What happens when a participant dies and there is an outstanding loan that the surviving spouse knew nothing about? No spousal signature on the loan doc. Is she liable for the loan? any recourse?

If a DC plan generally provides that all distributions under the plan must comply with Section 401(a)(9) and the regs thereunder, does anyone know if the model amendments found in Rev. Proc. 2002-29 must be adopted? Does every plan have to adopt these model, tack on amendments? If not, which plans are not required to do so?

Thank you for your comments.

I am curious as how others of you have handled the situation of notifying HCEs they can only defer x% on average but if you want to take advantage of the catchup contribution you need to contribute x% plus the catchup limit for the given year.

Client is reducing mandatory distributions to $1,000 or less without Participants consent. Client would also like to allow lump sum distributions of $1,000 to $5,000 with participant consent (to avoid mandatory rollover).

Question: In addition to the lump sum distribution, does a QJSA have to be offered to the partcipant with the $1,000 to $5,000 balance ?

I do not think so because the regs. under 417 and 411 only require consent for amounts over $5,000, but we have a conflicting opinion.

Thanks for any help.

How and when are attributable to match (ATM) forfeitures due to failed ADP test allocated when the plan has immediate vesting for matching contributions? The plan uses the corbel prototype doc, so the item selected for forfeitures of matching contributions is "N/A. Same as above or no matching contributions." The method of forfeiture allocation listed above is "allocated to all Participants eligible to share in the allocation in the same proportion that each Participants Comp for the plan year bears to the Comp of all Participants for such year." Allocating the ATM based on this formula results in several small account balances. Is this the correct method?

Company with DB plan is sold and purchaser wants to cease DB plan. No notices are issued. Under what circumstances is credited service ended, only if it is an asset sale?

To put it another way, if a company is sold, yet employees retained, can service be ceased without a 204(h) notice? And does it depend on whether it is a stock or asset sale?

This is not my area. Thanks.

Are you aware that if we died tomorrow, the company that we are working for would easily replace us in a matter of days.

But the family we left behind will feel the loss for the rest of their lives.

Come to think of it, we pour ourselves more into work than into our own family, an unwise investment indeed, don't you think?

What is behind the story? Do you know what the word FAMILY means?

FAMILY = (F)ATHER (A)ND (M)OTHER (I) (L)OVE (Y)OU

Is there any guidance from California state or federal law which would dictate the number of hours that employers must use to designate part time or full time status for benefit eligibility?

Can an employer use their own discretion in setting full and part time hours? Say, 40 hours is full time and 39 or less is part-time? This is for small group employers, under 50 employees.

Our employee has single coverage in one of our health plans and contributes on a pre-tax basis. His spouse has employee +1 coverage with her employer. She recently had a baby and will change to family coverage at her employer. Our employee wants to drop his coverage and be covered under his spouse's plan. We have said that dropping his coverage is not consistent with the event - birth of a child. Are we wrong in saying that he cannot drop coverage. I've looked through some of the regs and cannot find anything that specifically agrees or disagrees with our statement. Can someone help.

I am preparing the allocation for an age-weighted 401(k) plan. The plan requires a 3% non-elective safe-harbor contribution.

First, all participants that have met eligibility requirements and are eligible to defer under the 401(k) must receive the 3% nonelective safe-harbor contribution. This includes participants that terminated prior to the end of the year and worked less than 500 hours.

Next, the employer discretionary contribution is allocated on an age-weighted basis. The plan requires employment on the last day of the plan year or completion of 500 hours.

We have one employee that met participation requirements and terminated prior to the last day of the plan year and worked less than 500 hours. Should he receive the 3% nonelective safe-harbor? (I believe yes)

Given the 3% nonelective safe-harbor contribution, is the plan still considered an age-based plan for gateway relief?

In a non safe harbor calendar year 401k plan, there is a non-discretionary tiered match formula. The employer would like to modify this formula in mid year (as of 7/1). I have not yet seen his proposed change, but it sounds like the match will be greater on the first 3 percent deferred, and smaller on > 3% deferred. Since the current match formula is written into the document, can it be changed in mid year if a portion of the match will be subsequently be smaller?

A client just informed me that their Fidelity rep. recommended against the automatic rollover, implying that Congress may change the rule? They recommend that the client reduce the maximum to $1,000 and not pay automatic rollover.

This seems to be counter to what I'm seeing with the other larger financial institutions. Most seem to be embracing the rollover concept and making it very easy for the plans.

Has anyone else encountered this from Fidelity? Any idea why they would say this?

Funding Method is EAN. Plan hits ERISA/Traditional Full-Funding limit. As a result, are prior OBRA FFC bases treated as fully-amortized along with prior bases due to experience gains/losses, amendments, ...? If not, does the situation change in a subsequent year if the UAL is zero?

I am aware that the security requirements for electronic PHI must apply by April 20, 2005 (for small plans, April 20, 2006). Some are suggesting that Business Associate agreements must be amended to include language regarding electronic PHI by those dates. This seems to me to be overkill and unnecessary, since electronic PHI is a subset of PHI; that is, if it is electronic PHI it is PHI, so the original language in the Business Associate agreement should suffice. Am I missing something here? Thanks for any input.

Can anyone help me find a ruling on whether or not you can rollover a Keogh plan into a 403(b)? Someone is annuitizing an old Keogh plan over a 7 year period (due to a much higher contract value than surrender value). She is trying to consolidate accounts and wants her annuity payments to go directly into her existing TSA/403(b). I've contacted numerous advisors and insurance companies, but no one seems to know the specifics. Her current custodian didn't know either...maybe we shouldn't have raised the question.

Any help would be GREATLY appreciated.

Can a SPD be amended to only include compensation such as salary and not include, commissions, bonuses, etc.

Are non-discrimination tests under IRS §129 applicable to political subdivisions?

Specifically, is a political subdivision of the state required to perform the 55% Average Benefits Test for a dependent care FSA. Remember ERISA is not applicable to political subdivisions.

If a plan fails the adp/acp test and you have match contributions that are forfeited are those forfeitures hit with the 10% excise tax?

I have a new challenge that I need help with. Have a safe Harbor Plan that is a March year end. It will be merging with another group of plans as a controlled group. This plan is a December year end and is not a safe harbor plan.

What do I need to worry about with the merger?

Thanks for your help

Pat

PS they are putting in the 3% to meet the Safe Harbor

Calendar year client has a 3% Safe Habor non-elective contribution Plan. He's asking if the plan can be terminated or amended prospectively to get rid of the contribution requirement. There's 1 HCE and 1 NHCE.

I assume they've accrued the 3% on compensation earned to-date. I've looked far and wide and see many opinions that the 3% is locked in on all compensation earned during the Plan Year.

I'm thinking of creating a short plan year to lock down compensation earned to date. I know it will not be "Safe Harbor", but HCE will not defer in 2005.

I'll end now and see if there are any opinions/options out there.