I've read that EGTRRA sunset language may be advisable in 457(b) plans. The IRS has indicated with respect to qualified db plans that there is no need to take the sunset provisions into account currently. Is anyone currently including sunset language in their 457(b) plans?

I am surprised to see an arbitration clause for participants in the NQDC plan I'm reviewing.

As a ERISA Part 5 jurisdiction plan I would think DCP participants could file directly into federal court after the 503 procedures and ignore the arbitration language entirely.

Anyone use similar clauses and what's the result you think you'll get? Thanks.

I would like to open a Roth for both my husband and myself. We both contribute to our company's 401(k) plans. Can we both contribute $3,000 if our AGI is less than $150,000? We can't open traditional IRAs right?

Does anyone know if the IRS has decided upon a formula for a new rate for 1/1/2004, or what the lead time might be? Might there be a temporary notice to give us something to work with if there is need for a period of public comment?

My supervisor told us today that under HIPAA, we are no longer allowed to discuss amongst ourselves our illnesses, aches, and pains, etc. We were told that speaking of our illnesses may even lead to our termination. I have been doing some research on the web, but most things are over my head. From what I can gather, the privacy act applies mainly to medical offices, and our personell records, not our personal conversations about my snotty nose. Can someone please set me straight? Can you explain it in laymans terms? I am not sure how I go t to this message board. Please e-mail me directly at emcapwell@nc.rr.com.

Hi,

Just wondering if anyone has experience with a terminated DB plan that hasn't filed premiums in a very long time. We have been advised to terminate through the PBGC and not risk the plan being treated as an on-going plan. I was thinking about just filing the Form 500 package normally, check the box "no" that asks if all PBGC premium have been paid to date and wait for an inquiry from the PBGC. Since I'm not aware of a voluntary compliance program for unpaid PBGC premiums I'm not sure the best way to proceed. The plan has only had 2 or 4 participants since it's inception and many years just one. Assets are sufficient to pay all benefits for employees. The owner is waiving unfunded amounts.

If anyone has encountered this or can offer some insight, it would be greatly appreciated.

Thanks

A client's plan states that an unmarried participant will be paid in a single life annuity. In addition, he/she can qualify for a death benefit equal to 48 monthly payments which is payable to his/her beneficiary in a lump sum after his/her death.

Q/A 1 of regulation section 1.40(a)(9)-6T (new regs) states that distributions from a defined benefit plan (ignoring insurance products) must be paid in the form of periodic annuity payments for the employee's life (or the joint lives of the employee and beneficiary) or over a period certain... In addition, all payments must be either nonincreasing or increase only in accordance with one of 4 exceptions (listed in Q/A 1). (None of the exceptions prove to be helpful here.)

Further, paragraph (e) of Q/A 1 states that the rules prohibiting increasing payments under an annuity apply to payments made upon the death of an employee, unless the increase is due to an ancillary death benefit. (The ancillary death benefit rule does not apply here.)

Does anyone have a client with a similar provision in a defined benefit plan? If so, I would appreciate any guidance on how this benefit structure satisfies the above regs (or any other 401(a)(9) reg).

Thanks

I have member of the Board of Directors of a rehab facility come to me and is concerned over the appropriateness of having a 457(f) plan in a non profit organization. I do not have any 457 or 457(f) plans only qualified plans basically. So can anyone tell me how common this is or is not? Any problems related to...

Thanks

An employee is working in our jurisdiction and the Pension Fund is collecting the full contribution amount of $2.70 per hour on behalf of the employee. Must the Fund reciprocate the entire $2.70 to the employee's home local, if the contribution rate of the home local is only $1.00 per hour? If the Fund is required to only reciprocate the lower amount, what is to be done with the remaining monies ($1.70)? Thanks. Any cites to authority you can give me would be much appreciated.

One of the plans that I TPA is going to terminate. I found this out Monday. They got bought out on 3/26, and want this done yesterday.

The plan sent in their last contribution already (I found this out yesterday). They have about $1300 in forfeitures from a distribution done last week, and one done about three weeks ago. The plan document says that match forfs are used to reduce; but no more contribuitons are going to be made. It is ok to spread these to the 25 remaining participants (who will become 100% vested) prior to the termination distributions?

While I am on the topic:

The plan has three trustees. One retired in February and the other two have resigned their "posts" at the company. The plan doc was not changed yet for teh first one, probably b/c they knew this buy out was going to happen. They have elected to amend the doc for the termination instead of waiting for a determination letter (I know, against our advice). Do all three trustees have to sign the amendment & resolution? As far as I know, only the one who has retired is willing to offer her services (so to speak) and sign all the papers & checks. The other two feel that since they no longer work at the co, they no longer have fiduciary duties. We told them that this is not so, but it sounds like they don't care. The CFo is hounding me for the resolution & amendment before he goes on vaction on the 14th, and I don't know who needs to sign! Help!

Hi, we have C corp with Sep to Aug financial year. The corp can contribute to our calenday year 2003 SEP IRA till Nov 15th (or extension) but my W2 shows NO Retirement plan. Also, I put in $3000 into my 2003 regular IRA account which I can take deduction on since the company has not yet contributed to SEP.

