We are currently using the Corbel cross-tested volume submitter plans. It is our understanding that as long as we do not significantly change the language in the plan, we do not have to submit the document to the IRS for a determination letter. Is this correct?

Our 401(k) plan has a Puerto Rican employee who passed away. He has a beneficiary designation on file with us naming his 2 brothers as beneficiaries. The employee was never married.

A son has suddenly appeared, claiming Puerto Rican law requires any benefit to be paid to the estate (and therefore him), overriding any written designation and is claiming if we had paid the benefit to the named beneficiaries we (plan sponsor) would be responsible and would need to pay twice - once to the named beneficiaries and once to the estate to correct the mistake.

Is anyone familiar with this law, and does it involve benefit plans, life insurance and personal property? Thank you!

It's my understanding prototype adoption agreements must be restated for every amendment. Separate amendments to a document section are not permitted. Is this true? Is there a rev proc that backs that up?

Thanks

TPA/Recordkeeper provided the company with the safeharbor notice in September 2002. The company had the employee meeting and distributed the notice. TPA/Recordkeeper did not forward the plan document and amendment to the client until Feb/March 2003. The client has been making deferrals and matching contribution as if a safe harbor was in effect. Upon receipt of the documentation in Feb/March 2003, it shows an effective date of January 1, 2004 rather than the January 1, 2003 as the client expected.

Can't the document be signed in March 2003 with an effective date of January 1, 2003 and still use the Safe-Harbor for 2003 since the notice was given?

I thought I had run across some provision in the Regs. before regarding a frozen plan being exempt from coverage testing. Can anyone point me in the right direction? Thanks.

Can an employee get reimbursements from his flexible spending account for after-tax premiums he paid for dependent coverage under his own employer's group health plan? I know that the IRS has taken the position that individual plan premiums cannot be paid from FSAs and that premiums for coverage through another employer cannot be paid using FSA funds. However, in looking at Prop. Reg. 1.125-2 Q&A 7(b)(4) it is not clear whether reimbursement of premiums for coverage with the employer sponsoring the FSA is also prohibited. (Assume for purposes of this inquiry that there are reasons that the employer does not allow premiums for dependent coverage to be paid on a pre-tax basis through a premium conversion component of a cafertia plan.) It seems that many have interpreted this reg to prevent reimbursement of premiums for unrelated coverage, but not for group coverage provided by the employer. Does anyone have any input or other guidance to which I should refer? Thanks.

I have a 401(k)/profit sharing plan that the 2 HCE's (one of which is the owner) waived out of the plan irrevocably (not sure why). They are now looking to shelter some money somehow, and we are starting to think of a way to do this. Would the waiver from the profit sharing plan prevent them from implementing a cash balance plan? If so, what would you suggest, other than terminating the plan and starting over due to them waiving out of the profit sharing plan they now have in place?

A valuation is performed as of 12/31/2002. The assets on that date are $1,000,000. These assets include contributions for the calendar year 2002 of $500,000. Additionally, the client makes the final contribution in March 2003 of $75,000.

Now, it is easy to determine that in funding the plan, the valuation assets are $500,000 (ignoring potential interest for 412 prepayments for the moment). This is because the prepaid contributions for the current year are ignored for funding.

However, for PBGC Schedule A, the instructions for Line 3 appear to say that because the Determination Date is 12/31/2002 then the actuarial value of assets is used in the determination of the variable premium for 2003.

Is a client permitted to use the $575,000 (the prepaids during 2002 and the payment during 2003) on

line 3©?? The $75,000 would have to be discounted to the determination date but it is made prior to the premium payment date (which I read as one of the requirements).

The inclusion of this additional money would enable the client to avoid the variable rate premium entirely because then the assets would exceed the vested benefits.

Thanks for any and all comments.

Is anyone willing to share what wording they put in their comparability plans to cover the following situation:

Plan has a 1000 hour, last day of the plan year requirement for the allocation. Plan is top-heavy. Some people only receive the TH minimum. The plan fails the gateway. Those people that are below the gateway are bumped up to make the plan pass the gateway.

