If an employer self-insures a medical plan (such as dental benefits) but charges the employees a cost, which is paid through salary reduction contributions through a cafeteria plan, are the employee contributions "plan assets" that must be held in trust, or are they exempt from the trust requirement under the DOL Technical Release?

The benefits to be provided are just like those under dental insurance - such as orthodonture, exams - and benefits are not limited to the amount of employee contributioins.

My client has a 12/31 year end, so does its 401K PSP. An extension for filing the tax return was not filed. Client sent a contribution to the Trustee, and it was received 3/14 (Friday). The check has not yet been deposited to the trust.

When is the contribution "made?" Is is made when the check is sent, when it is received by the Trustee, or when it is deposited into the trust?

Thanks!

Has anyone seen a report that could possibly list all plans and their total value as of a certain date? I've been bouncing this idea around in my head for a while, and I'm not sure that it is doable, at least reasonably. If you did it through Crystal, you could generate it in Crystal, but you would still have to have the data for all plans in the temporary tables and that wouldn't be practical when you are talking about alot of plans.

Anyone have any thoughts on this?

Tim

What are the options for a plan that is terminating, with life insurance policies that has CSV accumulated?

1)surrender CSV and take as cash? I thought I read somewhere surrendered CSV cannot be rolled over.

2) Assume the life insurance policy as an individual policy? What happens to the csv from the plan? How is it treated as a distribution? Lump sum?

Thanks.

These are pretty new to me so I had a couple of basic issues I am not clear on yet:

Does the employer have to allow a carry over year to year or can the employer apply a "use it or lose it" policy?

Can the employer set different amounts of reimbursement for singles vs. employees with dependents?

I have a client who is telling me that her doctor has recommended that she get liposuction done because she is out of proportion. She is very small up top and larger around her waist area. I have a feeling she can't get reimbursed even though she has a doctor's note and recommendation, but please let me know if I am correct.

A 401(k) plan allows both 401(k) and after-tax contributions and matches the first 3% of such contributions. If a participant's 401(k) contributions reach the 402(g) limit, then the participant is deemed to have elected to make after-tax contributions from that point until the 401(a)(17) compensation limit is reached. In 2002, the plan allowed for catch-up contributions. A review of some eligible participants' contributions shows that, for some of these participants, the attempted "catch-up" contribution was made on an after-tax basis. Although it is possible to recharacterize a 401(k) contribution into an after-tax contribution, the reverse is not necessarily true. Does anyone have any thoughts on how this can be corrected?

What was the pre-1997 statute of limitations for medicare reimbursement claims? For some reason I had it in my head that the statute of limitations mirrored the claims filing requirement under the plan. Is this correct? If so, where can I find the authority?

I've been searching thru the messages and it appears to me that Indian Tribes are considered "governmental" for ERISA purposes and therefore no 5500 needs to be done (message of 5/19/00). We have a 401(k) plan that we took over. They have an ERISA doc but the old TPA never filed a 5500 or did a val. They really only tracked the loans.

Is this reporting matter (5500) still a "grey" area or has anyone see anything recently that clarifies the reporting requirements?

Thanks for any input!

I have a Client who has a Money Purchase plan. They recently established a Simple plan (recommended by their CPA). I told them that they cannot establish a simple plan in conjunction with another qualified plan. The question now is what do they do? My thought is that they need to terminate the Simple plan and distribute the deferrals made to it and report it as taxable income. Is there anything else I am missing? Are there any other ramifications?

Thanks

As a TPA when a Change of Status is received from the client's HR Dept. for an employee making a change such as reducing their premium account and medical reimbursement account due to "Spouse's change in employment status"... do you require that HR person to provide proof or documentation of that change (in this case spouse's new employment) or do you make the assumption that because the HR person signs the COS also that they have the needed "proof" on file????? :confused:

An HCE received distribution due to ADP failure for year 2002. The distribution was paid before 3/15/03. She is doing her taxes for 2002 and wants to include the distribution. I've found in 1040 instructions that you include it on Line 7 but she won't have a 1099 (with code P) until January 2004. Is that a problem? Does she have to wait for the 1099 and then do amended 1040? Thanks in advance.

