Does an employer have to offer the FSA as part of COBRA? We have an employer that uses COBRA serve & they administer the dental & medical. FSA is not offered. An employee terminated & was considering electing FSA under COBRA? How does the FSA & COBRA work together? Any input or advice would be much appreciated!

An IRA holder dies without naming a beneficiary. The documents say that his estate is the beneficiary by default.

If the estate is divided among three children (no survivng spouse), can each of the children--beneficiaries of the estate--set up "inherited IRAs", that is, an IRA in the name of the deceased for the benefit of child x?

I have a client who filed as a large plan in 2002 (133 - Line 6). Line 6 for the 2003 plan year is 108. Can the client switch to a small plan filing? The rules and exceptions, as I understand them, were specifically designed for a plan going from small to large and not the other way so I am having difficulty determinig which way the client must file.

Thanx in advance!

I have a situation in which the investment advisor is telling the plan sponsor that he need personal financial information such as net worth, personal investments, etc. in order to set up accounts at American Funds for new enrollees. Understandably, the new enrollees no longer want to participate. Is this a common practice?

I've reviewed some proposals where we instruct Partners to take their contributions as a ps contribution rather than 401k to avoid SE tax. I can't see where partners contribution is excluded from the SE tax calculation. Can someone confirm that the partners share of the ps contribution does not avoid se taxation? How about an LLC, whose income is reported on a K-1? How about a sole prop? I believe their share of the contribution does not reduce their schedule C income, reported on page 1 of the 1040, thereby incurring S/E tax on their share of the PS contribution amount.

Client wants to take an in-service distribution. Doc says as long as the participant has 60 months of participation it is allowable.

What are the taxes? 20% withholding (Minimum), 10% excise (EE is 57)... am I missing anything?

Tks!

I have an account with 50k in it. 40k invested and 10k is loan #1. We want to re-fi. Let's assume that Loan 1 will be repaid according to it's original schedule in the re-fi.

Is the maximum re-fi loan 20k or 25k?

I understand the "use it or lose it" rule with Section 125 plans. However, I just recently turned in my 2 week's notice at my employer. My boss informed me that on my final paycheck, they will be deducting an addition $180 from my paycheck to bring my total Section 125 allocation up to $480 (what I had originally allocated). I understand that if I don't use the Section 125 money, I lose it...but in this case, the money is not there yet. So, effectively my employer is putting my money into the plan so I will then use it. Has anyone heard of this? Can they do this?

Can the owner waive his benefit in the year the plan terminated for funding purposes? The plan will terminate 9/30/04 and the accruals were frozen 7/1/04.

Thanks, Sue

What disclosure are you giving to rehired employees who have taken a partially vested lump sum payment from a DB plan?

I understand that you don't have to allow payback when the employee was fully vested, but you do have to allow it when a forfeiture of benefits could have resulted.

Any sample wording would be appreciated.

After reading Grey Book 2004 #27 it's evident that if the measurement period is "current and all prior" for all the plans being tested under the ABPT then for a "frozen plan" it's appropriate to use testing service as of the freeze date but current average compensation in the development of accrual rates - and that seems logical also.

But if the measurement period is the "current plan year" for all plans being tested then it seems that Andy's response to my earlier question would be correct - i.e. the accrual rate would be 0/(current average comp) or 0 .

Does everyone agree ?

We have a client that excludes terminated employees in the year end cross tested profit sharing allocation. They do however receive the 3% safe harbor (401k cross tested plan) since it is funded each pay and there are no restrictions.

If we pass the 410b coverage tests with these employees excluded, do we have to bring them back in when testing for 401a4 for the cross tested?

With a volume submitter or M&P plan, can a successor employer that adopts the plan of its predecessor continue to rely upon the favorable letter for the plan? (no material modifications and all of predecessor's employees continue to participate in plan.) I cannot find a citation that addresses this issue in the Rev Procs.

Any thoughts would be greatly appreciated.

I am looking for survey information related to investment mix of defined benefit plans. Any suggestions or links? Thanks.

As Power of Attorney for My grandfather I used the Illinois Statutory Short Form for POA to remove the name of my deceased grandmother as beneficiary and named myself as the beneficiary and younger sister as contingent.

My POA Specifically states, "You have the power to name or change beneficiaries or joint tenants, and revoke and amend any trust"

When my grandfather died I submitted a claim for the burial insurance. The administrator of the ERISA Plan denied my claim citing that Illinois State Law forbid me to name myself as beneficiary.

Administrator QUOTE the authority to name yourself, as the beneficiary of life insurance is not specifically stated. Administrator Unquote

They accepted the beneficiary change form and entered it into the record now (in response to my claim) they are saying that they are willing to pay the contingent.....providing I drop my claim / appeal.

If specific reference to the plan is need why was any change honored when the plan itself is never mentioned????

Hi guys, just quick question. Based on long-term performance (not-recent obviously) how do Vanguard and American Funds compare?

Both are very respectable companies, offer great returns for Roth IRAs. The question is: is there a better one of the two?

Vanguard only charges a $10 a year custodial fee.

American Funds charges some commission percentages( 5.75% initial, .75% yearly).

Vanguard can handle Roth IRAs directly and easily through their web site.

American Funds looks like it can only be invested through third-party (i.e. brokerage, or online investor, Ameritrade etc...)

Lastly, does anybody know of any good mutual fund comparison sites, that I can use to determine the strength, value, etc... of funds within a family over the past few years.

I look forward to your replies. Thank you

Where can I find the rules for

early retirement

Spousal

Minor Children

benefits

i.e. the Hubby wirks and based on his wage history

his wife and children are entitled

to benefits

I'm having a tough time finding information on how to calssify employees that are a part of a non-qualified stock option plan.

A closely held corporation implemented a stock option plan during 2003 in which 40% of the company was optioned out to 4 employees. The shares are vested over a 5 year period and no more than 20% may be excercised each year.

The only real bit of info I have found is one line in the control group section (subheading of constructive receipt) of a pension resource book we have that says:

"An option to acquire stock causes the option holder to be treated as owning the stock."

If this is true to determine highly compensated or not for 2003, then the 4 employees are considered highly compensated for 2003 because they were all given at least 5% of the overall company. If I apply the vesting schedule to the amount of shares though, a couple of them are not vested in 5% of the overall value of the company. 3 of the 4 employees would not be considered highly compensated based on their annual salary.

Anyone have any thoughts on this? It of course makes a big difference in the testing of their profit sharing plan.

I'm not clear about the new HSA guidance. Can a person have HDHP coverage as an employee, and still be an "eligible individual" for an HSA if also covered as a dependent under their spouse's HDHP? Thanks for any clarification you can give.

Just wondering if anyone knows how an employee benefit percentage on a benefits basis would be determined for a participant in a frozen DB plan ?

Can you use the "accrued to date" over comp for this plan and "the annual change in accrued" over comp for other plans in the testing group ? If so, this would answer the question !!

thanks all in advance for your time !!