I had a medical reimbursement form returned to me because I had submitted a photocopy of the bill rather than a receipt for payment.

I was told that I need to provide proof that the bill was paid. I pay my bills by mail. So, the administrator said photocopy the cancelled check.

Is this for real!?!

Is an SPD required for a cafeteria plan if an SPD is provided for each benefit offered through the cafeteria plan? If possible please provide legal cites.

Thanks

I am struggling to design a floor offset cash balance plan with equal account additions for two owners who are different ages.

Everyone gets 7.5% in the defined contribution plan, including the owners, in hopes that will let me pass the meaningful benefit requirements for 401(a)(26) without having projected benefits for anyone other than the owners after the floor offset is applied.

I understand I also need to apply the offset on the same basis to everyone. Basically, my problem is how to state the offset so that owners get 7.5% in the defined contribution plan and 32.5% in the cash balance plan after the offset.

My "first shot" at that was to say the 7.5% directly offsets the cash balance addition, defined as 7.5% for group 2 and 40% for group 1. I am told though that I cannot simply offset the addition.

Can I instead say the maximum offset is the account coming from the first 7.5% in the cash balance formula?

Plan provides for in-service withdrawals of rollover contributions but failed to provide the option to participants. Any ideas for corrections under VCP?

We administer a 15 participant defined benefit plan that was frozen 2 years ago. For plan years beginning in 2002, the top heavy minimum is no longer provided. This employer also sponsors a salary deferral only 401(k) plan.

This employer wishes to provide another year of top heavy minimum benefits to participants of its defined benefit plan. The 401(k) document indicates that the 2% top heavy minimum is provided for in the DB.

Question: If a key employee makes say a 5% of pay salary deferral in the 401(k), wouldnt that then require the frozen DB to provide the 2% top heavy minimum for 2002?

We realize we could unfreeze the plan and change the benefit formula to 2% for each year of participation up to 10 years, but would prefer not to.

Anyone have any comments about this?

Thanks DK

Hello -

I'm been looking into whether a 401(k) plan that provides for plan loans can be amended to change the repayment terms of a loan mid-stream (i.e., a participant can't continue to repay post-termination and would be required to pay the outstanding amount immediately). Up to his point, the plan has allowed participants to continue to pay the loan back under the loan's terms, including post-termination participants. However, the plan would like to require former participants to pay back their loans immediately. I know that plan loans are not protected benefits under 411(d)(6), however, I'm not sure whether a plan can be amended to modify the repayment terms of a loan that is currently outstanding. I haven't been able to find any guidance on this. Any suggestions? Thanks for any advice.

New Rev. Proc. 2003-44 (which was released June 23, 2003) supersedes Rev Proc. 2002-47 effective October 1, 2003, but allows plans to adopt Rev. Proc. 2003-44 after June 5, 2003. For the first time, SIMPLE Plans are specifically covered by the IRS Voluntary Compliance Program.

We have been working on a voluntary compliance arrangement for a SIMPLE plan (technically "outside of VCP") for almost a year (and it has trailed on mostly because of delays within the IRS). We have just received a letter asking whether we want to "convert" the closing agreement to a compliance statement under the new Rev. Proc., but without any indication as to how such a conversion might affect what has already been done--whether we would have to make additional submissions, whether the proposed sanctions would change, etc.

Would be interested in having some insight as to possible advantages or disadvantages of making the change.

New Rev. Proc. 2003-44 (which was released June 23, 2003) supersedes Rev Proc. 2002-47 effective October 1, 2003, but allows plans to adopt Rev. Proc. 2003-44 after June 5, 2003. For the first time, SIMPLE Plans are specifically covered.

We have been working on a voluntary compliance arrangement for a SIMPLE plan (technically "outside of VCP") for almost a year (and it has trailed on mostly because of delays within the IRS). We have just received a letter asking whether we want to "convert" the closing agreement to a compliance statement under the new Rev. Proc., but without any indication as to how such a conversion might affect what has already been done--whether we would have to make additional submissions, whether the proposed sanctions would change, etc.

Would be interested in having some insight as to possible advantages or disadvantages of making the change.

It has always been my understanding that even if a plan specifies that distributions will not be made until the terminated participant has incurred a 1 year break in service, this would only apply to participants with vested account balances >$5,000. In other words, if a participant has <$5,000, then no matter when the plan says the distributions are payable, the plan sponsor can pay them out immediately upon request. is this correct, or have i been mislead????

Plan's in full funding - has a negative UAL (ie. $0), a full funding credit, and bases are wiped out.

I've seen both of the following methods employed:

1) let the balance equation fail. it's ok.

2) set up a fake loss base = cb so the equation works.

It's my understanding that either approach is acceptable.

What about this situation:

Plan's UAL is $0, but they do not have a FFC in the FSA. RR 81-213 says when you're coming out of full funding to set up a loss base equal to UAL + CB. Do I have to set up a base in this situation just because I don't have the FFC?

Thanks.

In reviewing assets of new client of ours, forms 5500 for years 1999 through 2001 did not include some assets that had been held by a second custodian. (Client apparently thought the asset statements they received from this second custodian were for a 403(b) plan that had been frozen when they started up a 401(k).)

Do we just file amended 5500's for all these years, or is there a voluntary correction program we need to pursue?

Thanks.

Has anyone delt with Enhanced Appreciation Securities in a qualified plan?

For 415 annual addition purposes, how are reallocated forfeitures valued in a leveraged S-Corp ESOP? Lower of Cost or Market? Fair Market Value?

Yet another top heavy question.

I have a Key Employee (5% Owner) who terminated in 2000. He just took his distribution in 2002.

Do I count his distribution in the Top Heavy Determination for 2003?

Thanks

I have a client with a profit sharing plan with no active participants. All are vested terminated and the plan is going to be terminated this year. What testing applies for a plan in this situation? Coverage? Top heavy? The last of the active participants terminated over two years ago.

May a non-vested participant withdraw his mandatory contributions to a defined benefit pension plan prior to his termination of employment?

We have an age-weighted plan that tested at 93.15 - a contribution was made for '01 based on the age-weighted formula. Received general audit letter from DOL for the '01 plan year asking for a variety of records, including the Top Heavy report. Question - is there going to be any issue with the testing % of the Top Heavy report and the contribution allocation? (some employees got 12%, some 3 some 1.2, etc.) Thank you.

Can anyone point me in the right direction to locate the history behind a Rabbi Trust and Secular Trust? (i.e., why they bear their names, etc.)

Employer has established a 401(k) plan. Employer tells all participants that they can only defer 12%, and that he will match no more than 5%.

An employee gross salary is $50,000 per year. He wants to defer 24% ...( $50,000 x24% = $12,000). But employer tells him that the plan document/ adoption agreement says that no more than 12% can be deferred.

Employee thinks that the new tax law (egtrra) allows him to defer up to 100% per year, as long as he defers no more than $12,000.

Who is correct ? (The employer or the employee).

When an IRA is rolled over into a Qualified Plan, does it loss its "IRA status" as far as:

- Purchasing Life Insurance?

- Qualifying for a Loan?