Does anyone know the proper date of withdrawal to use for a building and construction industry employer contributing to a multemployer plan? Would it be the day after the obligation to contributed under the CBA expires, where the employer continues the same kind of work in the same area. Or would it just be the day on which the obligation to contribute, (the CBA) expires?

Can someone tell me if there exists an IRS ruling for Simple 401K Plans that states no distribution can be made for 2 years

Are the requirements for the Small Plan Audit for plans with greater than 5% of assets considered non-qualified the same as the Audit for plans with over 100 participants?? Is it stated anywhere that the Small Plan Audit must be done on a cash or accrual or a hybrid method?? And must the audit match the Form 5500?? Any other info would be appreciated. Thanks.

I am having one of those days where I can't remember or find the documentation that I am looking for. Quick, basic question: Can an alternate Payee of a QDRO roll her monies into a IRA without any adverse tax penalties?

I got volunteered to speak at a seminar on 5500's. I prepare 5500's, but by no means am I an expert. I need to beacome an expert over the next couple of months. Can anybody recommend a good Prepaper's Manual I could study? Several years ago I saw a Manual by Joan Guaciardi (I think, but maybe not) that was excellent, but I can't remmeber the name of it and don't even know if it is still published.

Does anyone have any experience with the following scenario:

Company files for bankruptcy March 2002 but has not contributed 401(k) deferrals and matching contributions for November December 2001 as well as January 2002. This situation only comes to light May 2003.

I am new to the 403(b) arena and have the opportunity to takeover a state economic development agency 403(b) plan. Looks pretty simple to me, no HCE's, complete a few items on the 5500 and you are done. They have a model plan document with custodial accounts and annuity contract provisions. The document is not investment provider specific.

I do have some questions on the funding arrangements. I know they are limited to annuities and mutual funds for limited reporting, but it is our desire to offer a couple options to participants for investing:

Option 1 would be a mutual fund platform with a single fund family. Is this required to be a 403(b) specific platform, or can we just utililize their 401(k) platform knowing that the plan is still a 403(b)?

Option 2 would be individual brokerage accounts limited to mutual fund universe and annuities. Again, does this have to be 403(b) specific? Also, can we restrict this option to participants that have over 5k and are 100% vested?

Thanks for some prompt input!!

In calculating the 80%/120% corridor on actuarial value of assets, is the calculation:

1. (MKT + CONTR RECIEVABLE) * 1.20, or

2. (MKT * 1.20) + CONTR RECIEVABLE

With the newest legislation, it is now possible for participants to transfer their IRA's (SIMPLE, SEP, traditional, etc) into a 401k plan. I see many providers already have a transfer form out on this.

What reporting requirements are necessary for this? Presuming a plan sponsor pools all assets into a retail investment account and act as trustee (and no custodian). Do these assets continue to be tracked as IRA assets? or simply as transferred in assets that are fully vested? What, if any, reporting is required by the sponsor (again, remember there is no custodian).

please advise...

I have a client who has come to me with a question that has me confused. They are a group of 5 clinics that are owned by at least 10 different doctors per site. The clinics are run by a management group that owns 5% of each clinic. The clinics do common billing and purchasing, but do not share any revenues. The management firm charges a "fee" to each clinic for their services. While each clinic does its own hiring and firing of personnel all the paperwork and candidate screening goes through the management group.

In definition they aren't part of a controlled group nor affiliated services group, but there seems to be a common bond running through the five clinics and the management group. I have read some about common management groups, but don't know enough about whether this is one or not and whether these groups should be in one common plan or part of a MEP.

Any thoughts or direction would be greatly appreciated.

A Calendar yr plan is terminating effective 8/31/2003.

The valuation date is BOY (i.e. 1/1/2003) and the annual normal cost under the Ind Agg method is $100,000.

Per Rev Rul 79-237, for Section 412, Charges and Credits are pro-rated from BOY to the termination date.

So for the above, the minmum required would be $66,667 plus interest to EOY & late quarterly charge, if any.

Is there any such pro-rating requirement for determining the deductible amount S404(a)(a)(iii) i.e. deductible = Normal Cost + 10 yr bases' charges and credits = $100k +0 = 100k.

Your thoughts please.

We have a self insured health plan. I have been told that if we include in our HIPPA policy that assisting employees with health insurance claims is a routine and recurring task, that we are not required to have an employee sign an authorization form before we can assist them. Can anyone verify that this is correct for me? Thank you.

