We are a TPA firm and are proposing establishing a multiple employer plan for a group of unrelated stock traders. If one of the traders is elected as the plan sponsor and the other traders are adopting employers, is the plan sponsor exposed to greater fiduciary liability then are the adopting employers?

Didn't know where else to put this...everyone has been providing great info from the 2002 ASPA conference that I know is greatly appreciated...but what about the fun stuff? How was the conference in general and what about the new digs? Tom? Anybody? Please share with those of us who couldn't attend this year !

We want to implement a profit sharing / 401(k) plan on 12/1/02 and have two questions. The plan will have a calendar plan year.

(1) Can the profit sharing allocation in the initial plan year (the month of December 2002) be based on total 2002 compensation (Jan 1 through Dec 31, 2002)? Does anyone know the authority?

(2) Could the CODA and/or profit sharing portions of the plan be made retroactively effective? Does anyone know the authority?

Thanks.

I'm 54 and I was downsized last year. The only work I can find is min. wage. To top things off my husband lost both kidneys in June. How can I find out about hardship withdrawals from my 401K?

Can a SARSEP be frozen?

An existing profit sharing wants to now include a 401(k) deferrals, but company doesn't get around to executing the amended and restated plan (which now allows the (k) piece) until later in the year (but within the plan year and the corporate fiscal year). Thus, a proper and timely execution of a plan amendment, yet the company began taking EE salary deferrals before the plan was signed. Are these salary deferrals at risk?

Any problems? I think not. But what can you see? Cites, please.

Can 401(k) deferrals be used to satisfy Davis-Bacon contribution requirements?

2 questions:

1. can Form 5500 EZ be filed on cash basis instead of accrued basis (if assets are greater than $100,000 on accrued basis and less than $100,000 on a cash basis, what do I do?) (the forms were filed under an accrued basis for 1999 and 2000, but I switch to a cash basis for 2001?)

2. if a client didn't need to file Form 5500 EZ because assets were less than $100,000 and only one participant, but they filed 5500 anyways, can they now cease filing until the assets are greater than $100,000?

Thank you!

I know there have been several threads discussing the options for dealing with benefits owed to participants who can't be found. Just wonder if anyone has heard anything new, either official or "un", in recent months from our friends in DC.

We are in the process of searching for a Master Custodian. Recordkeeper on a Plan Level for governmental defined benefit plans only. Also need recurring and lump sum payment services. Requesting a sample RFP to do a search. Please email directly to jhagan@flcities.com, if you have a sample. Thank you.

Cafeteria plan sponsor has an employee who elected dependent care and medical care FSA in January 2002. In May the employee went from a benefit eligible position to a non benefit eligible position which stopped the FSA deductions. The employee returned to a benefit eligible position in September. This employee had originally pledged $5000 for dependent care and $1000 for health care. When the employee was reinstated into the health plan the pledged amounts were lowered on both accounts.

As I understand it, the return to benefit eligible status is a change in status that permits new elections under the FSA. Am I missing something?

An employer establishes a SEP for its employees on an IRS model document and provides that one of the eligilibity requirement is service in any 3 of the preceding 5 years. However, in practice, the employer has unintentionally done the following:

(1) For some eligible employees, the employer has either not started any contributions or started contributions later than the third anniversary of the hire date.

(2) For some ineligible employees, the employer has started contributions prior to the third anniversary of the hire date.

(3) For certain employees, the employer has contributed more than the monthly contribution specified in the plan document.

What are the methods for correcting these failures which have been on-going for years? What are the penalties, if any?

Thanks in advance.

I am reading the different definitions of compensation to try and determine whether to include or exclude excess group term life insurance from plan compensation. Does anyone know if this is considered a "welfare benefit" as that term is used in the "reimbursements or other expense allowances, fringe benefits, moving expenses, deferred compensation and welfare benefits category"? If not, than the only other thing I can think of is that it is like taxable PS-58 costs and included in W-2 compensation but excluded from 3401(a) wages subject to withholding. Any help is greatly appreciated?

Thanks a lot!

