We are currently looking at the option of requiring employees to be automatically enrolled in our 401(k) and needing to make an election not to participate. However, we are concerned about the various state regulations requiring authorization of the deduction. I am looking for state by state information explaining if automatic enrollment into a 401(k) plan is allowed under their regulations. Any information you could provide on this subject or resources you are aware of would be greatly appreciated.

Where could I find information on average mutual fund expense ratios by asset class, for example, large cap growth average expense ratio, small cap value average expense ratio, etc.

I want to compare our 401(k) funds' expense ratios to an average by class.

My client is a sole proprietor, age 40, whose salary is $30,000. He could easily make his salary $200,000, but for income tax purposes he chose frugally.

Can he implement a DB plan where the benefit is the 415 maximum of $160,000?

The benefit formula is based on the fractional rule. NRA =65

NRB = 530% x $30,000 x 25/25 (the accrued benefit formula assumes that 1/25th of the NRB is earned each year).

The NRB = $159,000 . . . close to 415

Is there any prohibition to this sort of benefit formula?

I am reviewing a plan document for a client that is a controlled group. Each of the adopting employers has executed a signature page adopting the plan. The EGTRRA amendment, however, was executed by only the plan sponsor. Should all of the adopting employers also "sign off" on plan amendments? Any citations to support your answer would be greatly appreciated since we have a difference of opinions in our office.

Okay, we have a little discussion going on in the office. Can anyone help us resolve it?

The document says:

On behalf of each Participant who is eligible to share in matching contributions for the plan year, a discretionary matching contribution equal to a uniform percentage of each such Participant's deferred compensation, the exact percentage, if any, to be determined each year by the employer, which amount, if any, shall be deemed en employer non-elective contribution.

This is how we are supposed to allocate it:

Participants with less than five years of service will get 100% of the first $300.00 of deferral, while participants with five years or more of service will get 100% of first $500.00 of deferral.

I can't see how this allocation method complies with the doc.. It doesn't seem to me that it is "equal to a uniform percentage of each such participan'ts deferred compensation".

Am I missing something here? Can anyone out there help me understand this?

Thanks!

I'm interested in opening roth iras for each of seven grandchildren with approx. $100 deposits for special occasions and/or achievements. I need low or no annual fee accounts with low or no minimum contributions.

Can SARSEP contributions made in the same year as 401(k) and profit sharing contributions be aggregated for 401(a)(4) testing purposes? Since I have read two different conflicting answers in reference books, please cite authority for your response. Thank you

Note: I also posted this question in the Cross-Tested Retirement Plans forum

Can SARSEP contributions made in the same year as 401(k) and profit sharing contributions be aggregated for 401(a)(4) testing purposes? Since I have read two different conflicting answers in reference books, please cite authority for your response. Thank you.

Company X maintains a 401(k) Plan. Subsidiary Y Also maintains a 401(k) plan. For valid business reasons, Company X shuts down Subsidiary Y and terminates all of its employees. The Subsidiary Y 401(k) Plan will also be terminated. A few of the subsidiary Y employees are becoming Company X employees. However, because this is not a severance from employment, these employees can neither receive distributions from the Subsidiary Y 401(k) Plan nor effect a rollover to the Company X 401(k) Plan. Instead, Company X decides that it will do a plan-to-plan transfer of the affected employees' Subsidiary Y 401(k) Plan accounts into the Company X 401(k) Plan. Company X files a Form 5310-A to notify the IRS of the spinoff. After filing the Form 5310-A, Company X is concerned that there could be compliance issues with the Subsidiary Y 401(k) Plan and decides not to allow plan-t0-plan transfers from it to the Company X 401(k) Plan. Instead, Company X decides to buy an annuity contract to guarantee the accounts of (1) those Subsidiary Y employees who become Company X employees, (2) those Subsidary Y employees whose account balances under the 401(k) Plan exceed $5,000, but who did not elect to take distributions and (3) any misising participants.

What should be done about the fact that the Form 5310-A was filed notifying the IRS of the spinoff? Should Company X a) file a corrected Form 5310-A saying that the spinoff is off, or b) do nothing?:

Client files form 5500-EZ that is due on 11/30/2003, I was out of town and my secretary called in sick so the extension did not get mailed on the due date of 12/1/2003, rather it got mailed on 12/2/2003. What should I do? DFVC for one due even though this is an extension?

Thanks,

Ronnie

Assume

1) a DB plan has an accumulated funding decifiency (AFD) for 2002

2) form 5330 properly filed and tax paid

3) the AFD for 2002 has not yet been corrected

For 2003, the plan now has a full funding limit of zero. Thus the AFD for 2003 is zero. Does the full funding credit produced for 2003 "pay for" the prior AFD for 2002? Or, does the 10% excise tax on the 2002 AFD continue to apply (until remedied)?

