Dave,

Every time I return to the Board I have to hit the refresh buttom to pull in any new messages since I was there the last time. Is there something I need to reset?

I have been on permanent disability from my job since 1996, but still have an ESOP account with my employer valued at about $65,000.00. Despite many attempts I have been unable to receive an early distribution since disability is not considered retirement per the Summary Plan.

Recently i found out that i could receive the quarterly dividend as a cash payment rather than have it reinvested. This seems to be a change in policy since i last inquired about receiving some funds back in 2001.

My question is: Was the company under obligation to inform me of this change? And is it possible that i could receive retroactive payments dating back the last couple of years due to their non-disclosure?

Whoever can advise me, let me thank you now for taking the time. It's much appreciated.

Is anyone aware of an IRC cite or other authority which would allow a 401(k) plan to make a distribution to an employee who transfers employment within a controlled group to a foreign affiliate (i.e., a related company outside the US)?

I understand that such a transfer is not technically a separation from service or a severance from employment, but I have seen plan documents which state that if an employee remains employed with the foreign affiliate for a period of time after the transfer (say, five years) under certain circumstances a distribution is permitted, but I can't verify this.

Thanks in advance.

Here's our scenario:

Company A leases all employees (including employee owners) from Leasing Company X. Leasing Company X is a not otherwise related to Company A and is engaged in numerous leasing arrangements other than with Company A. The agreement between Company A and Leasing Company X terminates and all leased employees become employees of Company A. All employees are given distribution options, including rollover/transfers to the newly established Company A 401(k) plan.

Is this a related rollover????

It does not appear to fall within the statute, however, something about it just looks like it should be.

Any advice or comments would be appreciated.

Thanks.

I'd appreciate thoughts and comments on whether there is an ADEA violation if an LTD plan is amended to provide that LTD payments for disabilities that occur before age 60 shall end at age 65.

Obviously some participants would get longer LTD coverage depending on when their disability occurred. But, workers older than 65 would have no LTD coverage, or perhaps less if an existing schedule remains in the plan.

The schedule allows from 48 months of LTD coverage at age 61 to 15 months of coverage at age 68.

I am assuming that ADEA applies to retirees, per Erie County. Even if it doesn't apply to retirees, there are active employees over age 65 in the company.

If the message boards keeps asking you to log in when you try to post a message, even though you've just put in your username and password, the problem could be in your computer's "cookies" -- the little text files that usually work behind the scenes to log you into the message boards automatically whenever you visit the message boards.

Here's the likely fix for such trouble:

1. Go to the front page of the message boards, which is http://benefitslink.com/boards/index.php

2. At the bottom of the page (scroll a bit), click on "Delete cookies set by this board"

3. Now does your screen still say "Logged in as: <Your Username>" up top? If so, repeat step 2 until your screen says "Welcome, Guest!" up top.

4. At this point, quit your browser (including any open browser windows).

5. Fire up your browser again and go to the front page of the message boards.

6. Assuming the front page says "Welcome, Guest!" now click on Log In and enter your username and password in the appropriate boxes. Below them, you probably want to leave the "Remember Me?" radio button selected ("Yes"). Thereafter you won't have to enter your username and password; that particular computer will log you in automatically whenever you visit the message boards using that computer.

If you still have trouble with the software asking you to log in (after you've already logged in), please let me know (preferably as a reply message posted into this topic).

Thanks!

Can we put our birthday in the profile without the year?

With unemployment rising, I've had a few employees ask me about how friends/family members can get insurance if they are unemployed (COBRA to high, as other independent insurers).

Does anyone know of good, inexpensive insurance for people who are unemployed?

Thanks, Greta

What is the industry standard for proxy votes when a plan is in blackout due to transition reconciliation? The assets are held at a plan level until the reconciliation of the participant accounts is complete. If a proxy request is received during this period how would it be handled? Who would vote in the case of non-ERISA plans?

We are in the process of terminating a db plan that has always paid lump sums. The client is concerned that some participants may elect an annuity.

1) Does the annuity purchase have to preserve the lump sum as an option? If not, why not. Isn't it a "right and feature" of the benefit that must be preserved?

2) If the plan prohibits "in-service" distributions (other than those related to the plan's termination) does the annuity purchased also have to enforce this? In other words, assuming the answer to #1 is yes, if an active person declines the immediate lump sum, can they decide two years from now that they want it? Can they get a "retirement" annuity without actually retiring?

My understanding is that the annuity purchased must preserve all of the ERISA protected plan features and therefore the answer to question 1) is "yes". This would mean that the participant either elects a current lump sum, a current annuity or elects to defer their decision until a later date. This "later date" decision is what the annuity purchased must provide.

Anyone agree or disagree?

