Does anyone have a solution for this scenario:

In an online daily valued environment, employee requests the "maximum amount available" online (e.g., 50% of vested account). System calculates amount avail. based on prior night's unit values and gives amortization and all Reg. Z disclosure. Employee approves the loan for processing and direct deposit to account. At the end of the day, the market drops and the loan amount would now exceed the 50% vested value.

Example: Ee. has $40,000 vested and requests 50%.($20,000 modeled,

disclosed and accepted for processing by ee.) That night, the market drops

and the person's account drops to $38,000.. new maximum amount available is

$19,000, which is different than amounts disclosed on screen at point of approval.

Any solutions out there? What process do you follow?

Thanks

Oscar

Our current Prototype allows for in-service distributions under 59 1/2 for match and profit sharing. Is there any material out there that may discuss the pro's and cons of 1) actually choosing that option for a plan or 2) benefits/drawbacks for participants?

Your thoughts are appreciated.

We are in the process of reviewing a 12/31/01 Top Heavy test in order to determine if a Top-Heavy minimum needs to be made for the 2002 plan year. This plan changed from a 10/31 PYE to a 12/31 PYE in 2001.

At both 10/31/01 and 12/31/01 the following amounts were receivable:

10/31/01 Profit Sharing Contribution

12/31/01 3% Top Heavy Minimum

My question is, what of the 2 contributions above need to be included in the 12/31/01 Top-Heavy test? One opinion is to exclude both contributions since they were receiveable at 12/31/01. I can see excluding the 10/31/01 P/S from the 10/31/01 Top-Heavy determination, but can it also be excluded from the 12/31/01 since it is really the next plan year? Also, can the Top Heavy contribution be excluded since it is a required contribution?

Any input would be appreciated.

the age 50 catch-up provides that if an employee has or will attain age 50 during the tax year, that the catch-up can be used. Is the same true for utilization for the 15 years of service catch-up? Can it be used in the tax year 15 years will be attained, or must one wait until the actual employment anniversary before utilizing this catch-up?

at the Missouri Association of School Business Officials was that one gatekeeper was working as a common remitter, but the employees sought to have their paychecks reflect how much money went specifically to each specific 403(b) vendors, as opposed to having illustrated one explanation of dollars deferred to the 403(b) TPA remitter.

it appears that States who have State retirement programs which are not FICA states may have less of a chance for audit. Has anyone seen anything to the contrary? It appears that for the effort, the Service isn't going to want to spend the man-hours and dollars to audit a public K-12 plan if all they can expect to recover is 1.45% Medicare withholding.

Comments welcomed.

at the Missouri Association of School Business Officials, two IRS agents (one from Kansas, the other from Iowa) discussed serial loans. The fact pattern presented was what if the employee had multiple contracts with multiple vendors--making contributions to each, but only having a serial loan with one of the vendors. The IRS responed (incorrectly I think) that tif a participant in a public K-12 had defaulted on a number of loans with one vendor, and they deemed the situation a serial loan situation, that ALL the 403(b) contributions made by that employee to ANY vendor could be subject to FICA and Medicare W/H.

It was always my opinion that in the event of a serial loan, the only contract affected was that of the specific vendor contract(s) with the deemed serial loan. Yet the Service indicated that ALL contributions to ALL vendors would be subject to withholding.

Anyone want to take a stab at this?

My question, hopefully appropriate here is if there is a potential for premium tax to be attached to a benefits plan (dental and vision) where the plan is using a hybrid form of insurance. That is, is a governmental entity contracts with the carrier(s) for admin (claims processing, network, actuarial svs and banking services [banking services meaning that the money is held with the carrier, interest credit is paid on the money by carrier], and the carrier is contracted as the stop loss insurer, but the primary potential funding and risk is held by the governmental entity, (this includes including reserve and IBNR risk). My general understanding is that governmental plans in general are shielded from taxation (loosely put). I'm trying to clarify if this there is a premium tax impact (in general) for 1) the type of arrangement described and 2) if there is a tax impact, would using a carrier who is a not-for-profit entity. The reason for the hybrids form has to do how the contracting would have to be done. h Any tips, suggests or other direction would be greatly appreciated

Say you have eligibility requirements of 3 months/21 years and quarterly enrollments. If you want to use statutory exclusions for their discrimination test, can you exclude an employee who was hired in 1999 and never worked 1000 hours? Or do you go by the hire date and you can't exclude the employee? Thank you!!

Bob has had a Profit sharing Keogh for years.

ABC Inc. is the Trustee and Plan Administrator.

The assets are held in custodianship at XYZ Inc., a brokerage clearing firm.

