A Plan uses W-2 definition of comp, which includes tips. The Plan Sponsor wants to define comp to exclude tips. In order to satisfy 414s, the comp definition must be 1) reasonable and 2)pass the ratio test. Assuming number the definition satifies #2, does anyone have any thoughts on the "reasonability" of such a definition? Any precedence in PLRs?

The Plan Sponsor is a food service company.

Plan received a DRO in mid-December, 2002. DRO identified plan (which is a PSP) as the "XYZ, Inc. Defined Benefit Plan". DRO was returned citing the error and noting the correct name of the plan. Amended DRO was received and all correct thereon as of 1/20/03. Is interest normally payable from the date the DRO was submitted until the date actually paid? Or is the start date the date the DRO is determined to be "qualified"? Thanks for the help....

I have a client with a Employee Assistance Program that provides counseling to any employee on a limited basis. The employer does not know who is being treated or for what they just get the bill and pay for the service from employer assets. Any employee is eligible for this benefit so I am considering all employees as participating. There are over 100 employees eligible to participate in this benefit. Do I need to include on the Form 5500 as welfare benefit?

I have a client who is trying to claim reimbursement for a specialized pantyhose that puts pressure on her legs to remover her spider veins.

Is this eligible for reimbursement?

Must a plan administrator distribute a 204(h) notice prior to amending a defined benefit plan to change the disability benefit offered under the plan? The disability benefit is currently an unreduced normal retirment benefit, and the plan sponsor wishes to amend the plan to provide that the benefit would be equal to the benefit that a participant would receive at early retirment age.

Our company wants to set up a plan as follows:

Each Quarter profit will be assessed and if it is 5% or higher an equal percent will be paid to current employee as a bonus. Is this gainsharing, profit sharing, just a bonus??? Also, can we set our own standards or are the parameters to follow and where would I find them if they have been set?

Thanks for the help!

:confused

Is it possible to set up a church plan so that a board of trustees bears all responsibility and liability for running the plan and the sponsoring employer has no liability at all? For example, if Church A set up the plan to cover it and 20 associated churches. A board of trustees, which is elected by the 21 associated churches administers the plan. If the plan document states the board of trustees has all responsibility for administering the plan, can Church A avoid liability if benefits aren't paid, etc.?

Has anyone dealt with the question of maintaining the loan balance of a participant when the loan is deemed distributed?

The balance does not get maintained for the Schedule H or I on the Form 5500 but my research indicates that the balance plus accrued interest is to be maintained for other purposes, one of these being the Top Heavy Test. Are any of you keeping the loan balance in Relius and then manually subtracting it to get the Schedule I amounts? Or are you maintaining outside of Relius so that your Schedule I matches the Relius Summary of Accounts?

Participant terminated in Oct. of '00; In January '01 she returned part-time for 2 weeks and received a W-2 for earnings and received a SH 3% contribution for the year. She took her entire distribution in '02. Again, her W-2 for '02 shows she had minute earnings for another part-time two week gig in Janauary...obviously this appears to be an ongoing thing. Question...does the employer have to continue to give her the 3% as long as she receives W-2 earnings? Could she just be 1099'd for her work? She no longer has her 401(k) investment account since taking her distribution last year. Thanks in advance.

A profit sharing plan has terminated and is merging into a new plan (profit sharing with CODA features) - don't ask me why the first plan didn't just add the CODA.

Regardless, if the profit sharing dollars in the old and new plan are subject to the same vesting schedule, can they be maintained in the same investment account, or is it necessary to keep the sources separate?

Does IRS Notice 98-52 still govern re: no allocation conditions may be imposed on safe harbor contributions?

Client makes 3% SH contribution to all eligible employees. This means that ALL employees eligible to make 401(k) contributions during the year receive the 3% SH contribution, correct? No hours or employment conditions allowed, even if coverage is still passed using those conditions (terms < 500 hours, etc.), correct?

I have a plan where an ineligible employee apparently got the enrollment forms and sent them directly to the investment company and a copy to the payroll department. They started deferrals (and unfortunately the company gave them the safe harbor match)... even though they were not yet eligible.

the participant is now eligible as of 1-1-03.

What is the correct course of action?

:confused:

Upon the ESOP's termination, can you eliminate the right to receive cash and thereby force participants to take stock? The statute suggests you can, but the regulations do not cover this. Does anyone know how the IRS feels? :confused:

Hi Everyone,

I feel like I am wasting time. My wife and I are in are early 30's and do not have any investments besides a checking account. Does the following sound like a logical way to invest my mone?

Begining Balance : $25K

$5,000 - into 2 individual 529's for my 15 month old twins ($2500 each) Is this enough $ to set into motion for college planning? Is the idea, that I am suppose to contribute to this each year? Month? or does the interest itself let it grow enough for college in 18 years.

