A company restated a qualified plan by adopting a non-standardized prototype 401(k) plan in 2002. In 2003, before applying for a determination letter with Form 5307, the company adopted an amendment that takes the plan out of prototype status and makes it an individually-designed plan. Is the plan now a non-amender that must go under EPCRS, or can it still take advantage of the September 30, 2003 deadline for filing for a determination letter?

We represent a nonprofit that has operated a 403(b) plan since 1987. A major brokerage house is custodian and offers mutual fund investment options. The nonprofit makes employer contributions and the plan is an ERISA plan. The nonprofit has never been able to obtain plan level information from the custodian, such as number of participants remaining in the plan, etc. The custodian indicates records are not kept on a plan level basis and they are not able to determine how many of the individual participant accounts are part of the nonprofit's 403(b) plan. Is this normal? The nonprofit would like to switch to a new custodian. How can this be accomplished when the custodian does not keep records on a plan level basis? The nonprofit can account for the current employees that it knows are participating, but it does not know what happened to the accounts of numerous employees who have terminated employment since 1987. Are those former employees left behind with the old custodian? Help!

While reviewing the instructions closely for line 4j of Schedule H, I noticed the following statement: "If the Schedule H is attached to a Form 5500 filed for a plan with all plan funds held in a master trust, check "No" on line 4j." I would love not to have to compile this info but am not sure if "master trust" applies to this plan.

What exactly is a Master Trust?

This particular plan has all assets with Wells Fargo, who directs what amounts are invested where (without any input from the employer). They also sign the Schedule P.

Thanks,

Rachel

Does anyone have any recent data on the size of the 457 market and key competitor market share?

Has anyone analyzed IR-2003-89, posted to the IRS web site on July 14, 2003? (Retirement Plans Need Not File Fringe Benefit Information)

Leon T. Konecny, Jr. CPA

Would someone please help me with the following:

If a participant takes a loan from a DC plan, which is not a money purchase plan and where the normal form of distribution is a lump sum and whereby the plan allows for in-service withdrawal distributions prior to age 59-1/2, and this participant a short time later stops making payments (for simplicity purposes, the payments stop in April 2002) and the partiicpant remains actively employed through 12/31/02 (calendar year plan year). Since the loan meets the conditions of a deemed distribution, what other reason would preclude a recordkeeper from treating this as a deemed distribution subject to 1099-R reporting? I am being told that due to a new "IRS Ruling" that this defaulted amount will continue to be treated as a loan balance until the participant leaves the plan or repays the loan.

I would appreciate either a quick explanation or cite to something that I can review. I have read the temp regs under 1.72(p) and come to the conclusion that this particular circumstance is a reportable event.

Thanks.

I have a Money Purchase plan that used forfeitures to reduce their employer contribution. How do I complete lines 6a-6c on the Schedule R?

6a Minimum Required Contribution?

6b Amount Contributed by the Employer?

6c Difference between Amounts

In this case, the Min Required Contribution is $357,580 but actual contribution was only $349,515 after taking forfeitures into consideration.

I am thinking that I am wrong in entering the Min Req'd Contribution as $357,580 and that it in fact should be the $349,515. Is this correct?

Thanks,

Rachel

Is anyone aware of a prototype document that can handle specific union employees as the only eligible group of employees and have a service formula for contributions?

I am in the process of updating for GUST and EGTRRA an old Principal Group prototype and have come to the conclusion that I will have to go off a prototype (Corbel's cannot handle) and use modified language in Corbel's volume submitter, along with application for IRS determination.

Any help would be appreciated. Client is a small paving contractor and not looking for anything fancy by any means.

Thanks.

When should the Business Associate Agreement be signed with a new insurnace vendor for a plan beginning 1/1/04? Does it need to be signed prior to 1/1/04, as PHI may be shared during open enrollment?

Before the final regs were issued, many people believed that you could create two categories--regular contributions and catch-up contributions--for participant contributions to plans that match on a pay period basis to avoid matching catch-up contributions. If at the end of the year a participant was not eligible to make catch-up contributions, the amounts called catch-up contributions would be recharacterized as regular contributions and participants would be made whole for any missed matching contributions with a true up.

The final regs state that the solution to the pay period matching problem is describing what can be matched rather than what cannot be matched. The example in the preamble describes using a percentage of elective deferrals to segregate what is and is not matched and makes no mention of separate categories. Can you still use the separate boxes, or has the IRS killed that method?

In a daily plan, are quarterly statements required and do they have to be provided by paper whether quarterly or annually? Also, do we have to provide fund performance on a quarterly basis?

I can't remember what the rules are behind the whole Gateway rules. Like when do you have to contribute the 1/3 of the HCE's, etc. I can't get it straight in my head. I'm working on a cross-tested plan, and the HCE is getting 12.5% of the P/S contribution, therefore I have to give the NHCEs 1/3 of that (4.17%). Why? I can't remember!!! Why can't I just give the 3% top heavy?

Help!!! Thanks.

http://www.sciencemag.org/feature/data/crow/index.html

"In the experiments, a captive female crow, confronted with a task that required a curved tool (retrieving a food-containing bucket from a vertical pipe), spontaneously bent a piece of straight wire into a hooked shape -- and then repeated the behavior in nine out of ten subsequent trials."

