If you fail the ACP test and have to refund after-tax contributions, must you also refund earnings on contributions? What if there is a loss?

A plan wants to change their 0 service requirement to 1 year. Would only non-participants be affected? What about an employee that was approaching the entry date, would he now be subject to the new 1 year wait?

Takeover calendar year target benefit plan has a 1/1 valuation date. It seems to arguable violate everything from 412 to 404 and 415, but prior (international) firm maintains everything is ok. Everything from benefit statements to plan documentation is cleverly worded to make due dates ambiguous.

Very strange. Anybody run across one of these or is this the only such creature?

Our management has decided to use as little customized Crystal Reports as possible to avoid having to do a lot of updating when we receive new versions of Relius. This means we scrapped a great report we used to determine which employees go on Schedule SSA as well as one we had written to use as the attachment to the Sch SSA.

So, now we're trying to use the ActTerm report (RW, Summary of Accounts, Detail) to get information for use on Schedule SSA. This can be quite tedious, especially on a large plan, so I'm wondering if anyone out there has any other solution?

Has anyone seen something definitive on how an employer can clear very small account balances from former participants' accounts? Is there anything on de minimis amounts for which checks don't need to be issued and the plan can just forfeit them? We have old unpaid checks in amounts less than $1 we'd like to just cancel rather than going to the expense of reissue only to have the reissued check end up uncashed too. I'm wondering if these checks should even have been issued in the first place, but on the other hand the participants were due the money even if it was only 78 cents.

What are others doing about this problem?

Thanks for any ideas or information you can offer.

I understand you can cross-tested a cash-balance plan by testing it on a benefits basis (subject to gateway req) . If true, if your plan's normal form of benefit is a lump sum and your actuarial equivalence in the plan for all optional forms of benefit use a standard mortality table & interest rate (7.5-8.5%), would you typically have an MVAR that is greater than the NAR ? Is the annual contribution (pay credit), using current year testing, simply projected to testing age at a 7.5-8.5% interest and converted to benefits using standard mortality table ? or does the 417(e) interest credits (if used) get included in the accrual and either result in a MVAR higher than NAR or generate a larger NAR than what I'd get simply projecting pay credit at 7.5-8.5% and dividing by annuity factor and then compensation. Any input on methodology would be appreciated.

Contract participant was receiving annuity payments under his contract. Participant died, but notice of death was not received by insurer until over 1 year after his death. Consequently, erroneous annuity overpayments were made during the period after death until notification was received. Attempts to collect the overpayments have been unsuccessful. There are 3 children - it appears that the son in charge of settling the estate cashed the checks and kept the money. However, beneficiary payments are now due to all 3 children. Can the benefit payments be reduced as a means of collecting the overpayment amount? While legal action could be pursued against the son, that would be costly and time-consuming, and the overpayment amount is less than $5,000. Thanks for any input you have on this issue.

If a company ceases operations on April 30, and begins the process of terminating it's plan, can ADP refunds be distributed prior to any plan distributions?

I understand it that they'd have to wait until after the plan year end (December 31). They could have a short year if all assets were distributed, but that would require distributing the potential adp refund.

Second question - same scenario except the company stays in operation. Deferrals cease April 30th and the plan begins work on terminating the plan. They expect all assets to be distributed in the following plan year. Would adp compensation include all of 2003 compensation or would it be up to April 30th?

Thank you

If I give one HCE an allocation rate of 0% and I give two other HCEs an allocation, do I have 2 or 3 rate groups for 401(a)(4) testing purposes?

An employer provides $40,000 of life insurance coverage on each employee. An employee who says she has no possible beneficiaries and is disabled asks if there is any way she can access this benefit while she is alive. Is that possible with a group policy? Are there any alternatives?

Plan had a 401(k) feature but was amended in December 1998 to remove it, effective 1/1/99. 401(k) money still in the Trust.

Can the plan add a 401(k) feature now and use a safe harbor in 2003?

Client has a pooled account in which cash and mutual funds are the investments. He receives statements each month indicating the holdings. With respect to Question 4i on Schedule I, I understand that you start with the balance at the beginning of the plan year (i.e. value is $200,000 at 1/1/02) to determine the 20% amount. He does have more than 20% in one security (one mutual fund), and obviously the value varies each month and stays consistently above 20%. For reporting purposes, what amount do I use to complete the Schedule? He also has about 40% in a money market account. That would not be considered a security would it? Thank you.

