When must contributions be made to 403(b) arrangements?

What happens if contributions are deducted from compensation and sent to the investment company but are never received?

I'm just wondering how anyone is finding Relius version 8.0+ to be? I'm currently on 7.3 and pretty happy with it...it seems like corrections to the 8.0+ versions on the website happen almost everyday, so I've been alittle leery about upgrading. Any pros &/or cons/comments appreciated.

An individual's current election under her employer's cafeteria plan provides for family coverage so that she may cover her children under such plan.

Her ex-husband, who is responsible for paying for the children's coverage per the divorce decree, has recently changed employment and has determined that it would be more cost-effective to cover the children under his new employer's plan rather than the children's current coverage under his ex-wife's employer's cafeteria plan.

The ex-wife has been employed with her current employer since the beginning of 2003, and the couple were divorced prior to her beginning her current employment.

May the ex-wife make a mid-year election change from family coverage to individual coverage (i.e., would an ex-spouse's change in employment be included in determining a change in status?)?

Thanks!

Anyone know of an Elected Officials Retirement Plan available in any of the states? DC or DB.

There is a participant in an employer's cafeteria plan who is being denied coverage for what I think is a covered expense and I need some other opinions or even a place to go to get the answer.

The participant took tetracycline as a teenager that turned her teeth black. So many years ago she had veneers put on her teeth to correct this problem. Well last year the veneers started to break and crack. She went to the dentist who said the only solution was to put new veneers on or cap the teeth since they had already been ground down for the first set of veneers. He recommended the caps and so the participant waited until this year and just had the caps put on.

The employer is stating that the guidelines for cafeterias are very clear that teeth whitening is not covered but since her teeth had already been ground down replacing the damage veneers with new caps is not teeth whitening. Any input on this would be appreciated.

I've been reading the posting from late last year regarding the calculation of MVARs when the plan pays a lump sum.

A posting on 10/31/02 from AndyH contains the following methodology.

**************************

So, assuming that the plan's QJSA is Joint & 50%, and using the above as a guide, I think the process is as follows:

1. Take the actual lump sum, divide that by the APR for an immediate Joint & 50% survivor annuity assuming the spouse is the same age. Then multiply that by the J&50% at the same age using testing assumptions. This I would call a "normalized" lump sum.

2. Bring that forward from AA to TA at the testing interest rate.

3. Then divide that by the life annuity APR at testing age using testing assumptions. Then divide that by testing comp and then by testing service. That is your MVAR.

This assumes of course that the lump sum is the most valuable accrual, which would be true unless there is a subsidized retirement benefit of some sort.

**************************

If the 50% J&S benefit is not subsidized, i.e. it is determined as the actuarial equivalent of the normal form life annuity, do we need to consider this benefit in calculation of the MVAR at all? It seems to me that using the plans conversion factors, the 50% J&S and life annuity are of equivalent value.

If the plan does not pay any early retirement benefits or lump sums, don't we only need to test the normal form benefit, and if the normal form is a single life annuity, there would be no conversion?

As a corollary to my first question, why does the above process for calculating the MVAR from a lump sum that has presumable been "subsidized" by the low 417(e) rates involve conversion through a 50% J&S annuity?

Does anyone have any guidance regarding why this is the accepted methodology (which from my reading, it appears to be).

2003 is the first year of a new defined benefit plan. It credits a maximum of 5 years of service prior to 1/1/2003 to calculate accrued and projected benefits.

For the Average Benefit Percentage test of 410(b) for 2003 (using 2003 as the measurement period) what do I use as the increase in accrued benefit in the DB plan since everyone enters with an accrued benefit as of 1/1/2003 (as a result of counting pre-participation service)?

For example, suppose participant A enters with 5 years of past service and the accrued benefit is $10/month per year of service.

Accrued Benefit @ 1/1/2003 = $50

Accrued Benefit @ 12/31/2003 = $60

Do I test $60 or $10?

Is an audit still required where the final plan year is a 2-week short plan year from 1/1/03 to 1/15/2003? (the plan otherwise requires an audit).

Unfortunately, the plan was not able to be merged until 1/15/2003 and has an audit report for the 12/31/2002 plan year.

Thanks.

Client has 2 DB plans - one for hourly EEs and one for salaries EEs. The hourly formula is simple ($ x years of service). The salaried formula is more complicated (% x average annual comp x credited service), but is a richer benefit. Currently, when an employee transfers from an hourly position to a salaried position, hourly benefit freezes and participation in salaried begins. All service and compensation taken into account for the salaried plan for all purposes. The plans have language to offset benefits to the extent they are for the same period of employment and/or earnings.

The sponsor has asked whether they can stop counting service while in the hourly plan as service in the salaried plan for benefit accrual purposes only. I have already explained that it could only be for new transferring EEs (anti-cutback rule), but I keep feeling like this is a bad idea. Unfortunately, my research hasn't helped me to pinpoint why I am uncomfortable.

Any suggestions?

Is a change in worksite an event that permits a participants to change his or her election under a dependent care spending account? If so, under what authority?

