I have a group that have a Flex Plan including the pre-tax Premium portion. They have 2 open enrollments a year for their health insurance. Their consultant want the specific regs that state an employer can have two open enrollments for their employees who are under the premium portion of the Flex Plan. Does anyone know where I can find the specific regs?

Under Ch 94 of the Texas Human Resources Code which is under the auspices of Title 20 of the USC, the state of Texas "licenses" handicapped people (with preference for blind people) to manage vending machine sales at government (state and federal) buildings. Under these rules, the state can provide retirement programs for these folks out of the proceeds of the sales.

Can anyone point me to cites that would provide further guidance on what types of plans are allowed under these rules and any other special rules under which they must operate? What about Social Security taxes?

Based on what I've read in the above cites, it sounds like the licensees are a mix of independent contractor and employee. They receive "commissions" but the state highly regulates how they operate their "business". The state government can set up a retirement program for these folks only if a majority of the licensed vendors approve the program. Then the state can fund the retirement program with part of the proceeds from the vending machines.

Any help would be greatly appreciated.

Can an employer have two retirement plans. We are a small non-profit that currently has a 403(b). We recently entered into an employee leasing arrangement that offers a 401k. The employee leasing company has a strict company match that is not the same as our more generous match. Can employee's still have contributions taken from their pay via the leasing company and put into the 401k while at the same time contributing the company match into the old 403(b)?

this is posted on benefitslink today - last paragraph states the following.

"Many companies enjoyed large pension surpluses during the stock market boom and now have deficits, and some sponsors must now make big contributions to comply with the law. There are fears that if the pension agency raises its premiums for all companies, those with healthier funds will drop out of the system. That would make the agency's finances even worse."

Am curious about how plan sponsor can drop out of PBGC program. Is the author of the article mistaken or is there something to this?

I am continually confusing coverage and nondiscrimination when it comes to cross testing.

For example, if I have a plan that benefits 4 of 5 NHCs and 100% of the HCEs, and it is being cross tested for nondiscrimination, coverage is still passed at the plan level using the ratio test at 80%, correct?

So for instance, if this plan were being submitted using form 5307 I could show my coverage passing by completing question 11 of form 5307 and include Demo 6 for the Average Benefits Test for nondiscrimination? No Demo 5 would be necessary?

As always, thanks for any input.

This was discussed briefly in 10/2002 but I need some clarification. Let's say that a calendar year Plan terminates in 6/2003. The termination amendment calls for cessation of benefit accruals (PSP) and proposed date of termination of 6/30/2003. Let's assume that all assets are paid out before 12/31/2003. Based on the 10/2002 discussion on this board is the scenario I have described a short plan year that requires proratioin of certain limits? If so, which limits? Are these correct:

401(a)(17) prorated

SSWB prorated

Vesting Credit prorated

415 limit prorated

How does one calculate the participant's PVAB in a cash balance plan in order to determine if the plan is top heavy?

I could see projecting the account balance to NRA, converting it to an annuity, and then determining a PVAB based on this annuity.

I can also envision just using the current account balances, since once we go through the steps of projecting, annuitizing, and calculating a discounted single sum, we are pretty much back were we started.

Is there any formal guidance on this topic?

Thanks.

Can anyone point me to the Regs that govern the reimbursement of expenses to trustees or other fiduciaries? Are per diems permitted? Are there any monetary limits to reimbursement?

The plan is a multiemployer plan, does this make a difference to the amount of and type of reimbursement permitted?

Thank you in advance for your help.

We use quantech, pentabs, and FDP in our TPA firm. We are upgrading our copier. According to the salesman, we should be able to print these software applications directly to the copier versus at the individual work stations. I hear they may be problems with FDP because it uses Word 97. Pentabs is a dos program.

Anyone out there printing directly to copiers versus printers? If yes, any problems?

