How does a fiduciary of an ESOP justify the use of floor prices above the valuation provided by an independent apprasier? Can the fiduciary use the mechanism to protect retirees requesting a distribution when the stock price is severely depressed?

Thank you

Pardon me if this is a stupid question, but if a company were to adopt a new 401(k) plan in 2003 with a calendar plan year, what would the deadline be for adopting good faith EGTRRA amendments?

A husband and wife were participants in a 401(k) plan. The husband is now deceased. Can the wife, as beneficiary, roll his account into her account in the plan? Or, if she decides to roll the proceeds to an IRA can she roll it into an IRA which is already in existence? I see where a similar question was posted on the message board in 1999 but I didn't see any responses. So, I apologize, in advance, if this question has been asked and answered under another topic. Thank you for your responses.

Question for experts:

Our company's current policy is to pay for the single portion of the employee's medical benefits. (If they are single, their medical is entirely covered, if they are family they have to pay the remainder after the single rate is taken out).

We have a Manager who wants to offer to an employee that the company will pay ALL of his medical (he has a family) rather than give him a raise.

In other words, this one employee would get his medical paid for by the Employer in full while all other employees at his level still on the current policy.

Obviously, this is not the right way to go and our Benefits policy SHOULD NOT be a tool for negotiating.

My question is, is there somewhere I can go to show him in writing that legally we can not make this change for only one employee?

Hi, I have a situation where someone is moving Cash from a Traditional IRA to a Roth IRA, and then back to a Traditional IRA all in the same year.

On 1/22/02, a guy moves $ 132,000 from a Traditional IRA to a Roth IRA.

On 10/10/02, he moves an additional 60,000 from the Traditional to the same Roth

On 12/31/02, he moves the entire $192,000 from the Roth back to the Traditional IRA.

What is this called, (Conversion / Recharacterization??), and how do I report this (1099 R and 5498's). What dollar amounts, etc.

Would it be reported differently is stock instead of cash is involded?

Thanks, Anthony J. Milano

Does anyone have any thoughts on whether a plan document can exclude employees simply by reference to their name. I represent a doctor's group who wants to exclude two incoming doctors from all of their benefit plans. We don't want to attempt to exclude on an hours of service basis and we cannot easily exclude on the basis of one or more job classes. Some years ago, I seem to recall that the IRS did not look favorably on this but I can't seem to find anything now that would prevent us from doing this. Any help is greatly appreciated.

I believe the 411(b) parts of the proposed cash-balance regs were not part of the withdrawn sections, if so, can anyone explain the importance of the 1st of the two criteria for being an "Eligible Cash Balance Plan" where it states:

".... for accruals in the current plan year, the normal form of benefit is an immediate payment of the balance in a hypothetical account......a plan does NOT fail to be an eligible cash balance plance merely because single-sum distributions of that amount is NOT actually available as a distribution option".

I recognize CB plans don't have to offer lump sums, but don't understand then the importance the IRS is placing on the normal form being an immediate payout of a hypothetical account when you don't actually have to offer a lump sum distribution ?

Can a non-standardized prototype plan permit different participating employers (from within the same controlled group) to make and allocate different levels of employer contribution? For example company/division A gets 4% and company/division B gets 8%.

Benefits Link Q & A #12 under Prototype plans seems to clearly say no. I addition, the sponsor of that Q&A column was kind enough to reply back to my inquiry and let me know that nothing had happened that would change the answer listed. I looked at Rev Proc 2000-20 and concur.

The problem is that the recordkeeper is telling me that a Non-standardized prototype can provide for this type of allocation. I'd like to get some additional feedback from others on this. Thanks.

PAL

Who gets tested when determining the rate groups when you have a complex controlled group?? One school of thought (read=loose interpretation) says that once you've established the "Plan" by passing 410(b), then only those within that Plan are tested. The conservative school of thought says, doesn't matter, all Nonexcludable employees of the Employer are included in the entire test. This, based on the definition of Nonexcludable employee in the a(4) Regs.

Example:

Large Corporation with 100,000 has 2 Plans, one salary (50,000 Non-Ex Elig's), one hourly (50,000 Non-Ex Elig's). The salaried Plan includes a tiered allocation to many, but not all ee's in that Plan (35,000 benefitting; 15,000 non-benefitting). The corporation also owns 10 additional subsidiaries under 414, each sponsoring their own plan, or in some cases plans. Let's say an aggregate 10,000 ee's in that subsidiary group.

Liberal View = So long as 50,000 ee-salaried Plan passes coverage, then only those 50,000 are included in the test when determining rate groups.

Conservative View = All 110,000 Non-excludable emloyees must be included in the test when determining rate groups.

Does anyone have the Holy Grail answer to this question?

Does anyone know when fees sent back to either the plan or the investment advisor for the plan from the mutual fund (that is an investment under the 401(k) plan) are plan assets - and therefore there must be a determination by a fiduciary of the plan that they be reasonable, etc. ?

