We have a plan that is a pooled account and is valued quarterly. We are switching recordkeepers and going to a daily valued account where each participant will have their own account. Currently, a participant has to wait until the first day of the following quarter in order to exchange investments, obtain a loan or a distribution. If the transfer of recordkeepers will begin and end in the first quarter where participants did not have the right to exchange funds or obtain a loan/distribution under the terms of the plan does the blackout notice need to be provided? I would not think so because the change of recordkeepers in this case does not appear to suspend a participants rights under the plan during this change. Any thoughts are welcomed.

If an MPP merged with a 401(k) plan effective February 1, 2002 and had the last day of the year rule, does someone who terminated during 2002 receive an MPP contribution since the plan was merged?

If a state teachers' retirement system offers an enhanced benefit in exchange for a voluntary contribution, but the years of creditable service are not changed, will 415(n) apply? For example, a person with 25 years service will normally receive a retirement benefit equal to 50% of compensation, but may increase the percentage to 60% with a voluntary lump-sum payment to TRS.

If 415(n) doesn't apply, does that mean the voluntary contribution will have to meet the DC plan limits of the lesser of $40K or 100% of compensation?

If 415(n) doesn't apply, does that mean that trustee-to-trustee transfers from 403(B) and 457(B) accounts may not be used to make the payment?

Thanks in advance for any replies.

Ken Davis

Univ. of South Alabama

Profit sharing plan allows for participants to direct the investment of their account balances. In the past, participants have been selecting their own broker to handle their accounts. The trustees of the plan did not have much involvement with the set-up of the directed accounts. Recently, as other participants have elected to direct the investment of their own accounts, their brokers are requiring the plan trustees to sign off on a myriad of forms, including indemnification/hold harmless language, etc...... The trustees are somewhat squeamish about signing off on such documents especially given the way that the typical directed investment account works, e.g., participant calls up broker/advisor and says let's buy that condo in the Bahamas..... Is there a practical way to handle this other than the trustees' combing through each account agreement and telling the broker which language they will and will not accept and sign off on???

I have a Sub-s corp that took a pre-EGTRAA loan

Prior to EGTRAA this was a prohibited transaction

My question is if this loan were never paid back would this disqualify plan?

An employer pays 100% of the group life and group disability premiums for its employees. Are these two plans ERISA PLANS ?

We use the corbel document. Can a non-standardized plan or a volume submitter have full reliance on Corbel's determination letter?

When I read notice 2001-77 it says no because of the non-safe harbor definitions, such as accrual requirements. Do you agree with this?

If I elect a 410b safe harbor in the document, which prevents the plan from failing 410b then would I have full reliance?

In determining the amount available for a hardship withdraw, what sources are available to be used?

Example. A participant has a vested balance of 5000, consisting of 80% salary deferral + gains and 20% employer match + gains. The participant has a need for all of the vested balance. Now Is 5000 available to withdraw? or Is 4000 available (only salary deferral)? or Is 4000 minus the gains on investment available?

Thanks,

Andrew

Does anyone have any ideas regarding what to do with uncashed distribution checks? Evidently, the participants have received the checks; however, they have failed to cash them, perhaps due to the checks' small amounts. What, if anything, can the plan administrator do to get these account balances off the books? Thanks.

Is there a maximum salary reduction amount in a cafeteria plan, other than the $5,000 maximum for child care? I have an employee who wants to run $10,000 through health care reimbursement.

Do cafeteria plan salary reductions tie into salary reductions for 401(k)?s Do we have to aggregate cafe plan reductions w/ 401(k) to make sure we don't exceed 402(g) limits or 415 limits?

Thanks.

I have found Rev. Ruling 2002-32 which deals with transferring health FSAs from one employer to another pursuant to an asset sale. Does anyone know what would be applied if you had the same issue in the context of a stock sale? Or why the two would be treated differently? Thanks in advance for your help.

i have a client that has an "inactive" 403(B) plan. all of the remaining participants have terminated employment, some with vested balances exceeding $5,000, some not. since there is no real plan termination procedure for 403(B) plans, can we force these remaining participants out?

