I have a question regarding receipts claimed on the medical reimbursement claim form. I have an employee who was charged a fee for no show/ late cancellation on an appointment. Has anyone seen this before and is this an allowable expense?

Any help would be appreciated.

May a 403(b) plan be set up as a 413© multiple employer plan?

Where is the IRS guidance for the following situation:

A non-union employee is eligible and participating in a qualified plan. He terminates employment and two months later is re-hired as a union employee at another division. As a union member, under plan terms, he is not eligible to participate in the plan.

Can he take a total distribution from the plan at any time now because he had a separation from service?

He had an loan outstanding at the time of his termination. If he does not take a distribution, am I obligated to resume withholding loan repayments from his pay?

A PBGC plan has an NRD of 65 and 5. The owner, who is scheduled to retire at 65, is getting close to retirement and during a meeting states that he intends on working to 70.

What happens to the various benefits legally?

My opininon is as follows:

Funding for the plan benefits depends on whether a benefits suspension notice needs to be invoked. A projected benefit at 70 (greater of AE or current formula) could therefore be used OR the current benefit at the later retirement age. This is therefore an assumption.

The question concerns other calculations.

For current liability, my inclination is to use the same methods and assumptions as my valuation.

Am I required to ignore this new valuation 'assumption' and use the participant's normal retirement age for purposes of the current liability calculations? This would obviously impact the current liability calculations and the PBGC premium calculations as well (assuming the general method was being used).

I could not find any cite other than that the assumptions should match those used in the valuation except for required interest / mortality changes. Any comments are greatly appreciated.

Ok start shaking your heads, I am clueless about money matters.

I am in my early 40's and have no retirement or savings accounts.

My employer doesn't offer 401k or retirement plans. I make very little money a year (less than $10,000), but my husband does well. I would like to open a Roth IRA but really really don't want the stress of the stock market. Even if CD's might not make as much money isn't it better to open a conservative secure something. We had money in a savings account but with the 1% interest and charging monthly fees if it fell below a certain amount, we moved the money into our checking account. My husband has a 401k. I want to be really conservative and know that the money placed will only increase as time goes by. I thought of CD's but I am pretty clueless about how they work. If you open one for a certain number of years, does the bank notify you when the term is up and what do you do then? There has to be something that is safer than the stock market but earns more than a savings account. Can anyone help?

Has anyone ever seen any document language which provided for the sum of continued accruals plus actuarial increases vs the greater of the two? Would this be treated as a separate benefit structure and require (a)(4) testing?

Under the proposed regs 1.457-4(d) a deferral of compensation was allowed only if an agreement providing for the deferral was entered into before the begining of the month in which the amounts would be otherwise paid or payable and the participant is an employee in that month. The final regulations purportedly allow, under the special rule, for elections to defer to be made after the beginning of the month for sick, vacation & back pay provided the vacation pay would otherwise have been payable before the employee has a severance from service.

What is the case for an employee whose termination date is June 30, he severs his employment as of that date, but his accumulated sick pay, etc. is included in his final paycheck which is not paid to the now terminated employee until the next pay period which would be in July, due to administrative requirements? If he is entitled to the pay as of his date of termination, is this sufficient to deem the accumulated sick pay, etc. as "payable" before the severance from service?

Can commissions be excluded from the definition of compensation (for calculating contributions) in a Safe Harbor plan with 401(k) and employer non-elective?

Thanks -

Can a sponsor sponsoring a 401(k) plan stop paying administrative expenses, and instead charge them to participants on a monthly/quarterly basis without notifying participants of the change?

Assume the document allows payment of expenses, and that the expenses are reasonable (flat charge per month per head).

What are the parameters of Social security replacement plans? Can I create one in a 401(a)? Could I create one in a 403(b)? I understand that there is a certain percentage from employer and employee, what are those percents? Is there any guidelines from the IRS? If a plan is implemented would the IRS or Social security Administration need to be informed?

Thanks for any info!

We have a client who allows employees to pay preimums pre-tax through the cafeteria plan. The health insurance company has increased their premiums effective 9/1. It's a significant cost increase that would allow the participants to make a change in status and have the premiums increased. However, the cleint has a number of employees who had not participated in the plan at the beginning of the year and would like to automatically enroll them now. Can the employer implement an automatic enrollment mid year?

