Is it enough to be considered an affiliated service group if three entities, without being a controlled group, share the same address? One company falls under the definition of a service organization (consulting) the other is a PR or advertising company, and the third is a one person LLC?

What questions should I ask to determine ASG status?

For funding purposes, should a temp annuity be based on limited salary or unlimited?

401(k) Plan allows for participants to roll $ into their account from prior QP and conduit IRAs - plan doesn't get much more specific than this ^ regarding rollovers "in". Participant's husband dies. Would there be any reason that she cannot roll his QP balance into her 401(k) Plan? I know this may seem obvious and I am 99% sure that this is ok, but with all the recent changes I wanted some reinforcement.

I was wondering if anyone knew how the meeting went last week between the FASB and the IASB regarding the future direction of pension accounting in the U.S. At the Enrolled Actuaries meeting it was mentioned that the meeting in London last week would determine if the FASB and IASB would put the pension accounting standards on a fast track for globalization of standards. Since the U.K. bases pension accounting on immediate recognition of gains and losses and marking to market, any move in the U.S. to such a method could pose huge problems for the continued maintenance of DB plans. Any info would be greatly appreciated.

HIPAA supposedly requires that amendments be added to cafeteria plans where the employer has more than 50 employees.

Would anybody know where I could possibly look at those amendments? Thanks for any help.

Plan Administrator received a draft DRO. Before DRO was finalized and signed by a judge, the participant's employer (i.e., PA) received a state withholding notice for child support because the participant's ex-husband (alternate payee under DRO) owes back child support. The withholding order doesn't specify the plan name, so it will be denied and probably re-submitted. When the PA gets a corrected withholding order specifying the plan name, it will be deemed qualified, and when the draft DRO is signed by a judge, the PA will now have 2 separate QDROs. Neither the DRO nor the withholding order indicates that the amount awarded under the DRO can be offset by the amount specified in the withholding order. So, PA is assuming that participant's account balance will have to be reduced by the amounts specified in BOTH DROs (yes, there is enough in her AB to cover both). Is PA's assumption correct? Thoughts?

A client has a new PS 401k plan that holds merged MPP money. The PS plan allows In-Service Distributions from all accounts after age 62 and 5 years of service.

Would this apply to merged MPP money also? Thanks.

A trust is named as beneficiary of an IRA. Owner dies before age 70 1/2, and the trust agreement indicates that the 2 children are the named beneficiaries. Obviously conduit or decendent IRA's could be established to allow each beneficiary to receive the distributions over their lifetime, but the question is that when the payments begin, can the payments be made to a different trust (in the name of the beneficiary) and not directly to the beneficiary? The logic is that it would be considered taxable income to the trust, and thus subject to lower tax rates than if the individual beneficiary included the distribution on their personal tax return.

Any thoughts would be appreciated. Thanks.

I'm work in Third Party Administration where we administer health FSA and HRA plans. I was wondering how others would handle substantiation of orthodontia claims under a health FSA plan under the following scenario:

- a participant pays a discounted amount up front for 10 months of orthodontia work (say, $2,500). He/She is seeking reimbursement of the expense. Since the current law states that medical expenses are not reimbursable through a health FSA until they have been incurred; and that expenses are treated as having been incurred when the participant is provided with the medical care that gives rise to the medical expense, and not when he/she is formally billed, charged or pays for the medical care, how should this particular situation be handled? Should the participant be reimbursed the full $2,500 upon claims substantiation, even though all 10 months worth of services have not been incurred? Or, should the participant be reimbursed $250 each month (even though this may not be the actual cost of the treatment) upon submission of documentation which states that one month's worth of service has been incurred?

I know it seems that the answer is obvious. But I'm interested in knowing how others in the industry have handled this.

Thank you!!

A client of ours, who is the owner of his small business, had 2003 earnings of $10,000 and put all of it into his SIMPLE IRA for 2003. Also during 2003, he and his wife acquired a manufacturing business from which they both took a salary, neither one made a contribution to the manufacturing company's 401(k) plan. The manufacturing business had a substantial loss for the year. He ended up with negative income as a result. My questions are:

Since these businesses would constitute a controlled group could he even have the SIMPLE IRA?

