DB plan with maybe 15 retirees receiving monthly payments was amended in 2002 to provide that all retirees who had been retired for 5+ years receive a 7% pension increase. I'll call it a COLA.

Two of the retirees did not qualify for the 5 year rule. One was the former President, the only former HCE who is retired.

Client wants to give a 7% COLA in 2004 to the two who did not qualify in 2002.

Is this discriminatory? Is there some type of coverage problem? How do the testing rules for former employees apply here?

I am really just a cartoon character invented by the Japanese. And you folks have been depending on me for answers.

(Click on my name)

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Is it possible to have a 401(K) plan with discretionary safe harbor matching provisions. The idea here would be that if the company does not want to match from year to year, and wants it to be discretionary each year. It would have to be safe harbor though, b/c they fail ADP testing.

Any thoughts?

I run a non-profit commuter services organization called the Artery Business Committee transportation Management Association (ABC TMA) My Webpage. We provide commuter benefits to companies to reduce the number of drive alone commuters traveling into work in order to improve congestion and air quality.

The programs inlcude:

- Guaranteed Ride Home Program: The Guaranteed Ride Home program allows all employees that take the bus, subway, commuter rail, boat, carpool, vanpool, bike or walk to work to receive a free Guaranteed Ride Home in the event of an emergency or unscheduled overtime.

- Personalized Commuter Assistance and Ridematching: The ABC TMA uses a computerized ridematching system to match member employees with other employees commuting into the Boston area who are interested in sharing a ride.

- Bicycle and Pedestrian Incentive Program: "Work out to Work" is the ABC TMA's program providing incentives and safety training to employees who bike or walk to work. Participants receive a logbook to keep track of their miles each month in the program and receive prizes each month they submit their miles to the ABC TMA.

· Vanpool Seat Subsidy Program: The ABC TMA offers financial assistance to those tenants interested in forming a vanpool or any drive alone commuters who joins a vanpool already serving the downtown area.

· Carpool Subsidy Program: The ABC TMA provides assistance to new carpools by covering the cost of fuel for six months. Participants in the program receive a Wright Express Fuel Card, which allows them to purchase up to $35 in gas each month.

· Express Bus/Commuter Boat Subsidy Program: Provides $100 per month for three months to employees currently driving alone into work, if they agree to use an MBTA Express Bus, Private Bus Carrier, or MBTA Commuter Boat.

I was wondering if other companies currently provide these benefits to their employees and if so how effective you have found them?

Thank you!

dstraus@abctma.com

A client (one owner and one common law employee) has a calendar year DB plan effective 1/1/02. The 2002 work was completed on a timely basis based on a letter from the client stating that he made the required contribution (also on a timely basis). As an aside, this client has outstanding fees of almost $6,000 and we have not done any 2003 work since requesting the census and assets in January, 2004. We have found out that the client did not make the 2002 contribution at all, he has not been at his medical practice (he is on extended medical leave), his house is dark and mail is piled up. All that being said, what are my options with regard to funding and/or terminating the plan or our services?? Thanks.

We have 2 entities, one for-profit one not-for-profit. The for profit has a 401(k) with deferrals only. The NFP has a safe harbor 401(k).

To reduce costs they would like to put everything together. We like the idea of a multiple employer plan but how to we reflect the different benefits in the document (Corbel Volume Submittor). Can we simply write in the eligibility that Employees of the for-profit entity are not eligible for the safe harbor provision?

I know that the testing (where applicable) is separate and i know all the 5500 nuances, etc.

Can someone please tell me what the compensation limits are for someone to become on HCE in 2004 and 2005.

We have a client that has terminated their DB plan. They have not yet received approval from the IRS but they have submitted the termination to the IRS. They have a $200,000 funding shortfall. They want to go ahead and fund this but Principal (their provider) is telling them they cannot accept the contribution. Is this correct? Can they not fund the shortfall until they receive approval of the termination from the IRS?

A client of ours has given us an IRA beneficiary designation (his son is beneficiary) drafted by his attorney that basically directs the custodian to distribute the RMD based on the son's recalculated life expectancy. the custodian (fidelity) will not take the form.

i noticed a sample beneficiary designation in a forms book i have with similar language except that it is permissive (not mandatory). is this the reason they wont accept the form or are the wrong in not accepting the form?

