For those of you that have never watched our "great deliberative body" in action (actually, they have been on this bill since last Thursday but have only discussed it for about 15 minutes in between babbling about other things not relevant to the bill), the Senate vote is on CSpan:

http://www.c-span.org/watch/cspan2_rm.asp?Cat=TV&Code=CS2

Currently they are in a quorum call (a delay tactic) for Arlen Spector to have time to argue with Finance Committee leadership to allow his amendment to reinstate the US Airway pilot's plan with a 30-year amortization of their DRC, instead of continuing its turnover to the PBGC. Yesterday, the amendment was blocked as not germane.

(The above link tries to use RealPlayer. There is also a link on the right of the screen to use Windows MediaPlayer. This is all on CSpan2 in case you have cable access.)

Business owners son died 2 years ago leaving father as beneficiary. Father has not withdrawn the account--doesnot plan to until close to the 5 year deadline.

Father is now turning 701/2. Does the son's account need to be considered for minimum distributions?

Thanks for your help

ED

I am not a DB number cruncher.... but I want to understand how it all works... the math. Can anyone reccomend a publication.... provide an Excel SS... anything that will help me calculate and understand a retirment benefit for a participant in a DB plan?

I ask because I have been asked questions and I want to be able to answer.

Thanks!

Hello,

Hoping someone might be able to provide me with some insight.

Company has a discretionary match which it has never funded to date. They use Prior Year Method. For 2003 they intend to fund the match. The problem is that with the Prior Year Method, the ACP for NHCEs is 0% for 2002 since they never funded a match. Therefore, it appears that the Match for 2003 will fail ACP and all HCEs will be required to receive a refund of the entire 2003 match.

Since 2003 has closed, it appears that they cannot change methods for 2003 and this causes a problem.

Has anyone run into this? And is anyone aware of a possible solution for this dilemma?

Thanks in advance for your feedback.

Sincerely.

Andmik

What are the requirements for giving participants notice of special enrollment rights under HIPAA? Is the SPD posted on an employer website sufficient or is some other form of notice necessary? Also, what are the timing requirements for the notice? And, finally, is there a cite I can review?

Once a year we pay for our employees' annual physical. If an employee terminates, do we have to offer him COBRA for this? If so, can we charge as the premium 102% of the full cost of the physical or do we have to figure out how much it would cost in premiums to buy insurance for the physical and charge 102% of that amount? I posted this previously but there was no response and I wanted to try again.

"Q. A plan has two normal retirement benefit formulas. One is 40% of AAC for any employee with at least 25 years of service at normal retirement and the other is $30 per month per year of service. At normal retirement, the employee gets the benefit produced by the greater of the two formulas. Prior to normal retirement, the accrued benefit is the greater of 1) the 40% of AAC flat benefit projected to normal retirement age and then prorated by service, and 2) $30 per month per year of service to date. Can this plan meet a safe habor?

A. No. The accrued benefit is not calculated in accordance with the fractional rule safe harbor method, nor is it eligible for the unit credit safe harbor."

I've been puzzled since I read this several years ago and I've got at least a couple of these that I'm trying to determine whether or not they need to be general tested. I cannot quite understand this answer. Can anyone explain it?

From RIA "Understanding Defined Benefit Safe Harbors" article by Peter Christensen, F.S.A. Reprinted in ASPA's "Current Topics for the Retirement Plan Consultant (C4 Exam required reading)

Can an owner who is over the age of 50 make the catch-up contribution if he is not going to make the minimum Top Heavy contribution for the year?

Employer X with rank & file employees had a DB plan. Employer sold the business to Y on November 7, 2003, say, and also terminated the DB plan effective Nov 7, 03. Plan assets will be distributed to the participants asap.

The rank and file employees have continued working with Y. Y now wants to adopt a DB plan.

Is the new DB plan required to recognize service for vesting/eligibility etc prior to the business purchase date?

If you have a small plan (fewer than 10 lives), not covered by PBGC, can the owner waive benefits in order to terminate? I seem to remember that the IRS only allowed this when there was coverage under PBGC. Is the answer any different if the employer is in bankruptcy proceedings?

Participant went out on disability 2 years ago. ER has been withholding loan payments but never sent them to the recordkeeper. Just discovered this. Would you deem the loan and have the ER return the loan payments to the participant? Would you apply the loan payments and then deem the loan?

I know the regs are very clear on the fact that a loan needs to be deemed or offset after the cure period has expired. How are you handling administrative errors such as this?

Is there any reason why a participant should not be able to get a hardship distribution during a pending termination. essentially a 5310 has been filed with the IRS and the plan is being reviewed. I dont see any reason why not but i was curious if you all shared my view.

I have a plan that is top heavy for the 2003 plan year. The plan eliminates commission as a form of compensation for the plan year. The participant in question is a HCE.

He earns 13,000 in salary and 90,000 in commission. Deferrals and the safe harbor non elective are based on the 13,000.00. I have been told that the top-heavy contribution is based on total compensation(salary & commission). Can anyone give me their opinion on this.

A health plan previously offered both individual and dependent coverage. As of 1/1/04, dependents are no longer covered.

1. If there are qualified beneficiaries who were already receiving COBRA and are dependents, are they still entitled to coverage?

2. Am I correct in my understanding that dependents who are not yet receiving COBRA are not eligible for COBRA because dependents of active employees are not eligible and the COBRA coverage mirrors that of active employee coverage or am I mistaken?

Please advise.

For purposes of the ACP test, is a non employee owner, who participates in the active day to day mangement, considered an HCE?

What if they are NOT actively participating in the day to day management of the company?

What if they are married to a paid HCE employee?

What if they are married to a non paid HCE actively participating in the day to day management of the company?

Thanks.

Has anyone seen any guidance on reimbursing dualla expenses through a medical reimbursement account?

From my understanding on the claim - their insurance is not covering it, and they are not medically required to have a dualla present. She's there to help through the labor.

Sorry for any misuse of the dualla terms. This ones new to me.

Thanks for the help.

Is there a standard federal withholding amount that should be applied towards distributions from NQ deferred compensation plans?

We have an employee who was covered under her husband's military health care plan. He has been discharged AND the couple has decided to divorce. The question is, does anyone know what type of continuation of coverage is available through the government in a situation like this? Our employee is having difficulty getting answers from the husabnd and the military.

Thank you.

Using Relius 8.3.7. Trying to allocate a QMAC. Relius allocates QMAC pro-rata to compensation. Is there anyway to allocate pro-rata to deferral? Relius support says no, but I'm hoping I got a new or less than stellar analyst.

Does anyone know how to handle the 1099R's for those benefits sent to the PBGC on behalf of lost-unlocatable participants?