$5,000 - to open a Roth IRA for my wife and I to retire (or should it be two Roth IRA's?) How can I figure out how much money this will bring us when we retire? Even if not accuate, is it possible to make a guess? Assume worst case? Best Case? Average Case?

$5,000 - into an agressive Mutal fund, because we are in our early 30's and can take the risk. Will this bring me a ton of money in 30 years? Or is it a waste of investment... Also, can I use this money over the years or is it locked?

$15K stay in checking account to keep liquid.

OR

forget all the planning and go buy myself a new car ;-)

Any thoughts or insight are appreciated,

thanks much,

Speech Coach-

Hello,

I know this isnt really a forum for asking these types of questions, but I really need some assistance.

I am relocating to Florida and am searching for a position with a TPA firm in the St. Petersburg (west coast) or central florida location. I have tried everything I can think of to find firms-looking on the job postings on this board, sending inquiries to CPA firms and ERISA attorneys in the area, general internet searches, and even asking wholesalers for Florida at fund groups who they work with for TPA firms in Florida.

Does anyone have any ideas as to how I can go about finding firms who do what I do? I am finding it difficult, as we arent exactly listed in the yellow pages...

Currently I work in a very small firm doing all aspects of plan administration. My firm has an excelllent reputation so I am only looking for quality TPA firms to work for when I move. I handle 80 cases, and we do everything by hand on spreadsheets, including testing, so I don't use a system. I have eight years of experience.

I know there are a few "big" firms, like Ceridian, down there. But I would rather not work in a big institution where I will not keep my hand in all areas of plan administration. I fear turning into a "testing person" or a "distribution person" at an assembly line institution.

I apologise if this is an inappropriate post. I was hoping someone might have some insight as to how to find TPA firms. Thanks in advance for any assistance you might be able to give me. -Lisa

Is it permissible to fund a 529 plan on a pre-tax basis through a cafeteria plan? I am assuming not, but remain uncertain. Concrete cites, if available, would be appreciated. Thanks.

Schedule T asks for proof that a plan meets the coverage requirements. It asks that 401(m) contributions/eligibility be disaggregated from 401(k) etc. This means that Voluntary After-Tax Employee contributions and matching contributions are part of the 401(m) testing portion for coverage.

What if you have different eligibility requirements for your voluntary after tax and your matching? Or you could have 2 different kinds of matching, credited and made throughout the year as well as one that is made at year end, but you could have different (non-failsafe coverage) eligibility for both types of matching.

Now having noted this... my dilemma is I look at the Schedule T box and it only has room for one answer, it does not take into account the different eligibilities for differing types of 401(m) contributions. How do I decide what to disclose here? If one of the contribution types meets coverage fail safe eligibility then is that enough? or is there going to be a problem where one of the other 401(m) contribution types doesn't meet coverage? and if so, how do I disclose this and know WHICH to disclose coverage figures for?

Thanks for your help.

Samantha Prince

I hear that the IRS frowns on 2 short plan years in a row: how might they react? Slap on the hand? Stiff penalties?

Scenario:

The employer started a cafeteria plan (with FSAs) for the first time while already into their medical plan year, so they set up a short plan year so the cafeteria plan would line up with the medical renewal going forward. Then a few months into the cafeteria plan year, the medical carrier discontinued the medical plan that the employer was offering so the employer was forced to seek a new carrier, resulting in a new medical plan renewal date. The cafeteria plan short plan year is 4/1/02-1/31/03. The medical plan USED TO renew on 2/1, but the new medical plan began on 9/1/02. The employer is letting the cafeteria plan run its course through 1/31/03, but wants to do another short plan year from 2/1/03-8/31/03 -- then run a full plan year from 9/1/03-8/31/04.

Question: Is the fact that the medical carrier completely discontinued the medical plan and the employer was forced to make a change outside of their control enough reason to allow 2 short plan years in a row?? If not, any thoughts on how to handle this scenario? Thanks so much!

Our company offers and I currently participate in the 401K plan. I have existing traditional and Roth IRA's from a time when we didn't have a 401K. My gross income is over $65K and I'm single.

If I elect not to participate in the 401K any more, can I contribute to the IRA's? Or does the mear fact that my employer offers the plan mean I have to choose it over the IRA? (I know that you can contribute to the IRA with income testing, but I believe I'm over that threshold).

Since Roth IRA contributions are made with after tax dollars, can I contribute to that plan while also contributing to the 401K?

Carl

We are being told by several different Ins Cos that they no longer providE the PS-58 costs for the 1099-R reporting. There was a new table issued for this purpose in Notice 2002-8. Which types of ins policies should ps-58 costs be calcualted for????? We are getting conflicting info. Does anyone out there know for sure???? Thanks!!!