If an employee incurrs an eligible expense while on leave, and used the catch-up rule regarding their health FSA deduction, can that claim be reimbursed even though the service date occurred while on leave?

Thanks in advance for any help.

The sponsor of a general tested plan, actually a DB/DC combo, may wish to defer applying the EGTRRA comp limit increase retroactively for now due to the cost being too much to handle along with the other stuff, such as poor asset performance.

What are the issues if in the future if it is amended, for example, in 2004 to apply the $200,000 retroactively?

I've read comments about a plan no longer being a safe harbor, but it is not now, so that would not appear to be a problem.

There could be an issue of past service credit exceeding 5 years, but I can't see how that could be a problem if the only people over the comp limit are HCEs.

Clearly there will be testing issues if the annual method is used, but that is quantifyable.

Are there any other pitfalls to be considered?

I'm dealing with a 401(k) plan that has received proceeds from the demutualization of the insurace company that holds the plan's investments. The trust now holds common stock which will shortly be sold for cash.

The question at issue is the basis for allocating the proceeds to participant accounts.

Based on information provided to the insurance company, policy holders in 12/2001 are the ones who received demutualization proceeds. However, the demtualization was not approved, and the proceeds were not issued until 10/2002.

Obviously, neither my firm (recordkeeping) nor the client is overjoyed by the prospect of allocating these earnings to participant accounts based on their positions in 12/2001. Everyone involved would be much happier allocating the earnings based on the positions at 10/2002.

Is this an issue where the trustee can exercise some discretion? The trustee is going to get the opinion of their attorney, but I am curious about the experience of others on these message boards. Is there any published guidance?

The employer currently sponsors a defined benefit plan and is considering implementing a profit sharing plan as well. The intent is to allow younger employees who do not appreciate the DB plan to participate in a profit sharing plan while allowing the older, longer service employees to continue to accrue their DB benefit.

However employees will only be allowed to earn a benefit in one of the two plans (the documents would have the correct language to permit this).

The client wants to allow current DB participants choose which plan they participate in, effectively giving them the ability to waive current accruals in exchange for a profit sharing allocation.

Is it legal for a current plan participant to waive future participation in the plan?

Specifically in this case, can a current DB participant make an irrevocable election to stop accruing benefits in the DB plan and to now participate in the new profit sharing plan? And conversly, can the new profit sharing plan stipulate that those who participate in the DB plan are not eligible for allocations?

Finally, can new employees be given the choice of which plan they want to participate in upon employment?

I would really appreciate citations to support the answer.

Thanks.

Are governmental 401(a) plans subject to the same timeline as other qualified plans when it comes to implementing good faith amendments? In other words, is there any special exception for governmental 401(a) plans? Thanks.

An employer started a 403(B) plan that only provides for employer contribuitons. The vendor is saying a plan with employer contributons must be a 401(a) plan. Is the vendor correct?

Has anybody had any success in creating a custom report that will calculate the top heavy percentage? I had one that worked before the law changed and messed up the formula.

Thanks in advance for any help and advice.

Hello! I am taking the Dec 2002 exam. Just finished the weekend review course where the instructor gave us the exams but did not give us the answers... We were supposed to cover in class, but ran out of time... If you have them, would you please e-mail them to me or fax them to me?

Thanks!

Shannon C.

The DOL's website advises that the DFVC program is not available to Form 5500-EZ filers. A new client has advised he has never filed the 5500-EZ and his plan was established in 1994. In 1997 his assets exceeded $100K. What relief can he seek from DOL/PWBA/IRS?

I have a company that wishes to list the company name under the trustee section of the prototype plan. Can this be done? Must they name an individual person as trustee?

Are there any penalty's for early withdrawal from a Roth-IRA? If so, what are the rules? Is there a link anyone can post for me with the "official" rules.

Thanks,

Karl

I'm just wondering if someone is aware of basic guidelines to conducting the cross testing (as opposed to explaining what the cross testing is). I have been asked to do a training for my co-workers and thought perhaps there might be something already available. I have not come across one.

Thank you.

Couple of questions regarding early retirement window programs in a qualified DB plan:

1. Can the window period be extended for a single individual for bona fide business reasons (and to no one else)? What if all other eligibles have already accepted the window?

2. Can an individual terminate employment in order to become eligbile for the window benefit and subsequently return to work? Does one have to demonstrate that this is a bona fide termination (does there need to be a waiting period or must the rehire be on a contract basis)?

Seems to me like the above is not permissible but there is not much guidance on this (at least I can't find it). Is there some wiggle room or room for creativity?

I contributed $2000 to a Roth in 2000 and have lost $1500 since. May I sell my shares these shares and take the tax loss?

Do we have to file revised SPDs with the DOL or any other governmental agency? I found two proposed rules issued by the DOL in 1999 saying that the SPDs and SMMs no longer need to be filed with the DOL. Were these finalized?

Is a top hat plan an "individual account plan" for purposes of Sarbanes-Oxley? I know there are exceptions from the definition for plans consisting solely of the employer or partners in a business partnership, but have been unable to ascertain if a plan comprised of executives and other highly compensated employees must meet the blackout requirements, despite the fact that the plan's assets are general employer assets.

I have a participant who began his RMD's in 1998. This participant is not a 5% owner and he is still employed.

My understanding on Notice 97-75 Q&A 7 & 8, is that employees are able to cease their RMD until they retire.

The plan does not have in-service distributions, so does the participant have to cease these payments? What about the RMD's they have taken the past 4 years?

We are consulting on a plan that:

1. Matches only if participants are deferring to company stock

2. The match is made only in company stock

3. The company discontinues match if participant stops deferring to company stock

We have only seen this type of match once before, and are looking for any research or statistics that would back up our recommending a change in their matching practice.

Has anyone seen this type of match, does it work effectively, and/or can you provide some guidance?

bbaudo

We have a 401(k) participant who is off work due to health problems. He has not terminated - just on leave for an undetermined amount of time. He would like to take a hardship withdrawal for his health premiums - can he do that? (The plan does allow hardships) Could that be considered a medical expense? If so, for how many months premiums could he take for (he does not have a lot of money in the plan)? The plan also allows loans, which I know need to be taken first, but if he cannot afford to make the payments, it would put him in default and he would be no better off then he is now. Any suggestions would be great. Thanks!

I have created a Crystal formula variable that looks at Category Code and status date so that term dates will print on my Employee status report pages for all terminees but not for participants with status dates for other reasons. (I did this because termination dates do not update to that data field until the end of the plan year, so all current term dates were not printing on my status pages). In any event, I named the formula field @termdate, but my problem is that when I want to insert that field into another report, I don't see it listed as a formula option in the new report. HELP! I'm on Relius version 7.3 & Crystal 8.5. Any help is appreciated.

As usual - I have discovered how to do something within minutes of posting or sending questions to Relius support! In any event, for those who might have wondered...I simply opened the report with the formula I wanted and opened the new report. I then simply copied the formula field from the old report to the new report. It was easy.