Target page includes link to downloadable video clip. Amazin'.

I injured my leg in an accident at work and an ambulance was called to the job site. This happened on May 7th. I went to work that next day. My leg has not been much of a problem. However, within a couple of days, I started experiencing numbness an weakness in my left pinky and ring finger.

I reported this to Human Resources. I was terminated on June 2nd, due to an absence. Prior to my termination, I had been talking to the company's WC Insurance company. I pleaded for them to let me see a doctor. They have to this day, not done so.

I took it upon myself to see a doctor, while still employeed. The doctor said I needed to have EMG/NCV studies done A.S.A.P. She also wote me out a light duty note that was ignored by HR and my supervisor. I put myself on light duty the best I could till I was let go.

I have 3 doctors who say I was hurt on the job and that I am unable to work. Yet, to this day the insurance company has neither approved or denied my claim.

I did have the studies done and the result was UND.

The labor board has told me that until the insurance company makes a decision, I will have to keep on waiting.

Is there anyone out there who knows what I can do?

Final 419 Regs

Actually, after reading through the examples, bye bye any death benefit 419 plan unless it is pure term only (with no level term period allowed and no bogus "special term" insurance to get around the rules).

Aftermessage:

BTW, Dave's edit only steered the URL link to a cleaner version of the regs (provided by the Congressional Register through Benefitslink) than the one I originally posted through Relius. No "big brother" action by our fearless leader for anyone wondering why there was a message for awhile that said "edited by Dave Baker"

This isn't going to make sense since I haven't been able to think too clearly about this all, but in reading through some of the stuff in my HIPAA implementation checklist, it just starts to boggle me about how the plan can't release info to the employer, but when you are one and the same person how do you differentiate between when you are working in one capacity and when you are in the other, and how are you supposed to keep yourself from knowing information that the employer isn't supposed to know without authorization, when you already know it, because you do the work for the plan?! I must be missing something...

I'm reviewing a (cafeteria) plan document (drafted by another organization) that specifically incorporates the Summary Plan Description into the plan. It goes so far to refer to the SPD for many of the definitions of plan terms.

(Examples: "Company": The organization named in the SPD as the "Employer"; Participant Termination: A Participant will cease to be a Participant as of the earlier of the dates set forth in the SPD.)

I think incorporating the SPD into the plan document is poor practice at best, but it's so pervasive in the document that I would have to recommend a nearly complete re-write of the plan document to correct it. Any comments as to how common this practice is? Should suggest a re-write, and if so, how strongly should I suggest it?

This is the first year that I've had to file a 5500 for a large plan (lucky me). I've helped with them in the past but never had to complete one on my own. I got through most of the financial info on the Schedule H but have now come to questions 4i and 4j (Part IV) and am not sure how to proceed.

What exactly does the DOL want for the "Schedule of Assets"? Is this something filed for every large plan? I have reviewed the instructions and they don't seem to make any sense to me. Do I just create a spreadsheet with a list of all their investments (w/info specified in instructions- i.e. Identity of Issue, Description of Investment, Cost & Current Value)? Or would the auditor take care of any of this? I can't seem to find a copy of a spreadsheet in past files and the person who used to do them is gone on not-so-great terms and probably wouldn't be much help.

Regarding the 5% of current value transactions... what is current value? Also, if the plan decided to move from one investment to another, that is still considered a "transaction"? It seems like a lot of extra work to me.

Thanks,

Rachel

I have a client who is questioning the years of service for employees on a plan with an effective date of Nov. 1, 1999. Standardized plan that credits service for all employment years.

Example: Full time employee hired in March 1998. My calculation is one year of service each for 1998, 1999, 2000, 2001 & 2002 (only looking at data through 12/31/02). 5 years. His calculation is one year of service each for 1998, 2000, 2001, 2002, and one year for 1/1/99 - 10/31/99, one year for 11/1/99-12/31/99. 6 years. His arguement is for the short plan year, only need 166 hours for a year of service. Somebody hired in October 1999 is credited with a year of service for 1999. He argues that if you credit somebody that wasn't there the full year a year of service just because they had full time hours for that plan year because it was a short plan year, then somebody that was there that same year, but the full year should get 2 years of service. Because if somebody was hired in October 1998, they would not get a year of service for 1998 because they didnt' work 1000 hours in 1998 and then they would only get one year for 1999.

I need help explaining this.

I'd appreciate any comments as to whether you think there are any issues with designing a DB plan to not offer lump sums, in order to reduce or eliminate impact on general testing a Most Valuable Accrual Rate (MVAR) due to 417(e)/act. equiv., AND then in the 11th hour before plan termination adding a lump option which is never considered in any testing.

My concern is it seems a little too good to be true; to be able to avoid having to test 417(e)/actuarial equiv. lump sums in the MVAR for the entire life of the plan, and then just add the lump sum option at the end with no ramifications or impact on prior years testing.

I like the results though, and want to use that option (periodically) if available, but would appreciate any comments pro or con on this approach.