I am filing a Form 5500 for a discretionary severance plan (that is a welfare benefit plan). No employees received severance benefits in 2002. For the 5500, is the number of participants (1) the number of employees employed by the employer (even though no employee received any benefits from the plan) or (2) the number of employees who received severance benefits for the year.

Can anyone offer suggestions as to the following:

A company has liquidated in bankruptcy and is in the process of winding up its business. It wishes to terminate its 401(k) plan but cannot locate some participants (most participants have already withdrawn their account balances). I am aware of the IRS' humane locator program which will attempt to notify missing participants. What if after using this program, some participants still cannot be located? What should be done with the remaining account balances?

Thank you for any suggestions.

There is a company that has been engaged by a large number of California public schools to act as third party administrator for the schools' 403(b) plans. In order for the investment product provider (insurance company) to offer its products to these schools, the TPA is requiring that the provider pay the TPA a monthly participant fee. Is the payment of this fee a "rebate" in violation of state law or ERISA? Basically, you have to pay to play. Thanks for any input on this issue.

I have recently learned, when running an age weighted plan in Relius, that the allocation shedule in the Corbel document is not the same as the schedule that Relius Admin. uses to calculate points. I would think that you should have the same factors when you use the same interest assumptions and mortality table. Has anyone else ran into this issue?

Are employees of an LLC treated differently or are they restricted in some way regarding executive non-qualified deferred compensation plans? If the answer is yes, could you point to the relevant articles, letters, regulations, etc. Thank you.

Facts: W is a former partner of a professional service firm "XX" that operated as an LLP. The firm recently "disolved" due to litigation and government inditement and all former partners have left to practice elsewhere. The partner has substantial retirement assest invested in a Keogh plan. She would prefer to roll the Keogh assets into an IRA, but also has her new firms 401K plan available if necessary.

Question: Considering the possibility of potential lawsuits down the road impacting former XX partner personal assets; are there any risks involved to the plan assets if the partner rolls her Keogh assets into an IRA? What are they? Are there in recommended steps to avoid? Is the 401K preferable to the IRA? Why?

We have a self funded medical and dental plan and need to know if we have to provide participants with a Summary Annual Report. We are required to file form 5500. Any input is appreciated.

May an IRA sponsor require that all distributions to beneficiaries be paid out in a lump sum rather than over the beneficiary's life expectancy?

A DB plan acquires qualifying employer securities, and immediately after the acquisition the FMV of the securities does not exceed 10% of the FMV of the assets of the plan. Over time, the securities appreciate and the other plan assets depreciate, so that now the FMV of the securities exceeds 10% of plan assets. Must the plan divest itself of enough of the securities to get back below the 10% threshold?

A 401(k) plan provides for a discretionary matching contribution to be made as deferrals are made. The plan sponsor determines the rate of match before the plan year begins for that plan year. In the middle of the plan year the employer wants to either change the rate or stop the match for the rest of the plan year. Can an employer change the rate of a discretionary match during the plan year without amending the plan by simply giving a notice to employees? To stop a discretionary match during the plan year, must he amend the plan to remove the matching contribution? Or, can he stop the match after notifying employees?

Does anyone know of any sources (i.e., Corbel, McKay Hochman, Datair) for plan documents for a defined benefit, non-electing church plan. I will be restating a church plan and would like to see some model documents. Thanks.

Just when I thought it was completely understood<GGGG>.

The ARA reduces the PVB for certain funding methods when determining normal costs under 412. This adjustment is for methods which produce bases to maintain the equation of balance.

Is the ARA recognized at all in the determination of the Additional Funding Charge? There is no equation of balance (per se), although there may be amortization bases, and therefore I would think it would be ignored.

Thanks for any and all commentary.

P.S. I tried to anticipate Mike Preston and look back at my old actuarial meeting stuff back to 1994 but did not find anything specifically stating to use or ignore the ARA.<GGGGG>.

A Son-In-Law to the owner is employed, he makes approx. $60,000 annually. Is he considered to be highly compensated because he is now related to the owner due to marriage?

