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.

FACTS: A business owner is currently receiving minimum required distributions, sells his or her interest in a business, remains an active employee, and the plan document permits an active participant in payment status to discontinue minimum required distributions.

QUESTION: When is the participant no longer considered a 5% owner and eligible to discontinue minimum required distributions?

HIPAA requires segregation between an employer's business functions, and administration of its self-funded group medical plan.

In the real world, human resources personnel at such businesses peform some HR tasks such as hiring, firing, and discipline, and also help administer claims and perform other health plan functions. HIPAA requires that employers strictly segregate these functions. HIPAA also requires appointment of a privacy officer. Also in the real world, HR directors are the likely candidate to serve as HIPAA privacy officers because they are usually much more familiar with the group health plan than are folks like the CEO or CFO (of course this can vary greatly).

Many employers out there are just not able to create a salaried

position of privacy officer, and many also don't want to hire the number of people it would take to totally segregate HR functions and group health plan functions. I am curious as to what practitioners are advising clients in this regard, and whether TPAs are stepping in to help bridge the gap.

Does anyone know if a for-profit parent that has a 501©(3) (tax-exempt) subsidiary can allow the employees of the tax-exempt sub. to participate in the parent's plans (i.e., 401k plan)? I would imagine this would depend upon where they would be considered to be in the same controlled group, however I'm not sure how that would be determined in relationship to the tax-exempt subsidiary. I'm not having luck finding an answer. Any suggestions? Thank you.

Plan was effective in 2002. A safe-harbor plan using the 3% non-elective.

Employer did not understand he had to limit his compensation to $200,000 and contributed 3% of his total compensation which was over $300,000. Most the contribution was made prior to year-end.

What is the correction for this?

Thanks.

Has anyone had experience with monitoring excessive trades by employees? If so, do you have rules or written policies established that you can share?

Sorry to ask what I'm sure has been gone over before, but...

We have a 401(k) plan with no service requirement for deferrals and a One Year of Service requirement for non-elective, in addition to 1000 hour requirement and last day rule.

Profit sharing is cross-tested.

The plan is not passing the ABT due to the increase in ees who are eligible to defer.

I have been reading a lot of the threads with regard to restructuring the plan; we have no experience with this method with cross-testing and probably have some really basic questions.

We are using Relius. Choosing the option to test statutory exclusions separately allows the test to pass. The right ees seem to be excluded, however is there anything that I need to watch out for?

I also have a top heavy issue. I believe I read elsewhere that if I restructure the plan than those statutorily excluded need only receive the 3% contribution?

The plan was previously amended to allow for the top heavy only ees to receive the gateway however the amendment did not mention anything about restructuring. Is a further amendment needed?

Thanks very much for the assistance.

I'm working with a takeover plan that has over 200 terminated participants that the client wants to force out. When we submitted our invoice to the client for our charges to coordinate the distributions, withholding and federal filings etc., he was very unhappy - to put it mildly.

The prior administrator used to deduct the distribution fees directly from the participant account prior to paying the distribution. It is my understanding that the DOL does not approve of this, but I am not able to find anything that I can use to convince the client of this.

Does anybody have any insight on why distribution fees cannot be paid by the participant?

Thanks in advance.

Does a corporation which employs only a husband, his wife and their mother have to file a 5500 or can they file a 5500-EZ?

Actually, the mother no longer works there, but receives a benefit from the plan.

Tired of constantly being broke and stuck in an unhappy

marriage, a young husband decided to solve both problems by

taking out a large insurance policy on his wife, with himself as

the beneficiary, and arranging to have her killed.

A "friend of a friend" put him in touch with a nefarious

underworld figure who went by the name of "Artie." Artie

explained to the husband that his going price for snuffing out a

spouse was $5,000.

The husband said he was willing to pay that amount but that

he wouldn't have any cash on hand until he could collect his

wife's insurance money. Artie insisted on being paid something

up front.

The man opened up his wallet, displaying the single dollar bill

that rested inside. Artie sighed, rolled his eyes, and reluctantly

agreed to accept the dollar as down payment for the dirty

deed.

A few days later, Artie followed the man's wife to the local

Ralph's grocery store. There, he surprised her in the produce

department and proceeded to strangle her with his gloved

hands. As the poor unsuspecting woman drew her last breath

and slumped to the floor the manager of the produce

department stumbled onto the scene. Unwilling to leave any

witnesses behind, Artie had no choice but to strangle the

produce manager as well.

Unknown to Artie, the entire proceedings were captured by

hidden camera and observed by the store's security guard,

who immediately called the police. Artie was caught and

arrested before he could leave the store.

Under intense questioning at the police station, Artie revealed

the sordid plan, including his financial arrangements with the

hapless husband. And that is why, the next day in the

newspaper, the headline declared: "Artie Chokes Two for a

Dollar at Ralph's Market".

For a plan that has a dicretionary match formula, must the BOD complete a Board Resolution each year a match contribution is made? Must the particicpants be notified of the match formula each year? Has anyone ever had an issue come up with the IRS or DOL where they were asked for a Board Resolution pertaining to a discretionary match formula for a give Plan Year?

Any help is appreciateted.

I have a Standardized 401k plan that is top heavy for 2002. The employer matches 100% of deferrals. All participants except one receive enough of a match to cover the 3% TH min contribution. Can the employer simply contribute an additional amount to the one participant to get them up to 3% allocation or must there be uniform allocation to all participants since it is a standardized doc?? Thanks.

An employer set up a SIMPLE IRA. No elective deferrals were made to the plan. However, the employer did make the nonelective contribution he promised to make. Do you see any problem with this?

Our plan's definition of compensation excludes bonuses. My understanding is that because the definition excludes bonuses, the plan must demonstrate that the definition does not discriminate in favor of highly compensated employees under 1.414(s)-1(d). First, is my understand correct? Secondly, what form is the plan required to file? Does the form have to be filed with the d letter application?

My ex-husband lives in the US. I live in the UK. Thanks to this board I have now extracted details of his 401k plan and established my right to it as his spouse. However he did not declare my name on the plan even though I was married to him when it was taken out. Four days after the divorce another person was named on the plan. Numerous other things were not declared and the court order was not met in its entirety. I have been lewft in dire financial straits. Is there any way of retrieving my entitlement to the plan? As the Human Resources director my ex-husband was responsible for over-seeing the company plans.

I have a client that has a group health plan that ONLY provides free medical examinations to eligible employees and retirees (no dependents). When redoing their SPD, I wanted to add COBRA language since the plan seems to fit the definition of IRC 213(d)(1)(A). The administrator said that they've never sent out a COBRA notice and doesn't want to include the info.

Does anyone have any thoughts?