My understanding is that generally a qualified plan may not permit the assignment of benefits. 401(a)(13).

An exception to this is a QDRO. 414(p)

A QDRO provides for a payment of the "participant's" benefit to an alternate payee. I need to verify who is considered a participant.

The QDRO Answer Book seems to indicate that it is the participant or the participant's spouse. So I don't think participant in this context includes a beneficiary (unless it is the participant's spouse). Agree?

Also, I've been reading that an alternate payee cannot obtain a QDRO after a participant's death.

So, if a participant dies and the death benefit is payable to a non-spousal beneficiary then an alternate payee to the participant cannot, after the death of the participant, obtain a QDRO against a the benefit. Is this right?

Thanks for your comments.

Michele

I recall reading a reference to a California state case where the court ordered the pension plan to change the form of benefit a participant was receiving after the participant had begun receiving benefits under another form of benefit. I can't find this case, and hoped someone on this board might recall the name. Thanks.

I have a question regarding the filing requirements (if any) when a former MTIA contains only one plan during the year. Does the MTIA have to file a "final" 5500 or should there be no filing at all?

Is it ok to make a retroactive plan amendment to change the plan name and sponsor? Our plan has included the words "long term and temporary disability" in the name, even though those benefits were dropped several years ago. I would like to change the name to just "Welfare Benefits Plan" or something more simple like that. Also the plan is currently shown as sponsored by one of our companies, which now only has 4 employees, I would like to switch it to shown as sponsored by the main company (300 ees). Can we go back and say that this change happened at the new plan year (Nov 1st) or should we wait and make the changes next year? I am just trying to get all of our plan stuff cleaned up.

Thank you for any thoughts!

A friend's daughter was walking and was hit by a car and sustained injuries as a result. The health insurance company is now telling her that it will not pay any of the related medical expenses for her daughter. In order to get the medical expenses paid she has been told that she must go after the driver of the car and/or his automobile insurance for payment. I have not seen the plan yet but this just doesn't seem quite right. What ifit was a hit and run? Any thoughts/comments/suggestions as always are welcome. Thanks.

A plan using a prototype document indicates the plan is a safe harbor non-elective 401(k) plan in the document. However, the employer failed to provide the safe harbor notice to the employees.

The ERISA outline book states that "A failure to provide the safe harbor notice would not necessarily mean the section 401(k) arrangement is disqualified. It would, however, mean that the ADP test would be run for the that plan year. To the extent correction of the failure by providing a late safe harbor notice is not available, it seems reasonable that the plan should be able to protcet the qualified status of the 401(k) arragment by simpy running the ADP test (and ACP test if applicable) even though the plan document might state that the plan is intended to be a safe harbor plan."

Assuming the ADP test is run, will the employer still need to make the non-elective contribution? The document states employer will make sh cont. in the amount of...

Just want to verify this. Participant in 401(k) is deceased. Never married and has his elderly mother as beneficiary. Plan uses lump sum option. Elderly Mother appoints daughter as power of attorney(probably not relevent).

check gets issued Payable to elderly mother(not rolled over) and uses social security number of elderly mother? 20% witholding using SS# of mother? Something is making me question this.

Thanks

How would I ensure that a participant is not going to get her status set as Terminee, assuming the employee has terminated after the eligibility requirements of the plan were met, but prior to entry date?

Having trouble getting this particular fact pattern to set correctly when I'm running year-end eligibility transactions. It could be that I'm just overlooking it and making the error myself, but I'm trying to eliminate the possibility that this isn't user error:) The odd exception in this case may be that I only ran two eligibility transations - one at the beginning, one at the end of the plan year.

The example I have before me is a six month eligibility req't, qtrly entry. Employee was hired 7/16/2002, and terminated 2/1/2002. The entry date got calculated as 04/01/2002, and the Status is set as Term with Break (incorrect).

This is really causing me some headaches - any comments, suggestions, or tomatoes greatly appreciated.

Thanks in advance,

Bill