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

Please help - need some clarification here:

Younger spouse "A" had an IRA and and died in 1997 at the age of 63. Surviving spouse "B" ( who was 71 at the time) was advised at the time not to take over the IRA in his own name as that would trigger minimum required distributions based upon his life expectancy. Instead he was told to keep the IRA in "A"s name and start minimum distributions based on her life expectancy starting in the year that she would have attained 70 1/2.

Is this correct?

How do after tax 401(k) contributions work w/ regard to 402(g) and 415 limits?

If I understand it correctly, the 402(g) limit (12K in 2003) refers only to pre-tax contributions.

However, the total of pre-tax,post-tax, match and profit sharing cannot exceed lesser of 100% pay or 40K (in 2003)? Other than that, there is no other limit on the after-tax contribution.

Is my understanding correct?

Also, where is a good source of information on after tax 401(k) contributions?

Thanks,

Al

"General Motors' Destruction of California Transit Systems" is at

http://www.trainweb.org/mts/ctc/ctc06.html

Consider an employer that has only HCEs. What is the general consensus "out there" about defining in the plan document each participant to be his/her own individual rate group. It's certainly permissible under the IRS Field Directive for a rate group to have only one participant. I will appreciate your thoughts. Thanks.

What information must be reported on a summary annual report for a 403(b) Plan subject to ERISA?

It is clear that such a plan must file a Form 5500 and it is also clear to me that all ERISA plans must distribute a summary annual report.

The required information on a 403(b) Form 5500 is very limited (basic plan information; no financial or participant data). Based on the 5500, a SAR for a 403(b) wouldn't tell the participants much of anything.

Any help is appreciated.

I've obtained my APA through NIPA and have thought about becoming a member of ASPA. I've also considered taking the exams for the QKA & QPA designations but am questioning if it is needed. Does the retirement plan industry look at the QPA and APA as being equal? Knowledge is power so I’m not out anything for going ahead with the additional courses.

Any feedback on the APA and QPA designation would be appreciated...

Was wondering if anyone knows where a cash-balance sample document (single or occasional use) could be purchased. I have checked with some of the more popular providers and can't find one. Only PenDoc said they would have one available, but late Summer at the earliest. Client does not want to use an attorney. I would prepare the benefit and actuarial related sections with the usual caveats about seeking legal counsel. Seems like one could convert a regular DB document to a cash balance without too much modifications, but not having done it I may be oversimplifying.

Self employed deposits $8,500 as "elective deferral" during 2002. CPA gets creative post year end with deductions and reduced net earned income (prior to pension deduction) to $2,500. How is the $6,000 excess in the plan as of 12/31/02 categorized? The 402(g) limit seems to be a dollar cap only - no correlation to compensation. Plus, I'm inclined to think that it cannot be an excess deferral because it's not an elective deferral in the first place. How can one defer income that one does not have? If it's not a deferral, would it just be deemed an employer contribution and then subject to the non-deductible penalty?

We have just discovered that we failed to notify 15 people that they have account balances in their FSA for 2002.

How do we rectify this? Can we notify them now and give them until the end of April to request a reimbursement.

Help!

In a non-qualified deferred compensation plan, can the cost of legal review and establishing an account for an Alternate Payee in a domestic relations order be passed along to the employee/alternate payee? How about ongoing administration costs that are typcially payed for by the employer - i.e the company pays $300 a year for each account in the plan.

If a participant is terminated as part of a possible partial plan termination, then rehired without loss of any vesting or plan benefits (other than failure to make salary deferrals during absence), can that person be disregarded for purposes of counting those affected by the partial termination?

Would answer be different if person lost eligibility for employer matching contribution due to failure to defer during absence?

One of our multiemployer health plans has always had language in the

SPD about the ability of the Administrator to offset future benefits

against monies owed to the plan as a result of erroneous payments, subrogation situations, etc. Since [/i]Knudson the Plan has begun

to more actively use the offset provisions to collect monies due the Fund.

Recently a participant submitted a complaint to the DOL/EBSA. After collecting

the documents, the office decided to take no action, but also would

not explicitly "bless" the offset. The participant was given a 502 letter.

My first question then, is whether anyone knows of guidance by the DOL

regarding equitable offset by a health plan?

Also, this plan is considering changing its "Dollar Bank" rules to

compel participants to quickly pay any debts to the plan. The Dollar Bank is a non vested account from which the Plan withdraws the monthly cost of the health premium. Once the changes are approved, the participant who refuses to repay the Plan will not be able to "bank" his excess work hours, nor will he be able to use the Dollar Bank to continue eligibility once he is laid off. Essentially, his continued coverage will depend on the prior month's work hours.

Does this raise any red flags to anyone? My research has yielded very little.

SHOULD I ROLL MY PFG STOCK INTO AN IRA?......IM REALY GREEN ON THIS.......THANKS IN ADVANCE

Does anybody have information on the funded status of the Central States Teamsters Plan as of 12/31/02?

Can anyone tell me what the 20-30 largest 401k providers are in the US or tell me a web site which lists the major 401k providers in the US? I'm currently looking for jobs in the 401k sales industry but would like to get an idea of who is out there for companies before I begin my search. I know Fidelity is a large one....thanks so much.