Plan year-end is 12/31/02, what is the deadline for the profit sharing contribution to be made? If possible, please let me know via e-mail: scott.paterniani@gt.com

I have a 1 man plan who wants to purchase as part of plan assets real estate that's subject to a mortgage. What are the issues involved (prohibited trans, unrelated business income tax, etc)-how do you handle it?

Thanks

Regarding Sec 404(a)(6), timing of when contributions made/deducted: If cash-basis employer is calendar year and defined benefit plan had June 30 year-end, what year would deduction be accrued to?

For example: 12/31/02 employer year-end; 6/30/03 plan year-end. I would assume the accrual of the contribution for 6/30/03 would be on 12/31//02 corporate return since 6/30/03 is the 2002 tax form used. Or would it be 6/30/03 plan contribution accrues to 12/31/03?

If 6/03 would accrue to 12/31/02, then I would assume the plan contribution would still need to be made by 8.5 months (9/15/03) after 12/31 and not 6/30 (2/15/04).

Or, is the deduction governed by Reg § 1.404(a)-14©(1) and the employer can elect what year to take the deduction?

Is the compensation period an issue also? For example, if the 6/30/03 plan year contribution is "on account of" 12/31/02 compensation.

Thanks for any light you could shed on this issue for me.

I have an employer with a current 401(k) profit sharing plan. The employer wants to remove the 401(k) piece from their document since no employees are interested in participating. Does anyone have any idea how to go about doing so? Could I just restate the plan and not include the 401(k) provisions?

Participant was paid a distribution of:

$10,000 from 401(k) account.

$600 from match account (forfeited other $400).

$700 from profit sharing account (forfeited other $300).

When the participant is rehired and meets other requirements for buy-back, does the participant have the option of:

1) Repaying $600 to match account to have match account restored, but not repaying profit sharing account?

2) Repaying $1,300 to have both match and profit sharing restored?

Or is the only allowable option to repay $11,300 to 401(k), match and profit sharing to get the forfeited amounts restored?

Terminated ee had eligible medical expense incurred before termination but did not submit for reimbursement prior to termination. The expense exceeds terminated ee's contributions. Must the plan reimburse up to the annual coverage amount, or may the plan limit reimbursement to account balance (or not reimburse at all if plan terms permit).

Is it common practice to allow 401(k) deferrals to be taken on vacation payouts made at termination of employment? Can vacation payouts count towards final average pay and credited service in pension plans? If yes, what are the advantages and disadvantages?

Hello!

I am new to this area so please bear with me! I am working with a small company who, about one year ago, decided that it was going to merge the money purchase pension plan into the profit sharing plan. No amendment was signed to effectuate the merger and a section 204(h) notice was never given to the Participants. Instead, the MPP account was transferred into the PSP account. This is reflected, obviously, on the statements. I contacted the IRS on a "John Doe" basis. The agent said that if this truly is a merger and not a plan termination than an amendment to effectuate the merger can be done by September 30, 2003. However, I am also concerned that a 204(h) notice was not given out prior to the account being transferred. How do I correct this situation?

If an individually designed plan was adopted by 2-28-02, is the plan still required to submit for a determ letter by the 9-30-03 deadline? Thanks

If an individually designed plan was adopted by 2-28-02, is the plan still required to submit for a determ letter by the 9-30-03 deadline? Thanks

A married person living in a community property state designates an IRA beneficiary other than his/her spouse, and then dies. The spouse asserts a right to a portion of the IRA based on community property law. What options does the spouse have in dealing with his/her interest in the IRA?

He/she doesn't appear to be a "designated beneficiary" under 401(a)(9) and the regulations, so his/her options there should be the same as those of an estate -- continuing the decedent's distribution if death was after the required beginning date, or payout within 5 years if death was before the required beginning date.

Can he/she roll over to his/her own IRA? That doesn't depend on "designated beneficiary" status under 408(d)(3). Assuming ownership of the account under Treas. Reg. 1.408-8, on the other hand, appears to require designated beneficiary status.

I would appreciate any thoughts or comments.