My question is this: What is the extent of an employer's obligation to furnish information about a participant's account balance to a participant or an alternate payee who is preparing a QDRO? Specifically, is it sufficient to merely give the participant or alternate payee the current account balance (vested and non-vested amounts, as well as loan information), or does the employer have to go back and attempt to determine the participant's account balance as of a particular point in time in the past (e.g., December 31, 1992?)

The DoL QDRO Publication only mentions that an administrator must furnish a statement of the participant's benefit entitlements, or indivdual benefit and account statements.

The only record retention requirement that I could think of is ERISA Sec. 209. What records must an employer retain under this requirement--the participant's accrued benefit, or the contribution history?

Any thoughts would be appreciated--thank you in advance.

Does anyone have a reliable link for finding lost participants?

We have a (non-ERISA) 403(b) plan with employee contributions going into custodial accounts. I have been told that as a church plan we can also make employer contributions without being subject to any of the discrimination rules, but that we must have a plan document. Can anyone tell me what must go in that plan document. Since it's not subject to ERISA as a church plan, I wasn't sure if we just had to have in writing what we intend to do or if there are requirements other than ERISA that need to be included in the document.

Does anyone know of any model church plan documents? or anyone who drafts them at a reasonable price?

LJC

Safe harbor 401(k) to be added to current PSP. Effective date of 401(k) portion/deferrals is to be 2/1/04. Would it be allowable to draft document such that all e/ee's employed on Jan. 1, 2004 are eligible for and enter the 401(k) portion of the plan as of Jan. 1, 2004 even though the effective date is 2/1/04? Doesn't make much sense, but thought I'd ask..... Will probably have to draft document such that e/ee's employed as of 2/1/04 are eligible and add special language regarding 2/1/04 being an entry date for 2004 plan year only.....? Any suggestions?.... Thanks.

We are wrestling with the Annual Addition applicable to plan years ending January 31, 2004. EGTRRA amended Code Section 415(d)(1) to provide that the Secretary shall adjust annually "© the $40,000 amount in subsection ©(1)(A), for increases in the cost-of-living in accordance with regulations prescribed by the Secretary." This amendment was effective for plan years beginning after December 31, 2001. Regulation Section 1.415-6(a)(2) provides that adjustments to the dollar limitation "is effective as of January 1 of each calendar year and aplpies to limitation years that end during the calendar year." Do we use $40,000 as the Code seems to specify or $41,000 as the regulations specify? Any help will be appreciated.

We are in the process of writing specs for charging a redemption fee (all redemptions within 90 days at 2%) to participants. One of the questions involves the minimum distribution requirement as it relates to the redemption fee.

The fund company has told us that for their own recordkeeping business they have assumed that the redemption fee amount (even though the participant does not receive this amount) is a taxable distribution. Does anyone know for sure whether this is true? This is how they process a minimum required distribution of $1,500 with a $100 redemption fee and $300 in federal and state withholding.

Distribution $1,500

Fee $ 100

Withholding $ 300

Taxable Amount $1,500

Check Amount $1,100

With this logic if a participant requests a $1,000 loan that has a $100 redemption fee the principal amount of the loan would still be $1,000 even though they only received $900.

Any thoughts anyone has on this topic would be greatly appreciated. This fund company always reduces the requested amount, never grossing up to cover the fee.

How are other folks handling redemption fees? If anyone has any cites backing this or any other position, please pass along. Thanks.

Since a church plan is not subject to 411(d)(6) can it decrease or freeze its COLA? Does anyone know of any pre-ERISA or state law reasons why the plan can't do this? If uncertain, do you have any suggestions where I should look for the answer? Thanks.

I haven't thought about Cafeteria Plans in years (I deal with Pensions), so forgive my ignorance with this question.

A relative of mine (single, no dependants) started a new job last July and while she was filling out all of the various paperwork, for some reason completed a Cafeteria Plan enrollment form authorzing the company to deduct monies for health insurance. This was even though they were deducting money for health coverage already. I guess she didn't know what the Cafeteria Plan form meant. Anyway, she doesn't renew the Cafeteria election as of January 1st, realizes that her paycheck is significan't higher now, and finally realizes what happened, that more money was being deducted for health insurance than she wanted or needed.

I'm pretty sure I know the answer to this since it really was her fault, but does she have any options in getting the money back that was deducted "by mistake?" Thanks for any input.

BTH

E/er currently maintains no qualified plan but wants to put a 401(k) with safe harbor provisions in place. The approach would be to have the PSP portion effective 1/1/04 and the deferrals effective 2/1/04. The safe harbor notice specifying the 3% non-elective contribution will be distributed prior to 2/1/04. My understanding is that even though the deferrals would not start until 2/1/04 the 3% NEC can still be based on comp.from 1/1/04 to 12/31/04. Can anybody confirm? Thanks.

