A not-for profit client has a flexible benefits plan where the employer contributes a flat dollar amount to each eligible employee per month. The employee can use the money toward their premium, in the spending account or take it as cash. If an employee exercises his/her cash option, the money then becomes taxable compensation. Can the employee then turn around and put that money into a TSA pre-tax? I know that a TSA/403b cannot be part of a flex plan, but if the money is taken as cash, I would think that this would be an available option.

Are automobile expenses included in the various 415©(3) and 414(s) "safe harbor" defintions of compensation? Does this depend on whether the "automobile expenses are 1) use of a company car, 2) a car allowance payable in advance, or 3) remimbursement of car maintenance and fuel expenses?

A Client currently has a PS plan, he would like to start a DB plan in 2003 and not fund the PS plan. For vesting service, is it allowable to disregard service prior to the DB effective date or must the PS service be included?? Thanks.

A fairly large company that is stationed in Bermuda, has hired my firm to complete an RFP and find a US based provider to administer their retirement plan.

Does anyone know of a US vendor that can supply this client with a retirement program? Are there any issues with this scenario?

This is a multi-million dollar plan. Any ideas?

As always thank you in advance.

I have an employer whose employee was covered under their medical plan. SHe went on medical leave and has been on LOA off and on over the past 4 years and on Workers Comp in January 2002. She has not worked since then. The employer has continued to pay her health premiums but would like to discontinue that if they can. Can the employer send her a COBRA notification after all this time? Can anyone tell me what options they have at this point?

Thanks

Pam

Are Professional Employer Organizations (PEO) considered MEWAs? Are they considered associations?

If a COBRA administrator does not send an invoice to an employee, does the responsibility fall on the administrator or the employee?

We have a former employee in this situation who did not make their payment since they didn't receive the invoice. They were termed from COBRA for non-payment.

As the employer, what concerns should we have with this?

We are a TPA. I have a single parent who is leaving for a business trip. She has asked if she can submit expenses for child care that will be necessary while she is away. I haven't seen anything that says yes or no. Has anyone else faced this question before? Any opinions?

Many thanks!

Carolynn

Given a terminating money purchase plan with truly lost participants, has anyone found an insurance company willing to sell deferred annuities without participant signature?

A sponsor has an existing safe harbor uniform allocated profit sharing plan. They want to start of new DB floor offset plan--also to be a safe harbor plan. Are they required to consider the existing DC account balances, or can they count only future employer contributions? What are the options?

How are the taxable amounts on distributions from a non-qualified stock purchase plan reported? The stock was purchased with employee after-tax contributions. Do I report the distribution on 1099R and just show the taxable and non-taxable amounts? Or is another form used since it's a non-qualified plan?

Thanks.

Let's say the employer provides a Notice that otherwise satisfies the Notice requirements to convert existing 401(k) to a Safe Harbor nonelective, effective 1-1-04. But the employer provides this Notice PRIOR to the 90 day period - in June of 2003, to be precise. Is this a valid safe harbor Notice, and is the employer bound to honor it?

Prior to checking, I'd have said that if issued prior to the 90 day period, it wasn't valid. But note the following excerpt from IRS Notice 98-52. It says that it is a facts and circumstances test, then goes on to say that the timing requirements are DEEMED satisfied if between 30 and 90 days prior. But it really does not say that you CANNOT provide it earlier. Any opinions? Thanks.

2. Timing Requirement

a. General rule

The timing requirement of this section V.C.2 is satisfied if the notice is provided within a reasonable period before the beginning of the plan year (or, in the year an employee

becomes eligible, within a reasonable period before the employee becomes eligible). The determination of whether a notice satisfies the timing requirement of this section V.C.2 is

based on all of the relevant facts and circumstances.

b. Deemed Satisfaction of Timing Requirement

The timing requirement of this section V.C.2 is deemed to be satisfied if at least 30 days (and no more than 90 days) before the beginning of each plan year, the notice is given to

each eligible employee for the plan year. In the case of an employee who does not receive the notice within the period described in the previous sentence because the employee

becomes eligible after the 90th day before the beginning of the plan year, the timing requirement is deemed to be satisfied if the notice is provided no more than 90 days before the

employee becomes eligible (and no later than the date the employee becomes eligible). Thus, for example, the preceding sentence would apply in the case of any employee eligible for

the first plan year under a newly established section 401(k) plan, or would apply in the case of the first plan year in which an employee becomes eligible under an existing section

401(k) plan.

Does anyone know if the Boilermakers 401(k) plan that has recently been in the news re: market timing is a multiemployer plan? I would assume so....

Is there a requirement as to how much notice a trustee must give an employer when resigning as trustee? Although the standard Sungard Corbel language allows for some flexibility here--"Unless otherwise agreed to by both the Trustee and the Employer, a Trustee may resign at any time by delivering to the Employer, at least thirty (30) days before its effective date, a written notice of resignation."--I'm wondering if there is a regulation or other source speaking to this issue. Assuming there is not, we should be able to permit a trustee to resign effective immediately upon delivery of a written notice to the employer. Thoughts?

An employee indicates they want to have 10% of pay deferred into the company 401(k) plan. The employer only withholds 5% and matches on the 5%. The employee never says anything to the employer about the miscalculation - has left employement and received a distribution of his account.

What is the ramification to the employer - if any - for failing to withhold the proper amount? Does the employee's failure to notify the employer in a timely fashion have any bearing? What if anything should the plan do to rectify the error?

This happened on a number of the employer's employees.

Two questions: 1) Can shipping costs for prescription or OTC medications be reimbursed under a health FSA? I have read and heard two different answers: Yes, because it is related to the cost of the product being used for medical care and; No, because it is the participant's choice to purchase the item either via mail or Internet and the shipping costs would be considered "transportation". (My understanding is that mileage and transportation expenses for driving to a store or pharmacy are not eligible.) 2) Can the cost for Air Duct cleaning be reimbursable if it has been determined that the participant has severe alergies and must have this done on a regular basis? Any help would be appreciated.

If we use the integrated formula for SEP IRA's, are we limited to deferring 5.7% of compensation or can we go above. Here is how I understand the integration formula works:

Joe Blow makes $200,000 and the other employees make less than $50,000. Joe Blows Contribution will be:

$200,000 x .057= $11,400.00

($200,000 - 84,900 TWB) x .057 = $6,560.70

then all future contribs will be paid out based on the proportionate formula:

$200,000 x 11.01965% = $22,039.30

We then would only have to make an employer contribution of approx 16.71965% for the rank and file.

Please enlighten me if I am incorrect.

Thanks,

Butch

Can someone steer me toward an easy grid of what H&W plans need to report on 5500 and associated forms. In english, e.g.,:

Medical

Dental

Rx

Vision

etc.

<100 if Insured, 5500 and Schedule A

<100 and completely self-funded, using gen assests, no ee contribs, no reporting

>100 all plans

Thanks. /Chase

Does anyone know where I can find guidance on reimbursing sales taxes on medical expenses (i.e. prescriptions)?

Joe loses coverage under his employer's plan. The employer's insured plan offers Joe COBRA coverage at 102% of the regular premium rate. Joe pays premiums for 8 months. The insured plan comes back after 8 months and demands that Joe pay $x because they quoted him the incorrect rate when he elected COBRA or they will retroactively terminate COBRA coverage.