Is anyone using debit cards with their QTFB program? If so, and you also have debit cards for your health FSA, do you use one debit card or two?

Can a non-ERISA 403(b) have a vesting schedule for employer contributions?

Is there any reason why an safe harbor 401(k) plan would (or should) set a maximum limit on a participant's elective deferrals? The Plan uses a Basic Matching Contribution to satisfy the safe harbor requirements.

Is there any reason for a one participant plan sponsored by a sole proprietor to NOT have a 401(k) feature nowdays instead of being a basic profit sharing plan?

We are looking for recommendations on DB software. Software would need be able to handle 412(i) plans. Any thoughts?

Thanks in advance for any guidance.

We have a client who received an Audit Letter from the DOL's Office of Chief Accountant in Washington, D.C. requesting copies of all audit workpapers and other documents within the independent auditor's possession that support the audit procedures performed with respect to investments, contributions, benefit payments, participatn data, plan obligations, and prohibited transactions. The letter simply notes that the request is being made as part of an "ongoing program" by the DOL to ensure compliance with ERISA's plan audit requirements.

I am curious if others have received similar requests and this is likely just an ongoing program and the client got audited at random or whether it is likely that something on the Form 5500, a participant complaint, or other issue triggered this request. Other audits we have seen that have been sparked by participant complaints have generally originated from the DOL's Regional Office and the client is not aware of any problems or complaints that would have sparked this. Thanks in advance for any thoughts.

Hello, I was laid off from a company due to a merger for which I had worked for close to 5 years. I was 3 months short of vesting. The merger automatically vested my 401k dollars, but they say not the DB dollars. I have read on DOL website that plan termination mandates immediate and full vesting, but in a merger situation, if the new company assumed the old plan, does this count for vesting purposes? Any advice would be appreciated. Thank you!

A participant in a self directed plan invests in Corporation A. After the purchase, the participant's account will hold less than 10% of Corporation A's stock. The participant later becomes a director of Corporation A and Corporation A subsequently purchases property directly from the participant. This transaction seems fishy. In a rather indirect way, it seems like the plan is purchasing the participant's property. The only way I can see this being a PT would be if the Corporation was considered to be the Plan. Can anyone make that connection? Is there a point at which the Corporation would be considered to be the Plan? 100% ownership of Coporation A through the Plan? Am I missing something?

New Comp plan. I want to give the least amount of PS contribution. I have two non excludible NHCE participants, 1 of which does not meet the accrual rqtmts, significantly impacting my 401a4 test. If I give a very small contribution to this participant, making a corrective amendment, I can pass, but I won't meet gateway. Do corrective contributions need to meet gateway, when they do not meet the accrual requriements for a contribution?

Is 457 the ONLY choice for a state university to offer non-qualified deferred compensation? In other words, unless the requirements of 457 are met, does 457 render an employee unable to defer the taxation of income when he/she has no constructive receipt of the income?

Thanks,

Ken Davis

Client contacted his broker to establish a 401(k) plan. The broker gave him an IRA adoption agreement to complete. The broker says it is his mistake. The assets have been in the traditional IRA since 2003.

Now the client and the broker wants adjust all activity and assets from the IRA to the 401(k) plan.

Is this a correction process that is allowed? If is there not a deadline of the next year-end( the year end after the year that the mistake was made.?

Thanks for your help

I'm trying to determine how the deferral and contribution limits work in this situation. We have a person (Joe) self-employed for the first half of the year with a Solo 401k plan. During the second half of the year Joe goes to work for an employer offering a 403b plan.

We understand that the total deferrals for the year are limited to $14,000 total in both plans combined. We also understand that the limit on total contributions to the Solo 401k is $42,000 including any deferrals in that plan.

Assuming self-employment earnings (after subtracting 1/2 SE tax) were at least $210,000 could Joe forego making deferral contributions to the Solo 401k and instead make only a profit sharing contribution of $42,000 and then make deferrals with the new employer's 403b plan of $14,000?

I suppose he could acheive the same thing by using a SEP plan for the SE income, if the Solo 401k plan weren't already in place. right?

Has anyone looked at this or is anyone willing to hazard a guess?

We have a participant on a leave of absence who wants us to suspend his 401(k) loan repayments. He is receiving worker's comp payments from his employer, and the worker's comp payments are more than the loan installment payment. So far, his loan installment payments have been deducted from his worker's comp checks.

The regs say that you can suspend repayments where a leave of absence is either:

(1) without pay from the employer, or

(2) with pay, but only if the pay is less than the amount of the loan's installment payment.

Does a worker's comp payment from the employer (or from an insurance company on the employer's behalf, for that matter) count as "pay from the employer" that a loan payment has to be deducted from? How about a self-funded disability plan's income replacement payment (not the case here, just curious about what y'all's thoughts might be)? I've looked around a bit and haven't found any specific guidance on what exactly constitutes "pay from the employer", although it seems like this would be a common question.

Yes, that's right...the client just decided to write this terminee a check from the company's checking account rather than have the funds issued from the plan. Incidentally, the amount they paid the terminee was at no time her actual vested balance (go figure). This occurred back in 2001 and the plan is now terminating. Of course our records still show she has money in the plan, but the client is adamant that she not receive a distribution from the plan because they consider her already paid out. I don't even know where to begin. Does anyone have any thoughts?

are disability benefit provisions subject to 411(d)(6)?

Does anyone have a VFCP Class Exemption Notice to employees/beneficiaries you have created? While the 2002 fed reg gives a general outline of what the notice should include, we would like to see an actual notice. It can be emailed to: lmichals@pensionadm.com. Thank you.

Linda Michals

We took over a MP plan with standardized document in February; we prepared amendments to change it to a PS w/ Safe Harbor 401(k) Plan. Just found out employer neglected to adopt & a few a participants have accrued a benefit under the MP document.

I'm trying to find a solution to this problem. The MP plan requires a 25% contribution. Client prefers to amend rather than terminate. If plan retains QJSA provisions, is there any reason the plan couldn't be amended in 2005 to a profit sharing plan with a 22% employer contribution plus a 3% SHNEC? I don't see a problem right off, but I just found out & my head is still spinning.

Employer has an existing SIMPLE - due to cash flow problems they are looking to stop ER contributions for a period of 12 months. I don't believe they can do this without terminating the plan for ALL contributions. If this is correct what is the correct procedure to terminate the SIMPLE? I would think they could "re-adopt" the plan again at a later date?

I know that somewhere there was a notice or ruling to the effect that when determining the maximum lump sum at the 415 limit for principals, instead of using GATT interest, you can't use anything less than 5.5% interest or the plan's AE rates or something like that. I'm trying to look it up, but can't seem to find it. Can anyone provide a cite where I can dig up more info?

Thanks!

Dennis

Two books on HSAs will be released shortly, as follows:

Health Savings Account Answer Book (Aspen Publishers)

Advisors Guide to Health Savings Accounts (AICPA).

I expect that both books will be released within the next 60 days. Both books are similar in scope, but the "answer book" is written in Q&A format.