For participants that are not 5% owners, do the final regs give an employer the option of selecting the RBD as of the date afterthe EE retires (after 70.5) or can the ER make them begin taking RMD as of the RBD after 70.5; or does the ER have to use the RBD after the later of retirement or age 70.5?

I want to exclude HCE's by compensation (and give owners an allocation) from receiving a profit sharing contribution and use their 0% accrual in my 401a4 test. Can I accomplish this by excluding their pariticipation in the profit sharing source? Can I accomplish this by making a rate group of hce's by compensation and allocating 0% to their group each year?

Which would be the better approach?

Finally, I want to exclude all hce's from the safe harbor 3% non-elective contribution. Does anyone see a problem with these plan design ideas?

We have recently implemented our new HIPAA compliance procedures and have sent out the HIPAA compliance notice to employees. We now have an EE that doesn't believe that HIPAA is protecting his rights sufficiently and wants to opt out of our SEC125 medical and FSA plans. (There is no qualified change in status at this time)

I'm inclined to believe that without a change in status, he'll have to wait until Open Enrollment to make this change.

Am I correct to assume that there is nothing in HIPAA that gives EEs the right to decline coverage because they "don't agree" with the legislation?

Thanks for your input!

Can someone point me toward regs/documentation that explain the fact that pre-tax FSAs are treated as a type of "insurance"--meaning that both the employer and the employee assume risk.

I'm led to believe that the "insurance" aspect of it is tied to the change in status rules-that's why people can't just come and go into the plan at will.

any help is appreciated!

Does anyone know if it says anywhere in the codes that a plan and/or other fiduciaries have to review the investments in a plan?

All I can find is under ERISA 404(a) and © that the investments must be diversified and there must be at least three options with differing risk/return.

Any thoughts would be appreciated.

Do the new regs on cross-tested plans requiring the gateway or broadly available or age-based allocation rates affect the average benefit test in 1.410(b)-2(b)(3)? i.e., can I calculate employee benefit percentages for the average benefit percentage test using the 1.401(a)(4)-8 regs without having to worry about the gateway?

Say an employer institutes an HRA allowing for rollover of unused funds. Ten years down the road, the employer decides to terminate the plan.

What happens to the employees' funds?

Is this something you would define in your plan doc?

I can't seem to find guidance on this, although I did see it was not permissable to just pay a terminating or retiring employee a "bonus" equal to or based on the balance in his/her HRA.

I'm no expert on HRAs, but I could foresee an employer's plan building up quite a lot of rolled over funds, and ten years down the road that employer not wanting to be exposed to that. Or maybe that doesn't happen in practice?

Someone want to educate me?

Do employers have to offer the same benefits to all employees. If it is different from state to state, our company is located in NY with a branch in OH.

IE: Vacation time accurued at the same rate for all employees; medical benefits offered to all employees after the same lengths of service.

Thanks for any help you can give!

Employer with 401(k) plan wants to amend the plan so that a hardship distribution can only be taken one time by a participant for the time they are in the plan. I've never seen anything like that before in a plan, is it allowable?

Did the Message Boards forget to "spring ahead" or is it just me thinking that I'm posting an hour ago.

If you have participant loans in a 401(k) plan who do you report on the Summary of the Annual Report as the financial institution holding the loans? The employer is the Trustee. All other funds are custodial accounts at various mutual fund houses.

Would it be permissible for a group health plan to have a provision that excludes employees who are receiving benefits under the sponsor's long-term disability plan?

I'm concerned this could be a health-status related factor. I thought that it might be a permissible distinction based on similarly situated individuals, but I'm not sure that's ok when the factor that makes the individuals similarly situated is disability.

Under the terms of the LTD plan, an individual on LTD remains an employee of the company for two years. After two years of LTD, the individual's employment is terminated, although LTD benefits may continue.

Any thoughts or insights would be greatly appreciated.

My client wants to consider terminating it's 401(k) Plan. Their company is not yet bankrupt, but it is insolvent.

The plan has a $50,000 contribution receivable from the previous plan year. My client thinks that the plan termination will eliminate it's need to fund this receivable. I am looking for confirmation that this is absolutely incorrect.

Furthermore, the client does not want to have to pay for a plan audit for the last plan year as well as the current plan year (which will include the plan termination.) The plan has paid a significant amount in plan administrative expenses and the client does not want the plan to incur any more expenses, if not absolutely necessary. Any cites that I can reference regarding audit requirements in year of termination??? I don't know how to convince this guy that, even though his company is insolvent, that his plan must be audited (the plan has well over 100 eligible participants at the beginning of each plan year in question.)

Of course, this client does not want to file a 5310. I am curious what the timeframe is lately re: receiving a FDL for termination after filing. Anyone?

Any benefits in simply freezing the plan (it is 401(k) with discretionary match and discretionary PS) until if/when the company files for bankruptcy? What about transferring to a wasting trust?

Any insight will be greatly appreciated!

Dentist A and Dentist B are both sole-props (no common ownership). They share employees as follows: They also share office space:

Dentist A employs 5 full time employees and sponsors a profit sharing plan.

Dentist B employs 2 of Dentist A's 5 employees on a part-time basis. Dentist B sponsors a retirement plan in which he is the only participant (the two employees never met service requirement).

The shared employees receive separate W2s from each of the dentists.

Question is: Do the "Affiliated Service Group" rules apply here. I would think not, since there is not common ownership. I would think it is okay for Dentist A and Dentist B to sponsor two separate retirement plans covering only their eligible employees?

Just needing confirmation or correction if neccesary!! Thanks.

I have a question regarding forfeiture allocations in a cross tested plan.

If forfeitures are being added to an employer contribution-

Is the overall total (employer contribution plus forfeiture) allocated (as a percentage of

compensation in this case) by rate group

Or

Is the total allocated (as a percent of comp by rate group) strictly the new employer

contribution amount...and, the forfeitures would be allocated by rate group in proportion to

the employer contribution to that rate group?

I am a teacher in the state of Kansas. Kansas offers KPERS a required defined-benefit retirement plan. Required member contribution is 4% of salary with a state match. I would like to contribute more. Am I eligable for a 403(b) plan as well since I have no control over my KPERS plan?

Is a Non-ERISA 403(b) required to draft a legal plan document and SPD since there are not testing requirements or IRS/DOL filings?

thanks, joe

We have a client that is proposing to offer qualified beneficiaries the option to extend their coverage period to the last day of the current plan year, with a maximum benefit equal to such participant's balance as of the participant's termination date. The participant will pay a one-time premium for this election. In addition to electing COBRA coverage and paying for it for the remainder of the current plan year, this other option provides that participants may use the available balance in his or her account as of his or her date of termination if he or she contributions $1.00. Such participant is not permitted to contribute any additional funds to the plan but is able to utilize the balance of his or her account until the end of the plan year. I have been unable to find anything that would prevent this option, does anybody have any thoughts?

An employer fired an employee for embezzlement, criminal charges are pending. The employer would like to be reimbused for the stolen funds from the employees 401(k) plan balance. It is my understanding that this cannot be done. Am I right??

We have a client that is proposing to offer qualified beneficiaries the option to extend their coverage period to the last day of the current plan year, with a maximum benefit equal to such participant's FSA balance as of the participant's termination date. The participant will be a one-time premium for this election. I have been unable to find anything that would prevent this option, does anybody have any thoughts? In addition to electing COBRA coverage and paying for it for the remainder of the current plan year, this other option provides that participants may use the available balance in his or her account as of his or her date of termination if he or she contributions $1.00. Such participant is not permitted to contribute any additional funds to the plan.