My plan does not currently say that you can bump these people up to the gateway. It specifically says they will receive no more than what is required to satisfy the top-heavy minimum. Therefore, I will be doing a corrective amendment by Oct 15 to allow for this correction for the 2002 plan year. For 2003 and future I would like some failsafe language in the plan.

I have an article dated 1-23-2003 from Sungard Corbel that says they had submitted some wording to the Volume Submitter Coordinator for approval for the "topping-off the tank" wording. Anybody willing to share any wording that has been approved by the Volume Submitter Coordinator or has been approved via Determination Letter in an individually designed plan?

Thanks

Excuse me if this has been posted elsewhere, I searched and could not find anything.

I was referencing an old Top Heavy Training Manual and came across this situation:

Company A closes it's doors on July 15th, 2002. The plan was found to be top-heavy for the year of 2002. Under IRS regulations, it says that because the company has now closed it's doors, that the TH minimum is not required.

I don't believe that I have ever ran across information indicating that this is a true statement and I have always thought that because the plan is a seperate entity outside of Company A, the TH contrib. is still owed to the plan, regardless.

Thoughts?

I've seen this question posted before, but with no response. I'll give it another try.

Anyone know of a list of plan changes applicable to 403(b) plans arising out of the GUST legislation. It can't be very long.

Thanks.

A terminated participant is requesting two things:

1) he wants to roll money from a previous plan into the company he just terminated from. The document says "employees" are allowed to roll $$ into the plan, so the employer can tell him no on this one, but..............

2) he also wants to take a loan

The loan program states loan payments are to be repaid via payroll deduction. Is the plan obligated to allow for this loan? Can the employer technically "get out of" allowing for the loan based on this?

Many of my plan sponsors cringe when terminated participants want to even continue making their loan payments, they feel they should no longer have to administer their loans :angry: , so I usually take over for them to keep them happy! But this situation is different, he want to initiate the loan as a terminated participant.

As always, your comments are greatly appreciated!

Linda

In a 401k plan, do you include the basic PS contribution with the matching contribution when you do the testing? Or do you use match only?

Employee's spouse has DCA through her job, $5,000 for the year. However, she quits as of 6/1. She has submitted $2,000 and been reimbursed that amount BUT has submitted invoices for $3,000. Employee enters into DCA through his employer and wants to get that $1,000 covered. Now, the Employee can't do this because the invoice for services was before he was a participant in his plan.

The question is, can the qualifiying event that allowed the employee pick up the DCA be when he knew his wife was going to quit rather than her actual term date? If that was the case, then he could have covered at least part of the last invoice. Thoughts?

What plans are required to provide this schedule. Instruction say plan covered under title IV. I have a professional organization with 23 employees. Must they provide this schedule?

Thanks, Susan

Is it a withdrawal event if a business that was participating in a multiemployer plan ceases to exist. Are there funding liabilities?

Client just found out that employee would like to drop dependent group-term life insurance for his child who has in fact not been a "Dependent" within the definition of the Plan for several years. In other words, this child is ineligible for coverage and has been for quite some time, and yet has been enrolled. How do we correct? I assume we immediately cease collecting premiums (given that the kid doesn't have life insurance coverage anyway and was never eligible). Do we have to go back and refund the past years' premiums paid in error? Thanks for your help.

Please post your company's policy on continuing medical coverage for EEs out on Workers Comp.

1) Do you treat them the same as active EEs? If so how do you collect any cost sharing from employee?

2) Make them pay the full cost (or COBRA rates)?

3) Other?

Does your policy change after the employee has been out for a period of time (one, three, six...months)?

I should know this.. But I am doubting my own knowledge and can't find it in writing anywhere.

Do participants who were no employed as of 12/31 have to receive a TH Contribution?

Does anyone else read the new regs to effectively require a safe-harbor plan to match contributions and to do the ACP test on the match?

Thanks for your input!