if you become 62/meet NRA as provided in the plan? Do the automatic rollover rules no longer apply? Or perhaps you can take a full cash distribution since you are at retirement age?

Sorry for asking here, but my DC book does not cover what happens when you meet this age in the chapter...

Thanks in advance for any posts on the topic.

Vicki

I have a client who is administering their own retiree benefits and is charging an administration fee onto the dental/health premiums thay are charging the retiree. Is this possible? and where can I find information on this.

I seem to remember a requirement to notify pension recipients of ???? on an annual basis. What is this?

I have heard administrators apply a "2 times loan balance" rule for security for loans, but I don't know if that is in the regulations or their plans/procedures.

We are trying to come up with a formula for determining how much should be available for hardship distributions and want to know if we need to account for loans by doing anything other than disregarding the receivable.

Do we need to make sure that one times the outstanding loan balance is retained in the account (or even two times??) or is that just a rule that has to be met at the time the loan is originated?

I'm new to 403(b) Plans - my prior experience has been with 401(k) and HR10 So I am reading IRS Pub. 571 to learn about them. In Chapter 3, the cost of incidental life insurance is discussed. If an annuity contract includes incidental life ins., the employer must include the cost of that coverage on the employee's W2.

Questions:

1. Does this apply to non-ERISA 403(b) Plans ?

2. Is this also known as PS-58 cost ? (we used to offer whole life as an investment option in the HR 10 plan and had to issue 1099 R's each year for the PS 58 cost of the term life portion of the policies)

Thanks in advance

An employer provides flex dollars to its employees; I'm not sure of the specifics, but dollars not used to purchase benefits are received in cash. This year the employer implemented a matching contribution to its 401(k) plan; the odd part is that anybody receiving a match has his flex dollars reduced by an amount equal to the match. I'm still checking, but it's possible that employees who were receiving flex dollars in cash but in amounts less than their match are having the difference taken out of normal compensation. Is any of this permitted? The situation just came to my attention, and I don't have access to my ERISA Outline.

Plan and Regs permit education expense for next 12 months. Next semester has not been billed yet. Anyone have a problem with estimates used as justification? Maybe it is not IMMEDIATE and heavy financial need if not billed yet, but plan uses safeharbor and this meets those requirements.

1) Can a plan administrator give employees a grid with their individual benefits and distribute the grid to everyone, so in effect, everyone's information would be on view for anyone to see?

2) Is there an easy way to find relevant DOL regs for a particular ERISA act section you are researching?