Not sure if this is the right folder for this question, but here goes:

Company with 5 employees (4 family HCE's, 1 non-HCE's) with a 6/30 fiscal year. The adopt a SEP with an initial PYE of 6/30/02. They are considering adopting a PS plan, effective either for PYE 6/30/03 or 6/30/04, and doing away with the SEP.

If they adopt the PS plan, is the $500 (max) tax credit available to them for either 6/30/03 or 6/30/04 plan year, possibly both? Does the SEP interfere with them taking advantage of this credit? If they wait until 7/1/03 to adopt the PS plan (630/04 PYE), can they take advantage of any of this tax credit for SEP admin costs (if there are any) for 6/30/03 Plan year?

Thanks for any help.

A married person is a member of PERS dies and names his girlfriend as beneficiary. He is not divorced! is the wife treated as a surviving spouse, is entitled to widows benefits? Is girlfriend still treated as beneficiary? Any case history?

Recently one of our clients were bought out by another company. The 401(k) PS plan for the original client is still in existence with about 40 participants with balances even though the company is not. There are no contributions going into the plan nor were there for 2002.

Therefore, there was not testing run on the plan for 2002.

How do I continue to complete Schedule T. Can I mark one of the exception boxes. If so, which?

Thanks

Employer has a 401(k) safe-harbor plan.

Three kinds of contributions go into the plan.

1) Elective deferrals (withheld from employees' paychecks).

2) Required 3% employer match (required for safe-harbor status).

3) 11% employer discretionary contribution to profit sharing plan.

I realize that 1) & 2) are immediately 100% vested. But what about 3) ?

So, my question is .... Does a discretionary contribution to a profit sharing plan have to be 100% immediate vested, just because the profit sharing plan happens to have a "safe-harbor 401(k) feature" ?

I have been asked whether a wheelchair ramp (installation) is a covered expense for a medical FSA. I haven't found anything one way or the other, any opinions?

Thanks!

Carolynn

One of the two methods for a late correction of the ADP test is the one-to- one correction method. This method involves the Employer making a contribution to the Plan equal to the amount distributed to the HCEs. This contribution is then allocated to the NHCEs. In the ERISA Outline Book, there are four ways to allocated this contribution, and all four methods refer to allocating the contribution to participants who were NHCEs for that year. The ADP Test used the Otherwise Excludable Employee rule. Should the one-to-one contribution be allocated only to those NHCEs who were in the ADP Test, or should it be also be allocated to the NHCEs who were excludable from the test?

Can a participant in a 401(k) plan take advantage of the catch-up contributions in both the 401(k) plan and an IRA?

I think it might be useful for some of the authors to post about how the new tax laws, especially as relate to capital gains and dividends, might change investment/retirement basics. {I have only started to think about this and will post the first reply! with some of my ideas}

Do the new ERISA "medical claims deadlines" that the DOL requires a plan's insurance company to follow ... have to be described in the Summary Plan Description ?

It seems that the SPD wording might have to be quite lengthy to fully explain the new regulations.

Medical insurance companies must now process medical claims faster than before. The fact that there is now a separate set of DOL rules for each of three types of claims (urgent health care, pre-certification health care, and post-service health care) will make the SPD more difficult to write.

Can anyone direct me to a SPD on the internet that has this new disclosure ?

Thanks

I have a new (2002) calendar year 401(k) plan. The plan inception date was 10/01/2002. The client has a 3 month eligibility, but they let everyone in who was an employee on or before 10/01/2002. I'm preparing the 2002 5500 form. The plan has 123 participants as of 10/01/2002. There were 26 participants with account balances on 12/31/2002 with a total plan balance of $2,798.36. (The plan got started late with the deferrals and only had 3 or 4 weeks of deposits.) I know I'm grasping at straws here...is there any way to avoid having to do Schedule H and the client needing an independent financial audit for the 2002 plan year? Since the plan was effective 10/01/2002, I'm pretty sure I can't get around having the BOY 123 participant count & filing a Schedule H with audit...any input is appreciated...

An employee (this is in California) will be out on workers' comp. leave for 12 weeks.

Q1: Does his beneficiaries have COBRA rights? What rights do they have?

Q2: What are the employer's responsibilities to the beneficiaries in this case?

Since this is a subject about which I know nothing, thought I'd solicit some opinions. Suppose you have a multiple employer plan. Under 1.413©-2, each employer is treated as having a separate plan for purposes of nondiscrimination testing. Now suppose company "y" fails.

If there is a disqualification, how does this work? Is the entire multiple employer plan disqualified? Doesn't seem reasonable... but what are the mechanics of leaving disqualified money in plan, or getting it out if there's a disqualification, etc.?

