I have a client with a fully self-funded medical and dental plan and whose health premiums are deducted on a pre-tax basis that presently the following scenario.

They have an employee who currently has employee only coverage and has just presented a QMSCO on two dependent children. The children are currently covered under individual medical policies. The employee wants to drop the individual policies and add the dependents to the group plan. (fyi, there are no significant cost difference or benefit difference between both plans).

Am I correct in stating that this employer does not have to accept the QMCSO because the children already have coverage (that they are not losing) and therefore there is not qualifying event to make the change eligible under Section 125 rules?

Situation:

Company A and Company B both owned by Mr. X.

Company A maintained a 401(k) plan with ees of Co A and Co B participating.

As of 1/1/03, ownership of Co B changed so it was no longer part of controlled group.

Since they were located in the same building and trying to help each other during the transition, Co B's payrolls were run on Co A's software. Guess what? Co A's payroll system already had 401(k) deductions loaded, so deferrals were taken from Co B ee's checks until late February. Deferral $$ were deposited in single pooled Schwab account that was used for both companies in 2002.

I want to get the ineligible deferrals out of the plan, but am not sure of the mechanics of the process. Would I distribute the ineligible deferrals using code 2 (early, but exception applies) on the 1099R? I know the exceptions under code 2 do not fit this situation, but am trying to figure out a way to refund the $$ and not have the ineligible participants pay 10% early dist penalty.

Thanks.

I am preparing the SAR for a small money purchase pension plan. Most the plan assets are held in an insurance company variable annuity product. However, one of the participants has his assets in two brokerage firms. I was listing the assets on the SAR and then realized that the participants have a right to ask for statements from the brokerage accounts, even though they personally are not invested in them.

Is this correct? And, if it is, do they actually get to see an asset statement showing this one participant's balance in those accounts?

A company pays its employees in two phases for each month. The first check is on the 5th of the month and is in the nature of an advance, a set amount each pay period based on a minimum number of trips for which the employee will be paid, taxes are withheld from this amount.

The second check is paid on the 20th of the following month and is a reconciliation of the advance amount with trips actually made. It is from this check that the salary deferral amount for the 401(k) plan and other amounts, such as the employee's share of insurance premiums, are deducted.

The issue is what should happen when, for unexpected reasons, the amount available in this check, after taxes are withheld, is insufficient to cover the 401(k) deferral amount.

Is the risk of such an event solely on the employee? Is there any obligation on the employer to assure that the 401(k) deferral is taken out? For example, should the employer front the deferral amount and then deduct that amount from the next advance check?

I welcome your thoughts. Thanks.

I have a multiplemployer plan sponsored by a PEO. The PEO handles most of the employee benefits for all participating companies. Some of the sponsoring companies have the cafeteria deductions come straight to them and other have the cafeteria deductions go straight to the insurance companies. Is it okay to file one form 5500 for this plan or does this issue cause multiple 5500s to be filed?

Is a long-term care plan covered by ERISA? I have found information stating that long term care programs are not subject to HIPAA and COBRA - if provided as a separate plan. However, are such plans covered by ERISA?

Company A maintains Defined Benefit Plan X. Company B maintains Defined Benefit Plan Y. Company A acquires Company B. Plan Y includes voluntary employee contributions. Company A also maintains Plan K, a qualified cash or deferred arrangement. Company A is considering the transfer of the voluntary contributions of Plan Y (V) into Plan K and then merging Plan Y into Plan X.

1) Is V subject to a separate cash-out rule than the remainder of Plan Y under 411(a)(11) and 417?

(2) Would the transfer of V into Plan K cause Plan Y to be terminated under ERISA Section 4041(e)?

(3) Are there any regulatory filing requirements in connection with the movement of V into Plan K?

Hello once again. Continuning to learn about these plans - if only I had more access to organizations that can utilize these plans!

My client offers a salary deferral only 403(b) plan to its employees. Progress is being made and the client is interested in adding a matching contribution. I understand that a formalized plan document will be needed and the matching contributions will be tested the same as matching contributions in a 401(k) plan.

Right now, the employee 403(b) accounts are all over the place. The client would like to set up a group account where the participant and employer contributions are grouped together. Is there anything an employer can do to round up the individual 403(b) accounts and bring them under one umbrella?

Hopefully you understand the gist of my question. Any and all thoughts would be appreciated. Thanks.

No matter how hard you try to avoid it, eventually some document allows both loans and hardship distributions!!

Employee has a vested interest of $22,500 consisting of $10,000 of deferral contributions.

He has applied for and received a loan of $11,000. Now he wants a hardship of his $10,000 of 401(k) contributions under the safe harbor hardship provisions.

Okay?? I don't see how it is not acceptable but need feed back.

