Can a new employer established in 2002 allow the owners to participate in a SEP while keeping out all other employees that have not met the 3 year eligiblity?

When preparing 5500's, is it OK to report the plan sponsor's name in care of our company name and address for item 2(a), "Plan sponsor's name and address...", of the 5500. We don't list the company's address at all.

Any comments would be appreciated.

I understand how a person can "buy back" the forfeited amounts under a plan. However, in my office there is some dissent on whether or not someone who was 0% vested can get the forf'd amount back.

The pension answer book says that as long as the person pays back the entire distribution, the forfeited amount can be restored. Some people here believe that if the the person was zero % vested, he could not buy back because he could not pay back the vested portion (because there was none).

Any thoughts?

(I also understand the 5 breaks in service stuff, too)

Recently, I've been approached by several different referral/networking organizations comprised of other professionals outside of the employee benefits field. The idea seems to be that you get a group of 10-15 different professionals, say for example, an attorney, an accountant, realtor, financial agent, etc. and you all refer business to each other. There are some implied "quota's" to meet in regard to your referrals to other members of the group. There are fees involved, which have ranged for a couple hundred dollars/year to several thousand dollars/year. BNI is one of those I've talked to.

I'm curious as to if anyone else has been a part of these networks and what your experience has been. Has the new business come rolling in as a result, or is it something that sounds like a good idea on paper, but in practice there's little to be had. The skeptical side of me flashes red alert when I think about the "pay now - get tons of business later" promise that is involved.

Thanks for any comments.

There is a participant in a 401K plan that was divorced in 2002 and changed his beneficiary to his minor son. He is now deceased and I am not sure how to proceed. His ex-wife is the son's mother and I would assume is his legal guardian. They are from California so I'm not sure if I need to look at CA law along with the plan doc.? Any help would be appreciated. The son's only option for the distribution would be cash, correct?

A participant terminates, part of the account balance contains after-tax contributions. Can the participant directly rollover the taxable portion and keep the after-tax contributions (no earnings) or does the 72 pro rata rules apply?

I understand that the IRS will be issuing pending guidance regarding 401k and 401m testing and the definition of HCEs. Does anyone know the status if this and any idea what the guidance will be? What changes are they making?

ADP perfroms the "typical" COBRA services for an employer with a fully insured plan. Employer will receive no PHI from its insurer. ADP has sent a Business Associate Agreement to be signed.

1) What kind of PHI would ADP be handling in processing COBRA notices, forms and payments?

2) If this is a small plan, would there be any requirement to have this agreement in place before 2004 (if it is required in the first instance)?

Are small 401(k) Plans (under 100 participants) required to have a separate bank account through which they funnel contributions, withdrawals, etc. or can they use their main business bank account for those purposes? We are a TPA working in an unbundled environment and always recommend to small 401(k) clients with individual trustees that they open up a separate plan bank account. However, the bank for one of our new clients is giving them grief about this - the bank does not want to open the account because the account will normally have just a very small balance. The bank told our client it had never heard of having a separate 401(k) Plan checking account. So I need some information/ammunition before talking to the new client and/or their bank. Thank you!

We are considering dropping our dental plan, vision plan, and alternative care plans and setting up an HRA instead.

Can we charge employee's a monthly premium to participate in the HRA?

We would place a deductible on the HRA (about $50 per family member) and allow either a full rollover or a rollover up to a maximum dollar amount (we might cap it) not sure yet.

We currently have an HMO w/ Rx coverage which will remain in place, but everything else would be dropped and replaced with an HRA plan.

What are your thoughts out there????

I have noticed that several 403(b) document providers allow for exclusions (bonuses, commissions, overtime, other) from compensation when calculating contributions. Should an alternative compensation test be completed when an alternative comp is being used in a 403(b) plan?

Thanks

Does the non-allocation period (the later of 10 yr period after 1042 or payoff of loan) disappear in the event of death. That is, if someone who exercised 1042 dies prior to the 10 yr. period, does the non-allocation period automatically expire.

We have a case where the owner who exercised 1042 dies after 8 years and the sons are curious as to whether they can now receive ESOP forfeitures.

Any insight???

Thanks

I have a takeover plan. It's been frozen since 1998. I am doing the 2002 calendar year val. The prior actuary used the Projected Unit Credit funding method. The plan has a negative unfunded (can you believe it in this day and age?). There are no bases because the plan hit the ERISA FFL last year. This year the FFL is not 0. There is a small credit balance. There is a negative unfunded this year.

Here's the question. If I calculate a Gain/Loss base starting at the negative unfunded from last year, and going to a negative unfunded this year, I am still out of balance. Is this okay or do I have to force it to be in balance?

Hi: I have a simple question that I hope anyone can answer. I have been always been told that a SEP IRA is an IRA. I have a client with an existing IRA. Can they add to it assets from a SEP IRA, and make both Traditional and SEP contribtuions to it?

Thanks for the help, Anthony

I have heard from some that 412(i) plans must be funded on the first day of the plan year. I have heard they must be funded before the end of the plan year. I have heard they must be funded by the due date of the corporate tax return. Just curious if anyone has any idea which is correct and why.

A broker I do some business with called me today to ask for some help with what he thinks is a 403(b) issue. I don't have much to do with 403(b)s and I really don't know how to help him.

A client of his is a public school teacher. She has been offerred an early retirement incentive. A part of the incentive is a $20,000 employer nonelective contribution to a 403(b). She currently has an employee funded 403(b) with Nationwide. Nationwide has informed her that she cannot deposit the nonelective contribution to that plan because it does not allow for employer contributions.

The 403(b) contracts are in separate accounts through different providers. The employees do not have to have a 403(b) - it is an individual decision and is in addition to the state retirement plan the employees are also covered by.

Only seven teachers are taking advantage of the early retirement incentive.

Does this teacher simply need to find another provider for this one-time nonelective contribution? Is the contribution subject to any kind of testing since only 7 out of who-knows-how-many teachers will receive this benefit?

I'm not sure if I am even asking the right questions here. Any advice would be greatly appreciated.

Kate Smith

We have a client who wants to have the following ps vesting schedule (the plan is not currently top heavy but it is projected to be in appx 4 years):

Start the plan with a 1/20 5 years 100% fully vested

When the plan becomes top heavy, change the vesting schedule for new participants entering to -

2/20 6 years 100% vested.

The plan has fairly high turnover and the client feels the additional forfeitures will help offset minimum top heavy contributions.

Sounds ok to me. Anyone see any problems?

If I have a plan with "mixed" assets generating a total of appx $6,000,000. Let's assume 96% are qualifying assets. Does the $500,000 bond limit still hold or would I need to have the client get a bond for $816,000?

($6,000,000 X 96% = $5,760,000 X 10% = $576,000)

$576,000 plus $240,000 (4% non qual) = $816,000

If 100% of the assets were qualifying, could I leave the bond at $500,000?

Is the interest on a loan taken from a participant's 401(k) that is being used for a 2nd home mortgage deductible just like a mortgage or a home equity loan?

Can anyone recommend a good telemarketing lead company for group health leads? I work in metro Denver and would like to increase the number of prospects. Finding a decent telemarketing lead company has been difficult. It does not matter where the lead company is located. Any recommendations would be appreciated. Thanks