I have a friend whose father was given a workman's compensation settlement in 1997 via an annuity. The ownership of the contract remains with the employer's workman's compensation carrier. His father did a partial buy out of the annuity for a lump sum through one of the companies that buys structures settlements. His father died about 2 years ago, and now my friend is receiving the payments which were guaranteed for 15 years. He wants to buy out the remaining payments for a lump sum, but is being told that there has since been a new law at the federal level that prevents this. The same company that did the original buy out is saying that they can't do it again because of this law but they are unable to provide a cite . Can anyone confirm or dispute this and provide a cite or cites for this? Thanks!

Carolyn Cassetty

Does anyone want to weigh-in on whether mouthwash of any brand, over the counter, should be in the dual purpose column or excluded column??

I have written a program to calculate various annuity purchase rates, and I need to check the results for a particular scenario. Does anyone have a system that could easily check the following rate for me?

Mortality Table:

1994 GAR for males and females

Rates Projected with Full Generational Improvement for Issue Year 2002 using Projection Scale AA for Males and Females

Interest Rate: 6.00%

Certain Period: 5 Years (and payable regardless of primary annuitant surviving to deferral age)

COLA Rate: 3.00% (annual rate applied from current age)

Primary Annuitant is Male; Secondary Annuitant is Female, 3 years younger

Form of Payment: 100% J&S, Deferred to Age 65, with monthly payment frequency

Annuity Purchase Rate for male 60 (with female spouse 57) at issue = 16.1303 ?

Is the monthly rate for the Treasury bonds maturing in Feb 2031 otherwise known as the 30 yr. Treasury Constant Maturities rates? I've looked at enough sources to get confused and would like to know if there is a reliable list that shows the "GATT" rates to be used for lump sum calculations. All help greatly appreciated.

Don't you just love this time of year when this or that executive wants to tamper with the established benefits plans? Or is it just me?

Anyway, been asked to look into companies offering money to employees to take their family coverage elsewhere. That is, if the employee chooses self-only coverage where s/he would have normally chosen family or spouse coverage, then the company would pay him/her money. Got several questions on that:

1. How much do you pay someone? $20? $100? Percentage of premium?

2. If lots o' employees choose this option, won't some adverse selection ideas come into the insurance carrier's mind?

3. One can assume that the money paid to the employee is taxable income, ain't it?

Many thanks.

JPR

I am interested in knowing what kind of special considerations a company

might take when making the conversion from traditional accruals of separate

vacation and sick leave to a combined paid time off arrangement. If anyone

has made such a leap, I would appreciate any advice or tips you could

provide.

Thanks in advance for whatever anyone can provide.

Can a 423 plan impose a 2-year eligibility requirement for some employees but not all, e.g., union employees or employees of a division or subsidiary?

I have a prospect who wants to use their FSA forfeits from the end of this plan year to establish a self-administered Wellness Program.

Given my previous experience with Sec 125, my understanding is that the funds can only be used to refund all plan participants equally on a post-tax basis or to offset administrative costs of same FSA plan.

My legal eagle is on vacation and of course I need the answer yesterday.

Can anyone help with this one?

Thanks!

I finally have a copy of our Plan document in house and have been trying to familiarize myself with it. I recently discovered that our payroll had not been taking contributions from bonuses and have set them straight on that. Since we have an extra payroll this month, I thought to check the Plan doc. again. I am trying to understand the plan language. Our definition of compensation is stated as following Code 6041 & 6051, income reportable on W2, with all pretax contributions added. Does this mean that they should be taking contrib. from the extra payroll? (we also have a p.o.p. cafe plan)Any help would be appreciated. Thank you.

Hi!

I have a client who is ready to terminate his plan over top heavy!

At PYE 2003, we determined that the plan is now top heavy. Now down to 10 employees he's had 3 valid hardship terminations and and 3 employees stop making deferrals at all.

We figured that if the hardships had not been taken, they would not be top heavy.

Any suggestions?

********************* Side note********************

Is the Michael Preston on this message board, the same Michael B. Preston, EA, MAAA that I use to work with in Los Angeles? If so, guess who?

If an accountholder is receiving systematic payments from his IRA, does he need to receive a W-4P each year? Or, does one W-4P at the time of the first distribution cover all future payments, regardless of the year distributed?