Thanks

A prospect has a 401k plan with a discretionary 100% match. The employer has never made a match and doesn't really even know why it was in the adoption agreement in the first place (but it was). However, they now want to make a match, but don't want it to be 100% vested. My basic question is - is there any way around this? If they keep the plan where it currently is, then I think the rules under Section 411(a)(10) will prevent them from imposing vesting on any of the current participants. They could amend for new participants going forward.

I'm wondering if this result can be avoided by first eliminating the matching contributions from the existing plan. Since there are no matching dollars, this would seem to be pretty simple. Then, we would establish a a new 401(k) plan with a matching contribution that is subject to vesting. Finally, we would merge the two plans together (the current plan which would no longer have a match being merged into the new plan).

Does anyone think that would work? If not, is anyone familiar with any legitimate technique for solving this problem?

When processing a distribution form, if marital status is marked as Widowed, do we need to get a copy of the death certificate to prove that spousal consent is not needed?

Employer has "standardized" profit sharing plan.

An employee met the eligibility requirements on 04/17/03. His entry date will be 07/01/03. Same employee terminated employment in Oct 19, 2003.

Plan document says that in order for a participant to share in the allocation of employer's discretionary contribution ... he must work over 500 hours during the year or be employed on the last day of the plan year.

He worked 960 hours in 2003 ( 01/01/03 - 06/30/03), prior to his 07/01/03 entry date ... AND worked 480 hours in 2003 (07/01/03 - 10/19/03) after his entry date.

Can he share in the employer's 2003 contribution?

(True that he worked more than 500 hours (namely: 1440 hours) during the plan year 2003 .... but most of those hours were worked prior to his entry date. He worked less than 500 hours after his entry date and he was not employed on the last day of the plan year 12/31/03)

A 401(k) participant names his spouse as beneficiary of his 401(k) plan, then divorces. The MSA contains mutual disclaimers of each party's retirement benefits and is notarized. Its a community property state.

He changes his life insurance beni designation from the ex-wife, to his mom, but forgets to make a corresponding change under the 401(k) plan.

The participant dies. The ex-wife is now a non-spouse, named beneficiary. The mom wants the retirement benefit. Can the ex-wife disclaim interest in the benefit, so the mom can get it? The plan definition of beneficiary says that in the absence of a designation, it goes first to a spouse, then to children, then to the participant's estate. He has no children.

My company (we have 8,000+ employees) currently continues Medical coverage indefinitely for employees on LTD. At no cost to the employee. I would like to hear how other large companies cost sharing medical coverage with there employees on LTD.

We are looking at changing to cost sharing at the active employee level and providing coverage for two years follow by COBRA or continuing coverage til medicare eligible.

Please share your policy.

I am an administrator of numerous governmental defined benefit plan in the state of Florida. Recently, a number of employee groups have started converting from a defined contribution to a defined benefit plans by using DC money to purchase the past service in the new DB plan. It has come to my attention from my actuary that under 415(b), if an employee has less than 10 years of participation in a DB plan, the 415 limit is reduced by a fraction where the numerator is the years of service in the DB plan and the denominator is 10.

Does this 415 limit reduction apply to converted DC to DB plans or is there a way out of this reduction.

If the UAAL is negative in any year, does the funding method revert to Aggregate or stay FIL?

If we stay with FIL, do we continue with negative UAAL? or

Set the negative UAAL to $0 for the following valuation.

Assume the plan is not subject to full funding limitation.

Our plan does not permit participants to buy employer stock with their deferrals to the 401k plan. It does give participants the option of buying employer stock with the employer match. We did not file a Form 11-k and are assuming that we are not affected by the requirement to file a Form 5500 within 180 days of the fiscal year end of the plan. Does anybody know if we are making an incorrect assumption?

Under a church plan (as defined in IRC Sec. 414(e)), can anyone please tell me if the entity itself is required to have the following financial forms disclosed?

FAS 35

FAS 87

FAS 132

I understand that a Form 5500 is not required (nor is a financial audit), I'm just not sure if the entity itself is required to disclose information.

Thanks.

Company A maintains Defined Benefit Plan X. Company B maintains Defined Benefit Plan Y. Company A acquires Company B. Plan Y includes voluntary employee contributions. Company A also maintains Plan K, a qualified cash or deferred arrangement. Company A is considering the transfer of the voluntary contributions of Plan Y (V) into Plan K and then merging Plan Y into Plan X.

1) Is V subject to a separate cash-out rule than the remainder of Plan Y under 411(a)(11) and 417?

(2) Would the transfer of V into Plan K cause Plan Y to be terminated under ERISA Section 4041(e)?

(3) Are there any regulatory filing requirements in connection with the movement of V into Plan K?

My 401(k) plan document indicates that the plan does NOT offer annuities and the J & S rules of Code Sections 401(a)(11) and 417 do not apply to the plan.

Therefore, I assume no spousal consent is required to process distributions for above or below $5000 vested dollars.

Does it matter that my employees live in California? I assume not based on my plan document. Does spousal consent matter depending on what state my employees live in if no annuities are even allowed in the plan?