The company administering our health claims, does the 1st level of appeal

Our company does the 2nd level of appeal

Our Health Plan SPD also indicates a vountary arbitration process addiitonally

Is a 2nd level of appeal allowed by Company or must this arbitration process be the 2nd level of appeal

woudl anyone have language they could share on the 2nd level review process to put in an SPD

thanks

A client of mine merged its money purchase plan with its profit sharing plan. Both plans contain the J&S requirement. The assets were previously kept in several pooled funds with 3 funds being just money purchase money and 3 funds being just profit sharing money.

Is there any reason why they cannot merge all of the money together? To keep track of the balances, I could just use the total rate of return for the plan instead of separating the money purchase and profit sharing rates as in previous years. Is this common practice or are the assets usually kept separate even after the merger?

Flex Plan has two components: Health and Dependent Care Reimbursement Accounts. Participant may elect to defer up to $2,000 towards Health Care Reimbursement. Plan Year is the Calendar Year. Plan sponsor wants to know if they can amend plan mid year to increase the amount of Health Care Reimbursement up to $4,000 and as a result, allow particiapants to increase their salary deferral amounts.

Would someone please be kind enough to direct me to a prior posting (I could not find one that fit my inquiry), or appropriate Internal Revenue Code cite?

Thanks.

What's the latest on the proposal to change the PBGC interest rate for calculating the variable prem? Is the congress even looking at this right now?

The low interest rates starting Jan 2004 is producing a variable prem for some of the plans I am working on.

The plan provides for ER Match of 100% of deferrals up to 5% of compensation. This HCE has compensation of 350,000 in 2003. He made the maximum elective deferral plus cach-up for a total of 14,000. 5% of 350,000 would allow for a match of 14,000. The 401(a)(17) limit on compensation (200,000) only provides for a match of 10,000. I don't see any mention of the 401(a)(17) limit in the regulations for 414(v) so I'm saying that the 200,000 comp limit comes into play and prevents a full match on the 14,000. Am I correct? Any thoughts?

A sponsor has a safe harbor provision in the document with an enhanced match formula (100% of the first 4% deferred.) The SH notice provided to the participants last year said the company will match 100% up to 3%.

Does the typo in the notice take them out of safe harbor status?

A PBGC covered defined benefit plan is winding down. The participants are 2 parents and 5 children over age 21. The parents own the company.

The plan is underfunded, so I have been asked to come up with a creative way to shift more dollars to the parents, something the children are willing to do. Right now the children are not considered owning any of the corporation because of the 1563 attribution rules used for PBGC purposes, so they cannot waive benefit as majority owners.

I have come up with the idea that 2 of the children can be given options to purchase the half of the company each. That would make them majority owners too and they could waive benefits. But that is not good enough, so the search continues.

Any thoughts, no matter how aggressive or ridiculous, that this could be done? It is not something I have to recommend, but rather just come up with as a possibility.

There is a HIPAA/ERISA exemption for on-site medical clinics, but I can't find a definition of what an "on-site medical clinic" is.

The clinic I'm analyzing is physically located away from the employer's offices, but nurse clinicians perform MOST of the services on the employers premises. Some services are performed at the clinic. (e.g., if an employee misses his on-site flu shot or annual physical, then he can go to the nurse's clinic off-site and get the shot/physical, etc.)

There is a HIPAA/ERISA exemption for on-site medical clinics, but I can't find a definition of what an "on-site medical clinic" is.

The clinic I'm analyzing is physically located away from the employer's offices, but nurse clinicians perform MOST of the services on the employers premises. Some services are performed at the clinic. (e.g., if an employee misses his on-site flu shot or annual physical, then he can go to the nurse's clinic off-site and get the shot/physical, etc.)

Is there any significant difference in 401(k) plan design when you jump 10 participants and under to over 10 participants? A friend got some marketing information from a large mutual fund company in which they list have listed different thresholds for 401(k)'s, of 1 life, 10 & under, 11-99, and 100+ participants. She didn't have the details on why they would market them differently and was asking me about the difference. I could explain the 1 life, & 100+ differences, but the 10 life breakpoint had me lost. I suspect there may be a price difference at that point, but I can't think of anything technical in nature that changes. Is there something special about going from 10 to 11 participants in a 401(k)? Thanks for your comments

Self funded group health plan processes claims and appeals in-house; claim appeal process is three step: appeal is first reviewed by claim manager, then by committee consisting of senior benefit managers, then by president of company.

