If a single former employee elects COBRA coverage and while on COBRA coverage gives birth, what are the time frames with respect to the following:

1) when the former employee must notify the employer of the birth

2) when the former employee must pay the premium for the newborn

I have been unable to find anything in the regs regarding the above. Does the 45-time to pay rule also apply for purposes of paying for the newborn child? Is it only with respect to the premium for the newborn, or does the former employee have 45 days to pay for both his or her coverage and the newborns? Any guidance/direction would be appreciated.

We have two closely controlled corporations under one plan. We also have a separate company that is currently not under the plan, but we would like to add it. It is not a corporation, but a sole proprietorship, if that matters. All 3 are 100% owned by the same person.

We contacted our broker to look into adding the third company to our plan. She talked with the carriers (or one anyway) and is now telling us that we can't do that because they all have separate tax ID#s. So we are confused. Is what they are telling us correct? Wouldn't the insurance contract be with the plan and not the company, so if the plan included multiple companies then so would the contract? But I assume they would have to agree to that, and is it common that an insurance company wouldn't? They are saying that we would have to have separate contracts for each tax ID#, but can you have separate contracts for one carrier under a single plan. That just seems weird.

Any thoughts on this would be greatly appreciated.

Thank you!

Edit to add - Especially confusing is because we already have two taxIDs that we consider as part of the plan, so are we then in violation of our contract because they are only using one taxID#?

I have a client that owned 100% of a sub. The parent and sub employees were both under the parent's 401(k) plan. The parent sold 50% of the sub to an unrelated 3rd party. The sub then adopted the parent's plan as a multi-employer plan. The sub employees have a lot of loans in the plan.

Question 1 - Is there a distribution problem with the loans when the sub adopts the parent's mulit-employer plan?

The sub now wants to adopt the third party's multi-employer plan and get out of the parent's plan. Question 2 - When the sub adopts the third party's plan and the assets and loans are transferred to the third party's plan is there a distribution problem? If this is a distribution, it is my understanding that loans cannot be rolled over.

A plan computes lump sum using the gatt basis.

The plan uses the greater lump sum amount under gatt or a basis that uses 6% for lump sums under 3,500.

If that is the case should the over 3,500 lump sums also mandate that the amount be compared to the 6% basis since it is done for lump sums under 3,500?

Any thoughts?

Gary

Hi,

If you have a pay period that runs from 12/14/02 to 12/28/02, but the actual paycheck is not issued until 1/3/03, when are the deferrals reported. Do you report them as 2002 deferrals because of the pay period or do you report them as 2003 deferrals because that is when the paycheck was received by the participant?

Thanks for your input. I have a Client anxiously awaiting a response and I have had no luck finding any guidance.

Joanne

An employer sponsors 2 plans-a cross-tested profit sharing plan and an ESOP, both with the same eligibility requirements and both covering the same employees.

Both plans pass 410(b) on their own and are not aggregated for 401(a)(4).

If the employer provides a 5% of pay allocation in the ESOP, does that satisfy the gateway and allow him to use cross-testing in the profit sharing without worrying about the gateway?

My client has a 403(b) plan that uses the actual hours worked for purposes of vesting. An issue has come up regarding a salaried employee who is questioning his vesting calculation. He is claiming that he has already worked in excess of 1,000 hours this year because he routinely works over 40 hours a week. I have been unable to locate any guidance on calculating "actual hours worked" for salaried employees. Any help would be appreciated.

We have two separate plans, one is a health fund providing health, prescription and life insurance benefits. the other plan offers legal services, dental and optical. All are funded solely by employer contributions.

What are the ramifications, if any, of merging dental and optical into the health plan? Can assets be transferred?

Any help is appreciated.

Is it correct that the Uniform Lifetime Table is part of the 2002 Regulations and that when determining minimum distribution from a defined benefit plan for 2003 I would not be able to use that table?

Not sure which board is best for this question, but here goes.

A C-corp is converting to an S-corp. An individual owns C-corp shares through a SEP-IRA established by his separate sole proprietorship. Since a SEP-IRA cannot own S-corp shares, the individual (who is also a director of the C-corp) is contemplating establishing a "Uni-K" plan for his sole proprietorship, taking a distribution of the shares from his SEP-IRA, and rolling them over into the Uni-K plan.

