Plan failed 12/31/2002 test and was using prior year nhce %'s. Client wishes to correct using the QNEC method, under the Self-Correction program under EPCRS.

I need some clarification as to who is considered an "eligible non-highly compensated employee" for the QNEC. Can we use the plan's allocationi formula, which is currently a "bottom-up" approach or do we need to give the corrective QNEC to all employees who were eligible to defer in 2002, regardless of the plan's eligibility provisions for QNEC's.?.

I am an Enrolled Actuary. I am discussing a possible business arrrangement with a firm that wishes to add DB plans to their services. Presumably, there would be very few such plans, at least at the outset, however we are running into a snag regarding E&O insurance.

It seems that both the company and I need to be covered separately for work we do on DB plans. That's one thing, but perhaps a bigger issue is that the premium quotes we are receiving do not take into consideration the fact that we will be servicing a very small number of plans. Paying thosands of dollars a year for premiums doesn't make any sense if we are only servicing a few plans.

Does anybody have any suggestions as to any companies that might be able to quote us a premium that takes into account the small clientele?

I want to make sure we can do this... employee came to me in May, said the wife will be covered June 1 under her new employer's plan. So we can submit the drop of the wife. He can also then change down his FSA, can't he? Or could he only do that if she also had an FSA she could then enroll in?

Now let's complicate it more- he came to me about two weeks later and tells me they are getting divorced. She has moved out. He is keeping his kid and their kid. Custody of her kid will probably be going to her parents. But at this time, her kid, the employee's stepson, is no longer living with him, so he would like to lower his DCAP. Can the change of residence of the wife and stepson be used as a status change to allow that? Could it also be used to lower the FSA, if it can't be lowered due to the new coverage? I don't really understand the change of residence status change and when it can be used, whether the change also has to affect eligibility for the benefits first. On the DCAP, the plan doc says that "an eligible dependent is any member of your household for whom you can claim expenses", so by moving out the child is no longer a member of the household, so he would lose eligibility and therefore the amount could be reduced, right? But I don't think that would apply for the FSA.

I know that once the divorce is final these changes could be made no problem, he just would prefer to lower them now, since he no longer has the expenses for them.

Thanks for your thoughts on this!

PS - The plan doc pretty much allows all changes in the regs.

Can anyone recommend a good source for drafting a Wrap Plan? I am working on drafting one for the first time and need a good resource.

I know that another person had a post from four years ago that he had written an article about drafting wrap plans in the late 1980s. I couldn't track that article down. Plus, I worry since it is not very current.

Thanks.

Can anyone recommend a good source for drafting a Wrap Plan? I am working on drafting one for the first time and need a good resource.

I know that another person had a post from four years ago that he had written an article about drafting wrap plans in the late 1980s. I couldn't track that article down. Plus, I worry since it is not very current.

Thanks.

We have an employee that is out on Long Term Disability. They are not making any contributions right now to their FSA. Can they still submitt claims or use their FSA Card?

We have a client who would like to terminate their 401(k) plan and establish either a simple IRA or simple 401(k) this year. Is there any waiting rule (successor plan rule)? Do the participant funds have to be transferred to the Simple?

Some of our clients are receiving refunds from their broker/dealers due to an over-paid sales charge for large investments of mutual funds.

How do you equitably allocate the refund? It would be time consuming and cumbersome to determine trade amounts by specific participant. Some of the refunds are less than $1,000. If the document allows for it, should the refunds be used to offset fees?

Has anyone received these investor discount checks?