Are there any articles regarding how to structure a match in a 403(b) church plan? I.e., whether it is best for the match to go into the 403(b) plan or into a separate 401(a) plan? I am just looking for some guidance on the best way to structure the arrangement.

Thank you.

May an employer, who is experiencing financial difficulty, stop making contributions to a simple 401(k) plan mid year? Must they terminate the plan in order to accomplish this?

We have submitted a plan under the VCO program due to profit sharing contributions made for 2 employees who are in an ineligible class of employees. We will be transferring the contributions to an unallocated account and the ER will allocate the dollars to the remaining participants next year.

The agent would like us to address how earnings will be calculated. These individuals were eligible employees for several years, then entered an ineligible class a few years ago. Is there a generally accepted method for calculating earnings for the years the employees were not eligible. It seems impossible since the employees were diversified amoung several funds offered under the plan and had the ability to change investments periodically.

We are getting ready to upgrade to 7.2 and wanted to make sure there weren't any bugs or issues associated with this upgrade.

Thanks for your help.

Heather Aaron

The Emerging Issues Task Force of the FASB reached a conclusion at their meeting two weeks ago that the only proper attribution method for a cash balance plan is traditional unit credit.

Up until now, there has been a wide variance in approaches to applying SFAS 87 to a cash balance plan. The other very common method is to project out all salary and interest credits and then prorate on service. This is no longer allowed.

All measurements after today must use traditional unit credit. Any change in PBO due to methodology should go through the gain/loss (this was in the EITF minutes).

At the end of the EITF meeting, Jules Cassel made the following "observation" (if an observation is included in the EITF minutes, it carries the same weight as a published staff Q&A). For plans that use a market-based rate to credit the account balance, the discount rate must be that same rate. This was included in the EITF minutes.

EITF minutes must be ratified by the Board. At today's Board meeting, the observation about the discount rate was dropped from the minutes prior to ratification. The FASB staff was directed to write up a more comprehensive position paper on the specific circumstances that a discount rate other than corporate bonds would be used. This may end up as a staff position paper (similar to Q&As) or be sent through the EITF. In any event, this is expected to be completed fairly soon. By the end of this year, many cash balance plans may be required to use a different discount rate than they are currently using.

We are receiving a number of Medical FSA claims with prescription receipts that do not reference the drug prescribed. Some pharmacists are telling us that because of HIPAA, they are not allowed to print the name of the drug on the receipt. Instead, they can provide a phone number and a prescription number and it is up to us to call them for the name of the drug.

Are any of you getting this kind of feedback?

Thanks....Sheila

How is the annual accrual for a Cash Balance Plan General Test calculated after the first plan year if the interest crediting rate changes (annual change in 417(e) rate).

Assumptions:

Testing on the annual basis (not accrued to date).

Cash Balance Plan credits interest at 417(e) rate.

5% 417(e) for year 1 and 6% 417(e) for year 2.

$1,000 allocation each year.

Participant is age 40 for year 1 and 41 for year 2.

Retirement age is 65.

5% GAR 94 Age 65 APR Monthly = 141.5291

6% GAR 94 Age 65 APR Monthly = 130.3888

Year 1 Accrual:

1,000 * 1.05 ^ (65 – 40) / 141.5291 = 23.93

Year 2 Cash Balance Account Detail:

1,000 * 1.06 + 1,000 = 2,060

Is the Year 2 accrual for general testing (a) or (b) below:

(a)

2,060 * 1.06 ^ (65 - 41) / 130.3888 = 63.97

63.97 – 23.93 = 40.04 accrual for testing

or

(b)

2,060 * 1.06 ^ (65 - 41) / 130.3888 = 63.97

Then Recalculate Year 1 at new interest rate

1,000 * 1.06 ^ (65 – 40) / 130.3888 = 32.92

63.97 – 32.92 = 31.05 accrual for testing

We prepare a Schedule P for each trustee of the plan. I noticed that some TPA's complete only a single Schedule P with the 3 trustee names on the 1 line. Previous reviews of this process end in a split vote. My theory is why would the software allow multiple schedule P's then.

However, In regards to EFAST signatures, do I need to obtain 3 EFAST signature ID's? The reason I ask is in Relius Gov't Forms, when electronically filing, the software will only extract the names on the 5500 (plan administrator & Plan Sponsor/employer, if they are different) regardless of how many trustee's (Schedule P's).

Do I even need EFAST signatures for the Schedule P?