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?

Company that has a 401(k) plan that does not exlude union employees. Can the contribution made to the union retirement plan count toward all or part of the 3% non-elective contribution if we were to amend the plan to a safe harbor 401(k) Plan?

What is the best way to deal with a plan that has failed the ADP test and not made the necessary corrections in time.

Is there something we can do to correct it?

Could someone give me some guidance?

Thanks

An 85 year old employee working full time with full benefits will be retiring soon. Will he be eligible for COBRA continuation?

Can a publicly-traded employer contribute its common stock to its defined benefit plan? I'm aware of Keystone and the DOL's Interpretive Bulletin in which the DOL basically states that any in-kind contribution to a DB plan is a prohibited transaction. However, both Keystone and the examples in the DOL Bulletin involve real property. I have seen other guidance addressing the contribution of other types of property, but nothing on employer securities.

It appears that ERISA Section 408(e) would allow this contribution, as long as the contribution does not cause the total employer stock held by the plan to exceed 10% of the fair market value of the plan's assets. Can anyone confirm this?

I'm working with a VEBA that has a vacation property as its only asset. The property has lost value since it was purchased, and the VEBA no longer has any employees!! There isn't much guidance, but it appears to me that the employer could try to sell the property to a third party to get it out of the VEBA - but at what price? Obviously, a third party would only pay FMV. Any ideas? Could the VEBA hang onto the property and amend the VEBA trust to benefit different employees with a common employer bond?

EGTRRA permits in-service distributions (eg. current, active employee who is a plan participant) from a governmental 457 plan to purchase governmental DB service credit. As a trustee-to-trustee transfer, this is not a taxable event.

Question: Can a post-service distribution (eg. former employee who still has money in your plan) to purchase governmental DB service credit be handled in the same way, without tax consequences, as a trustee-to-trustee transfer?

For the discussion, let's assume that the 457 plan has fully adopted EGTRRA flexibility and the separate DB plan will accept the distribution.

We can't find where this is prohibited, but neither can we find where it is permitted. Any cites greatly appreciated! Thanks in advance to all.

I'm looking for problems that would arise from amending a defined benefit plan to suspend benefit accruals for 2 or 3 years.

Assume the plan provides a monthly benefit at normal retirement age of $30 per year of service and is amended to provide that the benefit will be $0 for service during 2004-2005 and $30 per year of service after 2005.

The plan now satisfies the 133 1/3 percent rule. As so amended the plan would satisfy the 133 1/3 percent rule, according to 1.411(b)-1(b)(2)(ii)(B), the conference committee report on ERISA, and IRS Document 6390.

Is there something else I'm missing that would cause a problem?

F.S. 112.0805 Employer notice of insurance eligibility to employees who retire.--Any employer who provides insurance coverage under s. 110.123 or s. 112.0801 shall notify those employees who retire of their eligibility to participate in either the same group insurance plan or self-insurance plan as provided in ss. 110.123 and 112.0801, or the insurance coverage as provided by this law.

Question: Based on the above statute, when does the city have to inform the retiree regarding the insurance plan if a vested employee leaves a city and does not wish to start collecting pension at that time, and the city does not consider them to be a retiree until the time they do begin collecting pension? Can the city inform them at time of departure or must they also be informed at time they start collecting?

We would like to eliminate lump sum option effective 1-1-03.

Normal form is life only.

Actuarial equivalence for lump sums is 417(e)

What future benefits must be offered to participants?

An example:

on 12-31-02 we have a participant with an accrued benefit of $1,000 per month

on 12-31-06 the participant terminates with accrued benefit of $1,500 per month

Which of the following options is the participant entitled to?

1. A lump sum based upon $1,000 accrued benefit as of the amendment date

plus

life only benefit of $500 payable at retirement ($1,500 - 1,000).

2. The choice of:

lump sum based upon $1,000 accrued benefit as of amendment date

or

life only annuity of $1,500

3. Life only annuity of $1,500. Clearly we have to provide this option.

My hope is that we would only have to provide options 2 and 3 and that the protected benefit would work in a manner similar to the changing of actuarial equivalence.

What amounts have to be protected?

Thanks

F.S. 112.0805 Employer notice of insurance eligibility to employees who retire.--Any employer who provides insurance coverage under s. 110.123 or s. 112.0801 shall notify those employees who retire of their eligibility to participate in either the same group insurance plan or self-insurance plan as provided in ss. 110.123 and 112.0801, or the insurance coverage as provided by this law.

Question: Based on the above statute, when does the city have to inform the retiree regarding the insurance plan if a vested employee leaves a city and does not wish to start collecting pension at that time, and the city does not consider them to be a retiree until the time they do begin collecting pension? Can the city inform them at time of departure or must they also be informed at time they start collecting?

If during an unpaid FMLA absence an employee fails to make payment for benefits.......

1. May the employer cancel the benefits?

2. Would that then be a qualifying event for COBRA?

A plan defines an eligibilty computation period as the 12 consecutive months starting on hire date. Future computation periods are the plan year (calendar). The employee is required to work 1000 hours in a computation period. For a fractional year there are no hours required. Plan entry is semi-annual. Service is credited at the end of the computation period.

If the year of service requirement is 18 months, and the employee does not work 1000 hours in the intial computation period, should the eligiblity date be based on the first entry date after a 12 month period in which an employee meets the 1000 hours plus 6 more months.

Hire date is 7/2/02

Initial computation period is 7/2/02 - 7/1/03 (<1000 hours worked)

Second computation period is 1/1/03 - 12/31/03 (>1000 worked)

Is the plan entry date 1/1/04 or 7/1/04?

I am new to multi-er issues, but I have a quick question.

My wife and I are Self employed. Are there any issues preventing us from forming a multi-er plan?

Would it matter who the plan sponsor is for 5500 filing?

Any ideas on how to handle a union member who wants his prescription card ID number to be changed because his id number is currently his SS#. He wants us to change his ID # because he maintains it violates his privacy to have his SS# on the card.

My thought is that since he is the one w/ the card and it is only being distributed to him, that would not be any HIPAA violation and would not require any changes.

He mentioned a concern that whoever makes his card now has access to his SS #.

Please help!!!!!

A calendar year employer adopts a non-safe harbor defined benefit plan January 1. Some employees leave the company by mid year without accruing a benefit and the plan fails 401(a)(4) by December 31. Can the employer provide additional benefits to a group of currently eligible NHCE's to pass 401(a)(4) for the first year of the plan? 1.401(a)(4)-11(g) does not seem to say you cannot. It only appears to indicate you cannot have a pattern of such amendments.

I seem to remember reading something about corrective amendments being questionable in the first year of a DB plan.

Anyone know about this?

Thanks.