Just starting to get in data for 1/1/2004 valuations and wanted to make sure that I am up on the changes effective for 2004 in the current liability calculations (absent any corrective legislation).

To confirm:

EGTRRA repealed the "OBRA" Current Liability Full Funding Limitation effective for plan years beginning in 2004, right or wrong (so I assume that I still need to calculate RPA '94 Current Liability for the 90% threshold).

The RPA '94 CL range goes back to 90%-105% as the 120% change was only in place for 2002-2003 years, barring any future legislation.

PBGC variable rate premium goes back to 85%, rather than 100% of prior year's 30 year treasury rate.

I figure that some valuations may need to be redone (at lease as far as CL goes) if future legislation provides relief, but I would like to make sure that I'm not missing anything on the CL calc side.

Customer establishes brand new SIMPLE IRA w/an effective date of 12/31/03 and mails check w/a check date of 12/31 but instructs us that the contribution is for 1st payroll in 2004.

When are SIMPLE IRA contributions "deemed" to have been made? The date the check was cut or the date in which the financial institution received the funds?

Highly comp employee over age of 50, makes $270,000. Employee defers $12,000 + $2,000 catch-up contribution. Employer's match is dollar-for-dollar up to 6% of wages. My feeling is the employer match is limited to 6% of $200,000, which is $12,000. There should not be a match of the $2,000 catch-up contribution.

Is that correct? Thanks.

Does an employee participating in a 401(k) Plan who is still working, but not an owner, have to take the 70 1/2 Required Minimum Distribution? Thanks!

Does anyone use this part of the Relius Administration System? If so, to what extent to you use it?

I know this has probably been asked, but I was wondering can an employee be reimbursed for over the counter medications prior to the ruling made? I have a claim that I got for a date of service for 4/26/03 and was wondering if it was eligible for reimbursement since it was prior to the IRS ruling of over the counter medications.

Does anyone know what penalty can be imposed for late distribution of an SAR?

Thanks!

Ok, I have a cross-tested profit sharing plan. Group 1 is shareholders and their spouses. Group 2 are HCE's not in Group 1, and Group 3 are all other participants. In Group 1, the goal is to maximize the 2 employees at $40,000. However employee #1 has $200,000 in comp. and employee #2 has $160,000 in comp. Don't they both have to receive the same percentage of allocation, even though that does not get employee #2 to maximize at $40,000???? I cannot have them both receive $40,000 right?

Employee #1 = $200,000 x 20% = 40,000

Employee #1 = $160,000 x 20% = 32,000

Isn't that what they should receive? I can't give employee #2 $40,000 b/c it would violate the same percentage allocation right?

Thanks.

Can someone tell me exactly how accrued interest is calculated for purposes of reporting a defaulted loan on the 1099-R.

A plan sponsor timely adopted for GUST but failed to adopt the RMD final reg amendment by 12/31/03. Where are we now? Non-amender? Help!!

We have a 5,000 annual health FSA limit. Employee's spouse also has an health FSA with 5K limit. It is my understanding that unlike the depednent care fSA which limits to 5K between both of them , that the healthcare FSA is a plan limit adn employee can do 5K in our plan and his posue can do 5K in her employer's plan, correct?

At this point, my wife and I are under the "salary cap" for contributing to a Roth IRA, and we both are actively contributing to our accounts. What must we do with our existing accounts if our incomes exceed this value in the future, and we are no longer eligible to contribute? Do we need to somehow convert these accounts, or are we allowed to have them, just not to make any further contributions?

Thanks!

We have a client, here in California, who is interested in adding automatic enrollments to his Plan. I remember reading that there is an issue in California regarding the legality of automatic enrollments and whether the state law is preempted by ERISA.

Has there been any further guidance in this area?

Is there any one here in California with automatic enrollments in their plans?

As always, thanks for any suggestions.

I have a 401(k) Plan that is a 4/30 year-end and each year has laid-off several employees. They have required an audit (over 120 Parts) every year since 1980. During this plan year (03/04) the number of actual participants (including terms w/balances) has now dropped below 80. Will this plan still require an independant audit? Thanks for the help.

I am reviewing 6 years of past filings for a company's medical welfare plan. I would like to know if a SAR is required to be prepared and distributed to each participant for each filing. Any opinions/guidance/reference would be appreciated.

Thanks.

We have a situation in which a participant who was eligible in the prior plan year was granted an unpaid leave in the prior plan year. This person was not "officially" terminated until after the start of the new plan year. The census received from the client indicates the EE's term date with $0 comp earned for the plan year.

Without modification of some type Relius will include this person in the testing. Reading up a bit on a participant with $0 comp it appears the most conservative approach is to not include this person in testing, especially if they are an HCE.

Has anyone run across a similar situation, and what is the best method in Relius for removing this person from testing.

Thanks for your help.

Hi,

I have had to research church plans for the first time and I have read through every thread since 1999. I was hoping to get clarification on these items.

1. Do the nondiscrimination rules apply to church 401(k) plans? I see a thread that says, yes, now these rules do apply (maybe after SBJPA??).

2. It looks like there is no submission required to be a nonelecting church plan. So, if you're relatively confident you're a church (i.e. a jewish temple) then you don't need to file for church status.

3. Non-electing church plans have no Form 5500 requirements.

4. Can a non-electing church plan use a prototype document that has ERISA language and still not be considered an ERISA plan. I think this is yes, but want to confirm.

Any help is greatly appreciated!!

I was wondering if there are any regulations on the timing of switching 401(k) testing methods? Is it possible to amend the tetsing option after the plan year is over? I have a new plan - effective 01-01-03, which which stated they wanted prior year testing when being set up - they fail 401(k) testing using prior -3%- but would pass using current. Can I change to current after 12-31-2003 (the plan anniversary)?

I have a plan asking that the invoice for their 2004 Defined Benefit Pension Answer Book be paid from the trust.

Would this be considered a legitimate administrative expense? The EBSA site addresses a lot of expenses, but I could not find this one.

Does anyone know of any alternatives for a more than 2% Sub-S owner to pay unreimbursed medical expenses pre-tax other than under a Sec 125 plan?