Am I doing this right? Have a client failing the ADP. A few HCEs are catchup eligible. The method I'm using to fix the ADP test is:

1) Calc the ADP of the NHCEs (we use prior year).

2) Calc the ADP of the HCEs. Fail.

3) Find highest ADR of an HCE and solve for amount of reduction needed to equal the next highest HCE's ADR.

4) Calc the ADP. Fail.

5) Repeat 3) with both HCE's (now equal) ADRs to the next lower level.

6) Repeat 5) and 6) 'til passing.

7) Calc the total amount of the reductions.

8) Assign a refund amount to the HCEs with the biggest dollar amount of deferral until it equals the next lower dollar amount. Repeat as necessary until Step 7) amount is used up.

Then, and only then, do catch-up considerations come into play. Catch-up eligible HCEs will receive smaller (or no) refunds.

Seems counter-intuitive.

With respect to contributory defined benefit plans, the payment of benefits related to employee contributions are not subject to a suspension of benefits under the ERISA Regs. How is this rule applied as a practical matter? Do you have to commence payments based on the accrued benefit related to the employee contributions while the remainder is withheld? Alternatively, can you provide an actuarial increase for the employee contributions rather than commence benefit payments?

Is there a statutory deadline by which employees much submit claims for reimbursement after the plan year closes? Or is this simply a deadline arbitrarily set by employers? In most instances, it seems as if companies use 90 days, but is this just an industry standard of is this an IRS rule?

Any guidance is greatly appreciated!

Plan is a multiemployer, self-funded ERISA arrangement. Our participant "P" was divorced about 11 months ago. Order provides for a joint custody arrangement and for BOTH parents to provide health coverage on behalf of the children. The ex-spouse "X" has health insurance available through work but has elected not to cover the children.

Under the Plan's COB rules, X's plan should be the primary payor, but since she

has ignored the order, our Plan is paying benefits.

What is the recourse for the Plan? Keep in mind that we are not a party to the divorce decree and P has done nothing wrong. The children satisfy the new IRS definition of dependent and if it weren't for the decree, the Plan would cover them with no questions asked.

The most popular idea to this point is to continue to cover the children, but inform P that he must bring a contempt action against X or face the risk that the plan will begin paying only secondary to the plan that should be in place.

Ideas??

Any ideas on how retroactive payments can be made under this Rev. Proc? Would a lump sum be permissible even if the plan doc does not permit a distribution in that form? Should a lump sum provision be added with the reforming amendment?

Ok, plan started 9-1-02, had a short plan year for 2002, now is a calendar year plan. This was a plan started by a new business that took over the operations of some existing manufacturing company, and credited past service with that employer. Plan document is a simple SungardCorbel-created prototype.

Here's the question: Are the past years to be calculated on the typical calendar year basis, or do I have to count back periods from 9-1 to 8-31, to determine the past years? Someone was hired 8-23-00. Do they get credit for 8-31-01 and 8-31-02 for the prior employer, and then 8-31-03, 12-31-03 (vesting computation change), and 12-31-04 with the new employer? Or should the years before 2002 be looked at on a calendar year basis? This is intriguing, and a bit nebulous, I fear, within the scope of the prototype.

--bri

I've never been asked to change a vesting schedule until now.

My plan currently has a 5-year cliff. They asked what might happen if they changed to a 10-year cliff. I'm not really sure what would happen, although, I'm sure the ramifications are big. Could anyone advise me on this?

Bankruptcy Bill is Law

Effective in 6 Months.

Check AP News Wire etc.

Are 5500's required for qualified plans sponsored by Indian Tribes or sub agencies of the Tribe?

Is there guidance or any requirements out there that specify what form employers can accept participant address changes, banking information changes, name changes, etc?????

I am looking at how we accept these changes and if simple verification over the phone is adequate especially in light of all the identity theft that is out there.

Thanks,

Fred

I'm searching for some authority that requires a plan sponsor to stay within the 4 corners of the plan document and precludes him from looking outside the document. I seem to recall the IRS/DOL (??) issuing something to that effect but cannot put my finger on it. Any thoughts???

