I have a client that wants to know more about communicating with clients regarding deferral levels. Can any recommend an article regarding tips on these communications? What is going too far? I'm curious to hear all of your thoughts as well, but I would like to send the client an article.

They are closing on passing ADP tests, so she really wants the NHCE's to contribute.

Plan is changing carriers and there will be a market value adjustment assessed against the "fixed" fund. The employer wants to pay the adjustment (small amount) to make participants in that fund whole. Seems fairly clear that this would be a contribution vs. a restorative payment.

What would seem fair, equitable and acceptable would be to make the payment only for participants in the fixed fund in the amount their account was reduced.

But if the amount being restored is considered a contribution, doesn't the allocation of that amount have to follow the terms of the plan re- allocating employer contributions (e.g. comp/comp)? If so, some participants who weren't in that fund could be getting an allocation.

I have looked at RR 2002-45 and the PLRs and they seem to deal with what is/isn't a restorative payment but haven't seen anything that deals with the payment as a contribution and how it would be allocated.

How have others done this?

An employee submitted a claim that included mileage reimbursement for his doctor's visits. Not sure if this is an acceptable expense & what can of substantiation would be required. How is it determined if this expense is essential to medical care? Any advice or info would be great!

Thanks

Participant with ESOP, 401(k), and IRS accounts. Deceased former spouse is named as the beneficary with children as contingent beneficiaries. 3 years ago the participant remarried a non-resident alien. The participant hinks that the children are protected as beneficaries as the former spouse is not eligible for the distribution the benefits of each go to the contingent beneficiaries.

I think the participant needs to get the spouse to sign a consent form for the children to be named beneficaires. Please advise.

A 401(k) plan is sponsored by a partnership which is comprised of the attorney's PCs. Each PC is an adopting employer of the plan. When a partner leaves the partnership must the partnership do anything to remove the PC that left? The PC is still in existence.

Employee on HMO declines COBRA, moves out of HMO service area, incurs medical bills, and then decides she needs coverage, after all. At the very end of the 60 day election period, she elects coverage and notifies employer of her move. Employer informs her she will need PPO coverage going forward, and she demands the employer and insurer reinstate PPO coverage retroactive to her date of resignation. Insurer refuses to reinstate coverage.

Am I correct in surmising that Treas. Reg. Sec. 54.4980B-5 Q&A 4 only requires PROSPECTIVE conversion to indemnity/PPO coverage, not retroactive?

I posted this question once before, but got no response, so am trying again. The Summary Annual Report (SAR) must be distributed to participants/beneficiaries 9 months after the plan year end. Or, if the 5500 is on extension, two months after the extension filing date. This is a DOL requirement. However, I've searched and cannot find what, if any, are the penalties for not providing this notice to participants/beneficiaries.

I have a client who is questioning this requirement. I was able to tell him that providing the SAR is a requirement, but that is all. I know, as probably many of you do, that many Employers do not give this item out - especially the small, closely-held entities.

I've got a client with a safe-harbor 401(k). Notice was given timely for 2004, match formula is 100% of 6%. Document calls for match to be calculated per pay period.

Now the client wants to amend the plan mid-year to change the match to be calculated annually, which means a true-up at the end of the year. It appears to me that mathematically there is no way that this amendment could cause a cutback of any accrued benefits, and some people will receive more match than they otherwise would have if calculated per pay period.

My question is, if the safe-harbor notice said that match was determined on a per pay period basis, am I in trouble if I amend the plan? Have I for some reason gone out of safe harbor status? Clearly I can amend for 2005, but I am concerned about the current plan year.

I'm looking at a cross-tested plan with three rate groups: (1) staff (2) officers (3) officers negatively impacted by freezing of defined benefit plan as determined by the Board of Directors. Based on testing by TPA these groups pass. Any thoughts on whether wording of group (3) will cause me any problems with the IRS?

DB plan has outstanding loan which is being treated as defaulted in year of distribution. PVAB way over $5,000, so distribution cannot be forced. Loan is not going to be paid back.

Plan has a lump sum option which will almost certainly be taken.

Participant is below NRD, is agreeing to the distribution.

One approach might be to take the outstanding loan balance, project that to NRD using actuarial equivalence, determine the accrued benefit equivalent and subtract that from the accrued benefit. That would cause the participant to lose the benefit of the 417(e) rate on the accrued benefit presuming that the 417(e) interest rate is below the AEQ rate.

