Need to clarify my understanding:

Under Section 4.02 of Rev Proc. 2002-40, the only approved change is the change to the Unit Credit method.

This means, under the Procedue, a change in assets valuation method and/or Val date to BOY cannot made for a frozen plan!?

Can an eligible 457 plan, i.e., governmental plan, choose which employees are eligible? For example, can the plan provide coverage for a select number/class of employees?

Is there a rule that says you cannot use a distribution form older than 60-90 days? I have to pay residual balances (year end Emoployer contributions) to participants who received a distribution of their then vested funds back in March.

If there is a rule, please let me know the code section and where to view this online.

Thanks!

I have a client that has a 401k and Profit Sharing Plan. We are amending the 401k to make it a safe harbor effective 1/1/04, using the safe harbor match. The intention is to not make any additional contributions to the profit sharing plan. The only contributions going into the plan will be employee deferrals and Safe Harbor match. Notices to participants will be provided before 12/1/03. My understanding is that as long as we have only deferrals and safe harbor match going into the plan, we'll pass ADP/ACP and top heavy. I have told the administrator that if additional discretionary contributions are made, we would have to test the plan.

In terms of general safe harbor rules, is there anything else that I'm missing or need to be aware of? Sorry, I haven't done many safe harbors and I want to make sure I'm covering everything.

Thanks for your help!

Any ideas on how to handle the following situation...

A final 5500 was filed for the 2002 plan year. All money had been distributed. We have now received some settlement income for a fund error. It is to go to everyone on record as of a certain date in September, 2002. Do we need to file a 5500 for 2003 to report the income and distributions?

Any guidance would be appreciated.

Thanks,

Laurie

We have an Ohio based JATC Fund that has been named

as an "employer" in an Illinois Workers Comp claim. This

Fund is somewhat unique in that Union members across

several states can attend a three week training course and

live on-site in Ohio.

Under Ohio law, it is clear that our JATC is not a statutory

"employer." Ohio gives the Fund the right (but does

not require) to become part of the Ohio WC program. The

Fund has always done so.

Several months ago, a union member from an Illinois came

to the training center. He didn't return from a weekend at home

and later claimed he had hurt his knee.

A few days ago, the Fund received word that a claim

was being pursued under the Ilinois comp system. My

questions to the attorney were as follows:

1. The trainee was not our "employee"...he was

a union member who chose to sign an indenture

agreement and receive training.

2. The Fund is not a statutory employer. While it

participates in the Ohio system, it does not meet the

definition of employer under Ohio law.

3. Jurisdiction. The indenture and injury occurred in

Ohio. How does Illinois have any jurisdiction in the

case.

Any thoughts, suggestions, arguments???

Q1) Are all Section 125 pre-tax benefits included for the 25% Concentration Test?

Q2) What is the maximum pre-tax benefit that an individual can have for 2004? An employer wants to set the Health FSA limit at $10,000.

Thanks, Joe

I just set up a SIMPLE IRA plan for a client effective 10/1/03.

The fiscal year of the corp ends 9/30/03.

Is there any matching contribution for compensation from 1/1/03 to 9/30/04?

If so is this deducted on their 9/30/04 corp tax return?

How should I work and deduct the the 10/1/03 to 9/30/04 plan company contributions ?

Any other thoughts on this confusing area would be appreciated ! The fund companys are useless here !!

What is the best way to correct an error with a document signature page. Specifically, the adoption agreement signature page (that was signed and dated) references the wrong protoype plan document?

It seems inevitable that a 4:00 PM hard close (i.e. only trades received by 4:00PM will get that days mutual fund price) will become the law of the land.

IMO, the SEC will not go so far as to require that the trades actually be at the transfer agent by 4:00 PM but will require some insurance that late trading is not taking place at an intermediaries operation. Requiring receipt of the trades by close would have serious effects on TPA's or for that matter on anyone with a multi-fund family product.

The form of that "insurance" could be onerous depending on how far the SEC is prepared to take the issue. While it may be premature, I'd like to generate some discussion on the possible effects of new regs related to a 4:00 PM hard close.

