I have a client who has said that they have an ERISA bond, not a fidelity bond. My questions are:

1) Are they the same thing? (The client does not think so.)

2) If not, what is the difference?

3) The client also states that the fidelity bond is not required. I believe it is. Please confirm that the fidelity bond is required.

Any help would be greatly appreciated.

Help! The IRS has revised its website and removed one of my favorite links. I'm looking for electronic versions of the proposed cafeteria plan regulations (1.125-1 and 1.125-2), and the final regulations (1.125-3 and 1.125-4). Does anyone know where I can find these now?

Would a fertility monitor be considered a reimbursable expense under a cafeteria plan.

Is there such a thing as . . . a 401(k) plan adopted pursuant to a standardized prototype that is not required to cover all entities in the controlled group? I have an attorney telling me that this is possible (to have a standardized prototype that only covers some entities in a controlled group), and it goes against everything I have read. Please help!

Grrr! I'm glad I don't work with these darn things (401(k) plans) much! This will undoubtedly seem like a foolish question to those of you who do, but here goes...

Had a couple of questions come up which are fortunately hypothetical. Of course, I find that most of the hypothetical questions subsequently turn out to be real.

1. Suppose you have an employer who incorrectly calculates a QNEC or a match, and contributes too much. This could be forfeited and used to reduce future cost, I believe. But suppose they don't want to do this? Can this be refunded to the employer under the "mistake of fact?" PLR 9144041 does list a mathematical error as one of the items that could be construed as a mistake of fact. I'm always squeamish about refunding money to the employer if it can be avoided, but it seems as though probably ok in this situation. Opinions?

2. Ineligible participant is allowed to defer. Employer does NOT want to use the Rev. Proc. 2003-44 Appendix (B) method of retroactively amending plan to include the employee. So attempting to find a "reasonable" method of correction, it would seem that you could forfeit the deferrals and have payroll adjust the next check to the employee. Or, the plan could probably distribute directly to employee. Question is, what to do with any match and earnings on the improper deferral, especially if this isn't discovered for a while? Does the normal prohibition against keeping in an unallocated suspense account (1.401(m)-1(e)(1)(iii) as an advance apply to this situation?

A City is starting a new Defined Benefit Plan and giving all members their past service in exchange for their 401(a) DC balances being transferred into the new DB Plan. 415 DB limits will be relevant for the first few years. The DC transfer balances are made up of employer contributions, pre-tax and post-tax employee contributions, and gains. In calculating how much of a benefit is purchased with the transferred balance for the 415 calculation, which part of the transfered balance is used in the calculation.

I have a COBRA service provider that denies it is a "business associate" as defined in HIPAA. I think I disagree. Does anyone have any thoughts?

Thanks in advance for any help!

I realize that the hardship rules for 403b's follow those in place for 401k's. If someone wishes to claim hardship for unreimbursed medical expenses does it matter what type of medical care they receive? The definition in Code Section 213(d) does not really specify. Someone has questioned whether the hardship would be allowed for "alternative" care or therapy, which may or may not be covered by medical insurance.

Does a DB plan funded with group annuity contracts need to be bonded?

Using Relius software...cross-tested 401(k) plan with approximately 17 Doctors who are a mix of key/HCE. Some of the Doctors who are key & HCE take compensation but per the Plan Document waive ANY allocation and they do not defer. Can't I include them in my non-discrimination tests with a "0' EBAR? The Relius software is not including them. Any input is appreciated.

Will I have to pay taxes on any profit from selling stocks within a Roth IRA if the profit stays within the Roth Account?

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.

If a client filed the F5500 a year late can we still submit to DFVC for waiver of IRS penalty? We haven't received any notice from DOL as of yet. The IRS has sent a request for payment of $8775 for the penalty.

Client didn't contact us before submitting the 5500 after he realized he hadn't filed it yet.