Does anyone have a sample notice or language for the new QJSA/QPSA disclosures we will need to provide for DC Plans? October 1 will be here before you know it and we want to be ready ahead of time.

non-profit employer is partially funded by a municipality - municipality offers contributory employee health plans. non profit employer maintains a fully-insured contributory private health plan because it is cheaper than munipals offerings and some employees have opted for participation in those plans. Municipality has open enrollment in October of ea year with effective date of coverage Jan 1. Non-profit employer has fiscal year of 7-1 and wants their own health plan to renew on that date - insurer says fine. How do we handle open enrollment for currently insured employees under the private plan -can it be June of each year (the 31 day rule)? How do we handle the non-profit employees participating in the municipal plan that want to change over to the employers private plan? Can they participate in the June open enrollment sponsored by the non-profit employer? Do they have to wait for the municipals open enrollment in October to exit for January 1? Will we have to have two enrollments per year?

Thanks for your guidance and keeping us in compliance without discriminating!

MAT

We have a 403(b) sponsored by a church which was established 1/1/03. We must determine if it is/can be a "nonelecting" or "electing" plan. We use the Franklin-Templeton ad. agreement and custodial agreement. The adoption agreement allows for setting eligibility (for participation) requirements and age 21 & 1 yr. svc were established. Also, excluded ordained staff (3 pastors) all of whom are covered by a denominational plan. No HCEs in the covered group (1 of the pastors may be an HCE though I don't know that for sure). An employer discretionary contribution may be made to participants who earn a yr. of service in the plan year. 1] Is this plan electing or nonelecting? 2] Are there any problems with excluding ordained staff? 3] Is this plan subject to ADP (if there were any eligible HCEs)? If it is an electing plan (no election statement has been filed), I understand this can be filed with a 5500 - is there a specific format or a standard form available somewhere? If we got this all wrong, what to do to fix? Thanks.

Does anyone know if Corbel has addressed the new requirements in their forms? I can't tell that they have.

Thanks.

A Safe Harbor Top-Heavy Plan that provides the 3% 100% vested contribution to satisfy the safe harbor and "top-heavy" requirements also makes a matching contribution of 50% up to 6% of deferrals.

Is the plan now out of the "top-heavy" exemption because it makes the additional matching contribution? And does the plan have to do the 401(a) test on the matching contributions?

An employer is looking to get rid of his SEP and start a PS plan. PS plan will be adopted in 2004. The employer would like to keep out anyone who has terminated employment in 2004. So, I will propose a 7/1 effective date, but can the employer still use full year compensation from 1/1/2004 - 12/31/2004, even though the initial plan year will be from 7/1/04 - 12/31/04?

Much has been written lately about SSN use and the right to privacy. I've seen many printed valuation reports that use SSN as the identifier simply thrown out - not shredded or placed in recycling...

Is there any potential liability with this practice? I've mentioned on several occasions that a paper shredder should be standard office equipment, but it seems to fall on deaf ears.

Am I correct that an ESOP can be leveraged without involving a third-party lender? In other words, employer loans $1,000,000 to ESOP. ESOP turns around an buys out majority shareholder for $1,000,000 who defers gain on the sale. Employer then makes cash contributions to ESOP which ESOP uses to turn around and pay back to the employer to pay off debt. Basically a round-robin transaction cash-wise that allows shareholder redemption with pre-tax dollars.

Anyone seen this done or is third-party financing more popular?

Does anyone know of a website with old Federal Register pages? The official government site only goes back to 1994. I am looking for something from the late 1980s (volume 53).

Client withheld the 20% Federal Tax withholding on several 2003 distributions. However, the client never remitted the taxes to the IRS. We just found that out and are trying to gauge if there is a special approach to take at this point (any IRS correction programs) or just deposit the late taxes with a 2003 tax coupon and wait for the IRS penalties/correspondence on the issues. Anyone have any good ideas/opinions on how they might proceed in this situation. Thanks for any thoughts.

Can a Traditional IRA be transferred into a SEP IRA? Is there a difference for a Simple IRA?

I'm drawing a blank. What determines if "Additional Information" needs to be added to the standard contents of the Summary Annual Report? For example, if a DB plan is less than 70% funded--does that information have to be included in the Summary Annual Report to participants?

Thanks.