Thank you,

It has been clarified that non-spouse beneficiaries have the same right to get minimum distributions over their lifetime from the account of a deceased participant in a qualified pension plan as they would as if the money was in an IRA. However:

This is all well and good if the participant was in a large plan expected to continue in the future. What about the non-spouse beneficiaries of a one-man plan? Obviously, for the benefits to be paid well into the future, the plan itself must continue. However, the plan sponsor (as well as the sole participant) is no longer with us. How to handle this?

A situation that has been posed to us is a self-employed Keogh PS plan where the 2 adult children are the named beneficiaries (no spouse involved). The 2 kids are both self-employed, therefore there is a basis for establishing a new qualified plan and/or taking over from the prior sponsor (namely their mother).

Any thoughts out there? The brokerage firm who handled the plan has been giving some obtuse advise (first response was to establish trusts under the plan's name for each kid - didn't think you could continue plans too long without a sponsor).

Hi:

Just found your forum and am hoping someone can assist. I have a retirement plan from a private university under the co. Tiaa-Cref. I left the university's employ in 1988. Although I was able to rollover my stock portion of this program to another vehicle, I have been trying to for years to get the annuity portion. TIAA-CREF will allow it but my previous employer's rules will not. I have even asked to close the account, realizing there would be penalties and was told I am not permitted to do that either! The only option I have is to roll 10 payments of equal amounts into a money market account once a year and then withdraw from that. I am spitting mad because these people are holding my money hostage!!! What are my rights under ERISA?

thanks, clgray

I am still struggling with whether a safe-harbor 401(k) plan that wants to allow participants to make catch-up contributions may or must provide matches on those contributions.

For purposes of this question, assume that the plan matches deferrals on with each payroll period (and does not make a year-end gross up) and that the plan matches 100% of the first 3% and 50% of the next 2%.

If the catch-up contributions are not matched, how contributions are categorized during the year becomes critical. The IRS requires that all NHCEs be able to obtain the match to retain the safe harbor and if contributions are not deemed to be catch-ups until after a limit has been reached (generally the 402(g) limit), by definition the NHCE would not be eligible to receive the full match.

If the catch up contributions are matched (to avoid the administrative issues alluded to above) and the catch-up contributions are disregarded for purposes of testing but the match is not, does that mean that an electing HCE has a higher rate of match than under 50 NHCEs (blowing the safe-harbor by violating 401(m)(11)(B)(iii)).

Thank you for clarification.

Participant in a participant-directed DC plan is doing some estate planning and has inquired as to whether the Plan would allow an individual designated under her durable POA to direct the investment of her Plan account in the event of her "incapacity".

Has anyone ever run into such a situation? What are the "considerations" relative to a qualified plan?

Any and all comments appreciated.

An ER recently discovered that a couple of pay periods worth of elective deferrals were not deposited to the plan for the 2001 Plan Year. Of course, he's willing to make the contributions and must calculate earnings (or losses) on those contributions. He'll need to come up with the earnings out-of-pocket.

Is it possible that this could be dealt with via self-correction, or is it definately a VCP issue?

Employer A hires a number of new employees from Employer X. All of the new employees are covered under Employer B’s COBRA continuation coverage. May the new employees elect medical FSA under the 125 of Employer A, and submit for reimbursement the cost of the COBRA premium paid to Employer X? Could Employer A deduct (pre-tax) the cost of the COBRA premium directly from each of the new employees’ paychecks, and pay the COBRA premium directly to Employer X on behalf of the new employees? Note that there are also other employees without any connection to Employer X or the COBRA continuation option. Does the answer change if Employer A already has a group health plan for which the new employees are not yet eligible?

What are the potential ramifications of including a noncompetition clause or non-disclosure clause in a NQDC document? Can benefits be subject to forfeiture even once the exec is receiving benefits and retired from the employer?

Small NONprofit has only one HCE, the CEO, who is 100% vested. Can they intentionally fail the ADP/ACP testing, knowing that he/she will be entitled to keep the excess matching contributions, which, had the test been passed, would have been foregone?

If the only HCE was the owner, their would simply be easier ways to get the money out of the company.

Due to plan mergers, we now have folks with a deferred vested DB benefit in a FAE title of the plan and a deferred vested DB benefit in a cash balance title of the plan (this follows a retirement choice election process). This is now one plan with one plan number. Reviewing Schedule SSA, it appears that it doesn't allow an individual to have say a DB plan benefit under an annuity and another DB plan benefit that generally is stated in an account balance/lump sum manner (the Cash Balance benefit). Are we to convert the Cash Balance amount to an annuity, add it to the annuity due from the FAE title of the plan and thus report such in that fashion? Any other guidance?

I am looking for a checklist for a plan termination. The plans are a MPP and a PS. The 5500s for both plans are filed as having a single participant that covers 100% owner of corporation. The "Company" covered by these plans are in the process of being dissolved but it has not been completed.

Does anyone know of a checklist out there?

Thanks in advance for your help!