How does ERISA section 408(d) work? To whom does it apply?

I can't find much at all on it.

Any help will be appreciated.

Is it possible to designate a higher match level for the NHCE group than the HCE group such as:

NHCE: $ for $ on first 3% then 50% of next 3%

HCE: $ for $ on first 2% then 50% on next 3%...4%

PBGC has released the 2006 PBGC forms to it's software vendors. How are other TPA's proceeding with sending completed PBGC premium payment forms to their clients? Does it make sense to proceed with the calculations of the variable rate premiums for 2006 before Congress has finished work on the pension bills or should we wait to see if we get any relief in interest rates or changes in the actual calculations.

Employer contributes an amount equal to 18% of employee's salary toward the organization's (fully-insured) health plan premiums. If the 18% is more than enough to cover the premiums, then the excess is contributed to the employee's 403(b) plan account. If the 18% is not enough to cover the health plan premiums, the employee must pay for the difference.

Is this arrangement legal? Since the 18% is based upon individual employee salary, higher paid employees are going to get a higher contribution. Presumably, since it is a fully-insured health plan, the health plan contribution piece is fine. But does the arrangement violate 403(b)(12) on the retirement plan side?

I am starting a research paper on Cafeteria plans. I am looking for any input on what you know about disadvantages to the employee on a Cafe plan, both health and daycare.

I know there is the "use it or lose it" rule and that the grace period has been extended to 14 months and 15 days. I also know that the plan reduces your taxable income which can also decrease some of your benefits like social security, pension, disability and life insurance when those benefits are based on taxable income.

I know that you must enroll annually and determine an annual election amount.

I know that you must submit claim forms and wait for reimbursement (some companies have the new Flex Debit Card)

Anyone know of more disadvantages to the EMPLOYEE?

Also, anyone know what the eligibility requirements are to participate in a cafe plan?

I recently retired and attempted to make a redemption from my ERISA qualified 403B--I also wanted to transfer it to an IRA. I was told I need a form signed by myself and the plan adminstrator. When I called my ex employer I found out the plan adminstrator had left three years ago (the former CFO) and no had been named to replace hiim The employer said they were trying to straighten out this problem as they were also in the process of terminating the 403B plan and switching to a 401K. I am just curious. in the absence of a named plan administrator what , if any, options do I have to redeem or transfer my funds to an IRA. This involves considerable money and I am somewhat anxious about how long it will take them and what problems could arise. Thanks fca

Employer contributes an amount equal to 18% of employee's salary toward the organization's health plan premiums. If the 18% is more than enough to cover the premiums, then the excess is contributed to the employee's 403(b) plan account. If the 18% is not enough to cover the health plan premiums, the employee must pay for the difference.

Is this arrangement legal? Since the 18% is based upon individual employee salary, higher paid employees are going to get a higher contribution. I know that 403(b) plans are not subject to discrimination testing, but what about health plans (particularly regarding employer contribution for premiums)? I think this is a fully-insured health plan.

Thanks.

Could a designated beneficiary be changed after a participant's death?

Just curious if it's feasible to take more than one exam during a testing window. I may have a block of time that I can set aside to do nothing but study. How much preparartion time is needed to study for the DC-1, DC-2 or DC-3 exam? I have not taken any of the exams so I have no clue what the practical time requirement might be to get prepared for them. For example, would it be possible to schedule the DC-1 at the beginning of the testing window and the DC-2 toward the end of the testing window or is that not at all doable nor sane...?? Thanks for any help.

Is there any Federal law that states how quickly (two days, one week, two weeks ets) a custodian has to transfer your IRA to another custodian either a broker dealer or Federal Government plan assuming all of the paper work is given to the custodian? I believe you have to complete a Form TSP 60 and give it to your current custodian if you are transferring an IRA to the Federal Thrift Savings Plan.

Thanks, Dan

Our company has a VEBA that was established pursuant to a CBA in connection with a self-funded long term disability plan . The company must pre-fund 12 months worth of benefits for a newly disabled participant. Once a quarter, the company draws down from the VEBA the equivalent of the past three months worth of payments that have been funded from general assets. This amount goes back into general assets. For example:

Joe starts monthly disability payments 1/1/06. His benefit amount has been calculated to be $1,000/month. The company pre-funds $12,000 to the VEBA for the first twelve months of his disability payments. Each month, his payment is made from general assets. At the end of the first quarter, the company requests that $3,000 be paid from the VEBA back to the company.

