I have an off calendar plan year that end 6/30/03. There is a participant that is supposed to be refunded $1800. He is old enough for catch-up contributions, but I am concerned about how to classify them. Does $1000 count as catch-up for 2002 and $800 for 2003, or is all of it counted as 2003 catch-up?

Any help on this matter would be appreciated.

Carson

We have a situation where an employee was terminated and is not currently entitled to a distribution from the plan. Therefore, the employee is submitted medical claims for hardship distributions. The employee also wants a distribution in the amount of 3 months worth of COBRA premiums. Is this OK? Would this qualify as a "necessary for these persons to obtain medical care described in section 213(d)"? 1.401(k)-1(d)(2). Section 123(d) does not specifically state that premiums for COBRA are within the definition of medical care.

We have a controlled group client who kept the profit sharing plans for his three companies separate until mid-2002.

In 2002 he chose to merge the plans for document and filing simplification.

The SAR our system produces pulls data from the various schedules and has a "pat" format. Because of that, there is no language in the SAR that says something along the lines of "the assets were transferred to Plan B," it says "the ending balance was 0."

Should we modify the SAR to be more specific?

Any advice or counsel- PL or IRB or case?

Is a school district any more responsibile financially (Even with a "Hold Harmless"..) for mistakes in their participants contributions or distributions..... for their 403bs or their 457bs ??

Thankx

Any advice or counsel- PLR or IRB or cases?

Is a school district any more responsibile financially (Even with a "Hold Harmless"..) for mistakes in their participants contributions or distributions.....then for their 403bs or their 457bs ??

Thankx

It was just discovered a refund was made for the 2002 plan year in error. Incorrect data was given in census and the error was discovered when performing trust accounting(unfortunately after the refund has been made).

What is the corrective measure in this case? With the correction, the plan is now passing adp! Thanks.

Linda Michals

Will an alternate payee maintain the right to withdrawal monies without early withdrawal penaltys, having rolled over to a conduit IRA ?

Scenario:

Employer does not offer group health insurance. ER does offer a 125 plan for ee's to pre-tax ins. premiums. EE is still on COBRA and is pre-taxing that premium. Can the election amount be changed upon the end of COBRA coverage or if EE chooses to find a private insurance policy before that time (even if it's during the middle of the plan year)?

Can someone give me a good def'n of the Additional Minimum LIaibility added to the accrued (pre-paid) pension cost at the end of the FASB 87/132 report ? Can I think of it as an adjustment to recognize the unfunded accumulated benefit obligation in situations where combined events would otherwise show both an unfunded ABO and a "pre-paid" pension cost ? Perhaps because of this apparent conflict (unfunded benefits but pre-paid cost) it is then triggered ? I know, that's pretty rough and maybe not accurate.

ERISA 502(d)(1) says "in a case where a plan has not designated in the [sPD] of the plan an individual as agent for the service of legal process, service upon the Secretary shall constitute such service."

I see many SPDs that designate a non-individual (e.g., the corporation or partnership/LLC plan sponsor) as the Plan Administrator, and then say the agent for process is the Plan Administrator.

Does that mean I have to serve Ms. Chao? "Individual" is not a "person", and usually means human being.

Also, when the first sentence says service is on the Plan Administrator or Trustee, does that mean you can serve either one? Or, the plan/SPD can specify which one, meaning service on teh other is invalid?

Can a plan QDRO policy require that the QDRO specify the amount or percent that is to be distributed. The regs add a provision " ...or how the percent or amount is to be determined". Some of the formulas are complicated with premarriage benefits, post seperation deferrals, proration of income, and the qdro is frequently prepared two years after separation, etc. They will take a lot of work and are subject to complaints by both parties.

If you can't require a specific amount or % by policy-we can scare 'em with fees and maybe they'll come up with the number? Do you provide copies of the calculations and require the participant and alt payee to sign off along with their resqective attorneys?

If a sole proprietor has a safe harbor 401k plan, what is the "compensation" for the sole proprietor for the 3% non-elective contribution? Is it Schedule C reduced by 1/2 SE Tax and reduced by all the 401k contributions except the deferrals? I am confused! (Nothing new.)

A Company sponsors a Profit Sharing Plan that provides employees are eligible after two years of service (under the 1,000 hours of service rule, based on employment computation years) and quarterly entry dates. My question: how far can the Company go in excluding service for rehires?

