An ESOP plan and PS plan are to be merged into one plan. The surviving plan will retain both ESOP and PS provisions. For purposes of coverage testing, the ESOP portion will be considered a separate plan from the PS plan, notwithstanding that the surviving plan will file a single 5500. For purposes of MRDs, will the plan be considered a single pension plan or will the ESOP and PS portions be considered separate plans that must meet the requirements of 401(a)(9) separately?

Seems like this time of year, we get a handful of employees who are angry that their deferrals have been stopped after they have reached the $200k comp limit. Ususally, they have been deferring 1 or 2% throughout the year, and are stopped after $2000 or $4000 in deferrals. In those cases it is clear they are out of luck. My question is, does the comp limitation in regard to employee deferrals apply to compensation that has not had deferrals made on it? For example, an employee on June 30 2003 has $200k of plan compensation, but has deferred $0 year to date. Can that employee begin deferring 6% on her next $200,000 in order to get her $12,000 deferred by year end?

Company has both MPPP and PSP. One of the assets of the MPPP is a loan to the company. Form 5330 is filed and the excise tax is paid each year, however, the loan is still outstanding. Can the MPPP be merged with the PSP and the PSP then assume the "prohibited loan"? The company is not in the financial position to repay the loan at this time and they would like to merge the plans.

401(k) Plan has 3% nonelective safe harbor contribution provision. Document is Corbel prototype language. I don't know why the ER has done this, but they are not making elective deferrals. Are we required to make the 3% safe harbor contribution?

Scenario - Employer has unsigned cafeteria plan that allows for pre-tax premiums and medical reimbursement. At some point in the last few years, the employer stopped offering health insurance and began paying (as compensation) each employee $375 per month to go out and get their own insurance. The payment is listed on the paystubs as "medical", and appears to be taxed and subject to FICA, FUTA, etc. The employees REALLY use the med reimb portion of the cafeteria plan. I am now trying to clean up the cafeteria plan and am not sure how to deal with this "benefit".

As is, it doesn't appear to fit anywhere within the cafeteria plan universe. However, I would like to try to do something with this.

I've considered an HRA - this would limit the use of the $$ to medical expenses, but that seemed to be the purpose of the payment in the first place. On the upside, it appears that the payments would become pre-tax and the employer would avoid FICA and FUTA. Could these $$s be used to pay premiums for an individual policy? Am I creating any HIPPA or COBRA issues?

Any other suggestions? Do I let sleeping dogs lie and just redraft the cafeteria plan to offer med reimb only?

Thanks!

Scenario - Employer has unsigned cafeteria plan that allows for pre-tax premiums and medical reimbursement. At some point in the last few years, the employer stopped offering health insurance and began paying (as compensation) each employee $375 per month to go out and get their own insurance. The payment is listed on the paystubs as "medical", and appears to be taxed and subject to FICA, FUTA, etc. The employees REALLY use the med reimb portion of the cafeteria plan. I am now trying to clean up the cafeteria plan and am not sure how to deal with this "benefit".

As is, it doesn't appear to fit anywhere within the cafeteria plan universe. However, I would like to try to do something with this.

I've considered an HRA - this would limit the use of the $$ to medical expenses, but that seemed to be the purpose of the payment in the first place. On the upside, it appears that the payments would become pre-tax and the employer would avoid FICA and FUTA. Could these $$s be used to pay premiums for an individual policy? Am I creating any HIPPA or COBRA issues?

Any other suggestions? Do I let sleeping dogs lie and just redraft the cafeteria plan to offer med reimb only?

Thanks!

We are a small business and have always maintained an employee handbook. However I am not sure we are addressing every important employee policy. I am interested in finding info on some standard practices and procedures especially dealing with time off, paid and unpaid. I am not sure where to turn for accurate and legal advice that a small business owner can afford. I want to provide my employees with a fair policy, however I can not afford to pay for too much time off. we have always provided a fair amount of vacation time and are usually flexible with emergency situations, we alos provide for paid sick time off in our policy, I think that most people look at this as extra vacation time, which we cannot afford. Any help would be appreciated.

Employer has 401(k) plan that is fiscal year ending 8/31/03. Therefore the lookback year for HCE purposes is the year ending 8/31/02. In determining HCE's would we use the dollar amount for 2001 ($85,000) and determine who had compensation over that amount during the lookback year to determine who is an HCE for the current year or would we use the amount for 2002 ($90,000)?

