I have a client who is evaluating their DB plan that provides a low level integrated formula. Can anyone direct me to such a survey? I see lots of 401(k) plan surveys, but not many like this on DB plans. The client is anxious for the information so any help will be much appreciated.

Can an ERISA argument be brought into a state court or are they all remanded to the Federal Court System? Question in mind is a prohibited transaction: loan to prohibited party. Argument is valid, but plaintiff is trying to coerce client with holding up a summary of judgement in a state court with this "threat". I would think the state court would at worst hold over the summary of judgement until the ERISA suit is heard.

Am I right?

We have a 401(k) safe harbor plan with the basic matching formula. Employer is having a good year and is considering adding a discretionay match, retroactive to the beginning of the Plan year. The basic match and the discretionary match total would not exceed the enhanced match limits.

If not for being a safe harbor plan, the plan would be top heavy. Only deferrals and safe harbor matching contributions are being made to the Plan. Would the addition of the discretionary match cause the plan to be top heavy? Is ACP testing required?

I have acquired a plan that was poorly designed. It is a 401(k) safe harbor with the SHNEC. The document currently contains no matching provisions. Is it possible to add discretionary matching provisions without losing safe harbor status. I thought so initially and then I starting to go back and read through Notice 98-52 and now I lean towards it not being allowed. I reference the content requirement:

The content requirement of this section is satisfied if the notice (1) is sufficiently accurate and comprehensive to inform the employee of the employee's rights and obligations under the plan and (2) is written in a manner calculated to be understood by the average employee eligible to participate in the plan. For purposes of the preceding sentence, a notice is not considered sufficiently accurate and comprehensive unless the notice accurately describes (i) the safe harbor matching or nonelective contribution formula used under the plan (including a description of the levels of matching contributions, if any, available under the plan); (ii) any other contributions under the plan (including the potential for discretionary matching contributions) and the conditions under which such contributions are made; (iii) the plan to which safe harbor contributions will be made (if different than the plan containing the CODA); (iv) the type and amount of compensation that may be deferred under the plan; (v) how to make cash or deferred elections, including any administrative requirements that apply to such elections; (vi) the periods available under the plan for making cash or deferred elections; and (vii) withdrawal and vesting provisions applicable to contributions under the plan.

Would you agree that the match cannot be added to keep safe harbor status?

Regarding the yearly fee for maintaining a Roth IRA and the expense-ratios for mutual funds within a Roth IRA, do they have to be paid for from within the Roth IRA, or can they be paid for from outside of the Roth IRA? I was talking to a Fidelity representative who said the former, but the application forms for Tocqueville say that they can be paid for with money from outside of the Roth IRA.

I realize that SEP-IRAs are mainly goverened by IRS rules, but what specific ERISA sections also apply to SEPs?

Is it problematic under the “designed to primarily invest in Employer securities” standard to convert a stock bonus plan currently comprised of employer securities to the extent of 31% of its assets (and increasing) to an ESOP?

Can we obtain a DOL Advisory Opinion or PLR to give us greater assurance?

The owner in a cross-tested plan will attain the plan's NRA (65) next year. He has no intention of retiring at this time. What impact does this have on the non-discrimination tests & his EBAR? Will he still be able to contribute the max if the tests allow? This seems like it should be pretty easy, but I'm sensing there may be issues because he is 65. Any input appreciated!

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.