Here is a claim I haven't run into before...

FSA participant (from the U.S.) went to Canada and filled a prescription for Seldane and wants to be reimbursed. However, the US FDA has banned it from US because of the danger of strokes. The claimant's prescription plan has denied payment for the medication.

Can this be reimbursed through the medical FSA?

Thanks!

Under the updated claims procedure rules (for defined contribution plans), does anyone know whether a company must have its procedures in the plan document or whether it is sufficient that they are spelled out in the SPD? I thought it was fine to just have the claims procedures in the SPD, but I was not sure if the plan document could be completely silent.

Thank you for your responses.

We've been receiving some calls regarding FSA Debit Cards. Some issues that immediately come to mind are:

1. How to ensure that the service is for a covered dependent?

2. How to ensure that the entire charge is for eligible products/services?

3. The liability of the Company should someone obtain services/products that were not eligible?

Does anyone have any experience with these?

Thanks!

I have a PS Plan which had 3 groups for contributions:

25+ YS = 15% of comp

15-25 YS = 10.5% of comp

<15 YS = 5% of comp

Under EGTRRA, these amounts can go up (presumably the top group, including the owner, can now deduct 25%).

If the top group now is 25%, what must the other ones be?

Apparently, Accudraft's volume submitter only provides for a 3% top heavy minimum, and not the 5% required for a cross tested gateway. They have a stand alone model amendment to fix it.

What approach are you taking to this:

1. you had all cross tested plans adopt it < 12/31/02?

2. you are including it with all new cross tested documents currently, and will go back and add it to previously restated plans?

3. You'll handle it on a case by case basis, since it's not that common for actives in a x-tested plan to drop < 1000 hours and so it really doesn't arise that much?

4. You could do the same thing with a 401a4 (11g) corrective amendment?

5. Is a plan without this correction (but in no true need of it since no one is getting t/h only) somehow "deficient" or unqualifiable?

Sorry for the babbling but its difficult to imagine all the permutations to come up with the "best" answer. What are you doing?

If a single participant designates his brother as his death benefit beneficiary and then subsequently marries, we know that the spouse will automatically be considered the designated beneficiary when the participant dies. However, if the participant dies and the spouse wants the brother to take the death benefit, can the spouse make a post-death consent to the designation of the brother or is the spouse the beneficiary so that the only way the brother can take is to have the spouse make a valid disclaimer. Assume this is a defined contribution plan not subject to 401(a)(11). Regulation 1.401(a)-20, Q&A-33(a) indicates that a spouse may consent to any waiver at any time . . . . Thanks for your help.

Is there a minimum amount of time that a participant in a cafeteria plan has to review all open enrollment literature and complete forms before the employer requires enrollment forms to be be returned to the employer before a new year, (i.e. 30 days, 2 days)? Are there any IRS regulations or codes that address question?

Wasn't sure just where to post this, since we don't have a specific thread for QDRO's...

Divorcing parties have not been able to come to an agreement on the separtion of assets. Judge wants to draft an order requiring that participant use a portion his Profit Sharing Plan balance to pay off all marital debt, with an additional portion to be paid to the ex-spouse, as alternate payee.

It would seem to me that QDRO payments can be made only to an alternate payee who is a "person" (i.e., spouse, ex-spouse or child).

Has anyone ever seen such a QDRO provision? If so, to whom (participant or alternate payee) is the amount paid to creditors taxable?

I guess an alternate approach would be to include the marital debt amount in the alternate payee's distributable portion, but what guarantee would there be that it would be used to pay off the marital debt?

My QDRO experience is (thankfully!) extremely limited, but this approach would not seem to pass muster.

Thanks for any and all responses!

In today's Federal register the DOL issued a final rule relating to ERISA plan black out periods.

Anyone able to provide a synopsis/overview on how this effects trustees and custodians of ERISA governed employee benefit plans??

Thanks

Here's something cute that came to my emailbox:

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After every flight, pilots complete a gripe sheet which conveys to the mechanics problems encountered with the aircraft during the flight that need repair or correction. The form is a piece of paper that the pilot completes, and then the mechanics read and correct the problem. They then respond by writing on the lower half of the form what remedial action was taken and the pilot reviews the gripe sheets before the next flight. Here are some actual logged maintenance complaints and problems, as submitted by QANTAS Pilots, and the solution recorded by maintenance engineers. By the way, Qantas is the only major airline that has never had an accident.

P = The problem logged by the pilot

S = The solution and action taken by the engineers

P: Left inside main tire almost needs replacement.

S: Almost replaced left inside main tire.

P: Test flight OK, except autoland very rough.

S: Autoland not installed on this aircraft.

P: Something loose in cockpit.

S: Something tightened in cockpit.

P: Dead bugs on windshield.

S: Live bugs on backorder.

P: Autopilot in altitude-hold mode produces a 200 FPM descent.

S: Cannot reproduce problem on ground.

P: Evidence of leak on right main landing gear.

S: Evidence removed.

P: DME volume unbelievably loud.

S: DME volume set to more believable level.

P: Friction locks cause throttle levers to stick.

S: That's what they're there for.

P: IFF inoperative.

