This is a question of how to properly complete Schedule T for a unique situation. The plan is a Defined Benefit plan that was established to cover employees that are collectively bargained (within the meaning of Treasury Reg Section 1.410(b)-6(d)(2)), as well as employees that are not collectively bargained.

Effective 12/31/2003, the plan became frozen with respect to the employees that are not collectively bargained. The plan remains active for collectively bargained employees. Therefore, collectively bargained employees benefited under the plan in 2004, but employees that are not collectively bargained have not accrued additional benefits since 2003.

Under the mandatory disaggregation rules, the portion of the plan that benefits collectively bargained employees is treated as a separate plan from the portion of the same plan that benefits noncollectively bargained employees. Under the Schedule T instructions, it states that if a plan is disaggregated solely because it benefits both collectively bargained employees and noncollectively bargained employees, to complete the Schedule T with respect to the portion of the plan that benefits noncollectively bargained employees. It also states that no information is required for the part of the plan that benefits collectively bargained employees.

For 2003 and prior years, Schedule T was correctly completed for the portion of the plan that benefited noncollectively bargained employees. The portion of the plan that benefited bargaining employees was not reflected on Schedule T. For 2004, how should one complete Schedule T?

1. Since no noncollectively bargained employees benefited under the plan in 2004, do we ignore the mandatory disaggregation rules (for bargaining and nonbargaining) since this plan does not benefit employees that are noncollectively bargained? Would we treat this as a plan that benefited only bargaining employees and mark Line 3c only?

2. Do we continue to view this as a plan that is subject to mandatory disaggregation for the collectively bargained and noncollectively bargained portions? If so, is it correct to complete the Schedule T with respect to the noncollectively bargained employees? If so, would it then be correct to mark Line 3b (No HCEs benefited) because that is a true statement if no employees accrued a benefit in 2004 (because of the 12/31/2003 freeze date)?

3. Would it ever be correct to mark both Lines 3b (with respect to the nonbargaining employees) and Line 3c (with respect to the bargaining employees)?

I am working with an employer who has a standardized prototype document. The prototype sponsor has adopted the amendment to comply with the automatic rollover provisions on behalf of the employer. I believe this is acceptable. The plan however has a 6/30 year-end so the rollover amendment has to be adopted by 6/30/05. If the prototype sponsor is permitted to adopt the amendment on behalf of the employer how do I show that the Plan timely adopted the amendment?

I hope this makes some sense and someone has some guidance. THANKS!

I'm looking at a Schedule H for a large employer H&W plan (including health, disability and life insurance) where the amount in Line 2(e)(1) is 3 times the amount in Line 2(e)(2). Is it possible there are any employer health care expenses in this line? My assumption is that there are Section 125 reimbursements here, plus life and disability payments to employees? Am I missing anything?

Is a reimbursement account type of cafeteria plan the same as a Flexible Spending Arrangement (as defined under Prop. Regs. 1.125-2 Q&A-7©)?

Thanks,

Ken Davis

Univ. of South Alabama

the employee is terminating before 59 1/2 and will receive a lump sum distribution. with respect to lump sum distributions of employer stock, the code says that the employee is not taxed on the NUA. in that case do they have to pay the 10% penalty and if so would it only be on the basis portion of the distribution?

I believe the thread below relates to and answers my question, but was hoping for confirmation since my situation is a little different.

http://benefitslink.com/boards/index.php?showtopic=25657&hl=

Briefly, in April, 2005, company X is bought by company Y. X has a 401k and Y has a SIMPLE 401k. Normally, there can be no other retirement plan in place when a SIMPLE exists. But I believe the transition rule that applies to acquisitions allows both X and Y to maintain their separate plans for 2005 and 2006. Is this correct?

Also, I think the intention is for X's 401k to be terminated and for the SIMPLE 401k to remain as the only plan. As long as the 401k is term'd before 12/31/06 (calendar year plans), there will not be a problem?

Finally, would anything change if this involved a SIMPLE-IRA rather than a SIMPLE-401k?

Thank you

Our firm would like to offer special benefits to our employees such as discounts on entertainment, cell phones, health clubs, yoga, etc. It should be at no cost to the employer. Does anyone know where I can look for such services?

Who would be regarded as a non-excludable non-benefiting employee in coverage testing for a DC plan?

Looking for an administrator for a loan regime split dollar plan. Any recommendations?

I have a claimant who has submitted reimbursement for a remote car starter. They have a note from a physician stating this is needed "Due to heat; treatment of Multiple Sclerosis". I can find information that states A/C installed in homes to treat a medical condition is reimburseable. Would this also be reimburseable?

I am looking for some direction for a claim received for Reimbursement. The claimant is receiving treatment for Acne Scarring - would this be considered cosmetic?

Does IRC Section 401(a)(9) allow a governmental defined benefit plan to add, as a new benefit, a lump sum payment of the value of a participant's accrued sick leave at termination of employment, with the option to receive the value as a life annuity? The terminated employee would also receive a life annuity starting at the same time, based on years of service and final average compensation. This appears to have been allowed under the 1987 and 2001 proposed regulations, but not under the 2002 temporary or 2004 final regulations. The 2002 temporary and 2004 final regulations appear to require that a participant's entire benefit be paid in either an annuity or a lump sum, and not to allow payment of part in annuity and part in a lump sum. Any thoughts?

A surviving spouse is approaching the end of the 5 year period during which she must make a distribution election. If she does not make an election by the deadline, would the automatic rollover rules apply to her?

I have two separate 401(k) PS Plans that have a control group issue. When doing the 5500, do I combine the counts for the ee's of both plans as well as the assets, or do I just combine them for testing purposes.