Does it make a difference if instead of fees coming back to the plan, an affiliate (they specifically used this term so I think it has some significance) of the plan provids a discount on a service the affiliate provides to the plan?

I am a bit confused about all this, how it works and how it impacts my plan.

When filing Form 5330 for a calendar plan year, with a plan sponsor having an off-calendar fiscal year, what tax year beginning to you list at the top of the form? The fiscal year beginning or the fiscal year ending withing the plan's calendar year?

Has anyone handled a profit sharing plan that had individual account where the employer/trustee decided to take over the investment direction and go to pooled accounting? Any comments?

I have a plan that has already terminated and paid everyone out. They have failed ADP. The HCEs all did rollovers to IRAs. Would it be okay to have the refunds come out of the IRAs?

Have read Milliman's article on mulitemployer plans funding problems and am wondering what the rights of a participating employer are? We have a number of companies in the SMW pension plan and it is underfunded. What right do we have to information since we are the ones who will pay the excise tax?

How can an owner/employee of a small incoporated business pay his/her child's education expenses from the business' general fund/before tax money - estalishement of a Tuition reimbursement program?

Where do I find a document for a Tuition reimbursement program?

My spouse worked for a small company (15 or so employees) which had ususual Section 125 & Medical Reimbursement arrangment (s) which operated as follows.

The employee portion of the Medical, Dental and Vision insurance premium was treated as employee's deferral under Section 125 and appeared on the pay stubs as negative adjustment to gross pay as follows.

S125 Med -$M

S125 Den -$D

Vision S125 -$V.

The medical reimbursement plan would pay the medical/dental/vision expenses not covered by the insurance and worked like this.

The employee was not required to make an annual election to defer the desired amount as is generally the case for a S125 plan. Instead, when an employee submitted receipts for medical expenses (not covered by insurance) for $P, say, the pay stub would show the following two additional adjustments.

Med Reimb +$P (addition to gross pay)

S125 FSA -$Q (reduction in gross pay).

where Q was slighly higher than P (can't figure out the mathematical relationship between P & Q).

This has the effect of reducing income, FICA and other taxes.

The FICA and Medicare taxes would reduce by 6.2% & 1.45% of $Q, which indicates that the positive adjustment of $P to the pay did not affect the FICA (and other) taxes, yet the negative adjustment of $Q "did affect the taxes".

The claims were submitted to a TPA who would then advise the payroll service of the adjustments to be made (i.e. it was not done by the employer's in house staff).

We never got to find out what would have happened if the amount claimed far exceeded the periodic gross pay - say claim of $2,500 Vs semi-monthly gross pay of $1,500?

How does this work and what are the relevant Code sections providing for such arrangement as I would like to utilize this for my personal use (a small incorporated company in the pension plan industry). Where can I get a plan document for such arrangement?

What is the effective date for USERRA in regard to its applicablity to employee pension benefit plans? I know that the enactment date of USERRA was December 12, 1994. But, I also see in The ERISA Outline Book that "An empoyee pension benefit plan has two years to come in complaince with section 4318".

Here's the reason for my question: The employer has not been calculating the make up contributions under its money purchase pension plan on the correct rate of pay for re-employed vets. The question is how far back should the employer go to correct?

It looks to me like the employer should go back and correct for re-employments after December 12, 1996 (rather than 1994).

Any thoughts on this would be greatly appreciated. Thanks.

I'm working on trying to get our plan doc in order and I'm getting some confusing information. Our fiscal year is July to June our doc says plan year ends June, but we have a calendar year deductible. It is not stated anywhere in the doc Jan to Dec. Our Sect 125 doc is Jan to Dec.

Our TPA says that by having a "calendar year" deductible that means our plan year is Jan to Dec, the reason June is listed is because that is our reinsurance renewal. I'm so confused. I thought a plan doc was supposed to spell out all of the details and not leave anything open to interpretation.

How do I fix this??????

My insurance company issues annuities for 403(b) plans.

In the event an employer elevates the plan to Title 1 of ERISA and creates a plan document, what happens if the employer's plan document contains provisions that the insurance contracts already issued under the plan do not allow?

Specifically, would it be okay for the insurance company to inform participant that funds in annuity policy cannot be made available for loan? and then inform the participant that they may elect to move/transfer plan assets to another insurance company (perhaps one selected by the employer) in order to take a loan?

If the employer has the right & obligation to establish a written plan document, is an existing annuity contract required to include loan provisions (as well as any other provisions which are not already written into the underlying annuity contract) in the annuity contract itself?

I tried to research for information on the impact on existing annuity contracts when an employer upgrades a TSA into an ERISA Title 1 plan. What is an insurance company who has already issued a contract required to do?

Is it possible for TPAs to accept credit cards for COBRA premium payments? I can't find anything that states that payments must be made by check, money order, etc. Is there a law that states credit cards can't be used? If it IS possible, are we able to pass the fees that we're charged to run the cards on to the participants? If so, how?