Does anyone require active employees with ESRD (End-stage Renal Disease) to enroll in Medicare as a condition of continued participation in your active employee health plan? If so, would you be willing to share your plan language? Many thanks.

I have a KSOP that recently paid a stock dividend. I'm unable to find any language in the document which addresses what to do with the stock dividend on shares in suspense. The document does state that a cash dividend on suspense shares can be used to pay the loan or purchase additional stock. We have employees who are waiting to buy stock with their deferrals. Would it be reasonable to do this? Any suggestions?

Are there any COBRA administrators who have premium payments sent directly to a lockbox? How do you deal with payments that are made (postmarked) after the grace period has ended? Since the payment has already been deposited into the bank account, do you simply issue the participant a check?

Background:

1) plan participant divorced

2) a QDRO was drafted

3) plan participant died

4) the QDRO was then submitted to the plan administrator

5) the decedent-participant's estate claims the funds as does the alternate payee

The qualified DC plan has instituted an interpleader action. It intends to pay the account balance to a U.S. District Court, which will then decide who gets the money.

A few questions come up:

1) Normally a 1099-R would have to be issued, but does it in this situation, and if so to whom? (I see on the instructions to the 1099-R that if the payment would be exempt from tax no 1099-R need be issued.)

2) Is interpleader even permitted under these circumstances, and if so would the plan have to specifically provide for such an ability?

Thanks for any help.

When implementing a new cash balance plan for a professional organization (medical practice or really any organization) with 7 owners/HCE's... is it possible to exclude one or two owners if they do not wish to participate and contribute? Can this be done while drafting the plan? Does the number of owners or owner demographics play a role in the ability to do so or not? Does the company structure play a role? Most seem to be LLC's or partnerships. Thanks in advance for any help.

If an existing calendar year 401(k) plan wants to establish a safe harbor plan effective 1/1/05 using the safe harbor matching formula and timely provides the employee notices by 12/1/04 and operationally applies the safe harbor matching formula effective for the first payroll in 2005, when is the deadline for restating the plan document? Would it still be prior to the beginning of the 2005 plan year?

is a participant in a closely held esop entitled to receive a copy of the independent stock valueation reports used to annually establish esop stock value?

What happens to the 2% shareholders in a self-funded group health plan? I believe they are taxed as income on the fully insured equivilents and the claims paid out are not taxable as income. How does this impact non-discrimination testing if more claims are paid out to HCE's as opposed to non-HCE's? Are the HCE's then taxed as income on the claims?

Under a split dollar arrangement, if the cash value of the policy is paid to an employee (who at the time has terminated employment), is it reported on a 1099 or W-2? I'd appreciate any thoughs.

Is a 5500 filing required for a prepaid legal services plan (assuming the benefit is not incorporated in another ERISA-covered plan)?

We are trying to increase our organ transplant lifetime maximum amount, however, the increase will not apply to participants who have been advised to have or are in the process of having a transplant. Those individuals will remain at the lower lifetime maximum. (We do have particpants who fall into this catagory.) It seems to me that this would be a violation of HIPAA, however I cannot pinpoint a specific prohibitation in HIPAA to support this. Can anyone help me? Would this violate HIPAA's PCE or nondiscrimination provisions?

We have a client, presently a citizen of Venezuela. He has applied for

U.S./Puerto Rico citizenship, and is waiting and working on that process.

He resides in Puerto Rico (over 2 years), and is treated as a Puerto Rico

resident for tax purposes. He is the sole owner of an LLC (disregarded

entity, he files Sch C) that is a member of a Fl LLC, located in florida. He

does work for business in its Puerto Rico office. The LLC is profitable,

and he draws a salary from the LLC as well. Thus, I believe he is paying

Puerto Rico taxes on his salary, and U.S. taxes on his share of the LLC

profits.

I would like to transfer my Roth IRA ($10K) into an offshore retirement savings account in the UK (Isle of Man). Is this possible? If so, are there penalties?

