Here is an unusual fact situation:

Participant in 401(k) Plan is a 5% owner through 12/31/03, when he is bought out and his ownership goes to 0%. The participant turns age 70 1/2 in November of 2004, and continues to be employed.

Question is whether the participant is required to receive a 2004 MRD by 4/1/05, due to his being a 5% owner on 12/31/03, which is the determination date as to whether an employee is considered a "key employee" for 2004, or can he defer his distribution until he actually terminates employment. In addition, if he does take a 2004 MRD by 4/1/05, does he need a 2005 MRD by 12/31/05, or can he start to defer it due to the fact that he is no longer a 5% owner?

Any replies would be helpful. Thanks.

In 2003, the Texas Legislature passed HB897 to permit small employers (2 - 50) to join together to form larger groups "coalitions" (2 - 50 total employees) specifically to purchase group health insurance.

Is anyone aware of this? Setting up these coalitions?

Thanks.

I have plan that has a 3 month wait for eligibility. The client has several employees that are paid and receive a 1099 form rather than a W-2. The plan includes all employees except: Union Employees, Nonresident Aliens, and Leased Employees.

Do I need to include the employees who are paid and receive a 1099 form? Are these employees considered Leased Employees?

In your opinion, could a deferred compensation participant make an election to defer 1 year's deferrals into multiple "buckets" (say, over 5 consecutive years beginning 2 years from now), and then re-defer the first year's distribution an additional 5 years while leaving the other 4 "buckets" intact?

The question turns on whether the service would consider the original distribution election as 5 individual lump sum payments, or as installments. We would intend it to be viewed as 5 individual lump sum payments.

409A(2)(A)(iv) says "a specified time (or pusuant to a fixed schedule) specified under the plan at the date of the deferral...."

Any thoughts?

Joe

A church that sponsors a poorly-funded non-ERISA DB plan is considering several options, including initiating mandatory employee contributions in the current plan.

I assume that for current employees, continued participation in the plan would require employee contributions, and that for new employees, contributions would be a condition of employment.

Although this seems a backward-looking notion, a contributory church DB plan doesn't appear to be prohibited. Converting a noncontributory plan to a contributory plan seems to involve certain risks, such as possible coverage and nondiscrimination violations and the risk of triggering a partial termination if significant numbers of employees decline to make contributions and are thus excluded. Presence of employee contributions in the plan would require some operational changes, but they seem to be minor.

Are there other issues here, or does anyone have additional thoughts?

What does the "SC" stand for?

Company has a health plan covering its employees. Company is 50% owner of LLC with 2 employees (one of whom owns the other 50%).

May the 2 LLC employees participate in Company's health plan? May one participate, but not the owner/employee?

I don't see explicit application of the controlled group rules to ERISA welfare plans, and so am unsure how to proceed. Many thanks for any input.

I have a plan that I've been cross-testing for a couple of years by using the division field to allocate different %s. Now the client wants us to sort reports by REAL divisions - like Nashville Employees, Franklin Employees, etc. My division fields are already being used for the cross-test groups. Any ideas?

Thanks for your replies - I just know someone has an easy solution!

Notice 98-52 provides that in a safe-harbor 401(k) plan that hardship distributions are not a distributable event for contributions other than elective contributions. Presumably this means that the plan cannot permit safe harbor employer or matching contributons on account of hardship.

I tried to trace this restriction in the final regs but could not find it? Can anyone else? I realize this is an interpretation of Code 1.401(k)(12)(E), but I would not read it this way without the interpretation.

I am compiling a list of consultants who really know the large plan DC & DB recordkeeping marketplace. I'd appreciate hearing of past experiences or just suggested names to explore.

For now I just have WatsonWyatt and Towers Perrin. We're trying to steer away from consultants who have a recordkeeping arm within their organizations. I'd also prefer well-known firms with a national presence.

Many thanks,

Cole

Hi, the last post I could find on this subject was from a few years ago. What is the deadline a plan sponsor has to get the employee payroll deferrals invested into the plan? According to my memory, it is either 15 business days after they are deducted from the paycheck, or 15 business days after the month-end in which the deferral was taken. Which one (if either) is it? Thanks very much.

Plan Document has the usual boilerplate QDRO language in it and includes the option to pay out before the normal QDRO Early Retirement Age. Given that, and given the plan has a lump sum option in it, do you use the age of the participant or the alternative payee for the present value of the accrued benefit (distribution). The plan document is silent on this issue and the QDRO merely mentions that optional forms of benefits can be paid, plan allowing (nothing further). If it's not a clear answer, any "actuarial norms" that can be argued either way ? or should I just bounce the draft QDRO back to the attorneys and make them hash it out ? Thoughts ?

I am trying to figure out what information I need to file a Form 5500 for a severance pay plan and am a little confused. What schedules, if any, should be attached? I assume there is some place where I can input the dollars that were paid out of the program? I am just a little fuzzy and any help is greatly appreciated.

Thanks

I am trying to figure out what information I need to file a Form 5500 for a severance pay plan and am a little confused. What schedules, if any, should be attached? I assume there is some place where I can input the dollars that were paid out of the program? I am just a little fuzzy and any help is greatly appreciated.

Thanks

Looking for a internet source of generic master documents to cover the following DB:

Small Business may produce insufficient income after a few years, and owner personally guarantees its various expenses, and approx 50k per year contributions to the DB for the next 15 years, with his personal cash from other income sources.

The owner wants to reduce his personal AGI from wages by being bound to funding the various obligations of the business when/if its income declines, including its contribution obligations for its 1 other employee.

Any viewpoints on this?

Company X maintains a cafeteria plan for its employees. LTD coverage above a base line percentage of pay is paid for by the employee with pre-tax salary reduction contributions. LTD benefits are self-funded using a nonexempt welfare benefit fund. Do the employees' pretax contributions to the LTD coverage have to get taken into account for purposes of determining the 419/419A limits?

We just found out that we misclassified four workers as Indep contractors (when they were really ees). I know this means that we have to pay them the benefits - but do we try to retroactively get them included in the plans (EPCRS, etc.) or do we pay them a settlement based on the amount of benefits they would have received? I looked at the plan document and we do not have the "magical" language (not an employee even if determined by a court after the fact to be an employee). Thanks for any help!

Does anyone have a good source for comparing the various valuation software programs that are available?

I have a plan that has two owners. Only one of the owners takes compensation in this plan though. The eligibility is 6 months wait and quarterly entry dates. Can we include the owner with no compensation in the ADP test? I want to say no because this owner has no compensation to defer into the plan, but I have received mixed feedback from various sources. Thank you for your help!

Are VEBAs required to have fidelity bonds?