A participant with a QDRO recently came forward to request a benefit illustration. He is the participant; she is the alternate payee. The QDRO calls for her portion of the benefit to be converted to a benefit payable over her lifetime.

The previous actuary did an illustration for them 4 years ago and used sex-distinct mortality. In other words, the participant is 65 at his NRD. When he is 65, she would be 63. The previous actuary (large national firm) multiplied his benefit by a male factor at 65 and divided by a female factor at 63. Is it appropriate to use sex distinct mortality for this conversion?

I guess if the document said you always used male mortality for the participant and female mortality for the survivor, then it may be ok, but this document is silent regarding actuarial equivalents. It just lists the factors used to convert benefits, but never defines the underlying assumptions.

Employer is a non-profit school which maintains a 403(b) annuity plan through TIAA-CREF. Employer makes a % contribution on behalf of employees in the plan as well as handles employees' salary deferrals as per plan document. CPA has questioned whether the employer needs to continue filing a 5500......? Thanks for your help.

Can anyone verify if the Annual Open Enrollment period is mandated by state or federal regulations, or is it up to the individual carrier to offer?

What is the latest news on submitting a (k) Plan for favorable letter regarding EGTRRA provsions. Has the IRS said when the program would be open ? Site ? Thanks.

Hi,

I was hoping someone would be so kind as to provide a copy of the sample notice in Appendix A of PBGC Reg 4011.1. Apparently, we don't subscribe to that service on our research software. Any help is greatly appreciated.

Thanks!!!

When can we expect Congress to set guidelines for Phased Retirement?

I have a plan that just noticed that for the past three years they have sent in more match then they intended. The document says that match is discretionary. They calculate and fund the match on a payroll basis. They wanted to match up to 5% of deferral. They switched payroll systems and the system was matching up to 15% of deferral for everyone in the plan. Everyone was treated the same and matched on everything they were deferring. Communication to the employees at enrollment meeting states they were matching up to 5%. Testing was done each year. But this was not noticed until recently by the client. I see this as an operational failure. How do you recommend this be handled?

We have a client that recently filed their final 5500 on a terminated profit sharing plan. There was a security held by the plan that was in excess of 20% of the value of plan assets during the year. We answered question 4(i) as "Yes", but were stumped as to what value to put down as to the value of the asset. As all assets were distributed by the end of the year, and questions in line 3 all reference end of year values, we put down $0 (the value as of the end of the year) for the asset, since the instructions provide no guidance as to the value to put down (beginning of year, end of year, highest value during the year).

Client got a bounceback letter from the DOL on the question. Ended up with a supervisor on the phone who (basically a complete jerk) would not provide any guidance whatsoever as to the amount to put down for the question, whether beginning of year value or end of year value of security in question.

Besides being a little ticked that this guy wouldn't (or couldn't) provide an answer as to what to put down, what would you do in this situation?

1 - Terminated plan with all assets distributed by end of year

2 - Ongoing plan: beginning year value of security in question, end of year value, or highest value during the year (which would basically be an impossibility to reasonable track?).

We recently took over a 401(k) plan for a company with both collectively bargained and administrative employees. Until 2003 all employees could participate in the plan (now the union has its own plan). In previous years all eligible employees were included in the ADP test. The test failed badly each year and refunds were made. For 2003 the test would pass easily using current year data but the document specifies that look-back year data be used. Using look-back year the test fails, but of course, the 2002 test is incorrect since the CB plan was not segregated.

Is there any alternative to a correction program and rodoing all prior year tests? Has anyone had a similar problem?

Thank you!

Can I contribute $2000 from my savings account into my Roth IRA if I earn less than the $2000 per year as a college student?

I understand that the current rule states: "Each taxable year, you may make a cash contribution to your Roth IRA in an amount equal to your annual compensation or an annual limit, whichever is less."

What happens if I stop working while in college? However, I have enough money in my savings account to contribute $2000 per year for the next 8 years. Does the rule limit my contributions to a Roth IRA to the amount that I earn each year? Applying the rule, if I decide not to work during college, I am not allowed to contribute into my Roth IRA.

Thanks!

Kelly

Please confirm for me that a 5% owner over 701/2 is still eligible to defer into a 401k plan and recieve profit sharing contributions. They are however required to take the RMD. Is this right or not, I'm somewhat confused

Who has?

Is it a good idea? Necessity?

Where to get it?

Facts: Top Heavy 401k plan. TH required. TH minimum allocated only to nonkeys. Non Elective accrual requirement T>500 hours.

We want to make the least amount of contribution. We want to allocate forfeitures as the top heavy minimum.

Can we exclude the T>500 hours participants because it's only a TH minimum?

If we have to add the T>500 hours then do we also have to add the key?

How would you go about allocating a QMAC in order to get the ADP test to pass. How do you figure out how much each person should get? Relius support told me to first run an ADP test and have the system tell me how much of a QNEC would be needed, then to allocate as a QMAC to only those that deferred (forcing the QMAC eligibility for those that did not defer). This doesn't seem like it would calculate the correct amount for each participant. What do others do in this situation? Any advise would be appreciated. Thank you.

I'm aware that as part of EGTRRA a retired employee who has an existing 403(b) plan may receive contributions to the plan for up to five years after retirement. These post-retirement employer contributions are made using the ex-employee's unused sick leave or vacation pay. Would these contributions be considered true "employer contributions" for the purpose of qualifying the plan as subject to ERISA? My understanding is that a true non-ERISA plan is funded solely through salary deferrals; and it would seem to follow that unused vacation pay or sick leave would have been defined during the employee's tenure as a benefit, not as part of salary. Any insights would be greatly appreciated. Thx.

I am discussing with the OIC in WA regarding the degree of state regulation for self funded MEWAs. Sec. 514(b)(6)(A)(ii) says in the case of any other employee welfare benefit plan which is a MEWA, any law of any state which regulates insurance may apply to the extent not inconsistent with ERISA.

The OIC believes that MEWA case law would be totally separate from single employer case law. When considering the standard "inconsistent with ERISA," would different levels be applied for self funded single employer plans versus self funded MEWAs?

Don Levit

When completing Form 5330 for interest on late deposits, is the date of correction on Form 5330, Part IX, Item 29© the date deposits were eventually made or date in which interest was deposited?

Has anyone heard if the amounts allowed to be contributed to Dependent Care Accounts are going to change for 2005? Are they expected to stay at $5000/$2500?

Assume a sponsor has not, nor plans to make any quarterly contributions for a plan year. The sponsor also has asked for a funding waiver for that plan year (not granted yet). Assuming the waiver is granted, do interest charges for late quarterly contributions apply? If so, how are they calculated - i.e. when are the contributions deemed made?

The last paragraph of the answer to question 8 of Notice 89-52 seems to imply that the interest charges on late contributions do not apply if a waiver was granted. That's about all I've seen on the topic. Any thoughts are greatly appreciated.

How does an accumulated funding deficiency affect the quarterly contribution for the current year and next year?