Even if he could have the SIMPLE, since he had negative income isn't the SIMPLE IRA contribution he made ineligible?

How do we get the contribution out of the SIMPLE and what penalties apply?

I have a financial advisor who is of the understanding that a client can have a Solo K plan as long as the rank and file EEs are not eligible to participate (don't work the required 1000 hours). I told him that if he has EEs that are paid on a W-2 then they must be considered and therefore a solo plan can not be used.

Bottom line... if a Solo K can file an EZ then it can be a Solo K... Agree? if not, then it is a traditional 401K plan subject to ADP/ACP testing.

If someone can spell it out better I would appreciate it.. I think that simply someone confirming my statement will be enough. Thanks!

I was terminated from my position as "no fault". At the time I was terminated I had spent more than I had contributed to my cafeteria plan for reimbursement of medical expenses. When I was terminated the office administrator misinformed me that I had insurance benefits until the the end of the month (I was terminated on the 15th.). I went to two doctors appointments and then was informed that I did not have insurance after all in a letter from my former employer. I asked my former employer to reimburse me for the doctor bills. I would not have gone to either appointment if I knew I had no medical insurance. They only reimbursed me for a small amount claiming that the amount I overwithdrew from my cafeteria plan compensated for the balance. Can they do this? I thought the "use it or lose it" went both ways. I know if my usage had been under the amount I had contributed into the cafeteria plan I would not have received a "refund". Thanks for any help.

I got the dreaded call from a physician client who wants to purchase a 5% interest in a LLC out of his 401(k) plan account balance.

Now that you are done laughing (and yes I tried to talk him out of it), does anyone see a PT problem with this? I don't think there is a PT issue here. The LLC is a separate business which is going to publish a monthly newsletter for professionals. His ownership is limited to the 5% purchase and he derives no other benefit or involvement in the LLC.

The 401(k) plan is set up for wide open self directed accounts so no problem there.

I do realize that there are possible valuation and UBTI issues.

Any comments would be appreciated. Tx.

Mark.

Can anyone give me their opinions as to the people who should serve on the 401(k) Committee? We are a 2000 employee company with $45 million in our plan. We also hold employer stock as an investment option.

Currently, our CFO, General Counsel and HR Director serve as the Committee members. Our General Counsel has been advised that he should not continue as a Committee member due to possible conflict of interests with our employer stock.

Would like any advice or suggestions as to the preferred composition of this Committee or whether one should be maintained at all.

Thanks

Do the contributions to each of these plans aggregate toward the 2004 IRS deferred compensation limit of $13,000?

Is there a standard way to estimate what portion of a participant's distributable balance in a defined contribution plan can be treated as the spouse's portion if that balance was used to purchase a 50% Joint & Survivor annuity payable at Normal Retirement Date?

Playing around with numbers, I come up with about 12-13% of the current balance.

Now that both the DOL and the IRS have sanctioned allocating certain plan administration expenses (such as QDRO preparation) to individual participant accounts, I would like to update some 403(b) plan documents accordingly.

From a practical perspective, however, how would this work if the plan assets are held in multiple individual TDAs, rather than in a group annuity environment? What if some TDAs permit allocation of expenses, but others don't? I am presuming the new plan language would defer to conflicting language in individual TDAs, but am open to all comments and suggestions.

Is it a prohibited transaction if an owner makes a contribution to his individual account under a profit sharing plan during the plan year, but does not make any contribution to his employees' accounts?

Am I correct in the following two situations?

1) In a 2003 "wait-and-see" plan year, Employer forgot to give "wait-and-see" notice by Dec 1, 2002. Plan can be ADP tested.

2) In a 2003 "wait-and-see" plan year, Employer gave out "wait-and-see" notice by Dec 1, 2002 but forgot to give out the supplemental notice by Dec 1, 2003. Plan can be ADP tested.

Can anyone provide some info on how to convert a stock bonus plan to an employee stock ownership plan?