I'm not looking for specific cites - just some opinions from folks who may be more familiar with these issues! Thanks.

Situation:

- Corporation has 3 divisions (SC, IL, and GA), each of which has a 401(k) plan.

- Corporation establishes a new "USA" 401(k) plan in 2002

- Assets of each division plan are merged into new plan at different dates during 2002

Can I use use 3% NHCE ADP for testing the USA plan in 2002?

The PPD ERISA outlines says "For the first plan year of a plan (other than a successor plan) that used the prior year testing method, the ADDP of the NHCEs for the prior year is deemed to equal 3%" I'm not sure of the definition for "successor plan".

I have a student edition of Sal's ERISA outline, but the C-1 version omits sections on ADP testing.

If 3% can't be used how in the heck do I come up with an ADP for the NHCEs? I remember reading something a long time ago that the NHCE ADP would not be the average of the actual prior year ADP for the 3 plans, it would be a weighted average. For example:

SC plan 2001 NHCE ADP: 4%, 100 NHCE (100/450 * .04 = .0088)

GA plan 2001 NHCE ADP: 2%, 300 NHCE (300/450 * .02 = .0133)

IL plan 2001 NHCE ADP: 6%, 50 NHCE (50/450 * .06 = .0066)

weighted average: (.0088 + .0133 + .0066) = .0287, 2.87% compared to

average of actual prior year ADP (.04 + .02 +.06)/3 = .04, 4%

Any ideas? Thanks.

Our paralegal has been telling all alternate payees that the participant's account balance is confidential and that the plan administrator is not allowed to disclose any amounts without a subpoena directed it to do so. She says that this is federal law.

What is she talking about? Can anyone point me in the right direction?

Basic EDI question:

If a company's employees must log on to an intranet to make enrollment decisions, must the enrollment process comply with the EDI Rules?

Thanks.

I know there is a seperate board for the C-2DC but no one ever uses it...

Can you help with a couple of questions?

1. Can you really exclude participants from your ACP test if they are not eligible for a Match due to a last day requirement? Per the textbook, "An employee may be eligible for the ADP test and not the ACP test, e.g., did not meet the last day employed requirement to receive a matching contribution."

I have never seen this before and have always included participants in my ACP in this situation. And the question on the Practice Test:

"Which of the following describes participants that can be excluded from the ACP test?

a. A participant who cannot contribute due to a hardship distribution taken in the last six months

b. A participant who elects not to defer

c. A participant who is not included in the minimum coverage tests for the 401(m) component of the plan.

the answer is © but I am not sure why??

Also, another question asks, "All of the following statements regarding catch-up contributions are true, except:

a. Participant deferrals may be recharacterized as catch up contributions after the plan year ends

b. A plan will not fail 401(a) (4) because of catch ups

c.Participants must be at least 50 before the end of the plan year to be eligible to make catch ups

d. Catch ups will not cause failure of the ADP test

The answer is (a). I cant figure out why this is the answer as I dont see how catch ups are characterized until the end of the year when testing is done, so why would this be a false statement??

I really appreciate all you smart guys helping me out....

Lisa

Two corp's. -- Corp X and Corp Y. Corp X maintains a PSP. A and B own shares in Corp. X 50/50. A, B and C own shares in Corp. Y 1/3 each. C buys A's and B's shares in Corp. Y. Is the vesting of the employees of Corp. Y determined under the partial termination rules? ....i.e., now treated as 100% vested if partial termination has occurred, otherwise, vesting is as per schedule in effect at time of cessation of controlled group status?

I am working on a Form 5500 for a plan that has less than 95% qualifying assets but all of the qualified assets are limited plan assets. The rules imply that the audit wavier applies to the plan provided the employer purchases a bond covering the nonqualifed assets and the SAR provides additional disclosures.

What is the time frame for the purchase of the additional bond? We are just working through the calculation so the employer has not purchased anything as of yet (worse yet, they do not even have the general ERISA bond!)

Your thoughts would be appreciated.

Thanks,

Diane

I am looking for any survey results for small business 401(k) plans. I have a client who at the end of 2002, sold roughly two thirds of his business. He went from a corporation to an LLC. Needless to say our plan pricing needs revisited.

I am wondering if anyone has seen a survey of 401(k) plans that pertained to asset charge. I recall (but cannot locate it) a survey being done that compared asset charges based on plan size, and asset range.

This plan is around 500K and 40 lives.

Anyone have any idea where I can find this information?

Here are entries from a Photoshop contest; participants used the Photoshop image software to create 'what-if' shots of Martha Stewart's potential jail cell if she's convicted ...

http://www.worth1000.com/cache/contest/con...otoshop#entries