An employer has a discretionary match in their 410(k) plan which is pay with each payroll. In trying to cut costs, they are considering reducing their matching formula in the middle of the plan year. My research indicates this is allowable as long as they have a board of directors resolution stating the new formula, make the effective date in the future and provide an employee communication with the new match. Any other issues to be concerned with?

If an employer, in this case a city, has a contract with a union to pay all or part of the premiums for an HMO plan that is "an alternative to the city's group health plan," and the union negotiates with the HMO and has all other contact with the HMO, is the City or the union the "plan sponsor" for HIPAA purposes?

Only the union rep talks with this HMO, and if any HMO participant has a problem, they talk to the union rep for help (the union rep is a city employee, but is not part of the city's human resources/benefits department).

Participant and spouse divorce, and a separate account is established under a defined contribution plan for the former spouse alternate payee pursuant to a separate interest QDRO. Alternate payee has the right under the QDRO to designate the beneficiary for alternate payee's separate account, and alternate payee designates son as beneficiary.

Participant dies in 1997 (after separate account established), and spouse dies in 2003. Question: when does alternate payee's separate account have to be distributed to designated beneficiary son?

I dutifully read 1.401(a)(9)-8, Q&A 6, but I was not able to come up with a definitive answer.

I want to conclude somehow that altenate payee's death is to be used for required minimum distribution purposes, perhaps under 401(a)(9)(B)(iv)(II). If participant's death is used, what would this mean for distribution of alternate payee's separate account if alternate payee in this instance was still alive in 2004?

The Code and regs say the maximum deferral limitations for a 457(b) plan are to be applied on a taxable year basis. How then are the limitations to be applied in the case of a plan using a non-calendar plan year?

Was wondering if anyone had heard the news that there was guidance being issued next month that starting in January 2005, any employee who is terminated with money in the plan MUST be forced to roll to an IRA. Including terminated lost participants, or participants who dont answer election notices sent out. ALL terminated employees. Leaving money in the plan under $5k was not going to be allowed at all, even if the employer does not want to force out employees. According to speaker was only accounts $1-5k but I just cant imagine how this is going to work.

It was a Corbel seminar, I came back to the office and told everyone but they dont think this could possibly be. I cant find anything proposed on the DOL site, has anyone heard anything??

If I understand USERRA correctly, a participant on a LOA for his/her two week reservist training is entitled to contributions based on compensation not received during those two weeks. If a plan has a 3% safe harbor and a participant earns $500/week and has 2 weeks unpaid for military duty, the W2 would reflect $25,000 when in fact, the 3% should be based on $26,000, the same for a ps contribution, but not forfeitures.

Has anyone encountered this?

just wondering

I am new to employee benefits law and have a basic question. Is a government 457 plan wholly exempt from ERISA or just exempt from the disclosure requirements? And, is there a statute or regulation that provides this exemption and would point me in the right direction?

Thank you.

I've always assumed (and you remember what our teachers said about that!) that a profit sharing plan could not require a participant to complete more than 1,000 hours in order to receive an allocation of the employer contribution. However, the only 1,000 hour reference that I can find is in the safe harbor provisions under 1.401(a)(4)-2(b)(3). Is the assumption I've been operating under lo' these many years the ERISA version of an urban legend?

Can a profit sharing plan require more than 1,000 hours, so long as it passes the general test?

Thanks for any citations you can provide!

I am looking for a sample notice... and would also like to know when you send out the notice (it appears the rules have never been finalized to specify when to send it out?) Thanks for all input.

Plan year is 9/1/2001 - 8/31/2002.

Required quarterlies were $26,500 beginning 12/15/2001.

For line 9(e) on the 2001 Schedule B, when do you stop accruing the interest charge on late quarterly contributions? The employer DID NOT make the final required quarterly payment until 8/11/2003.

I declared an IRA for $1000 on my tax form which was sent in on time. However I needed to purchase the IRA for 2003 by April 15, 2004. I still need to make this IRA purchase however my bank said I couldn't. Is there a way to purchase an IRA for 2003 or should I make one for 2004. If not what will the penalty be as I have already received my refund?

Will pre-tax salary reduction under a cafeteria plan be deemed to indirectly fund an HRA where premium payment for the health plans sponsored the employer only permit after-tax contributions to the extent of the monthly HRA contribution (i.e., the HRA participant does not have a choice of using HRA contributions in lieu of pre-tax salary reduction contributions). Also, what are the practical penalties if the HRA is recharacterized as an arrangement that does not meet the definition of an HRA? Would this only entail income tax inclusion to the participants and wittholding obligations on the employer? Thanks for your thoughts.

I started a Roth IRA in 1998. I am not yet to the 59 1/2 year old age to take out the money, but I want to withdraw it anyways. I read an article on-line that mentioned that if you opened the Roth IRA in 1998 or 1999, you don't have to pay the 10% penalty. Do you know if this is correct?

I have a client with a Safe Harbor 401k Plan with a 5/31 year end. They are thinking about terminating the plan.

I have advised them that the plan should be terminated as of 5/31. If they were to terminate mid plan year, then the short plan year could not be Safe Harbor. Right now the owners are the only participants deferring into the plan, so they wouldn't pass ADP for the short plan year. They only fund the 3% Safe Harbor, no other Employer contributions.

Am I right in my thinking that a final short plan year cannot be Safe Harbor?

Thanks.

Searching through the cobwebs of my brain, I seem to recall that employees would be able to enroll in benefits if they incur a 'significant change' under their coverage say through their spouse's plan. This would pertain to (example) a situation when a husband who has the family coverage goes through Open Enrollment at different time than the spouse and the change in benefit cost is 'significant' and they are no longer able to afford the plan. Now they would wish to enroll in the wife's plan and cancel the coverage under the husband's plan. I can't seem to locate regulations that would pretain to this - Can anyone help me with this one?

I have a plan that remains in the 80-120 participant count for multiple years. Can they continue to use that "exception" and file the Sch I with no audit? The company's internal auditors think the exception can be used for only one year.

Now that the range has been reduced for to 90-100% for current liability calculations, is there any use of the 105% (the old high RPA rate)??

It seems like they left it alone and it still is used in the quarterly penalties but would like other opinions.

Thanks in advance.

DB Plan now only includes husband/wife but used to include other employees. Can we switch from filing a 5500 to a 5500EZ this year? Thanks....

As part of the new voluntary life product, each enrolled employee could choose one product from the following free:

1. Eyewear discount program

2. Counseling services

3. Mail order Rx.discounts

4. Chiropractic

5. Legal

6. Nurse hotline

7. Travel Assist

They could also buy any other of the programs on a payroll deduction basis.

My question is – is any or all of these services eligible for pre-tax payroll deductions? Do you have or do you know where I can get a list of eligible pre-tax benefits?