One might instead argue that the lump sum should be the PVAB of the total accrued benefit and the outstanding loan balance should be debited from that.

Opinions (other than that loans in DB plans are bad ideas for this reason!)?

In California, is it mandatory for a small group employer (under 50 lives) to offer a health plan? The employer currently offers a medical plan, but is considering cancelling the plan due to economic issues. And, if it is not mandatory, is the empoyer required to give the employees notice ? How much of a notice?

Thanks

Are state laws regarding withholding preempted by ERISA? I understand that New York State does not permit withholding without consent, which precludes the option of selecting the negative election option in a NYS 401(k) plan. Has anyone challenged this, or does it even need challenging if ERISA preempts the state law?

I requested a copy of the restated adoption agreement (Nonstandardized prototype) for a plan that is terminating and was told it has not been done. As I don't prepare adoption agreements, I am unsure of what needs to be done at this point. I am assuming there is a problem since the deadline to restate for GUST/EGTRRA has passed. I would appreciate any input. Thank you in advance.

I have just a few quick questions about FMLA. This will be the 2nd time I have needed to use FMLA this year and this will be probably the 2nd time it will be denied. The first time was earlier this year when I was out sick with a sinus infection. I missed approx 4 days of work and was on antibiotics for 10 days. When I was given my fmla paperwork to have the doctor fill out I was told that my approval rested on what the doctor had to say. Well I don’t have a “family doctor” I normally go to urgent care clinics. Well I took in the paperwork and dropped it off and the doctor filled it out, but when he did, he only put the date I was seen (by him) on the paperwork (not the 4 days I missed because of it). He did put down that I was on 10 days of meds but because he didn’t put the full 4 days that I missed on there my HR dept saw that and denied my fmla request. Since it was denied, those days I missed were counted against me and have adversely affected my dependability rating with my company. That means that until these days fall off at the end of a rolling 12 month period I can not apply for any promotions or raises.

That was back in Feb of this year. I am currently at home sick due to another sinus infection. This time it was a lot worse, I have missed approx 2 weeks of work. I have been on 4 types of meds. This time I thought I was being smart and I had the doctor write me a note for work, the note he wrote was just for 6 days though. After those few days I had to go back to the doctor because the antibiotic he put me on was not working. So he then prescribed 10 more days of meds. I went in to my work and got my fmla paperwork for the doctor and took it in to the office and dropped it off for them to fill out. Now my question is this, if they only put the 2 dates on there that I was seen by the doctor (versus putting all the time I missed work) and my HR dept denies my fmla request, what can I do? If it is denied this will bring my dependability rating down so low that I may lose my job.

How serious does the government take these complaints? Would my best bet be to talk to an attorney?

Thanks

Profit sharing plan sponsor is 100% owned by a family trust. The only two participants are the trustees and primary beneficiaries of the family trust. In other words, the two participants are John and Mary Smith, and the owner of the Smith Corporation (plan sponsor) is John and Mary Smith as Trustees of the Smith Family Trust.

Do you think a fidelity bond is required in this case?

We are taking over a plan that is in the process of merging two plans, one has a 5/31/04 anniversary date, the other a 12/31/03 date, each plan is separate, but a controlled group. The plan sponsor is retaining the 5/31 plan, terminating the 12/31 plan.

For purposes of the ADP test for the period ending 5/31/04, am I correct in assuming the census information for the employees who are transferring from the 12/31/03 plan needs to overlap into the 5/31 plan? To illustrate further:

1/1/03 - 12/31/03

6/1/03 - 5/31/04(wages/401k would of already been reported from 6/1/03-12/31/03 in the 12/31/03 plan, but needs to be also reported in this plan).

I hope I explained this to understand. Thanks.

Linda Michals

Has anyone heard of something that raised the maximum Fidelity Bond from $500,000 to $525,000? I've looked at ERISA 412 and see no mention of a change.

Thanks for any replies.

if a TPA has co-mingled Flex Spending and DCAP trust funds with operating and/ payroll funds...what is actual violation and what would cites be....Need help.

I am in need of finding a web site for information on setting up a 401(a) plan and it's administration.

Thanks,

Randy G. Day

May the written explanation of a QPSA be included in the SPD or must it be a separate written explanation?

MBL