Employer has a 401k/PS plan and starts up another business. He wants to amend the plan to:

. make the new business the sponsor employer and the old business a participating employer

. change the name of the plan to refer to the new business

. remove the 401(k) and match feature

. add a vesting schedule to the profit sharing

. add eligibility requirements

. add a cross testing allocation for the profit sharing

Does anyone see a need to start-up a new plan?

I have a small DB plan where the actively employed 100% owner elected to convert his PVAB into a 414k account (money never left the trust) about 4 years ago. He now is coming upon 70 1/2 in 2004. He has a TEFRA 242b election which states that no minimum distribution is needed until he ceases employment.

Should I be concerned that the 414k conversion may have voided the 242b election?

We had an employer with a major delinquency problem.

One cause of action the Union and Plan brought was

under the state prevailing wage law. (Very similiar

to Davis-Bacon in all material respects.) The theory

was that by failing to pay his fringes, he had also violated

the prevailing wage act.

The order from the court awards the monies and penalties,

but specifies the payments are to be made to the

employees...not their benefit plans. This creates the

obvious problem that our db/dc plans must grant them

service credit for all hours worked...even though we

will not be receiving the contributions.

Questions:

1. Can we somehow negate the service credit that

would otherwise be earned? How?

2. Do we have to collect the monies from our members?

3. Any other ideas?

We have an old ps plan with hub/wife holding assets in excess of $1,000,000. They have not made ps contributions in years. The funds were rolled in from an old DB. I realize they should have recurring deposits but that is not my issue here.

Question: Over the last few years they have hired employees. There are now 5 participants in the plan. The two HC's and 3 nhce's. The 3 nhce's have -0- balances.

There is no bond in place because the participants are not at risk. I would guess 80% of the assets are non-qualifying.

Is a bond and audit required? Again, if the intent of the reg is to protect the participants, we're fine. However, we are preparing 5500's versus 5500 EZs so I don't know if red flags are going to shoot up.

Any thoughts?

Hello, I need help with an RMD. I work for a transfer agent/IRA custodian and we can't agree on the best way to approach this situation. I have researched Pub 590 and found no definitive answers there and I have also reviewed Regulation 1.401(a)(9)-1, A-2©(1).

The Scenario:

Joe, an IRA holder is 81. Joe has been taking his RMD faithfully every year in September. His wife, Molly, is his sole beneificary.

Joe died two weeks ago before his 2003 RMD was taken out of his IRA account.

The Question:

Can we (as custodian for Joe's IRA) take his RMD directly out his account then transfer the balance of the account to Molly?

Our outside retirement services consulting firm has advised that we:

- move Joe's assets to a decedent IRA registration that includes his name and Molly's and is referenced under her tax ID

- remove the RMD from this new account

- and then move the balance to Molly's IRA (she is assuming Joe's IRA as her own)

This seems cumbersome to us.

I would like to know if we can simply take Joe's RMD directly from his existing IRA and then transfer the balance to Molly.

Since Joe was alive in 2003 he, or rather his executor, is going to have to pay taxes for him this year anyway.

Aren't IRA holders required to take the RMD beginning on January 1 and they are given until 12/31?

What if we didn't know that Joe had died and had sent his RMD check anyway?

Thanks for your help!

-- J

I have an employee who is separating and currently does NOT have his spouse on his health/dental plan. Our health and dental plans are pre-tax. He wants to add his spouse onto his policy when he enrolls in COBRA coverage at that time. Can he do that? I thought the only people who can continue coverage at the time of COBRA onset are the qualified beneficiaries (who was enrolled already before separation) or a newborn while under COBRA. Help? Can someone clarify this for me???

Thanks in advance!

KPB

I have run into a situation in which a plan has a number of defaulted loans (some defaults occurred 10 years ago and others within the past few years), but no action has ever been taken to report as deemed distributions or to offset. All involve participants who had filed bankruptcy and their files were set aside. New administrator is trying to deal with these files now. We went through VCP on some other issues recently & tried to get the IRS to bless a plan of correction, but they stayed away from the issue. I'd like any comment on correction. This is obviously a very messy situation.

I just received this from a good friend. I pass it on

................................................................................

...

Guess our national leaders didn't expect this, hmm?