Thanks.

An employer has a premium only plan. Can an employee revoke his coverage in the premium only plan if he wants to switch his insurance coverage to the spouse's plan because coverage and costs have improved dramatically?

We have a number of "orphan" plans, where the company has gone out of business and the principals have just walked away from the plan. Normally our distribution request form requires an employer signature. This can be tough or impossible to get in an orphan plan situation. We are considering the possibility of waiving the employer signature requirement in such cases.

Does anyone have any comments about the advisability of doing this, or the lack thereof?

Can anyone tell me if the DOL was quoted anywhere as saying that the fact that certain TPA's or investment companies refuse to accept (or charge additional fees for) more than 1 deposit per month should not factor into the analysis of when participant contributions can be segregated.

I think they also said that the fiduciary should reevaluate a relationship with a company that precludes the ficuciary from fulfilling his or her responsibilities.

Any help would be great.

I have a money purchase pension plan and I am adopting the Snap-on Model Amendment to satisfy the minimum required distribution regulations. One option allowed under the Model Amendment requires that a participant's entire interest in the plan will be distributed to the designated beneficiary, including spouses, by the fifth anniversary of the participant's death. This seems to trump the qualified preretirement survivor annuity requirement under the Code. Is this a correct reading?

Hi,

Was hoping someone would not mind reviewing the term "stacked match", or perhaps pointing me in the direction of where it may have been discussed earlier.

I've heard that it is possible to have a Basic Safe Harbor Match, a discretionary 4% of comp match, and an additional fixed match of no more than 6% of comp, which can be used to get an owner, or anyone else with similar comp and def to the 415 limit, all of which retains Safe Harbor status (ex. no Top Heavy concerns).

We have done some enhanced Safe Harbor Matches, but nothing to this level.

Is this possible, how does it work, and what are any possible pitfalls?

As always, thanks in advance for any assistance.

Is it permissible to allow contributions based on a percentage of pay instead of flat dollar amounts?

Example: Company A wants to allow employees to contribute an amount not to exceed their gross income for one pay period. This would make potentially everyone's maximum contribution to be a dollar amount.

I have been told that there has to be a fixed dollar cap across the board, but it has been my understanding that if the employer wants no dollar caps, the employee could potentially put 100% of his/her pay into the plan.

We have a prospect client that is looking to change their (discretionary) match and (discretionary) profit sharing allocation formulas. How much notice is required to the participants? Is it 30 days prior to effective date?

As always, thanks in advance for your wealth of knowledge!

I have a client who merged his MPP plan into a new PS 401k Plan as of 11/1/02. The PS 401k plan was effective 11/1/02.

In early 2003, the company rehired three former participants from the MPP plan. All three were rehired within five years of their termination dates.

Since the PS 401k is a new plan, can these former MPP participants automatically enter the PS 401k plan on their rehire date? Or will they have to meet the PS 401k plan's eligibility since they were never participants in this plan?

Thanks for any guidance.

I'm working for the University of Rochester. I contribute the max to my 403(b) plan each year, and am wondering how I can roll over my money into a Traditional IRA, so that I can then convert it to the Roth. I was told that I can do a 90-24 "asset transfer". Is it possible for me to do this, irrelevant of what my employer says? I like the Roth IRA tax benefit better than that offered by a 403(b), because over the long-term, the growth on my money will make it worth-while to pay the taxes up-front. Does anyone have any suggestions?

Can anyone refer me to some good reading material on the new IRS split-dollar insurance rules effective 01/01/04 ?

Consider the following factual scenario:

An employee was terminated in September 2002, but due to an administrative error, the administrator did not provide a COBRA notice until October 2003. In the October 2003 COBRA notice, the Company notified the employee that it would continue to provide the employee coverage until the end of October 2003 because of the Company's administrative error. Does this factual scenario provide for a claim of a violation of the COBRA notice requirements?

Thank you in advance for your help!

C corp client's fiscal year/plan year runs from 10/1/02 - 9/30/03. Employer sponsors a Simple IRA in which the employee and employer contributions were funded for the plan year for his employees. However, the owner's contributions were not withheld for the current plan year but an employer match of $7,713 was funded for himself during the plan year. Since his employee contributions were not withheld, what can be done to correct this? Also, what should be done about the employer match for the owner since it is over $6,000 (3% of $200k) and no employee contributions were made for him during the plan year?