Our DB plan does not provide death benefits other than the surviving spouse benefit. I have a participant who "retired" several months ago and shortly aftewards was divorced. He and his ex are in the process of developing a QDRO and so he has not taken a distribution from the plan. This process may take another year to complete and he is concerned about protecting his asset for his children during that time. I understand QDRO's do not apply to IRA's so rolling it out and QDROing the IRA is not feasible. Can he roll it out and do a QDRO on our plan that applies to the distribution he received?

I am trying to figure some stuff out regarding our welfare plans.

1. Without a ‘wrap-around’ plan document to bundle any/all of the plans into one “Plan”, are separate 5500 filings required? (We have previously filed one 5500 for the medical, dental, life plan and one for the Section 125 plan. We do not seem to have a wrap-around document bundling the plans. We only have a very old SPD that lists the benefits as one plan, but it is no longer current with ERISA SPD requirements.)

2. Are there any possible consequences if a single 5500 has been filed, but there is no wrap-around document, or if it is lost or out of date?

3. If plans are not bundled, can enrollment in one plan be contingent upon enrollment in a separate plan? For example, we require employees to elect both medical and dental coverage. If they are not bundled together, can that be required?

Thank you!!

Scenario:

I am testing the plan year 1/1/02 - 12/31/02. The plan has elected to use the top 20% rule to determine HCE's beginning 1/1/2002. Is this correct in calculating the HCE group?

I look at the population for year 2001. The number of EE's is narrowed down to 25. Thus, 20% of that is 5 EE's in the HCE group. I look at the salary, from highest to lowest and take the top 5, as long as they made over 85K for the 2001 year. After I narrow it down to those EE's, I still have 1 employee who is the father of a 63% owner. He needs to be coded an HCE as well, correct? Although that is greater than 5 EE's, I don't think you can remove the lowest paid guy of the first group, can you?

I know that it sounds confusing, but any feedback would be appreciated.

My companys uses a FIFO method for determining earnings on excess amounts. Does anyone know if FIFO is mandated in the code? Could we use LIFO?

If you could point me to the regs where it says FIFO, or LIFO or either, I would appreciate it. I could have sword I read it in the ERISA Outline book, but I can't seem to find it.

Deceased participant designated his sister and niece as co-beneficiaries under the Plan. The sister is a resident of Vietnam and (reportedly) speaks no English. The niece is a US citizen. The sister wishes to disclaim her interest in the Plan benefits. Other than meeting the rules for a "qualifed disclaimer" and perhaps verifying she comprehends what she is doing, are there additional requirements or caveats resulting from her nonresident status??

THANKS

We have a 401(k) Plan and an ESOP. We failed the ADP test and the company providing the testing services has suggested that we can use the ESOP contribution as a QNEC to pass the ADP test. This does not sound like it should work since the ESOP and the 401(k) are tested separately. Am I missing something? Any comments/insights would be appreciated.

We are getting more and more questions and opportunities in the nonqualified plan area. I was wondering if anyone knew of any conferences or seminars that would be good to attend or where I could find a listing of this type of conference.

Thank you.

If a beneficiary's benefit (that is, the participant's death benefit) is more than $5,000, does the beneficiary have to consent to a distribution or can we just pay it out?

The plan document doesn't say. I'm confused about how the 411 417 and 401(a)(9) regs fit together. The 1.411(a)-11 regs say consent is not required after the death of the participant. The 1.417(e)-1 regs say a beneficiary may be paid to a NONspouse beneficiary without the beneficiary's consent. The (a)(9) regs provide for several required beginning dates. If a plan can pay out to a beneficiary at any time without consent, why are the (a)(9) for beneficiary's necessary? That is, isn't the plan going to pay out a beneficiary's benefit before the required beginning date?

I realize that catch-up contributions are not counted in the 415 limit. Yet, suppose we have the following scenario:

2002 Plan Year.

HCE wants an allocation of $40,000.

He contributes $11,000, therefore could get $29,000 PS.

ADP test fails and he needs to get a refund of $1,000.

We recharacterize the $1,000 as catch-up, so there is no refund.

Previously (before catch-up rules became effective), we would still count the $1,000 refund in the 415 limit. But now that the $1,000 is recharacterized as a catch-up, is it counted in the 415 limit? If not, then the PS contribution could now be $30,000.

My personal feeling is that the $1,000 should be counted in the 415 limit and the PS contribution should be limited to $29,000. Does anyone know for sure?