On Thursday, June 26th, Darrell Scott, the father of Rachel Scott, a victim of the Columbine High School shootings in Littleton, Colorado, was invited to address the House Judiciary Committee's subcommittee. What he said to our national leaders during this special session of Congress was painfully truthful. They were not prepared for what he was to say, nor was it received well. It needs to be heard by every parent, every teacher, every politician, every sociologist, every psychologist, and every so-called expert! These courageous words spoken by Darrell Scott are powerful, penetrating, and deeply personal. There is no doubt that God sent this man as a voice crying in the wilderness. The following is a portion of the transcript:

"Since the dawn of creation there has been both good and evil in the hearts of men and women. We all contain the seeds of kindness or the seeds of violence. The death of my wonderful daughter, Rachel Joy Scott, and the deaths of that heroic teacher, and the other eleven children who died must not be in vain. Their blood cries out for answers.

"The first recorded act of violence was when Cain slew his brother Abel out in the field. The villain was not the club he used. Neither was it the NCA, the National Club Association. The true killer was Cain, and the reason for the murder could only be found in Cain's heart.

"In the days that followed the Columbine tragedy, I was amazed at how quickly fingers began to be pointed at groups such as the NRA. I am not a member of the NRA. I am not a hunter. I do not even own a gun. I am not here to represent or defend the NRA-- because I don't believe that they are responsible for my daughter's death. Therefore I do not believe that they need to be defended. If I believed they had anything to do with Rachel's murder I would be their strongest opponent."

"I am here today to declare that Columbine was not just a tragedy; it was a spiritual event that should be forcing us to look at where the real blame lies! Much of the blame lies here in this room. Much of the blame lies behind the pointing fingers of the accusers themselves.

"I wrote a poem just four nights ago that expresses my feelings best. This was written way before I knew I would be speaking here today:

Your laws ignore our deepest needs,

Your words are empty air.

You've stripped away our heritage,

You've outlawed simple prayer.

Now gunshots fill our classrooms,

And precious children die.

You seek for answers everywhere,

And ask the question "Why?"

You regulate restrictive laws,

Through legislative creed.

And yet you fail to understand,

That God is what we need!

"Men and women are three-part beings. We all consist of body, soul, and spirit. When we refuse to acknowledge a third part of our make-up, we create a void that allows evil, prejudice, and hatred to rush in and wreak havoc. Spiritual presences were present within our educational systems for most of our nation's history. Many of our major colleges began as theological seminaries. This is a historical fact.

"What has happened to us as a nation? We have refused to honor God, and in so doing, we open the doors to hatred and violence. And when something as terrible as Columbine's tragedy occurs, politicians immediately look for a scapegoat such as the NRA. They immediately seek to pass more restrictive laws that contribute to erode away our personal and private liberties. We do not need more restrictive laws.

"Eric and Dylan would not have been stopped by metal detectors. No amount of gun laws can stop someone who spends months planning this type of massacre. The real villain lies within our own hearts. Political posturing and restrictive legislation are not the answers. The young people of our nation hold the key.

"There is a spiritual awakening taking place that will not be squelched! We do not need more religion. We do not need more gaudy television evangelists spewing out verbal religious garbage. We do not need more million dollar church buildings built while people with basic needs are being ignored. We do need a change of heart and a humble acknowledgment that this nation was founded on the principle of simple trust in God!

"As my son Craig lay under that table in the school library and saw his two friends murdered before his very eyes, he did not hesitate to pray in school. I defy any law or politician to deny him that right! I challenge every young person in America, and around the world, to realize that on April 20, 1999, at Columbine High School prayer was brought back to our schools. Do not let the many prayers offered by those students be in vain.

"Dare to move into the new millennium with a sacred disregard for legislation that violates your God-given right to communicate with Him. To those of you who would point your finger at the NRA - I give to you a sincere challenge. Dare to examine your own heart before casting the first stone!

"My daughter's death will not be in vain! The young people of this country will not allow that to happen!"

..........................

Do what the media did not -- let the nation hear this man's speech.

Please send this out to everyone you can!!!

Our client is opening a 3 month early retirement window via plan amendment effective 1/1/2004; should the 1/1/2004 valuation reflect an assumed number of takers or should it reflect actual.

Also, if we go the assumed route is the change in liability an assumption or plan change ?