Just wondering if any TPAs that have Fidelity Funds in the plans they administer have received letters from Fidelity about tracking their short term redemption fees on a per participant basis? Basically they want us as TPA to calculate the short term redemption fee when applicable and forward to them via wire (I assume at our cost) on a weekly basis along with a file that details the fees.

Do you plan to accomodate Fidelity on this, seems like we have no choice?

Can you believe Fidelity will not refund the fee if it is processed in error?

Any thoughts on whether the other fund companies will follow suit on this?

I hope we see a max exodus of qualified retirement funds from Fidelity!

Can the plan sponsor amend the plan, retroactively, to provide for a retroactive cashout provision?

And by retroactive, I mean: an employee may have terminated 15 years ago, with a small balance in the plan. There was no cashout porvision in place then. Can the plan now impose the cashout limit, with the effect that the that long-ago terminateds will receive involuntary cashouts for amounts under 5,000? (The permissive automatic rollover under EGTRRA for amounts between 1,000 and 5,000 is not a feature of this plan).

I'm looking at Treas.s Reg. 1.411(d)-4, Q&A-2, subparagraph (b)(2)(iii)(D), Example 3(v). Seems on point (and seems to allow amendment), but doesn't address whether it can be retroactive.

Any thoughts/insights?

Thank you for any help!!

Once again I need the expertise of the Relius/Crystal users! I have a custom Employee Status Report that sorts by HCE code, by category and then by name. I want my names to run right after one another, even on a change of one of the sort items. (This report used to work before!) Now it is sorting the employees and participants in the correct order with the HCEs first, but after the HCEs, it is resetting to start the NHCEs on the next page leaving loads of blank space. I've tried everything I can think of from suppressing blank lines to starting over and I cannot get this to work. Any suggestions would be appreciated. Oh yes - I'm still on version 7.3. (Hoping to move to 8+ when it slows down).

What is the significance of a plan adotion agreement (prototype standardized) that was signed, but was not dated. Per the plan sponsor it was signed in 2001, but there is no date (another was adopted by 9.30.2003 - just in case) Do we have to submit to EPCRS for this and if so - what type of failure is it?

This is a multiemployer health plan that provides

health care benefits to active union members

and retirees who are not yet eligible for Medicare.

A situation has arisen where a man retired and began

paying for single retiree coverage. (The plan offers

retirees single; single plus one; or family coverage.)

His girlfriend is now pregnant and they are going to

be married. He has requested to add both as

dependents and begin paying the family rate.

ERISA 701(f) would seem to indicate that he has

the right to do so, but I would like to know the

opinion of those who deal with this type of mess

on a daily basis.

The plan is silent on the issue.

Thanks

Here's the situation- the plan allows for a maximum 50% contribution on a pre-tax and 50% contribution on an after-tax basis. The match formula is 200% upto 3% and 50% for the next 2%. So you put in 5% you get 7%. The match is made after the plan year end.

The question is this- we have a HCE how contributed the maximum $12,000 pre-tax and $28,000 after-tax. He has reached the annual additions limit in 2003 of $40,000. Basically, he just screwed him self out of $14,000 match. What happens if the plan fails ADP testing and he has to take a refund of $3,000. Are we able to then give him a $3,000 match? This would seem to cause a problem because then we would have to recalculate the ACP test.

I seem to think that annual additions is calculated once at year end and that's it. So, basically, he's screwed.

Another question: If the plan fails ACP testing, which comes out first? Match or After-tax? Does this have to be in the document?

Is anyone aware of specific IRS language covering this? My thinking is the distribution fee should come "off the top:"

For example:

Vested Benefit is $10,000 and participant elects to roll to an IRA, the IRA received $9,970 (the distribution fee is $30) and a distributable amount of $9,970 is reported on the 1099-R. If a cash distribution is taken, the gross amount would be $9,970, 20% would be withheld, and the balance paid to the participant.

Thoughts? What are YOU doing?