S: IFF always inoperative in OFF mode.

P: Suspected crack in windshield.

S: Suspect you're right.

P: Number 3 engine missing.

S: Engine found on right wing after brief search.

P: Aircraft handles funny.

S: Aircraft warned to straighten up, fly right, and be serious.

P: Target radar hums.

S: Reprogrammed target radar with words.

P: Mouse in cockpit.

S: Cat installed.

I know that an employer has until the DUE DATE of his tax return to fund his SEP contributions (including extensions).

However, do we have to HOLD (not file) the tax return until the SEP is funded?

I just took over a defined benefit plan with a benefit formula of [1.3% average annual comp + .58% (average annual comp - $10,000)] multiplied by total years of service.

The normal retirement age is 65 and the normal form is 10C&C.

Some of the participants will have 40+ years of service to apply to this benefit formula.

IRC 401(l)(A)(4) defines the maximum excess allowance as .75% x years of service not in excess of 35.

Reg. 1.401(l)-5©(1)(i) stipulates that the cumulative disparity limits is satisfied if an employee's cumulative disparity fraction does not exceed 35.

Must the years of service applied to the excess portion be limited to 35?

If not then consider this:

For somene who enters the plan after 12/31/88 with a maximum excess allowance of .65 (SSRA = 67) his annual disparity fraction would be .58/.65 = .89, so it appears that he could have 39 years of service applied to his excess portion (.89 x 39 = 34.71. Is this correct?

For somene who enters the plan after 12/31/88 with a maximum excess allowance of .75 (SSRA = 65) her annual disparity fraction would be .58/.75 = .77, so it appears that she could have up to 45 years of service applied to her excess portion (.77 x 45 = 34.65. Is this correct?

And finally, is there a statutory reduction to the maximum excess allowance due to the fact that the normal form is 10C&C or the integration level is a flat $10,000?

Does it matter where I open a Roth IRA if there are no fees attached?

Figured this was the best place for some help here, so I ask my fellow actuaries for some advise. Unfortunately, what we all considered a hypothetical is now emerging as a reality to many participants in plans across the country.

I'm running a plain-Jane profit sharing plan with a 1,000 hour/last day of year requirement for contribution (although I think that the questions posed will also apply to accruals in DB plans).

Situation is that the sponsor had two participants who were called up for service during the last plan year, although both were back by plan year end. One completed just under 1,000 HoS, the other over 1,000.

My questions, after reading USERRA:

1) Think that we need to project these participants as if they were hypothetically there for full period of time (so both get contribution for year).

2) Compensation used? Do I annualize salaries actually earned as if they were there for full year? These are hourly workers. Would taking last hourly rate multiplied by 2080 be a reasonable amount to use?

3) Vesting service (1,000 Hour requirement): For first participant, if I do treat as if working over 1,000 HoS for contribution, do I also impute this service for vesting service?

4) In my situation, length of deployment occurred during plan year. For future situations, what if they came back after plan year end. My cursory reading of USERRA seems to imply that makeup contributions are made in plan year in which the participant returns to employer (so say if deployed in 2002, but comes back in 2003, makeup contribution for 2002 is taken into account in 2003, or do I make this in 2002?).

Thanks for any help (and I guess these questions apply for benefit accruals in a DB plan also) as I just want to do the right thing in this situation.

Would appreciate suggestions regarding reference text on COBRA - more legal than HR.

Strange scenario: Insurance agent wants to pay plan administration fees for the plan for which he is the agent of record. (Sold group annuity contract, provides investment advice, etc.) Seems like a prohibited transaction (lending of money between the plan and a party-in-interest). Fees are reasonable, but agent's home office provides TPA services. Any opinions?

Under 402(f) a notice becomes "stale" if a distribuiton is not made within 90 days of the notice. I have looked under 401(a)(31) and the regs, and it does not appear that the failure to send a 402(f) notice in a timely fashion is a qualifcation failure under 401(a) (except for certain default election procedures in 1.401(a)(31) Q&A 7 ---and I realize there also might be plan document issues).

Has anyone ever looked into whether making a distribution in, say, the 100th day after receipt of a 402(f) noice is a qualfication failure or whether the only penalty is that imposed under 6652(i)?

I have an employee who dropped their spouse during Open Enrollment. They did this in anticipation of a divorce. The divorce is not final and the spouse is without insurance.

Is the spouse eligible for COBRA?

We have a Sect 125. Plan.

If you have an individually designed plan document, were you required to restate the plan document by 12/31/2002, or could you just add an amendment for GUST?

Owner A - owns 100% of C-Corp. A - is only employee except

for union employees

- owns 100% of Sole Prob B & has two employees

- owns 100% of Sole Prop C & is only employe

Some of Corp. A's union employees also worka small number of hours for Company B on occasion.

The plan is treated as a controlled group of corporations for plan purposes.

The plan document excludes union employees by class; however, do these union employees have to be included for the time they work as non-union employees?

If an employee has to complete a year of service to enter the plan and an employee works 2000 hours as a union ee but only 100 hours as a non-union ee do they qualify under the year of service rule and become eligible for a profit sharing contribution based on their non-union compensation?