Thanks

Has anyone seen a plan design where a individual is rehired, within a certain period of times after separation from service, and is able to "buy back" the missed service from the time the participant terminated until the date of rehire?

The plan provides that if a participant is a vested term or began payments and repaid the plan the amount s/he received, within a certain period of time, the rehired employee can purchase "service credits" of the time s/he was out of work.

Example: Participant terminated 12/31/00 with 10 years of service. The participant was rehired 1/2/03. The participant may purchase the missed service between 12/31/00 through 1/2/03.

I know that under EGTRRA, state and local governmental plans (403 and 457) can allow participants to purchase service credits, but I think this is done while the individual is employed.

If this is a valid design, could you please provide me a Code cite. Thanks!

Client desires to retroactively amend plan to lower the service requirement for plan entry. That is, bring in some new employees for the prior plan year who were not eligible under the current plan.

Plan year ended 7/31/2003.

All I can find is the 2 1/2 month rule, and that has passed. I've heard that you can amend to increase benefits (include additional Participants) at any time, but I can't find any rules on it.

Yes - we're dealing with Doctors again. Their CPA is real conservative, and I am sure he'll want some sort of definite code guidance before he changes the Deduction on the 1120.

I'm in Washington State.

Eligibility Requirements:

Our company policy states in order to be eligible for healthcare coverage, the employee must be compensated for 100 hours in the previous month's pay periods to be eligible for coverage in the following month. In other words, to be covered in December, the employee must have been compensated for 100 hours during the pay periods in November (time worked but paid in the following month do not count toward eligibility for the month).

Situation:

An employee goes out on FMLA and is covered under our health insurance. Regulations state that the employer must retain health insurance coverage on the "same terms" as if they were working.

Question:

Given the eligibility requirements above, it is possible that an employee on FMLA can lose its eligibility status for health insurance coverage. Since we are to administer FMLA health coverage under the "same terms" as active employees, does that mean we can end an employee's coverage who is on FMLA if they do not meet the eligibility requirements?

This is very confusing.

Thank you.

How do we roll over previous 401(k) plans for new employees? I assume it isn't too difficult, but I don't want to underestimate it.

A potential client currently has a grandfathered SAR-SEP using the IRS model doc. They have already made some contributions for 2003 but now are realizing a cross-tested plan gives them far more leverage for their key group of employees.

I'm trying to see there is anything that can be done for 2003. I don't believe they can have another qualified plan if they are on the Model SAR-SEP document. If true, would restating the SAR-SEP onto a customized doc in 2003 get around this problem ? They haven't made large contributions so there is sufficient deduction room for another plan. Does re-writing the SAR-SEP into a customized doc impact their grandfathered status on the SAR-SEP ?

Thanks in advance for any thoughts or opinions.

I have a client that has not funded its DB plan for several years. How do I correct this? I have the actuary running the numbers to determine what has to be contributed. However, I am not sure how to pay the excise tax. I assumed it was a voluntary compliance issue, but now I am not sure. Do I file a VCP or do I just file the 5330s?

Could somebody please send me a sample job description for an actuary (preferably Fellow, but could be Associate) that would approximately match the needs of a large (i.e. 25,000+ covered employees) MEWA. Please do not send resumes at this time as we need to finalize the job description before posting the position.

Thanks,

Guy Patterson

Acting Chief Operating Officer

Builder Services, Inc.

Can someone provide a clear example how to use the forward and backward feature to calculate FMLA usage? The description I have is as follows:

Counting Forward: The 12-month period measured forward from the date an employee first takes FMLA leave

Counting Backwards: A rolling 12-month period measured backward from the date an employee uses any FMLA leave.

Help!!!!!

Thank you.

Until the final regs on the retro ASD came out, I never gave much thought to how we processed benefits--other to ascertain the participant terminated before the requested ASD, notices were provided before the ASD, and that the first check could not be cut until the 30 day wait period lapsed.

I was under the impression that if a person terminated on 12/3/03 and requested his retirement benefit as of 1/1/04, that would be okay as long as the QJSA notice was provided before 1/1/04. In other words, as long as the paperwork was provided before the requested ASD, then the benefit start date would be 1/1/04 [in this case]. If the plan required a 30 day wait from the date the notice is provided, then assuming the paperwork went out on 12/26/03, the participant could not get his 1/1/04 check until 1/26/04. This would not be considered a retro ASD because the paperwork was provided before 1/1/04. Is my analysis correct? Some people believe that the QJSA notice would have to have been provided no later than 12/1/03 in order to have a 1/1/04 annuity start date -again assuming that the plan does not allow retro ASDs. Thanks.