USA Today is reporting the following today regarding Bush's new retirement reform legislation that will be introduced on Monday:

Eliminate some rules that make 401(k) plans costly and complex, such as the requirement that companies contribute to accounts of lower-paid workers if most benefits go to top executives. That could be a moot point, because business owners might prefer the expanded Roth and new savings account to setting up a 401(k), some experts say.

Is this an inartful way of saying they are going to propose a repeal of top-heavy requirements?

Does anyone know if non-qualified deferred compensation should be considered when determining the total compensation for highly compensated employees in FSA discrimination testing? (The non-qualified deferred comp plan is not a Section 125 plan.)

This is probably a very quick and easy question but I cannot find anything stating one way or the other.

Should/Can 5500's be mailed via certified mail? What about Return Receipt or Delivery Confirmation? Or does it even matter?

In the past, we've just mailed them First Class but since I'm reassessing how we do everything, I figured we might as well do this right (if we aren't).

Thanks!!

Rachel

Beginning with the 2002 Form 5500, only multiple copies of page 2 of Schedule SSA may be used to report information about participants with deferred vested benefits. No attachments will be permitted or accepted.

Are they serious?! They can't possible realize how many pages of SSAs are going to be sent.

Any updates on this?

Notice 98-1 explains how to determine the ADP/ACP for NHCEs after a change in the eligible group where a plan uses the prior year testing method. It calls for the use of an adjusted ADP/ACP, which are the ADP and ACP "for the prior year of the specific plan..." Does this mean we are to use the results of the prior year's ADP/ACP tests for each subgroup of NHCEs, which in turn are based on data for the second prior year? Or are we to calculate an ADP and an ACP in the current year based on prior year's data? If the latter, why does there need to be a special rule?

We have found a vested participant was not legally working in the US. However, we have determined that she has a vested right to receive these benefits (just as she has a right to a final paycheck reflecting wages for her actual work).

The question then becomes what to do with her vested account:

(1) Pay her benfeit and report the distribution using the inaccurate SSN - I am very uncomfortable with this option.

(2) Tell the participant that no distribution will be made until she presents us with a valid SSN or TIN. (So long as the participant has a balance in the plan, we must pay admin fees so this option is not ideal).

(3) Do number (2) but then treat her as a lost participant (even if we know where to find her) and forfeit her benefits to the plan, to be restored if she later presents her valid SSN or TIN. The problem with this is how to handle the required withholding and reporting on 1099-R and SSA on form 5500.

Does anyone have any other suggestions or opinions on the options listed above?

We have found a vested participant was not legally working in the US. However, we have determined that she has a vested right to receive these benefits (just as she has a right to a final paycheck reflecting wages for her actual work).

The question then becomes what to do with her vested account:

(1) Pay her benfeit and report the distribution using the inaccurate SSN - I am very uncomfortable with this option.

(2) Tell the participant that no distribution will be made until she presents us with a valid SSN or TIN. (So long as the participant has a balance in the plan, we must pay admin fees so this option is not ideal).

(3) Do number (2) but then treat her as a lost participant (even if we know where to find her) and forfeit her benefits to the plan, to be restored if she later presents her valid SSN or TIN. The problem with this is how to handle the required withholding and reporting on 1099-R and SSA on form 5500.

Does anyone have any other suggestions or opinions on the options listed above?

We have found a vested participant was not legally working in the US. However, we have determined that she has a vested right to receive these benefits (just as she has a right to a final paycheck reflecting wages for her actual work).

The question then becomes what to do with her vested account:

(1) Pay her benfeit and report the distribution using the inaccurate SSN - I am very uncomfortable with this option.

(2) Tell the participant that no distribution will be made until she presents us with a valid SSN or TIN. (So long as the participant has a balance in the plan, we must pay admin fees so this option is not ideal).

(3) Do number (2) but then treat her as a lost participant (even if we know where to find her) and forfeit her benefits to the plan, to be restored if she later presents her valid SSN or TIN. The problem with this is how to handle the required withholding and reporting on 1099-R and SSA on form 5500.

Does anyone have any other suggestions or opinions on the options listed above?