What steps are people taking to insure that trade sweeps take place promptly at 4:00 PM?

How prompt is prompt when it comes to the actual transmission of trades to the transfer agent?

I expect that the hard close will become an important SAS 70 audit and RFP question in the near future. Is everyone ready to objectively demonstrate that their operation has systems, policies, practices and procedures in place to insure a 4:00PM hard close?

Beside 1042 treatment, is there any other benefits using an ESOP to make the tender offer?

My main question is whether or not a S-Corp Shareholder" is eligible to participate in the Dep. Care Reimbursement portion of a section 125 plan? We have two different opinions on this from two TPAs. One says that a shareholder is allowed to participate in a dependent care reimbursement program with pre-tax dollars (definitely "no" on the medical reimbursement portion). The other TPA says they are excluded from all of section 125 plan benefits.

Anyone have wisdom to offer on this and sources?

Thanks

RDHFN

I have a copy of last year's data request letter for a Form 5500 for a welfare benefit plan. Our standard letter asks for the number of active plan participants as of the end of the plan year including those who have not elected coverage. I want to change this because even though the instructions are vague, I think only those who have elected coverage (even if they don't actually receive any coverage) should be reported as active participants.

Does anyone agree or disagree?

Thanks!

E/er contemplating adding loan provision to current PSP. Seems that plan amendment, written admin. procedure re loan program, summary of material modifications to SPD would be the only doc. issues to be addressed. Anything I missed?

Main issue is how to deal with discrimination issue as to setting a $$$ threshhold as to when a participant can and cannot direct the investment of his/her account..... Is it a matter of picking a $$$ threshhold low enough that some NHCE's can elect to direct the investment of their accounts? For example, e/er doesn't want participant with $1200 in his account to elect to direct the investment b/c of add'l admin charges by plan bookkeeper/accountant. Really becomes an issue when 50 participants with small balances want to elect to direct the investment of their accounts. Looking for any guidance as to setting a $$$ threshhold, if applicable, or for alternative manner of delineating who can/cannot elect to direct the investment of their accounts..... Thanks in advance...

When an employee elects COBRA and one month later becomes entitled to Medicare benefits due to ESRD, may the plan terminate the COBRA coverage as provided in the COBRA statute (due to entitlement to Medicare)? I have been told that the plan cannot terminate COBRA coverage because of entitlement to Medicare during the first 18 months of COBRA coverage based on the COBRA statute and HIPAA. CMS could not point me to a specific statute or regulation that stated this limitation. Any help would be appreciated!

Hi Have a potential client with an interesting problem.

Plan Year is 7/1 to 6/30. As of 7/1 the plan is only a profit sharing plan and is top heavy.

Effective 1/1 (mid-yr) the Employer amends his document adding 401(k) and safe harbor 3% non-elective contribution.

Here is the question:

Does the Employer owe a Top Heavy contribution for the full plan yr? Does the ER owe a TH contribution for the six months?

Does the ER owe a SH 3% for the full year or just the last six months?

Does the ER only have to meet TH/SH for the last six months when the plan actually has annual additions??

This is for a 2002 ADP test HCE determination.

As of 12/31/01 there was one plan.

As of 1/1/02, two new plans were started and a control group was created using all three plans.

This is probably a simple question.

An employee in one of the new plans, hired prior to 2000, has compensation over $100,000 in 2001. Because the plan is new in the control group, would this employee be considered HCE for the ADP test since HCE determination is based on prior year Compensation?

Can an ESOP be amended to provide that forfeitures may first be used for plan corrections (i.e. error with allocation)? If so, based on what authority? - Revenue Ruling 71-313 permits the use of forfeitures to reduce employer contributions - would this also include "corrective" employer contributions.

Hello, I work for a small Airline in Georgia. I am working on a vacation pay survey and was wondering if any of you would be so kind as to provide me with your vacation accural schedule, sick pay schedule and # of paid holidays. If possible, can you include your company name at least the state your company is located in?

Thanks

Chasity