Here's my issue:

I have a client who has an opportunity to market her plan document through a third party and do any plan admin work associated with this marketing. That third party is promoting this plan as a customer service gesture to its clients. Say 100 small clients want to adopt this plan, my thoughts (aside from potential controlled group & affiliated service group issues) are as follows:

I want each employer to adopt its own document for fear of a multiple-employer arrangement and the disqualification ramifications attributable to reg. section 1.413-2(a)(3)(iv).

My concern is on the trust side. In order to gain economies of scale (and to maintain good relations with the mutual funds), can the client establish a single account with one or more mutual funds and then break the account(s) out into "sub-accounts" down the each employer and their respective employees without group trust or master trust issues? The software system is capable of doing this. Or am I forced to open up 100 separate accounts much to the chagrin of the plan client and the mutual funds?

Spitting out separate 5500s is not a concern.

Any comments would be appreciated. Tx.

A client has made the following request to their recordkeeping service.

Client consistently fails the ADP test. They always elect to correct by distributing the excess contributions to the HCEs. They will never make a QNEC or any other employer contribution to the plan....so let's not discuss 401(k) safe harbor .

They want to provide a permanent instruction that if the ADP test fails, then the plan will distribute the excess contributions. In addition to this metohd, the plan document permits QNECs.

Comments?

Q/A 7(B)(5) states that to be reimbursed a medical expense must "...have not been reimbursed or is not reimburseable under any other health care coverage..."

Employee incurred a claim and does not want to submit it to her health care insurance company for reimbursement. Maybe they would reimburse it - maybe not....Claim is definitely a medical claim that would otherwise qualify for reimbursement under the FSA.

Must the employee submit it to the insurance company first and have it denied in order for the claim to be reimburseable under the FSA??

I have a client who is trying to claim her mother's prescription drugs for reimbursement.

Is this eligible for reimbursement?

Getting ready to do my first "real world" experience with a Cross Tested Plan w/ 401(k) & Matching Provisions. Just want to verify a few things:

1. Profit Sharing Contribs and forfeitures are the only contribs used in rate group testing.

2. 401(k) and matching only used in the Average Benefit Portion.

3. If my coverage ratios in the rate group testing ratios exceed 70%, I don't worry about the Average Benefit Portion.

Does this sound right?

Does anyone know whether a person who designates his spouse as his sole beneficiary (assume the husband and wife are the same age) can choose whether he wants to use either the Uniform Table or the Joint and Last Survivor Table, or whether he must use the Uniform Table?

The Preamble to the 401(a)(9) regulations (issued in April 2002) and all of the articles I have read on this subject indicate that in determining the amount of a person's minimum distribution (after age 70-1/2), the Uniform Table is used in all cases unless the spouse is named as the sole beneficiary and is more than 10 years younger. In this case, a person could use either of the tables, depending on whether they want a longer or shorter distribution period.

Although the Preamble says this, I could not locate any portion of the reg that states that the Uniform Table is used in all cases unless the spouse is named as the sole beneficiary and is more than 10 years younger. Does anyone have a site for this? Thank you.

Employer filled out GUST adoption agreement several months ago. The "entry" section of the adoption agreement allowed the employer to choose from various entry dates .... but the employer neglected to choose any of the methods offered in the adoption agreement (he left the section blank).

Shortly thereafter, when allocating the current year (2001) profit sharing contribution ..... only one new eligible participant entered the plan in the current year. The new participant's allocation was made (by an outside CPA that was hired to prepare the employer's corporate income tax return) on the basis that new participant entered the plan on the first day of the first month after he had completed the 12 month service requirement. The contribution was made and the portion allocated to him presently sits in his participant account.

After all the above took place, it was discovered that the adoption agreement section had been left blank and the the CPA had taken it upon himself to concoct an entry date choice (of first day of first month after meeting 12 service requirement) to use for allocating the contribution.

My Questions:

1) Is the plan in violation of anything ?

2) Can anything be done to now choose an entry date of "the 1st January 1 or July 1" after the 12 month service requirement.

3) If an entry date in 2) above is used ..... can the employer reallocate the year 2001 contribution and get some of the contribution back from the new participant's account ?