Claim manager and committee can deny claims before passing them on to the next level. However no subsequent appeal can be made.

This is a single-level appeal process, yes? My understanding is that a two-step appeal process requires a complete second shot at claim approval, following one unsuccessful appeal.

And is it appropriate (necessary) to spell out the three-step process in the SPD?

401(k) plan offers participant directed accounts with various fund options with mutual fund company A. employee investment education relative to mutual fund is such that, alone, it meets the requirements for 404© fiduciary "protection."

however, a segement of the participants (2 hce's and 1 nhce) are provided an "expanded" fund menu that inlcudes funds offered by mutual fund company B.

am i correct in assuming that this scenario does not meet the requirements of 404© as all of the participants have not been provided the same investment alternatives?

also, would the participants who have the "limited" fund menu have an argument for requesting the employer to make up any difference between the performance of the "expanded" fund menu vs. the "limited" fund menu?

401(k) plans may accept "direct rollovers" from IRAs/individual retirement annuities beginning 1/1/02 as a result of EGTRRA.

May 401(k) plans also accept "direct transfers" from IRAs/individual retirement annuities? What is the difference between a "direct transfer" and a "direct rollover"?

What is the definition of the account balance for loans. Section 72 dosesn't define. Does the account balance available include outstanding loans?If a participant's account balance is $26,000 including an outstanding loan of $13,000, what is the account balance for a new loan? $26,000 or $13,000?

Under the Individual Level Premium funding method, in calculating the temporary annuity factor (PVFS / current salary) in order to calculate the normal cost, can the following projected salaries be used:

2004 $500,000

2005 500,000

2006 500,000

2007 100,000

2008 100,000

2009 100,000

at 6%, this would produce a factor of 3.309186. Is this allowed?

Thanks in advance.

A participant wants to know the regulation that determines the definition of account balance for use in determining the account balance available for a loan. Participnat has $26,000 in money market investments and $13,000 in an outstanding loan. Participant believes that the account balance available for determiing a new loan is $39,000. Any comments?

I have been approached by a person who is employed by a local Orange County, CA, city. She needs, and is willling to pay for, advice about how to handle her retirement plans.

The city has offered to move her deferred comp assets into the city retirement plan.

I pled complete ignorance about public employee retitrement plans and told her I would try to find someone who could worek with her.

Please emal me if you have any ideas.

clinthopson@hopsonpension.com

How did we all miss this one? Dom et al must have been right!

[Link removed-too late for the fun.]

maybe I should have put this under humor? This definitely rates a WOW.

I have a client who was eligible to establish a SARSEP in 1995. The client exceeded 25 employees in 1998 and continued to accept salary deferrals into the plan from 1999 through 2003. I cannot find any guidance on how to correct this error. How do we properly correct this SARSEP? Do we need to use VCP? What do we do with the ineligible deferrals? Any thoughts would be appreciated. Thank you.

Has anyone researched the proper treatment of distributions that are less than the charge imposed on the account balance (i.e., not paid by the employer or by the plan generally) by the recordkeeper or custodian to cut the distribution check? For example, a participant has a $12.00 vested account balance (resulting from a small forfeiture reallocation) and the recordkeeper/custodian charges the individual account $15.00 to cut the check. Do you have the recordkeeper keep the $12.00 and issue a $0.00 check, or do you forfeit what actually is non-forfeitable money? Do you issue a 1099R for $12.00, or is the taxable amount net of the processing fee? I've seen "some" of this type of discussion below, but I can't find any IRS or DOL guidance. The employer does not want to pay the fee for small accounts just to make the problem go away.

My guess is that since the amount is vested, there is no basis to reallocate that money to other participants, so the plan expense avenue would be the best grounded approach. Also, my guess is that the plan expenses come off the top before the distribution, and the taxable distribution in my example would be zero.