I have a new startup plan. The plan sponsor is a wholly owned subsidary of a Japanese parent company (no other U.S. owned businesses). The U.S. company has employees that transfer over from Japan on work visas and stay a maximum of five years. The U.S. company wants to exclude these employees from the plan and I can not seem to find an acceptable excludable classification based on the following facts. Does anyone have an idea of how to exclude?

Facts:

-the employees have U.S. source income

- they live and reside in U.S. for max of 5 years

-They each have different job titles

-they are not here for a specific project (was thinking of special assignment employee exlusion)

- They are not hourly

Any suggestions would be appreciated....

Are qualified plans permitted to invest in offshore investments?

Some information on multiemployer plans from the Enrolled Actuaries meeting:

Guidance for the Central Laborers' vs. Heinz case on suspension of benefits is expected to come out in two parts. The first part was issued after the meeting as Revenue Procedure 2005-23, with a press release and examples provided on the Treasury and IRS web sites.

The IRS discussed their anticipated approach to amortization base extensions. The letters are expected to contain a condition to address the difference in interest between the valuation interest rate and the special rate for extensions. The difference would be amortized over a period of years following each year. The period would be between one and fifteen years. The condition is the accumulated amount of these amortization amounts would be a minimum credit balance.

The IRS has issued a private letter ruling saying a particular plan cannot use contributions for service after the end of the plan year to satisfy the minimum funding requirements. This letter had not been published as of the meeting. The IRS says this letter applies only to the plan it was issued for, and has not decided whether to issue general guidance. See the American Academy of Actuaries web site for their response.

For the multiemployer funding notice that will be required under PFEA, speakers speculated that participants will be most concerned with the disclosure of the low PBGC multiemployer benefit guarantee levels.

Hello,

Seeking your comments/suggestions on the following:

My current employment (since 7/04) as a full time staff nurse is being terminated. I have been out sick since 4/6/05, have exhausted my sick time and have requested STD. I expect to RTW within a month.

I was informed by my employer today that they view STD as a LOA. Since I have not been with the organization for at least 1 year, I am not eligible for a LOA and they are terminating my position effective with the exhaustion of my sick time. I will be paid unused vacation time and they will send me COBRA info. When I am able to RTW, I can reapply for another position (if one is open).

**Due I have any recourse?

**When I am able to RTW and if they do not have a similar position, can I apply for unemployment?

Many thanks..........Barbara

I was wondering if an employee is still allowed to make after tax contributions to a non-ERISA 403(b)?

If you have new startup plan and you select the force-out threshold to be $1000, will this automatically eliminate any need for automatic rollover amendment? Or does there need to be some sort of formal election?

Opinions please! We have a small business that currently offers no health insurance benefits due to the high cost of a group plan in our state (FL). All of our employees are retired military and don't need coverage or have it through their working spouses.

We do have an HRA that provides a small benefit for medical and dental costs not covered by a health insurance plan. We also have a section 125 plan for those who wish to set aside their own funds tax free for medical reimbursement purposes.

We'd like to be able to reimburse employees for their privately obtained health insurance expenses. In other words have them get their own individual plans and submitt a claim that we will reimburse. How is the best way for us to do this? Should we pay their premium bill directly? Have them submitt the claim after paying it themselves? If we offer this to one do we have to offer it to all? Is it better to establish it officially as part of a plan (HRA or 125) ?

How can we do this legally and fairly?

This is a start up plan recognizing service with another entity. Most of the employees were participants in the plan of the other entity and there are a substantial number of loans involved in these rollovers.

The promissory note is an obligation between the other qualified plan and the participant. Must we document these loans as an obligation between the recipient plan and the participant?

What other documentation is necessary?

Say a client has a 1-participant DB plan and at year-end plan assets are $50,000 and the client says he does not want to file the 5500EZ with the DOL since assets are less than $100,000.

In this situation do some of you prepare the Schedule B and Form 5500EZ to deliver to the client for their records or do you just prepare such forms for your internal records or do you take another approach?

One of the dilemmas is that we may prepare the forms and deliver them to the client and the client will say they do not want the forms nor do they want to pay for them, since they do not intend to file them with the DOL.

Thus we are looking for ways of handling this administrative situation.

Of course I realize that our communications on this situation need be addressed at the onset of our services. At least in the future.

Thanks.