Do the HIPAA Special Enrollment rights apply to retiree-only health plans?

Plan A is a 401K safe harbor with last day of year allocation requirements.

Mary meets eligibility requirements, defers into the Plan but terminates prior to end of year. She's entitled to the Safe Harbor contribution subject to Minimum Gateway.

John also meets eligibility, does not defer into the Plan and terminates prior to end of year. He receives no safe harbor contribution.

Mary and John receive no PS contribution.

If Mary or John worked less than 501 hours, they are not part of my coverage group. So do I ignore them completely for the various cross-test?

If either worked 501 hours or more, is Mary considered benefitting for purposes of the Ratio Percentage Test, and if necessary, the Nondiscrimiation Class Test? Or do I only get to consider her deferrals and match in performing the Average Benefits Test?

John, I presume, is still part of coverage group but not benefitting. Correct?

A participant needed money to pay his disorderly conduct fine. He calls the broker to "tap into" his 401(k) account. "No problem", says the broker, "how much do you need?". "$1,500" is the answer. "Checks in the mail" says the broker.

So, the first employee gets a check from the mutual fund company payable to the participant. Before the employer finds out about this there are five employees with eight distributions. (Word of a good thing spreads quickly and if one distribution is good, two is better). All this happened in the last 6 months and it's a calendar year plan.

The document has no provision for loans or early distributions. I've waded throught Rev Proc 2003-44 and am not 100% comfortable with how this should be handled. Example 21 references hardship distributions and retroactive amendment. Also the criteria used by the employer for the hardship distributions was in accordance with regs. Do you think a plan amendment only for the period January 1, 2003 to October 27, 2003 (when this was caught) allowing distribution based on age would work? There was no disclosure paperwork no tax withholding either.

Oh, did I mention that one employee got all funds, including employer, in which he was only partially vested? Of course, he has since terminated emplyment.

A plan fails their ADP test for the 2001 plan year. Refunds are not made by the 12 month period ending 12/31/2002. The plan is doing the one to one correction method.

There are union and non union members. Do just the NHC non bargaining get the QNEC? Or do the NHC bargaining get the QNEC also?

Has anyone heard of the requirement to amend your SPD's and SAR's to reflect the change in name from PWBA to EBSA? A provider we work with has sent notice to their clients that an amended SPD and SAR is required to reflect the change in the PWBA to the EBSA. We have researched this and have not been able to find any information.

Just ran across a takeover target benefit plan. Prototype doc. is dated some time in 1989. Other than amendment issues I noticed the interest rate set forth in the adoption agreement is 6%. What is the current interest rate (or range) that is ok to be used?

Is anyone familiar with or have any experience with these types of entities? I see on freeERISA that there are a number of these "companies/offices" around the country that sponsor qualified retirement plans.

We have been approached by one in our state about taking over the admin for their 401(k) plan and we've been trying to determine what type of entity they are.

This is what we've been told by the plan sponsor:

- Chapter 13 Bankruptcy (nationwide) is supervised by the Department of Justice

- Congress created a U.S. Trustee who appoints trustees nationwide to run the office

- Chapter 13 Bankruptcy offices collect fees from debtors and this is what is used to run the office

- Chapter 13 Bankruptcy offices are non-profit organizations (however, trustee says there was nothing like a 1023 Form Application for Exemption filed)

- The appointed trustee for each office has control over the employees – they are not federal employees

- The trustee files a Schedule C for income received from the Chapter 13 Bankruptcy office but does not claim the wages paid to the employees

- The employees receive a W-2 from the Chapter 13 Bankruptcy office which has their own tax identification number – the IRS assigned a tax identification number based upon a filing status of “other – tax exempt trust”

- Chapter 13 Bankruptcy office files the W-2’s but there is no "company" return (either state or federal)

- Chapter 13 Bankruptcy office does not have a local business license

- The trustee says there was nothing like articles of incorporation or any other paperwork when they were set up

- Trustee says they are not part of any state or governmental agency.

Any ideas?

A profit sharing plan has a 401(k) feature effective as of 4/1/03, and the plan has also adopted the safe harbor 3% NEC for 2003.

My question is can we make safe harbor contributions for only the period during which the 401(k) is active? For example, can we exclude people who terminated at the beginning of the year from the safe harbor contribution?

Suddenly brain went dead!!