Employer is a non-profit that employees blind indivudals. Employer wants to put in a medical expense reimbursement plan. Any way to do this given the disability issue? Plan document for medical expense reimbursement plan generally provides for ineligibility once participant becomes disabled. Also, disability seems to be a qualifying event under COBRA upon which the disabled individual is to pay 150% of the costs of the benefits under the plan. Any ways around those two issues. Bottom line is that employer wants to provide as much as it can to the employees without negatively affecting their SSI Disability, Medicare, Medicaid, etc... coverages......? Thanks for any help.

Participant is receiving lump sum distribution from DB plan and wants total rollover into IRA. Account includes after-tax employee contributions. Can contributory amount be included in rollover? Any constraints or cautions?

Our firm has primarily small DB plans (under 100 lives) but we're picking up more takeover plans which I defined as "mid-size" (100-500 participants) plans. We currently use Datair which we're generally happy with for small plans (except for the look of the reports), but it doesn't handle multi-decrements which some of our takeover plans have. I've searched prior threads and have gleaned some info, but does anyone have any recommendations on software that handles multi-decrements and does the 412(l) add'l funding calc for 100-500 lives sized plans without being too outrageously expensive ? thanks for any thoughts.

Have a potential PEO client that is under a multiple employer plan - each company has a seperate investement contract right now - one trust and owner of PEO is the trustee. Client wants to merge assets into one contract, wants to name an individual trustee for each company and wants to recieve comissions from the assets to offset adminstrative costs and reduce fee to companys. Comments????? Can there be one master plan with seperate trusts - how would hte 5500 be filed, with mulitple sch p? just like the ts? Is there any issues of the PEO receiving comissions - is that a prohibited transaction? Any ideas - any examples of what other peo's are doing?

Sponsor had a 401k plan that terminated. Final distribution was made in April 2003 (deferrals had ceased in 2002).

Now sponsor wants to start up another 401k plan. Although deferrals won't begin until July, I would still like to make the effective date of the plan 1/1/04. But I am worried that because the effective date of the new plan would be within 12 months of the final distribution date of the old plan, I will have a successor plan.

I can always go with a later effective date. However, I am not sure what policy objective or purpose this really serves.

I am wondering how to correctly handle employees who have exhausted their FMLA

leave and need to begin paying for their benefits. Currently, these employees are not receiving paid time so per our policy, they are required to begin paying for the full premiums for all of the benefits they were enrolled in prior to beginning their leave. Our company pays 100% of the premium for short-term disability, long-term disability and base life. Are we within guidlines to bill the employee for these benefits also, along with the full premium of the health and dental?

HELP! Does anyone know if there are any studies regarding productivity and how dress code may (or may not) affect work productivity?

I have a client who failed to file a Form 5500 for their health plan for 2001 and 2002 (calendar years). Because this was part of their Cafeteria plan, they misinterpreted Notice 2002-24 as meaning they did not have to file a 5500 at all for the plan (it has more than 100 employees).

What are the options? Are they best applying under the DFVC program and paying a $4,000 penalty? Any chance of getting this penalty reduced/abated either under this program or outside this program? I understand that the penalties outside of the DFVC program are potentially substantial, but $4,000 is still a decent hit that I would really like to try and avoid!

Thanks

A one participant plan uses the aggregate method in year one and switches to EAN in year two.

The dilemma is w/r/t the amort base.

Clearly if plan used EAN in year one then initial AL would have 29 yrs remaining in amort period.

By changing from aggregate to EAN in year 2, the UAL from the change in method is the only base and is amort over 10 yrs per rev proc 2000-40 for min funding and amort over 10 yrs for max tax. Thus no range.

A prior rev proc used 30 - x at time of change, thus in our case it would be 29 yrs, and allow for a meaningful disparity between min and max.

Therefore for eg. say participant entered plan at age 50 with NRA of 60. Under aggregate the PVFB is spread over 10 yrs and if plan used EAN the UAL spread over 30 for min and 10 for max.