A hospital recently changed from a 403(b) to a 401(k). The employee (who is still employed by the hospital) would like to change investment providers. Since the 403(b) is not the current plan, Can he rollover the account to an IRA? I believe the answer is yes, however, the rollover form does not allow for a rollover to an IRA. Only a 90-24 transfer to another 403(b). Please Advise.

I should know this, but....

Safe Harbor 401(k) plan with cross-testing provision . Over 50 participant earns $18,000, defers $16,000, shnec is $540. Assuming gateway is met & nondiscrim. testing passes can participant get a profit sharing allocation of $4,460, bringing total allocations to $21,000? I don't see why not but it seems to good to be true.

thanks

I've been asked to review a "separation incentive plan" for a gov't client. It's a money purchase pension plan set up to benefit employees who agree to retire early. It appears to provide for a one-time contribution for each eligible employee who agrees to retire.

I believe the plan is intended to continue indefinitely, although it seems that each participant would receive only one contribution. Employees could direct the investment of their contributions. I've not been told the contribution formula, but I believe it will be integrated with Social Security.

Has anyone seen/worked with one of these animals?

Our financial advisor wants us to terminate our profit sharing plan (it's two years old) and put a simple plan in place. I thought there were some issues centering on "permanency" when you terminate a plan (e.g., you are supposed to establish a plan for it to continue and if you terminate a plan and then establish another plan without some time in-between, the second plan is deemed to be a continuation of the first plan, etc.). Does this apply in a situation where you are going from a profit sharing plan to a simple plan? Is there a specific way you are supposed to handle this? I found guidance on going from a money purchase plan to a profit sharing plan - but nothing involving simple plans.

Has anyone experienced any large mutual fund houses (one of the leading ones) imposing a fee on funds held in 401(k) plans - exactly like they would for the retail customers?

Just wanted to see if I'm off base here. It appears that since the new IRC 7528 was added and EGTRRA Section 620 was repealed, the waiver of user fees for determination letters (including plan termination) in certain circumstances for small employers is now gone, and that any such determination letters will be subject to the user fee schedule in 2004-8. (Effective 1-20-04) Agree/disagree? Comments? Thanks.

Ok - just looked at the actual code section, and not just the Revenue Procedure 2004-8. Even though EGTRRA 620 was repealed, the new IRC 7528 does retain the waiver of user fees...

There is an employee who has been out on a leave of absence for almost 2 years due to a worker's comp. related injury. The employee has not ben oficially terminated by the Employer because of fear of a lawsuit. The question is, is this employee considered a participant that needs to be included in the ADP test for 2003? My sense is that they would not have to be included, but I would like some feedback from others who might be more sure of what to do in a case like this.

Facts:

DB Plan offers option of single-life or J&S benefit

Participant retires, then participant and spouse elect out of J&S

At some point in future, Participant dies in pay status

At time of participant's death, Plan owes participant retro check for accrued but unpaid benefits

Plan does not have beneficiary (designated or otherwise) rules (i.e., there is no express provision indicating what to do in the event of an unpaid accrued benefit)

As matter of course, Plan typically pays retro check to surviving spouse.

Question: Does payment to surv. sp. violate anti-assignment and alienation rule of IRC 401(a)(13)? This would seem to be the case based on fact that only participant (really, his estate) has a right to this payment since spouse opted out. If it is a violation, could plan get around it by adopting a rule or policy to allow such payments (assuming the Plan so allows)?

Thanks in advance...

If a participant retires and leaves his account balance in the plan and also has a whole life insurance policy. Is it okay to leave the policy in the plan as well and deduct premiums from his account balance? Or should the policy be turned over to him in which case he would be subject to the taxes. Also, would he have to be given a 1099 for the PS 58 costs each year?

Standard 401(k) plan.

Eligible HCE elected to defer in 2002, but the Sponsor's payroll department never set up his payroll deductions. This is discovered by RK in early 2003. Together, the RK and Sponsor come up with the following correction method:

1. HCE funds the 2002 deferrals to the plan via personal check; the Sponsor then revises his 2002 W2.

2. Sponsor makes up the match and earnings on the two sources.

The correspondence I have includes references such as "...in accordance with Revenue Ruling 2002-47". Although I think they mean "Revenue Procedure...".

I've researched the Rev Proc but can't find anything that allows this type of correction (ie., making up a deferral with ATAX contribution, then recharacterizing).

Would really like some comments. Thx.