The last time I worked on a 5500 filing for a defined benefit plan, I recorded the contract value of the general unallocated account for a defined benefit plan as equal to the value of plan assets for Schedule A and financial information purposes(now Schedule H). There were no other assets in the plan.

I now see Schedule A information provided by insurance companies including a FAS110 market value adjustment and a year end "current value" reflecting the market value adjustment.

Question: For purposes of determining 5% reportable transactions, should the threshold be based on the beginning year market value adjusted balance in the general account ?(there are no other assets in the plan) and do I treat the FAS110 MV adjustment at the end of the year as a potential 5 % reportable transaction if it exceeds the 5% threshold?

Thanks in advance.

What is the criteria for who must disclose FASB 87 information?

The "View New Posts" on the Boards produces a different result from the "Active Message Threads" on Benefits Buzz.

Employee left employment on 1/1/2001. Was not aware of retirement eligibility. has now (in 2003) requested retirement with a retroactive effective date of 1/1/2001.

(1) The plan includes a minimum from a prior money purchase plan account balance. This balance (with fixed rate of interest) can be taken upon any severance of employment, without regard to $5000 limit, the balance of the accrued benefit to be paid as an annuity. The plan defines the annuity conversion of this account balance as based on the 417 conversion factor in effect at the annuity starting date. At 1/1/2001, that would be the GATT mortality table (Revenue Ruling 95-6) and 5.49%.

(2) Suppose a slightly different scenario: same as above, except there is no MP plan account balance, but the plan offers a lump sum option on the entire accrued benefit. Revenue Ruling 2001-62 refers to annuity starting dates on or after 12/31/2002. Since the participant has elected a 1/1/2001 annuity starting date, does Rev. Rul 2001-62 apply?

Is this interpretation correct? Any other comments?

A 401(k) Plan converts to a calendar year in 2002 with the short year being April 1 through December 31. Ownership of the corporation is 1.01% each for 99 owners. The limitation year is the plan year. In calculating the top-heavy status of the plan for the 2003 plan year, how do you determine whether of not these owners are Key or not. For a full year, about 2/3 of them would earn more than the $150,000; however, during the short year, only 38 earned more than the $150,000. Does the $150,00 get pro-rated for the 9 months to $112,500 to see which of these more than 1% owners are Key Employees? Do you use compensation for the full calendar year 2002, even though it overlaps into the prior limitation year?

We have been accessing a web page at www.moodys.com to get the Moody's Aa rate each month. Today we found that it is no longer available to nonsubscribers. Does anyone have a source where we can get this information for free? What other rates do people use to benchmark the discount rate for FAS 87?

A plan allows for participant loan and also provides for the maximum "cure period" as defined in the final loan regulations. The "cure period" ends on the last day of the quarter following the quarter during which the participant missed a loan repayment. In your opinion, does the regulations require that "interest" be charged on the missed loan repayments that are made prior to the end of the "cure period"? In my opinion, the regulations are not explicit in this regard. I believe that the regulations could be interpreted either way, and that either interpretation would be acceptable. As an additional observation, the regulations are explicit in the situation where the participant does not make the missed payment by the end of the "cure period" and the loan is labeled a "deemed distribution" The regulations explicitly state that the amount of the "deemed distribution" is the amount of the outstanding balance with interest applied until the end of the "cure period". I am interested in hearing how other companies are handling the situation.

I have a client that uses a Bank as the Trustee of his plan. As I understand it the client is not required to hve a fidleity bond. In completing the Sch I, should I check "No Bond"?

If there is a cross reference to the Schedule P which names the bank and is signed by the bank, I guess the DOL could tell that the "plan" was not required to be covered by a fidelity bond. That cross reference seems unlikely to me. And what does "covered" mean? I would guess that the plan is not named on the banks bonding policy.

or... would you say yes and try to obtain the amount of bonding that the bank has?

or just assume that the bank has $500,000 of bonding in place and enter that amount?

Just seems like an obvious reject for audit item if I say "no Bond".

Service provider accidentally comingled pre-safe harbor matching contributions and safe-harbor matching contributions and, as a result, permitted hardship withdrawals of safe harbor matching contributions for several NHCEs over a three-year period. Several of the affected participants have since terminated employment.

Our thoughts are to perform applicable nondiscrimination testing for the affected years, but service provider is charging an enormous amount to run the testing. :angry:

Thoughts on possible alternative corrections?

A plan sponsor does not want to adopt the $200,000 compensation limit enacted by EGTRRA within the EGTRRA good faith remedial amendment period, but may want to adopt the higher limit later. If the plan prospectively adopts the $200,000 limit after the EGTRRA remedial amendment period ends, will this violate 401(a)(4)? The change will only benefit the highly paid (it will only affect those with comp over $170,000).

Supposedly there is some guidance out there regarding the limit change and 401(a)(4), but I haven't been able to find it!