The account is titled:

Bob Doe P/S Keogh w/ ABC Inc, Trustee

Who "owns" the account? Is it Bob Doe? Or is it ABC, Inc. who owns it FBO of Bob Doe?

If Bob Doe passes away is it the account of a deceased person? Or is it viewed as the account of the Trustee?

Thank you

If a distribution(Match) is processed for a participant prior to a plan restating to EGTRRA, should the old vesting schedule be used or should the 6yr graded be used.

A plan that is participat directed holds several life insurance policies. Participants have investment direction and want to surrender these policies. While I have seen many messages regarding life insurance in the threads regarding similar situations, they lead me to believe they surrender these policies at cash value and the participants use the proceeds to purchase mutual funds within the plan. Is this correct? Are there any tax consequences we should be aware of with the insurance surrender? Thank you for your help in advance.

can stockholders in a professional corporation be in a cafeteria plan? or would they be prohibited as self-employed? If they owned 10 percent or more, would they be prohibited?

We have a loan provision in our 401k and when the participant endorses the loan check, they agree to pay the loan according to Plan provisions. Our practice (not outlined in the Plan beyond the fact that "the committee may adopt reasonable loan procedures") is to withhold monthly loan repayments via automatic payroll deductions.

Can an employee elect out of making these loan repayments? In this case, she is willing to accept the eventual default. In the past, our position is that an employee cannot elect out of loan repayments as long as they are receiving a regular paycheck.

Does the DOL have anything to say about this?

Thanks for your help.

A while back, I posted a thread that asked, among other things, if revenue sharing fees could be used to offset plan expenses in 401(k) plans (see http://www.benefitslink.com/boards/index.p...649&hl=revenue).

Both Jon Chambers and Mojo were kind of enough to respond and provide some great information. Both suggested that the revenue sharing fees could be used to offset "plan expenses", but not "settlor expenses". A reference was made to the Frost National Bank DOL ruling, which I checked out.

It all follows that revenue sharing cannot be used to offset "settlor expenses" IF revenue sharing fees are considered to be part of the plan assets. My question is this; are ALL revenue sharing fees (including 12b-1, sub-TA, and Finder's Fees) considered to be part of plans assets? Someone in our office maintains that revenue sharing fees might NOT be considered to be part of plan assets, and hence could be used to pay settlor expenses.

If anyone could refer me to anything from the code or DOL starting that revenue sharing fees are considered parts of plan assets, that would be even better!

Thanks.

I'm looking for the disabled life mortality table, "1979 PBGC Table for disabled lives receiving Social Security benefits".

Does anyone know of a link containing the table or, if not, where I can get a copy of the complete table?

Thanks.

Plan allows for multiple loans. Participant had 2 outstanding loan balances as of June 2002 one amount of $16,000 and $29,300.00. The participant has paid off the $16,000.00 loan in August 2002 and has a current outstanding balance on the $29,300.00 loan of $24,460.00.

His vested account balance exceeds $100,000 so he would be eligible for a maximum loan of $50,000.00. So, with the two prior year loans do we have to take in the aggregate amount of the loans as of June 2002 totaling $45,300???? If so, then the calculation is the highest o/s loan balance would be $45,300 - $24,460 (current balance)= $20,840. Then maximum loan of $50,000 - $20,840= $29,160.

Take the $29,160-24,460=$4,700.00 available for new loan.

Please anyone confirm if this is the right basis.

Anyone from this message board attending either of these events? EBIA is sponsoring the Advanced Cafeteria Plan Seminar in Seattle in July and ISCEBS is sponsoring the Symposium in Phoenix in September. Just interested in networking a bit if anyone will be attending. Thanks!

Does a change in an employee's spouse's work schecule (FT to PT) qualify as a status change such that the employee can now enroll mid year in the DCSA? The spouse was NOT in a DCSA through her employer and is not going to PT status due to school, health, or to search for another job. In fact, the stated reason is so the spouse can spend more time with her children. Nevertheless, the employee now wants to use this event as a reason to join the DCSA.

The regulations I could find on this topic through EBIA, though not exhaustive, indicate that a change could be allowed to an existing account if the change in a spouse's work schedule necessitates a change in outside child care required. Again, this is not the case in this situation. I have not found anything that would seem to allow the employee to enroll in the DCSA when his spouse moves from a FT to PT status. Any opinions?

Good Morning:

I am trying to find an answer to the following question. Does a municipality in NY, that has over 100 employee's, need to file form 5500 for their welfare benefits? I am not sure if they are exempt or not? Please get back to me as soon as possible.

Thank you,

Wayne