When a fully-insured Plan Sponsor collects premiums, for example COBRA premiums, is the Plan Sponsor performing a plan administration function that requires it to meet the HIPAA privacy plan document and firewall requirements? Or can this be considered solely enrollment information that falls within the exception?

I have a plan that only requires six months to enter the plan and no age. We have a participant who is 17 and they want to exclude her from safe harbor or in general any employer contribution. Can this be done when the plan document does not specify it and if so what reg./etc. should I be looking at?

Can waiver of premium be provided in life policy insuring a participant either in a 412i or split funded db?

I've found nothing saying yes or no.

Any direction would be appreciated.

How long do you have to/should you keep them?

One of the owners of a small C-Corp passed away just before the SEP contribution was going to be made for 2002.

I believe that the SEP contribution should still be made for him.

Is there anyone who thinks it can't be made?

I have a money purchase plan with 1,000 hour last day rule that

was frozen in November 2002. Is the plan subject to the minimum

funding requirement in 2002 or is it exempt due to the last day rule?

2001 PYE ratio was 53.80

2002 PYE ratio is 60.02

top-heavy 2002?

the plan is top-heavy in 2003.

We have a takeover plan. The period ending 12/31/01 should have been audited and the Schedule I versus H should have been prepared etc.. (It closed in the 2000 year with more than 120 participants.)

We're going to break the news it must be audited for 2002. What about the 2001 year? I suppose the proper thing to do would be an amended return. What are the penalties?

I'm thinking this new client will simply want to "roll the dice" and see if IRS ever picks up on it. The are not going to be happy at all about the audit and having to pay for one. It's a 401 k plan with a 2 month eligibility. The have over 200 employees and only 40 actually defer and receive match. The other TPA firm only counted the ones who participated and said all other elected to opt out of the plan. I know they can't do that for acp/adp but I've never had that issue come up on the 5500 count. I'm thinking we have to count everyone who had the opportunity to defer regardless of whether the employer had them sign a form to "opt out". Am I losing it here? Also, if the client "rolls the dice" will my beginning number of participants be a red flag (it will really vary with the closing from last year.)

Help!

My client wants to terminate his Profit Sharing Plan that has Life Insurance policies as well as mutual funds as investment vehicles. He wants to have the insurance policies distributed in kind (I think it is because the participants insurability has changed). Does anyone see a problem with this?

I know it is too simple of a question to even ask, but--

Assuming I can pass the gateway, can I give the key owner an allocation of more than 25% of the total profit sharing contribution?

I've taken eligible comp times 25% and reached "X". The key makes $80,000. This is a straight ps plan. If I can pass the gateway can I actually give the key let's say 35%???

As long as my total amount is 25%, I pass the gateway, does it matter how high I take the key's allocation %???

We work with many brokerage firms that have 40l(k) funds invested for participants in various mutuals funds. We are a 3rd party TPA firm. We have a takeover plan. The prior TPA sent the brokerage firm's statement (1/01/01 thru 12/31/01) cash basis along with the SAR. The census data was not included (e.g., date of hire, vested %) on any statement to the participant. Also, it was simple a cash statement. It did not account for the deferrals/match contributions that came in the following year for the prior year. The 5500, of course, did. So did the SAR.

We have also sent an additional statement based on an accrual basis, which reflects all of the census info and vesting percentile.

Am I doing too much work? Does the DOL/IRS have any regs on what the participant must receive on an annual basis (I know an SAR and SPD must be given at the appropriate times).

All of are plans are based on annual valuations.

Any thoughts would be appreciated.

An employer currently maintains a defined contribution plan, which it intends to continue. Now the employer wants to add a defined benefit plan, but it would like to exclude service before the defined benefit plan's effective date for purposes of vesting. Is this permissible?

We think that the literal language of Section 411(a)(4)© and Treas. Reg. §1.411(a)-5(B)(3)(v)(B) (which I have paraphrased below) does permit this. However, we also suspect that the IRS may take the opposite position. Has anyone had the IRS review this type of situation?

Section 411(a)(4)© provides that a plan can exclude service before the plan's effective date for purposes of vesting for any period in which the employer did not maintain a predecessor plan.

Treas. Reg. §1.411(a)-5(B)(3)(v)(B) provides that an employer is considered to have maintained a predecessor plan if the employer terminated a prior plan within 5 years of establishing the new plan.

I have a 401(k) plan with a 3% nonelective safe harbor

Employer is also allocating an additional employer profit sharing contribution.

Relius 410(B) test shows a terminee who gets the safe harbor but not the additional profit sharign as benefiting

Is this corrrect?

Are there possible 401(a) (4) requirements?

A group of new employees (acquired through a corporate acquisition) become immediately eligible to participate in the company's cash balance plan. Suppose these new employees have the right to roll over lump sum distributions from the prior employer's qualified plan.

Can the receiving plan grant these employees the ability to convert the rollover balances into a starting cash balances? If so, do you think it would be necessary to create a minimum balance based on maintaining a separate account?

One more complication. What if the receiving plan only wanted to accept the roll over on the condition that the employee also agreed to convert it to a cash balance?

Employer is making 50% matching contribution to employee's 401k plan. After the employee terminates his employment, it is discovered that during the final year of his employment, employee had neglected the employer's work and actively promoted his own business while he was on the employer's payroll. Is there a mechanism for the employer to recoup at least its own matching contributions to the employee's plan?

Does form 1042-s require a tax ID number in all cases?

Thanks

Jane

I have a non-resident alien bene who is unable to set a SS# and does not have an ITIN.

She says she is not required to obtain a ITIN.

Is there an exception that would allow us to pay out the distribution without obtaining a ITIN or SS#?

Thanks for your help.

I am reviewing a ESPP document that was prepared by another professional a few years ago and I have found one item that I am hoping somebody could help me with. The drafter included a provision stating that "the contributions of the participants shall remain the property of the participants at all times as long as they remain segregated according to participant, though the company may use any unsegregated contributions as it sees fit." Though it generally makes sense to me that an ESPP is a funded plan, I am seeing nothing in the statutes or regs or in my reading to confirm this and none of the other plan documents I have read have included similar language or provisions. Has anybody else seen similar language or are you familiar with a cite to support it?

Thanks in advance,

Kristen

Raleigh, NC

do I need to worry about this test for a DC plan?

Under the new claims regs, a plan can have a voluntary level of appeal if no fees or costs are imposed on the claimant as part of the voluntary level of appeal. Does that mean that the plan would be responsible for the claimant's legal fees if the claimant hired an attorney for a mediation or arbitration? I want to say no, but would love to hear what others think.