I will be testifying this week (so prompt replies would be extremely appreciated!) regarding the value of a pension, currently in pay status as a joint & survivor annuity, in a divorce case. The expert (an accountant) on the opposing side calculated his present values for both the pension and even the survivor benefits by calculating the present value of an annuity certain payable for the life expectancy, based on 2001 CSO. Based on my suggestion, the attorney I'm working with plans to ask me what would happen if an actuary valued benefits for an annual IRS pension valuation by using the life expectancy approach. I'm trying to come up with the strongest fully supportable statement I can make denouncing this approach, recognizing that actuaries are generally allowed a fair amount of latitude in how they do their work.

I was initially planning to say something like "This approach would not comply with generally accepted actuarial standards of practice and the actuary would need to be prepared to justify his deviation from standard practice." -- however, there's got to be a stronger statement that I could make -- ideally that ties in with either IRS or Joint Board regs. Second best (since I don't think it would carry the same weight of law) would be something promulgated by the American Academy of Actuaries (AAA) or the Actuarial Standards Board (ASB). I've been trying to find something that _requires_ that the valuation be prepared in accordance with generally accepted actuarial principles and practices, but all the references to this that I've found are from the ASB or AAA and thus are internal requirements within the actuarial profession and not a legal requirement. Anyone have any suggestions?

Also under contention is the value of the survivor benefits. If the retiree outlives her beneficiary, then she gets a popup annuity. As I mentioned above, the accountant used the reasoning that, since the retiree has a slightly shorter life expectancy than her beneficiary, she is not "expected" to outlive him, therefore the value of her survivor benefits is zero. As much as I dislike seeing the life expectancy approach being used for a regular pension, at least it's a rough approximation. In the case of survivor benefits, however, this approach is (I believe) not even a rough approximation. Any other suggestions for nailing the accountant on this point?

Thanks!

I am posting this thread for all of you just to find out if, by any chance, you or anyone else that you know may have been able to record the former Saturday morning NBC series "Skate" ("SK8") on a VHS tape when it aired three seasons ago. I am also in the process of looking for someone who was able to record all of the show's commercials, along with the ending credits at the end of every episode. "Skate" was a teen-oriented skateboarding series that was a part of NBC's "TNBC" lineup during the 2001-2002 television season. The show only lasted one season, with a total of 13 episodes filmed. The main cast included Christopher Jorgens, Adrienne Carter, Jorgito Vargas, Jr., and Blair Wingo.

If you did record this show, especially if you recorded all of the TV commercials and the ending credits, or if you know anyone else who did record this show (in particular anyone else who recorded the commercials and the ending credits), please send an e-mail back to me immediately. Be sure to include the total number of "Skate" episodes that you or your acquaintance recorded. My e-mail address is david_lumpkins@yahoo.com. My ultimate goal is to set up a tape-trade with anyone who recorded this show, regardless if the person recorded or did not record any of the show's commercials and/or ending credits. If you did not record any episodes of this show, please try to give me some additional online websites so I can continue to post this message for other people to see.

Thank you.

(Extremely important note: Over the past year, eight different people have e-mailed me saying that they did record NBC's "SK8" and yet all of them never stayed committed with me to work out the tape-trade exchange. One of those uncommitted tape-traders happened to be Adrienne Justine Carter - also known as A.J. Carter - who is one of the show's actual cast members! All eight people stopped e-mailing me halfway through my agreement for unknown reasons. Therefore, if you do reply back to me saying that you did record this show, I encourage everyone to be 100% dead-serious and totally committed in working out the tape exchange from start to finish. If you did record this show and you are not willing to seriously help me get episodes of this show, please DO NOT e-mail back to me at all. I need a serious tape-trader; no joking around. Also, if you recorded the Nickelodeon TV show "SK8-TV" from 1990, please take note that it is NOT the show that I am looking for! I am only looking for the NBC television show titled "SK8", which was on the "Peacock" network between October of 2001 and September of 2002. Many people in the past have gotten those two shows confused with each other.)

--- David L. Lumpkins

Assuming the other conditions of the safe harbor are met, I'm looking for guidance on the "make or influence investment decisions" and "compensation" elements, where the employer is a bank that wants to offer its HSA custodial package to its own employees. Employer would waive its usual transaction and account-maintenance fees, but would receive some indirect income from the accounts (i.e., interchange revenue from debit card use, sweep fees from the program's money market account, and 12b-1 fees from non-proprietary mutual funds and investment management fees from proprietary mutual funds. There is simply no way to "turn off" some of these indirect revenue streams; does that mean that any HSA program the bank offers its employees is unavoidably an ERISA plan?

I've seen a little informal chit-chat advising banks to offer HSAs to their own employees only on the same terms they would give a third party--I'm not sure I understand that. In this case, that would mean keeping the "consideration" the bank is willing to forego, which seems like a direct contravention of the FAB.

When you have 3 rate groups, how does that affect gateways?

Thanks!

Can I design this formula for a DB client:

5% for ALL service for the owner max of 20 years; .5% of participation service for all others. Accrued benefit is accrued as earned. If owner has more than 20 years of service, his accrual is already zero. When I do the general test, it automatically passes using the accrual method since the owner's accrual is zero while the others is .5. Only need to provide 5% on the DC side to satisfy cross testing. Using the accrual method for the general test seems smelly to me but I cannot say for sure what is wrong with it.

Under a small defined benefit plan (1-5 participants) is there any reason to report under a Trust Tax ID vs. a corporate Tax ID? I recently spoke with a broker who was establishing one of these plans and was concerned that once a 1099R was generated, the corporation's Tax ID might be used in error as that was the number requested on the application. Is this just a high net worth tax strategy or is each small business looking to establish a defined benefit plan required to establish a trust? Any citations of regs, etc. would be helpful.