Can this be done? A couple of issues that jump out at me are (1) can a Uni-K plan (essentially a Keogh) be an S-corp shareholder, and (2) would the rollover be viewed as a prohibited sale or exchange of property between the individual (who is a disinterested person with respect to the Uni-K plan) and the Uni-K plan?

Any thoughts? Any other issues I'm not thinking of? Thanks to all.

I have been asked to research the incidence and discussion of defined benefit plans adding voluntary and/or involuntary contribution features to their plans. I have been asked for statistics, trends, and demographic information if possible. After researching numerous benefits links on the web, the only information I could find is that school systems and other public sector employers appear to be the main users of this feature. Does anyone have any better data? There are vendors who provide such plan designs, but I was unable to determine how common this design is. Any help would be much appreciated.

we just took over a plan. The past administrator did the 5500's on a cash basis.

We usually do 5500's on an accural basis.

Can we just switch the basis of the 5500 this year? Is there something we have to do to notify the IRS of the change?

Employee/participant filing chapter 13 bankruptcy. Attorney sends letter saying that loan payment should be stopped immediately as they don't want to show "preferential treatment of a creditor".

The plan is protected from any bankruptcy filing as long as it is a benefit held under an ERISA plan.

Does this also mean that a loan MUST be paid back, it can not be defaulted because of a bankdruptcy filing?

This employee/participant is also continuing to contribute 6% to the plan but wants her loan payment to stop.

A plan that was amended as of 1/1/02 to exclude employees who are considered a "Help out" status that only work a few hours per year. These employees are usually former participants in the plan who have terminated/retired but come back to help out. The plan is top heavy so an allocation has always been made in the past to these employees who were former participants now working a few hours a year. Can they be excluded from the top heavy allocation as of 1/1/02 or do they need to be included?

Does anyone know the rules for when an employer must set up a trust for the following plans: (i) a self-funded medical plan, and (ii) vision and dental plans are paid for entirely by employees.

I know that ERISA has an exception and does not require a trust for plans that consist of insurance contracts or policies.

Thank you for any assistance.

Does anyone know the rules for when an employer must set up a trust for the following plans: (i) a self-funded medical plan, and (ii) vision and dental plans are paid for entirely by employees.

I know that ERISA has an exception and does not require a trust for plans that consist of insurance contracts or policies.

Thank you for any assistance.

We're preparing to file our 11-K for our 401(k) plan near the end of June. In-house securities counsel insists that we must include a Sarbanes-Oxley section 906 certification with the filing. Has anyone else been advised that the 906 certification must be included with Form 11-K? If so, who are you having sign the certification? Plan administrator (who signs the ERISA equivalent, the Form 5500)? CEO of the plan sponsor? CEO/CFO of the plan sponsor?

Oh, one more thing: SEC is tightlipped to this point. Any guidance or reasoning, however informal, that you might be able to offer, would be greatly appreciated. Thanks in advance!

We're preparing to file our 11-K for our 401(k) plan near the end of June. In-house securities counsel insists that we must include a Sarbanes-Oxley section 906 certification with the filing. Has anyone else been advised that the 906 certification must be included with Form 11-K? If so, who are you having sign the certification? Plan administrator (who signs the ERISA equivalent, the Form 5500)? CEO of the plan sponsor? CEO/CFO of the plan sponsor?

Oh, one more thing: SEC is tightlipped to this point. Any guidance or reasoning, however informal, that you might be able to offer would be much appreciated. Thanks in advance!

Treas. Reg. 1.401(a)(4)-8(b)-(1) seems to allow

use of age 65 factor for those over age 65 in

age-weighted and new. comp. plans.

However, according to some documents

I've seen the factor tables use actual age

maturity value factors after age 65.

Are both methods valid?

Is there a preferred way of doing it?

Failure to provide timely notice for SIMPLE plans can result in $50 per day penalties (see, e.g., Notice 98-4 and Code section 408).

The penalties are imposed under Code section 6693©(2)... what IRS form is used to report and/or pay these penalties?