Have a PS plan, that excludes bonuses, commissions, and overtime. Three separate "check" boxes in the adoption agreement. They fail the testing this year by excluding bonuses, but would pass if you include bonuses. The plan is silent on the correction method if you fail.

Two schools of thought here. One is that you could do a retroactive amendment under 1.401(a)(4)-11(g) to include bonuses, you pass, end of problem.

Another is that absent specific plan language, you would automatically have to "revert" to total compensation. And that therefore any retroactive amendment that would limit compensation at all, as with first method(because overtime and commissions would still be excluded) is a cutback and you can't do it.

I'm leaning toward the first interpretation, which seems more reasonable, but I'd appreciate any thoughts on this. Thanks.!

so a guy wants a hardship withdrawal for purchase of his primary residence. the catch is that the residence will be shared with his sister and brother in law and it will be in their names, not his. does this qualify? its his primary residence, so i would think its ok.

Is it OK in a Profit Sharing Plan to set the Normal Retirement Age (NRA) at 40. The reason we would like to do this is to give the ability to all participants to take an in-service-distribution at NRA.

If it is not OK, then what is the earliest I can set NRA at?

Does any one know the definition of a financial institution as it would pertain to Rev Proc 2003-16? Wondering if the definition includes recordkeepers.

Can anyone here tell me what the regs say regarding the required time that dependent care expenses should be reimbursed? The situation I have is someone with weekly payroll who also submits the claims weekly. Can they be reimbursed monthly, bi-weekly, etc. And does it need to be spelled out in writing how often they need to be reimbursed?

thanks,

Tim

Can someone in layman's terms briefly tell me why a small business would be set up as a S-Corp versus a regular corp?

dang, you put one report out there and you get someone who wants another. Ha!

This is the ADP report.

Same rules as before, be careful, save a copy of Relius's version somewhere if you hate this one. Also note, be careful when you download an update or anything because this report will be overwritten and then you will lose it if you actully happen to like it.

This report is different from Relius in that it:

sorts alphabetically rather than by comp. heck, the old 1/3 2/3 rule for determining HCEs went away a long time ago. Well, ok, I have been using this report so long, maybe Relius' report sorts alphbetically now, I don't know.

It is hardcoded that if an NHCE's comp is greater than 90,000 there will be a note indicating ee is an HCE next year. Maybe I should make it say 'maybe'. I did not look at top paid group or possible termination status.

Age will print if ee is 49 or more to indicate possible catch-up availability, now or in the near future. Verify in census, as I don't know if age nearest or last logic is coded in specs.

An indication if ee is excluded from ACP test, and the reason.

There might be a few other totals that show up as well.

Assume a 401(k) Safe Harbor Profit sharing Plan that elects the 3% non-elective contribution (SHNEC) to satisfy ADP. Sponsor makes an 8.22% PS contribution integrated with social security.

1 of the 3 NHCE’s terminates with greater than 500 hours and is entitled to the 3% SHNEC, but not any additional profit sharing allocations due to 1000 hour and last day employment conditions. The 1 NHC's total plan allocation rate is 3%.

The only HCE receives a 14.50% allocation rate (11.50% 401(a) including integration and 3% SHNEC). All other NHCs receive a 11.22% allocation rate (8.22% 401(a) plus 3% SHNEC).

Since all 3 NHCE’s benefit with at least a 3% accrual rate, 410(B) coverage passes. However, since one NHC only received the 3% SHNEC vs 11.22% for the other 2 NHCs plus the HCE, it has been suggested to me that the allocation formula for the PS plan is no longer a designed-based safe harbor and would need to be tested for non-discrimination under the General Test. The rationale is that the SHNEC is considered a 401(a) contribution.

Your opinions are greatly appreciated.