Yesterday I electronically filed two 5500's with EFAST and they appeared to upload successfully. Usually I get a DOL acknowledgement file within five minutes of filing. As of today, I still haven't received an acknowledgement file for those returns I filed yesterday.

Has anyone else experienced a problem with this? How can I find out if the files were actually accepted?

Thanks.

Lets say you have a non-standardized prototype 401(k)/ps plan and the owners at this late date decide they do not want to share in this year's profit sharing contribution. They have already made 401(k) contributions and plan to continue through year-end. They can't waive participation, but can I amend the plan, effective 12-31-04 to exclude them from the plan? I could exclude all owners, just like Union employees, etc. The plan requires 1000 hours and year-end employment status in order to share and my concern is that amending to exclude them on the last day of the year would be a cut-back. A more expensive alternative, but one that I think would be more legit would be to amend to a New Comparability plan, putting the owners in their own group.

Any thoughts?

I have a client who may need to apply for a funding waiver for plan year that ended Dec 31, 2003. Client is still looking for ways to come up with money to fund plan, but wants to fully explore waiver option (which would give him more time to fund the contribution). Who's the expert out there? Here are the facts: Plan covers about 15 participants. Funding liability for year in question is $222,000. About 90% of that funding liability is attributable to owner. Employer has never applied for a waiver before. If you have experience with applying for waivers and can take on this project at this late date, please call me. My number is 805-563-5300, ext. 11.

Thanks.

I have a 9/30 plan year end and am getting ready to change to a 12/31 plan year end. The plan provides for CUC however, under the 9/30 year, participants were only permitted to make CUC between 10/1 - 12/31 if they met a regulatory limit - not because of a plan limit (which applies to the HCE only).

I will now have a short plan year that will end 12/31/04. I'm thinking that I will now be able to permit the HCE to make additional CUC in excess of the plan limit during this period. Does that sound correct? Am I missing anything?

PAL

The plan year falls between 8/1/03 - 7/31/04. The plan has failed the ADP test and an HCE that is eligible for catch-up contributions.

Assuming no catch-up will be used for the 2004 plan year, and no 402(g) limits have been exceeded in any calendar year. Can the 2003 & 2004 calendar year limits ($2000 & $3000 respectively) be combined for the 2003 plan year ADP test? Assume the test fails and the HCE's refund should be $5,000. If these two limits are combined for this plan year, the HCE could apply all of this to the refund.

Please advise what a defined benefit 457(b) plan is and where I can find additional information on it.

Thanks.

Participant takes a loan in May 2000. The maturity date is June 2004. Particpant missed a couple of payments at some point in time & in June 2004 was a month or 2 behind. The loan document echo's the law as far as cure period goes. Should this participant default unpaid balance in June 2004 because loan has hit maturity or should participant get the benefit of the cure period?

Thanks in advance for any guidance.

The 'actual' 401(a)(17) limit for 2003 was 203,180 (which was then rounded to 200,000 for purposes of benefit calculations).

Is there a site where the new limit is published (the exact one) because it can be used to project FASB compensation limits??

Thanks for any and all help.

Am I correct in saying that if a one man show plan like a solo 401K plan has no other employees then that plan is not protected by ERISA? Not protected from litigation? That it is only protected when there are employees other than the owner/trustee/sponsor? We all know that ERISA was put into place to protect employees from being cheated... Does the DOL take exception when a one man show establishes a plan and hides behind ERISA in the event he is sued? In that scenario will his pension assets be attachable in the event of a law suit?

Any cites would be greatly appreciated... either way they fall.

We (TPA) were approached by one of the advisors we work with regarding their client who (1) did not amend for GUST and (2) terminated the plan and distributed the assets without documentation or election forms. The owner is the only participant. Apparently he called the IRS and asked them how to terminate the plan, and they told him to distribute all the assets and file a final Form 5500. Sheesh!

Do you think this can be handled through a single VCP submission? If so, I am guessing that the reduced nonamender user fee would not be available, even if by some miracle we could get it submitted by September 30. Is this the best way to handle it?