How are you handling failures by participating employers to timely fund their required contributions to a multiemployer MP plan (commonly referred to as "Annuity Plans" in the multiemployer community). This is not a profit sharing plan, so the minimum funding rules of 412 seem to apply.

What happens when the trustees are unable to collect after exhausting all efforts (employer bankrupt with no assets, etc)? Clearly, from a financial statement perspective, allowances for doubtful accounts and bad debt write-offs are appropriate but it seems the minimum funding deficiency would never go away as far as the Schedule R is concerned. It would have to be included in the required funding amount again each year until funded, which will never happen.

I understand that the delinquent employers would be responsible for the excise tax.

I have looked at numerous Taft-Hartley annuity plans (that are money purchase plans) at Free-Erisa and find none showing a minimum funding deficiency. Some have not filed Sch R but my understanding is that will not work if the money purchase code is entered. I find it hard to believe that all of these plans receive all of the required contributions from every employer with 8 1/2 months of the plan year-end. At least that has not been my experience with multiemployer plans.

Has the DOL come out with a reg. that says elective deferrals must be deposited within 5 days after the payroll date?

I am familiar with the reg that says contributions must be made as of the earliest date they can be segregated from the general assets, not to exceed 15 business days after the end of the month. But someone just told me that a new DOL reg came out.

I have a plan that is still on a quarterly valuation system. About two years ago (when losses were mounting) the plan was amended on the advice of a consultant to require the retiring

plan participants to share the pain of all investment losses as

of the date of their departure.

Basically, the plan takes the required IRS withholding from the

distribution. Then it withholds an additional 15% until such

time as the administrator can determine the true value of

the person's account on the day of his distribution. This generally takes 60-90 days. When the administrator has the final number he will subtract any losses (or add gains) to the remaining monies and make a final distribution.

Recently a participant became irate and threatened to sue.

How is this problem handled by other plans? Is our method correct? Any IRS or DOL concerns?

Thanks for the input.

We currently use ASC for administration and are considering switching. We would appreciate any comments/suggestions regarding other administration software, especially Relius. We don't do daily valuations, so that is not an issue.

We currently use ASC for administration and are considering switching. We would appreciate any comments/suggestions regarding other administration software, especially Relius. We don't do daily valuations, so that is not an issue.

Does anyone have the authority which states that you can adopt a plan up until the end of the year and have it effective as of January 1?

thanks!

1.457-4(d) of the Proposed Regs provides that sick and vacation pay may be deferred under an eligible plan only if "an agreement providing for the deferral is entered into before the beginning of the month in which the amounts would otherwise be paid or made available and the participant is an employee in that month." Has anyone come across any guidance on what this language means with respect to the requirement that the participant be an employee in "that" month? Is the applicable month the month of deferral or the month that the amounts would otherwise be paid or made available? The fact situation involves a terminating employee who elects a deferral before the beginning of the month in which the amounts would be payable, but has terminated by the time the amounts are payable. For instance, the employee's termination date is 12/31 but the benefits are not paid until 1/15 due to payroll requirements. If the employee elects to defer in December, and is employed in that month, are the amounts deferrable?

We are being challenged by an employer regarding our claims substantiation requirements for dependent care claims.

Is a cancelled, endorsed check adequate substantiation if the participant includes the dates of services and TIN on the claim form?

When determining if a plan is Top Heavy for a 2002 calendar year plan, we look at balances as of 12/31/01. Since that date is prior to the new EGTRRA rule of including only one year lookback of distributions for plan years starting after 12/31/01, do we include 5 years , or actually just 1 year since it is determination for the 2002 plan year?

I have a client that wants to invest in gold and silver bullion in a participant directed account under the company's profit sharing plan. I've read commentary that states that 408(m)(3) exception to the acquisition of coins and bullion applies only to IRA accounts. Yet when I read 408(m) as a whole, and subsection (3) in particular, I don't see any reference to IRA's only. Any thoughts?

This is a first for me. Participant and Spouse divorce. Plan receives QDRO and begins making payments to Spouse (now Former Spouse) pursuant to QDRO. Participant and Former Spouse remarry, thus, Former Spouse is now spouse. What should the Plan do? Does it stop making payments because there is no longer a former spouse; Does it continue to make payments, because, the QDRO is a court order, until such time that the order is modified...Any other ideas?

Thanks.