I am not a health plan expert, so you might find this question to be very straightforward:

An employer provides medical coverage for its employees through a group medical contract. The employer pays 100% of the premium for its employees. All employees with the exception of one have employee only coverage. Would it be discriminatory to charge the employee that has elected family coverage? The charge would be based on the premium to cover the family members only. Would it make a difference if the employee was an HCE or a NHCE?

Thank you for your comments.

Are there any circumstances that would allow the IRA owner to pay the UBTI tax out of poket/ In other words, must this payment to the IRS always be take from the IRA?

Question # 2. What happens if the IRA transferred out before the payment was deducted from the account or if the IRA does not have sufficient balance to pay the tax?

PS. Same question duplicated on SEP board- just want to make sure I cover the bases

http://www.benefitslink.com/boards/index.php?showtopic=21107

Thanks in advance for your help

Are there any circumstances that would allow the SIMPLE IRA owner to pau the UBTI tax out of poket/ In other words, must this payment to the IRS always be take from the IRA?

Question # 2. What happens if the IRA transferred out before the payment was deducted from the account or if the IRA does not have sufficient balance to pay the tax?

If a multiple employer plan adopts a volume submitter word-for-word with no mondifications do they need to file for a determination letter just based on the fact that they are a multiple employer plan?

Can somene please explain what is "Safe harbor.. and hod does it work"?

Thank you.

A plan has a 6/30/03 fiscal year. Plan fails ADP test for year. Can excess contributions (plus earnings) remain in plan and be considered as deferrals for 6/30/04 plan year? HCEs would reduce deferrals for remaining 2003 pay periods to stay within 402(g) limit.

A company recently amended its VEBA to add an offshore captive insurance arrangement as a new investment vehicle. In trying to determine whether a new Form 1024 must be filed, I came across this thread:

Thread

In the discussion, vebaguru and Kirk Maldonado believe that a new 1024 is required when a VEBA is amended, but I'm wondering what the authority for that position is. When I read Treas. Reg. section 1.505©-1T, Q&A-12, it doesn't appear that a VEBA that has received a determination ever has to file again.

Any thoughts?

Client maintains a combination cross-tested p/s and 401k plan. Prior to 2002, participants who either were not employed at year end or did not work 1,000 during the plan year were not eligible to receive any p/s (or forfeiture) allocation. All participants were, of course, eligible to make 401k deferrals.

Can these p/s allocation requirements be retained for 2002 and beyond in light of the new minimum allocation gateway requirement? In other words, can the plan continue to be cross-tested even though some NHCEs do not receive the gateway minimum (i.e., those who terminated or worked less than 1,000 hrs)?

The preamble to the gateway regs seems to provide that individuals who do not receive any benefit (i.e., no allocation of p/s or forfeitures) need not be given the gateway minimum. Yes/No? Does the fact that these NHCEs can make 404k deferrals and receive a match impact this result?

Thanks.

Employer with money purchase plan has funding deficiency for 2001. We looked into one of the correction program but this fell trhough the cracks because it wasn't participant contributions that weren't deposited, but employer contributions. So they are paying the 10% penalty on Form 5330. Does this mean they do or don't have to pay the accrued interest from the time that the money was out of the plan? I know the correction plans instruct you to do so but I haven't seen the same instructions anywhere for delinquent employer contributions. A citation would be helpful so that I could follow up.

Also, I am assuming that I need to have the client file amended returns for the deficient year (they had said they made the deposit of the employer contribution). Do they report they made the deposit in 2003?

Just when I understood the correction programs .... along comes this! Thanks in advance.

Kristen

Would sunglasses that clip on to regular prescription glasses be reimbursable under a FSA?

The participant would be saving money by purchasing the clip on instead of buying a whole new set of prescription sunglasses yet the clip-on's by themselves are not technically medically necessary.

Opinions??

Thanks,

Rachel

Can anyone provide statistics on the types of pre-retirement death benefits plans offer? In particular, the prevalence of pre-retirement death benefits by level of benefit: % of plans that provide minimum J&S 50, as well as % and types of other benefits.

Thank you!

A Participant terminates employment and takes a cash distribution of his vested portion. 20% is withheld as Federal Income Tax, and the participant receives a 1099 for the distribution. The participant is rehired, and wants to pay back the distribution to have the forfeiture reinstated. Since the participant has already been taxed on the distributed amount, is the repayment now considered after-tax money and has to be carried as a basis?

Someone just told me the IRS is coming out with a rev proc that will extend the GUST deadline beyond 9/30 for a $250 user fee. Has anyone heard anything about this?

Can a partner who receives a K-1 use this income to start their own Uni-k? Or does the partnership have to sponsor a plan?

Income is based on consulting services, not rental income or anything like that.... so partner does actually "do" something to earn the income.

We have two corporations that our attorneys are 'closing'. One had a SEP plan and one had a SIMPLE plan (mostly same ownership, all family). Are we required to give the employees any notification regarding their SEP or SIMPLE plans? A new corp is being created that will hire all the employees and they will start a new 401k.

if we're starting a new 401k, for a new sub-s corp, on 9-1-03 and plan to use short plan year through 12/31. Can we give our notice to employees regarding the safe harbor match as soon as the plan is setup? Or do we have to delay the effective date of the plan to allow for a 30 day advance notice?

Just got word from my VP/HR that we may need to do an AAP (Affirmative Action Plan) since we may be a govt contractor in the near future. I have done one in the past, about ten years ago, without software and it was a nightmare.

Now, I am looking for recommendations for the best (and also read: cheapest) software out there to help with all aspects of the plan so I don't have to figure out cab fare to the halfway point of the Golden Gate Bridge.

Any help or suggestions? Please?

I have a plan that is going to make the Top Heavy minimum as a Profit Sharing contribution--3% of comp for the eligibles. The person who prepared the allocation for me merely took 3% of the eligible comp. The plan is integrated w/ social security. There was no contribution listed for the ecess comp. is that correct--it's just a straight 3% even if it's integrated?

Your thought are appreciated.

We are a TPA firm. Late last year we issued checks to plan participants whose company had gone out of business. We still have quite a number of uncashed checks where funds were paid to participanst & IRS withholding remitted. Rather than re-issue checks to participants we are looking at issuing stop payments & sending funds to an investment account. I don't believe we can set up IRA's since we've already issued a 1099-R for 2002 using code 1 & have sent 20% to IRS. Is anyone aware of situations where a TAXABLE account can be established without an individual participant signature? We reallly need to get these funds cleared as the financial institution holding them is now assesing monthly fees due to the remaining balance being below a set minimum. Any guidance here woule be appreciated.

An employee who has "an old" 403(b) account wants to roll the account into his current employer's 401(k) plan. This can now be done, correct?

An ongoing defined contribution plan purchases and distributes an individual annuity contract in full settlement of the participant's benefit under the plan.

1. On the 5500, does the plan check off box 9(b)(1) (insurance as a plan benefit arrangement)? Proposed answer: No. The instructions say "Insurance" means "the Plan" has an account, policy, or contract with an insurance company..." Here the plan is not a party to the contract.

2. Is Schedule A required? Proposed answer: No? The contract is not a plan asset, and no participants are covered by the contract at year end. (The employee ceases to be a participant by virtue of the annuity purchase).

3. On Schedule H, is Line 2(e)(2) completed for the annuity purchase? Proposed answer: Yes.

4. On Schedule R, is Line 2 completed for the annuity purchase? Proposed answer: Yes, for the year the contract is purchased only.

Thanks for any assistance...

card

(I hate 5500's...)