So if Employer used aggregate in year 1 and wants to reduce costs in year two, it would seem reasonable to change to EAN and amort over 29 years, which would be the same path if used EAN in year 1 over 30 years.

See the dilemma?

Has anyone analyzed and resolved this situation?

Thank you.

Gary

I have a SEP-IRA. I own 100% of company 1 and 50% of company 2. No other shareholders are family. Is this a controlled group? Can I take a 25%/$35,000 contribution to my SEP from company 2 without having to make equal contributions to my employees in company 1?

I am trying to get a feel for what types of trading restrictions various plans have implemented to address market timing issues. Are there any resources that compare limitations of multiple plans? Any information would be greatly appreciated.

Is it a common plan design to require lump sum distributions below a certain dollar amount (for example, $10,000) and installment distributions above that amount? I'm not aware of any problems with this arrangement, but would appreciate feedback.

I have a terminated participant in a Plan who rolled both her plan balance and her loan balance to her new Employer's Plan. (Yes, her new Employer's plan accepts loan balance rollovers and ok'd the transaction). For 1099-R reporting purposes, would you simply prepare a 1099-R form with code "G" for her entire balance including the loan? It seems unnecessary to prepare 2 1099-R forms when both would be coded "G". I looked in the 1099-R 2003 instructions, but it only says that a loan balance could be an eligible rollover, not how to code it.

I am new to form 5500 and have a basic question. The client's plan and fiscal years run from 1/1/03 to 12/31/03. The client deposited his '03 PS contribution on February '04 and took the deduction on his 2003 tax return. None of the 2003 YE supporting materials provided by the DFE account for this PS contribution b/c of its date of deposit. For Form 5500 and Sched. I, would I simply add the '03 PS contribution to the 2003 YE trust total or would I just report the amount when I file the 2004 5500?

If an employee is on a High deductible plan to be used with an HSA, and they have dependents on that plan who are not tax dependents (say step-children who live with another parent), should the employee be able to receive distributions from the HSA for the step-children's medical expenses?

I am raising a question that has been touched upon in previous posts but not directly related. Assume a 501©(3) non-profit, non-governmental organization that brings in good revenue and has never had UBIT or been part of a controlled group with a for profit entity. I am trying to find out if there are any obscure rulings out there that discuss limitations for qualified plan contributions.

Since the 415(e) limit has been repealed, it seems possible to max out a defined contribution plan and a defined benefit plan. It doesn't appear that the deduction limit under 404(a)(7) would apply since we have a tax exempt. It seems that as long as we stay within the 415(b) and 415© limits, we could max out both types of plans.

I am familiar with the Intermediate Sanction rules under 4958. Let's assume for the moment that there is no excess benefit transaction partially because we offer the same benefit to all employees and we are staying within the massive rules under 401(a), et al.

Can anyone come up with some arguments as to why we wouldn't be able to max out a dc plan and a db plan or at least not be worried about the combined 25% limitation?

I have a client that has a cafeteria plan document that has not been updated since 1988. Are there any requirements to have cafeteria plan documents updated similar to qualified plans for GUST, etc.?

We have been withholding the 20% on IRA rollovers for participants who have

defaulted on loans.

Example:

Account balance 100,000

Loan 20,000

net 80,000

If the participant wants to rollover the 80,000 and default on the $20,000 loan we

have been rolling over $76,000 and withholdng $4,000 for the defaulted loan.

We have recently been told that is incorrect. Please advise.

The new IRS regs re QJSA explanations, as applied to money purchase pension plans, require that information be provided on the "financial effect" of a purchased annuity contract as well as other available forms of benefit. The explanation can be based on "reasonable estimates of amounts that would be payable under a purchased annuity contract." It sounds to me like prose alone isn't enough to meet the requirement--some rough numbers should be provided.

Has anyone drafted an explanation of the financial effect of a purchased annuity contract in a MPPP for the new regs? Or even thought about what this requirement means?

If the plan document allows for loans, must a participant take a loan before a hardship distributions?