What is the correction process if the corp contributes to SEP IRA:

1) Before I file my taxes on April 15th

2) After I file my taxes

Thanks. I have been looking for more info in SEP IRA and all I could find so far was information on setting up the SEP. This is a wonderful site with its interactive forum.

Can loans be transfered over from the former employer plan.

Initial plan year is from 10/1/2003 thru 12/31/2003. I know that the 415 $limit is not prorated, but what about 401(a)(17) and the integration level? From my understanding, the compensation limit under 401(a)(17) and the maximum permitted disparity level are to be prorated if contributions within a dc plan are based on compensation during this short period.

Is this a correct assessment?

thanks for any replies

An employer has a medical expense reimbursement VEBA that is funded with only employer dollars pursuant to a collective bargaining agreement. It is not the actual health plan, but only a funding vehicle so that participants can be reimbursed for any out-of-pocket medical expenses.

I'm wondering if this plan must be updated for the HIPAA privacy regulations since claims and medical receipts are submitted that probably include personal information.

Also, since this is only a funding arrangement, does it need to have any language included that addresses COBRA or FMLA?

I'd very much appreciate the group's thoughts on the following. I've worked mostly with qualified plans and I'm not terribly familiar with SEPs. Here goes:

Facts:

A very small (4 employee) organization offered a SEP-IRA, completely funded by employer contributions.

In terms of payroll reporting and W-2s, the amount of the SEP-IRA contribution was characterized as an "employee contribution," on the theory that the company would gross employees up for the amount of the SEP-IRA contribution and then characterize it as a pre-tax employee contribution (not sure if this is the correct or appropriate way to do that).

Head of the company decided that the company could not afford to make SEP-IRA contributions. No further contributions were made to anyone's SEP-IRA. There is no documentation of this decision--no Board action, no memo, no change to the SEP-IRA form document, nothing but a decision by the president. The other employees were apparently not notified of the change.

Through a miscommunication, however, the company's payroll vendor continued to reflect "deductions" for the "employee contributions" to the SEP-IRAs even though no money was going into those accounts.

One of the four employees has left the company and has now complained to the Department of Labor that her SEP-IRA never received the approximately $9000 that her W-2 says was withheld from her pay as employee contributions to the SEP-IRA (the $9000 related to the period of time after the contributions were stopped).

The Department of Labor is now demanding that the company make the contribution with interest to the former employee's IRA.

My questions:

Can anyone see an argument that they may be able to make to the DOL since they never intended to make this contribution? Is the fact that they did not document the discontinuance of employer contributions a problem in light of the requirement that a SEP have a "written allocation formula"?

My (tentative) conclusion:

It may be in the company's best interest to make the contribution, rather than try to establish that the contributions were stopped and payroll errors were made.

Any thoughts or suggestions are appreciated--many thanks.

I am a marketing grad in the process of looking for a job. Many of the copies I've met with mention they offer health insurance but don't give any specifics. Others don't mention it at all. As a result, I realize I don't really understand what is considered "Standard Practice" and have some questions, I hope you might help answer.

Do most companies offer health insurance? (what %)

Does it generally include dental? What about vision?

What kind of coverage is considered average? Is it an HMO?

If a company says they offer a pre-tax savings plan and catastrophic coverage are they being cheap or is that pretty common?

I apologize if I sound uninformed. I'm hoping you can help me change that. Thanks SO much for your advice.

Lorrie

A DB plan's benefit is offset by the equivalent benefit from DC nonelective contributions. The top heavy minimums are provided in the DC plan rather than the DB. However, when someone works 1,000 hours but terminates before the last day, then they meet the DB but don't meet the DC requirement. In that case the TH is provided in the DB plan, but the same offset provisions apply.

Often the case is that when a person has the 1,000 hours and terminates during the year is that they get the 2% DB accrual, but the value of their DC balance is enough to completely offset this accrual and those earned in prior years in the DB, leaving their net benefit at $0 in the DB.

So what ends up happening is that they get no true benefit in the year they terminate (no DC and no increase in net DB). I see the logic in it because of how the TH rules work in DB plans but I just want to see if anyone disagrees with this result.

One other note - this person would be considered benefiting for gateway purposes and need to receive that minimum amount, agreed?

When taking a hardship withdraw from a 401(K) plan for the purchase of a primary residence can the participant elect not to have 20% withheld?

If an ERISA 403(b) plan, funded through custodial account, terminates, can the employees take a distribution of the employer contributions as a result of the plan termination and roll over if they choose?

403(b)(11) doesn't allow distribuitions of "salary reduction amounts" as a result of plan termination from annuity contracts. Distribution of employer contributions as a result of plan termination if held in an annuity contract would be permitted.

403(b(7)(A) indicates no "amounts paid by the employer" under the custodial account may be distributed unless 59 1/2, death, disability, severance, hardship (salary reduction amounts).

Does this mean no employer contributions under a custodial account may be distributed due to plan termination? If so, why the difference?

When running a 402g test, are you testing contributions with payroll dates for the testing year?

For example, I have a 2003 deferral (12/23/03 payroll date) that wasn't processed until March 2004. Should this deferral be included in my 2003 402g test?

Thanks.