I have an employer who would like to implement a Safe Harbor Match Plan. The characteristics of the employer are that most of the employees are very young or very old (e.g. fast food type of restaurant). The owner feels that no one (very minimal) will participate.

I plan on getting every eligible participant signature electing not to defer. Not only on the vendor enrollment but a customized one I will design detailing the plan. What else should I be concerned with the possibility of 2 HCE's and 2 NHCE's that will participate and about 25 that will have no interest?

Comments/Suggestions?

By October our plans will be required under the EDI regulations

to receive contributions and remittance information

electronically. A question that has recently arisen concerns

the interplay of the collective bargaining agreement with

the EDI regs.

Suppose the CBA says an employer must send all contributions

and reports in paper form to the custodian. Must the

plan still have the ability to receive this information

electronically? If the employer asks to send the information

electronically (in violation of the CBA) is the plan's only

recourse a grievance or 301 action? Can an employer

violate the CBA and still exercise its rights under the

EDI regs??

Any thoughts are appreciated.

An overcontribution for tax year 2001 is made to a SEP on April 15, 2002. Taxpayer's return is filed that day also. The mistake is discovered four days later and withdrawal of the excess sum made. Reading the Code literally - that we have until the due date of the return for the taxable year to which the excess contribution relates to make the withdrawal - we seem to have had until April 15, 2002 to make the withdrawal for that excess contribution. After that time the withdrawal is treated as a distribution. However, for Roth elections we have until October 15 to act. Would a similar rule apply here because Section 408(d)(4) allows withdrawals of excess contributions until the due date of the return "including extensions"? Or does that only apply to elections not withdrawals?

Are there any real good up to date 403(b) training manuals (specifically for plans sponsored by 501©(3) tax exempt entities) worth purchasing that would have calculation examples for compliance testing?

Prior actuary changed the funding method from Ind Agg to FIL and for amortizing the new base under S412 used an amortization period of 30 minus # of yrs the plan has been in effect.

Apparently the actuary is way behind the times and has not read the Rev. Proc 2000-40 (or 95-51, which came out over 7 years ago), under which amortization period for new base is 10 yrs (Charge or Credit base)!

The client funded the minimum required contribution computed by the prior actuary - which was grossly understated if one was to follow Rev Proc 2000-40.

What is the new actuary to do?

Redoing the prior yr FSA using the correct amortizaion period would produce a deficiency?

Invalidating the funding mehtod change (because it did not satisfiy the conditions for an automatic approval of Rev Proc 2000-40) and reverting back to the Ind Agg cots method would make the situation worse!

What can /should be done to go forward [other than not taking the case ] !?

It sounds like, based on other posts, that fail safe language can be limiting. In the document I am using, if I choose fail safe, then the Plan must pass 410(b) by the ratio percentage test. If I do not choose fail safe, then the Plan does not seem to contain any language about how to fix a failed 410b or 401(a)(4) test. Would I just use the corrective amendment route? Is it OK that the Plan does not specify that I should use the corrective amendment option? This is all theoretical, I am doing the GUST amendment and trying to pick out the best language.

I work for a company with about 10,000 employees. The company sponsors 3 self-insured medical plan options for employee to select from. The ER pays 92% of cost for the lowest coverage plan (Plan C), 85% on the middle plan (Plan B) and 78% of cost on the highest coverage (benefit wise) plan (Plan A).

The relative benefit value of the plans are:

Plan A = 112%

Plan B = 108%

plan C = 100%

A recent underwriting analysis showed that the current pricing for plans B & C are not in any means related to their relative benefit value. Plan A (this is a new plan) is priced correctly. However, Plan B is price 60% above its expected cost and Plan C in 20% below its expected cost. I am new to this company. But what has happened is these plans have only had minor benefits changes over a several year period. Each time the renewal period came up management decided to increase both plans premium equivalent rates by the same percentage.

My two questions are: does the pricing need to be changes to put the plans back inline with their true cost from any legal (compliance) stand point?

What would you recommend to correct this situation?