PLR 200430013 takes the position that federal credit unions are instrumentalities of the US government, and that their deferred compensation programs are accordingly not regulated by IRC 457.

IRS takes the position in the PLR that it will not take a position on applicable law. (It is apparently troubled by the "loophole.")

So, what's going on, and what do you do if you represent a federal credit union ? The last item on the list of employee benefit projects for IRS "priority guidance" is "guidance under Code Sec. 457(b) and Code Sec. 501©(1) on plans established by federal credit unions."

Unless legislation is enacted, it seems pretty clear (to me, at least) that 457 does not apply to federal credit unions and that 409A (issued after the PLR) probably does, although I suspect that Congress probably did not intend 409A to apply to federal instrumentalities, so even that is iffy.

Is it possible that federal credit unions simply need to operate deferred compensation plans according to pre-409A and pre-457 law?

George Chimento

I know this is a dead horse but can someone give me guidance on when elective deferrals need to be deposited after they have been witheld. I'm confused considering the 15th of the following month guidance and more recent things saying if you are audited it's a 7 day time period to be considered administratively feasable.

If a "safe harbor" profit sharing plan provides that a lump sum is the normal form of benefit, but also provides that a joint and survivor annuity is an optional form of benefit, are the spousal consent rules in effect? Or is spousal consent only required when the normal form of distribution is an annuity?

Thanks!

We all need to get together and come up with somehting like a "Darwin" or "Stella" award for the worst proposed pension law in House or Senate. Got to thinking we should award those folks like Tom Harkin (who truly needs a hobby).

Senator Harkin proposed S.607. This bill provides that in the event of a sale of a corporation or division, liquidation, merger, consolidation, or other similar transaction, an employee who continues employment in the same trade or business with the employer that acquires the trade or business and who participated in a pension before such transaction must, solely for the purpose of determining eligibility for any subsidized early retirement benefit provided by such plan, receive credit for any periods of service with the successor employer that would have been taken into account had such transaction no occurred. This provision would apply only if the successor employer did not continue to maintain the plan in which the employee participated before such transaction.

This one is giving me hives. Can just see my department 10 or 15 years from now trying to verify that someone continued working in a Plant we sold years ago. Of course we all know facilities never change hands, and all HR folks have employee files going back to when Noah built the Arc, and of course those folks the facility we sold to will drop everything to provide us with the proper data. And lest not forget, the verification and data will have suffer the scritiny of the new SOX requirements, the internal auditors, the external auditors and of course me the department head.

Did I mention, most of our plants are in rural non unionized locations. Can just imagine plant mgr and HR person "verifing" that 99% of the county continued to work at the plant after it was sold to new owner. Then every one gets to draw pension early and subsidized.

AndyH please feel free to join me in my vent. Guess the new SSA regs weren't enough for me today.

A plan was recently referred to us that combines a 401(k) and an ESOP under the same plan document.

The 401(k) is participant directed and employer securities are an investment option. And, of course, there are the employer securities that are in the plan due to the ESOP.

Are there special rules or pitfalls that I should be aware of relating to the employer securities since the two plans are combined?

The employer would like to eliminate any distinction between the 401(k) employer securities and the ESOP employer securities. He would prefer to treat them all as ESOP shares. Is that do-able? Recommended?

Your thoughts would be greatly appreciated.

My multi-employer client consists of numerous small employers, a few of which have had their accrual rates changed in 2004. The funding method is immediate gain, and the base for this amendment is less than 0.1% of liabilities.

Must I amortize a de minimis base for 30 years as a plan amendment? Or is it okay that I 'lump' it with the gain/loss of the plan and amortize it for 15 years? Any citations will be appreciated if it is okay to lump it with my gain/loss base.

Thanks.

I am looking for an easy to use source of quotes by highly-rated insurers. Anyone have suggestions for an easy way to get several quotes - short of spending a half an hour on the phone with 3 vendors? Thanks for all help!