Does this represent a prohibited transaction? This plan has been audited since the VEBA has been established but I don't see where this has been raised as a potential issue. Any input is appreciated!

Thank you!

Folks:

In today's Benefits Link, I noticed this story.

I was under the impression that the federal government passed legislation detailing how health and wellness incentives could be incorporated into plans, without being discriminatory.

Why couldn't insurers in MI be offering plans duplicating these federal incentives now, without legislation needing to be passed in MI?

As I understand federal law, the states can pass legislation, which would be more favorable to the employees.

Don Levit

Employer currently has a SEP, but now wants to stop funding that plan and start up a safe harbor 401k. To do so right now would mean the plan year (they want calendar year) would be less than 12 months. Since the initial plan was a SEP, does that make a s/h 401(k) a successor plan, and therefore we would have to wait until 1/1/2007 to start the s/h 401(k)?

Thanks

We are a medium sized TPA which still runs a few quarterly valued balance forward 401(k) plans. When election changes are made, we do estimated transfers of 80% of participants balances as of the last valuation date and complete the transfers when the current valuation is done. For example, a calendar year balance forward plan permits election changes quarterly. A participant completes a election change form in June, to be effective July 1st. On July 1st, we transfer 80% of his or her account balance as of March 31st, the last valuation date, and the rest when the June 30th valuation is complete.

When we instituted this procedure 8 years ago or so, we had many more balance forward plans. The 80% amount was the industry standard at the time. We are now reviewing a number of our procedures, including this one, and wonder it is reasonable and still the industry standard. Any thoughts from you balance forward TPA's out there?

Thanks

I am designing a safe harbor 401(k) plan that utilizes the 3% SHNEC.

The plan will also have a profit sharing component.

I would like for the plan to qualify for cross testing through the use of a gradual age or service schedule.

If my profit sharing schedule (which we'll assume meets the requirements of 1.401(a)(4)-8) starts at 3% of pay, can this minimum 3% contribution satisfy the SHNEC and the top-heavy minimum required contribution?

Alternatively, must the plan make a flat 3% contribution and then make an additional profit sharing contribution with its own age or service schedule (for example a schedule that starts at 0.5% or 1.0%)?

Greetings to all members, I am currently a law student doing research on this particular topic and any insight would be of great assistance. This question is in regards to the opinion letter issued by the DOL stating that anyone that provides 401(k) Plan participant advice is considered a Plan Fiduciary. Are there currently any cases that anyone is aware of, where a person has sued a financial planner for breach of fiduciary duty?

Has anyone ever heard of this? Corporate PS plan being audited by the IRS. Auditor maintains the plan is discriminatory because the compensation from the W-2 is rounded to the nearest dollar, and for the year in question, the HC and 2 NHC got rounded up, and 12 NHC got rounded down. By my estimation, given the percentage of compensation that was contributed, this would result in 9 cents being reallocated among 12 people.

If this were April 1 I'd think it was a joke. However, apparently it isn't.

There's always something new in this business...I never thought I'd be asking such a question, but does anyone know of any statutory/regulatory authority that allows rounding of the compensation. Sheesh.

I am confused please help. The company I work for was sold during 2005 and a new Corporation was formed. Does the 401(k) Plan need a new EIN number? Also, should the audit of the plan be for the period from the sale to the end of the year (7 months)? Finally, do the assets need to be transferred to another account if we are keeping the same custodian and trustee? Thank you for your help!!!!!!!!!!!!!!!!!!!!!!

I need to have an explanation in layman's terms as to related party transactions as it applies to prohibited transactions in qualified plans or IRAs.

Can someone give me some examples of these types of prohibited transactions?

For instance if a client has an IRA and wished to purchase stock from his son's business inside his IRA is he able to do that or would it be considered a prohibited transaction?

And if a client has an IRA and they want to purchase the building that his son uses for his business inside his IRA is this a prohibited transaction?

Any other examples that you could think of to help me would be greatly appreciated.

If a participant terminates at the end of the prior plan year and is not included in the 5500 Count and is rehired in the next plan year, is that participant included in the count at the beginning of the plan year for 2005, even though he was hired in May, 2005? Thanks.