Specifically, what if an employee was hired 2/1/2000 and left the Company 12/31/2001. This employee should have one year of service for each of the computation periods 2/1/2000-1/31/2001 and 2/1/2001-1/31/2002. However, the employee never entered the plan.

If the employee returns to the Company before incurring a one year break in service, I think all service must be counted (although I have a question as to whether the plan must let the employee in immediately, or wait until the next entry date).

However, what if the employee has a one year break in service (plus) and only returns in 2004: Can the plan provide that it will ignore the prior service? I know Section 410 permits a plan to ignore service for this plan if the employee incurs a one year BIS. But, is that rule inapplicable once the employee completes 2 years of service? Or, does the rule apply because the employee never entered the plan?

The language in the regs is somewhat ambiguous, and I would appreciate any definitive answers. Thanks in advance!

(I realize that, in reality, the answer would be governed by the plan document, but I would still like to know the answer from an IRC perspective.)

Harry Beker is saying the participant certification language should read, "expense has not been reimbursed and employee will not seek reimbursement". Is this to be interpreted as saying the employee does not have to submit the claim to their insurance company for payment first?

According to the EBIA Cafeteria Plan guidebook, Health FSA's are permitted to reimburse only medical expenses that are not rembursed or reimbursable through insurance or any other arrangement. We've had participants that have not wanted to submit psychiatric claims (for example) to their insurance company and try to be reimbursed for the full amount being charged for the visit. We told the participant to submit the claim to their insurance for payment first then we would recommend reimbursement on their out of pocket amount.

The new wording is not saying that the expense is not reimbursable under any other health plan coverage, but that the participant will not SEEK reimbursement under any other plan covering health benefits.

Any guidiance on this would be greatly appreciated. Thanks.

We currently prepare IRS Form 5500s for our clients via interactive forms from CCH (I think they come on a CD, but we may access them via the CCH website). We are examining all our subscriptions services and costs, and wondered what other folks use to prepare 5500s. We are a small firm and some of our subscriptions seem expensive and are probably also redundant. I'd love to hear what others think are the best ways to do these forms. Thank you!

Does anyone know where I might find a Word version of 2003-44? I have seen several pdf versions on the Internet, but none in Word.

Thanks.

I have a question about the DFVC process. I understand what forms have to be completed and sent to EBSA, but I am unclear with what needs to be done with the SAR.

If a 5500 (for a H&W) plan was never filed (calendar year effective 01/01/95) and as a result, the SAR was never distributed to participants, what is the requirement 8 year later? Unless I am blind, I did not see mention made of this in the rules and regulations related to DFVC, the FAQs on the DOL website, or by revewing posts in BenefitsLink.

Is the failure to distribute the SAR covered under the DVFC program?

Does the plan sponsor need to recreate who should have received the SAR for the filing years in question?

Any advice on this issue would be greatly appreciated.

Thanks.

Does the recent ruling about the reimbursability of non-prescription medications affect the reimbursability of weight loss program expenses when such expenses are not prescribed by a physician?

Is it possible for a safe harbor 401(k) plan to make a hardship distribution from the safe harbor employer match or the safe harbor employer QNEC? Also, can the plan make a hardship distribution of earnings on various sources of money? I have a safe harbor 401(k) plan document that says hardships can be taken on all money that is 100% vested.

Thanks.

New to section 132 & FSA programs.

With that said, my company has an issue. We rolled out a (pre-tax only) transportation reimbursement incentive program effective 1/1/03. We are now in discussions with the outsourcing vendor for the 2004 program year. They have informed us that per the new IRS guidelines we must provide vouchers if they are "readily available." However, the vendor is going to a purchase card to satisfy the IRS requirements. If we choose not to go this route, we must sign a hold harmless-type agreement.

My questions:

1) Can someone help explain the "readily available" and 1% financial rules a little bit better?

2) We are a NYC employer. Must we do this? I'm not seeing the upside of changing our process for what is still a new program for us. Our vendor has confirmed that ee's will lose out since the cards cannot be distributed before mid-Jan 2004.

3) Does anyone know where I can find the reg reference? I've tried the IRS website, and the Code of Fed Regs to no avail.

Thank you one and all.