Hi,

I dont' recall that the July 2000 proposed loan regs on multiple loans were ever finalized. I seem to recall that until the regs are finalized, employers are supposed to make a good faith effort at compliance (presumubly by operating under the proposed regs).

We have a participant who has already received two loans within the calendar year (which is designated as the 12-month period) but wants a third loan. The client believes that since the regs were never finalized, it is okay to give him the loan.

I just wanted to get an idea of what others out their in the professsion are doing. Are you requiring employers to operate under the proposed regs? And what if the client says, just issue the loan and then 1099-R the participant. This seems like circumventing the regs and almost a prohibited transactions if the loan was never intended to be repaid.

Any thoughts?

Thanks for contributing.

Lori

we have a large medical practice with about 250 employees and 25 physicians. The company currently contributes 8% of pay for all employees. The 8% of pay will support a 20% of pay for the Doctors as a separate class.

However, some Doctors would want to contribute the max for themselves and some will not. Can we structure the HCE groups in single age increments to accomodate this? i.e Groups as follows:

Group 1 All NHCEs 8%

Group 2 HCEs age 35 8%

Group 3 HCEs age 36 20%

Group 4 HCEs age 37 15% etc. etc.

I have an employee who is eligible to participate in the Flexible Spending Plan, but will retire at the end of June. Can this employee participate this year? If yes how would I handle the deductions from the payroll? Would the employee be limited to the amount they can deduct to half the allowable limit of the plan?

Corporation with 3 owners and nine other employees. Husband, Wife and Son each own 1/3. I want to put Husband, Wife & Son each in their own class. I would have 4 classifications of employees, a separate discretionary provided to each class. Classes as follows:

Class A -- President (covers the Husband)

Class B -- V. President (covers the Son)

Class C -- Treasurer (covers the Wife)

Class D -- Others

Is this permissable? I am concerned about each owner being a seperate allocation group.

It is my understanding that EGTRRA provides that participants can now make rollover contributions of all amounts from an IRA to a qualified plan (other than a rollover of after-tax amounts).

My question:

After EGTRRA, can a profit-sharing plan provide that it will only accept rollovers from conduit IRAs (recognizing that the term "conduit IRA" really has no meaning anymore, the plan would provide that it will accept rollovers from an IRA, but only to the extent such amounts are attributable to a qualified plan)?

Thanks in advance.

A plan with a 1,000 hours and last day requirements to receive an allocation of discretionary contributions has inquired about changing their formula for the calendar year 2002. I believe this is too late in the plan year to do so as participants have accrued the benefit upon reaching 1,000 hours of service.

The CPA argues that the last day requirement supercedes this and they have until December 30, 2002 to make a change in their allocation formula (i.e. from prorata to integrated). I still disagree.

What are your thoughts?

Thanks!

A participant is receiving a distribution from their 401(k) due to disability.

they are taking a cash distribution.

Is 20% still withheld from the payment?

anyone ever heard of them? looking for a website and finding zilch... ideas?

If a former participant's vested balance in his employer's PSP is only a small amount (say $10), and he requests a lumpsum distribution of it (no roll over) .... must the plan withhold 20% ? Or can the plan simply pay him the entire $ 10 ?

Dr. A owns 100% of a medical corporation which presently provides anesthesiology services to Hospital H.His medical corporation sposors a profit sahring plan in which Dr. A is the sole participant. As of June 30 he has qualified for a $40,000 allocation for 2002.As of July 1, H's anesthesiology services will be provided by Partnership P. Dr. A will be 1 of 20 equal partners in P and will be immediately eligible for P's ps plan. His partnership income for the rest of 2002 will be sufficient to qualify him for a $40,000 allocation in P's plan. Since he owns less than 50% of P there should be no 415 aggregation,right? Should be a simple question,but doctors and hospitals always give me the shakes.

If we are selling of a subsidiary of our company through a "stock sell", does this qualify for a distribution and if the employee currently has an outstanding loan what happens if the new 401k plan administrators say they will not let them roll over?

Does anyone have a copy of a model Business Associate Contract for a Multiemployer Plan or a link to such a contract?

Thanks for your help!

If we are selling of a subsidiary of our company through a "stock sell", does this qualify for a distribution and if the employee currently has an outstanding loan what happens if the new 401k plan administrators say they will not let them roll over?

Employer has an insured group health plan. Employer pays 80% for individual coverage. It used to allow employees to choose family coverage and pay the difference but it no longer provides for this option. There are a few employees who have family coverage because they had it before the employer changed its policy.

Employee A has individual coverage and has notified employer that he maybe required to provide health insurance for his children. If the Plan gets a QMCSO are they required to allow the employee to elect family coverage?

Section 609 of ERISA does provide that a medical support order is a QMCSO if "such order does not require a plan to provide any type or form of benefit, or any other option, not otherwise provided under the plan, except to the extent necessary to meet the requirements of a law relating to medical child suport described in section 1908 of the Social Security Act...."

Any thoughts?

A company located in Brooklyn, NY has between 15-25 employees. They want to have two classes where the first class would have all health insurance premiums paid for by the company and the second class would have the employees pay 100% of the health premiums. (Alternatively, the company may consider paying a small percent of the 2nd class' premium, e.g. 10%).

Are there any concerns with this from a regulatory standpoint?

if a dc plan is dissolving, is there any notification that must be given the participants beforehand?

Can an employer maintain multiple section 125 plans (pre-tax premiums only)? We have an employer group that offers multiple medical coverages.

For instance:

Coverage A has a renewal date of 1/1 (along with the dental plan).

Coverage B has a renewal date of 5/1

The Cafeteria Plan runs 1/1 - 12/31

When the Coverage B carrier comes back with a rate increase for 5/1, I understand that current participants can elect to drop or reduce coverage, but everything I read indicates that eligible employees that did not elect to participate in Coverage B during eligibility period, can not elect (because increase in premiums is not consistent with an employee adding a benefit).

Since the section 125 plan runs 1/1 - 12/31, Coverage B participants would be eligible under the cafeteria plan to make changes for 1/1, however, the carrier for Coverage B won't since the pan renewal is 5/1.

Any insight is greatly appreciated!

Does anyone have any more information about this?

www.ncpers.org/nm/publish/news_67.html

Of course, the IRS website is less than helpful.

In a cross tested retirement plan which lists group one as

"Owner" - do you think it would be okay to list a group as

"Children of Owner?"

The plan currently uses two groups:

Owner - section 318 shall not apply for group classification

All other Eligible Employees

The Owner has an 18 year old child who would fall in the "All other eligible class - but I don't want her to get any contribution at all becuase as an HCE she kills the allocation. If I can get her in her own group and give her a $0 allocation it is greatly beneficial.

Rev Ruling 61-146 says that an employer can pay the medical insurance premiums on the "individually owned medical insurance policies" of its employees. Such employer payments are not taxable (under IRC 106) to the employees..... if the employees furnish the employer with proper proof of coverage and premium $amount.

My Question:

Is such an arrangement an ERISA plan ? (Is a SPD required?)

I would think not ... because there is no group insurance policy.