I have a plan where normal retirement is defined as age 65 with 5 years of plan participation. I have a plan participant whose normal retirement age is 69 and whose social security retirement age is 65. How do I increase the 415(B) limit for the fact that his retirement age is past his social security retirement age?

Do I take the lesser of (1) the actuarial equivalent 415(B) limit using the plan actuarial equivalence or (2) the actuarial equivalent 415(B) limit using the GATT rate as of the first day of the plan year ???

HELP! How would you fix the following.

Welfare plan adopted in 1980 for group of union employees (under 100). Had trust that paid claims - so it was self-funded. 1996 the plan opted to start buying insurance rather than pay claims. Now benefits are fully provided by insurance. Trust is still there and growing. Employer contributions are more that the insurance premiums.

Plan has never been amended, Plan has never filed 5500, Plan did not file to be VEBA.

Any suggestions?

We have a client that wanted to implement the safe harbor plan for 2002, however it was too late so he is implementing a traditional 401(k) profit sharing plan in 2002 and amending it to a safe harbor plan for 2003. His concern is how much the HCE’s will be able to contribute to the plan this year. Is there any relief for the HCE’s in the first plan year? I think there is, but am not sure. In addition, how is the ADP/ACP testing completed? The effective date of the plan is 10/1/02, so is the testing based on the whole years income or just the past few months AND/OR how is the Top Heavy testing come into play?

thanks.

We are a sponsor of a Corbel Prototype and we just picked up a new plan from a major payroll vendor. They had a 401(k) prototype and the vendor received their GUST letter 4/29/02. We talked to the payroll vendor and they said new documents/AA/SPd were being mailed out end of November.

We thought, from prior conversation with COrbel, that Prototype plans had to sign a certification by 2/28/02 to be granted the extended relief. It now appears the client may have until 12/31/02 to adopt the restated plans from payroll vendor.

Query--Since the client did not sign a Certification by 2/28/02, are they granted the relief if they adopt the payroll prototype by 12/31/02. ALso, could they simply adopt the COrbel prototype by 12/31/02 with a 2/28/02 certification.

My plan uses a prototype document and it indicates the plan is a safe harbor basic match 401(k) plan in the document. It is discovered the employer failed to provide the safe harbor notice to the employees.

The ERISA outline book indicates under 6.c of chapter 11 that "A failure to provide the safe harbor notice would not necessarily mean the section 401(k) arrangement is disqualified. It would, however, mean that the ADP test would be run for the that plan year. To the extent correction of the failure by providing a late safe harbor notice is not available, it seems reasonable that the plan should be able to protcet the qualified status of the 401(k) arragment by simpy running the ADP test (and ACP test if applicable) even though the plan document might state that the plan is intended to be a safe harbor plan."

Does anyone know if there is any further guidance on this? If you run the ADP test is the employer still required to follow the basic safe harbor match formula becuase it is written this way in the document? i.e. they still have to follow the formula but you must test the plan becuase they failed to give the notice.

I have a client that sponsors a MPPP and a PSP where the PSP allows for immediate vesting and the MPPP has a 2-20 schedule. When we took over the recordkeeping the prior recordkeeper had everyone 100% vested in the MPPP and the PSP. I attended the ASPA conference and they had a workshop Fixing Plan Problems without IRS Supervision. Looking through my notes I am not sure I can self correct this problem. Any ideas? I think this is a significant problem since it may affect a large portion of the workforce. One thought I had was to go forward with administering the plan in accordance with the document, but allow all participants who were already in the plan to remain 100% vested.

I would welcome any thoughts or suggestions.

Prior to the new regs HIPAA administration consisted of primarily just issuing certificates of coverage. What has anyone's experience been in TPA charges for HIPAA administration and to include what services?

This may be a silly question or maybe just an error but can you have 2 plans, an ESOP(Stock Bonus Trust) and a Profit Sharing Plan run off the same document. This is a takeover plan and I have 2 5500's from the previous TPA, yet I only have one Plan doc? Has anyone else run into this situation?:confused:

It sounds like many of you were at the recent ASPA meeting. I did not get a chance to attend. I am sure that many of us (or our clients) have been bombarded by the recent 412(i) mania.

I'm having trouble countering the 412(i) argument with the "It just doesn't smell right". I've tried to understand how the products are designed, but the insurance companies aren't the most forthcoming with "real" information. The agents tend to respond with "well if {insert insurance company name here} is telling us it's ok, it must be ok".

Were there any sessions at ASPA that were particularly good at addressing this? Either pro or con?

It appears clear that Sec. 402 of Sarbanes-Oxley

will apply to collateral assignment split dollar

arrangements which are not grandfathered and are subject to the loan provisions of the proposed

split dollar regulations.

However,I am having difficulty envisioning how

a pre January 28,2002 endorsement(non equity)split

dollar agreement will fall within the purview of

Sec 402 of Sarbanes-Oxley.

The split dollar arrangement under review provides

only a death benefit to the executive. No cash

value will be made available to the executive.The

executive contributes, by payroll deduction, an

amount equal to the annual economic benefit. The

source of the executive's contribution is a bonus

from the employer. This bonus to the executive is

also "grossed up" so the executive has a $0 cost

for their death benefit(PS 58 Offset w/ Double

Bonus).

Your feedback is appreciated. Thank you.

This may seem petty, but as usual, actuaries disagree. Here goes:

In selecting an AVA, I have chosen one of the pre-approved methods in Rev. Proc. 2000-40. Note that each of Approvals 11, 12, 15, 16, and 17 uses the phrase "...no greater than 120% and no less than 80% of fair market value...". However, I have chosen a slight difference: use of a corridor of 90% to 110%. Does anyone think this distinction means I am not using a pre-approved method?

After recently leaving an administrative software firm where the system is not only programmed to pull an administrative fee for distributions but is also programmed to pull directly from the participants assets rather than the plan, I am now calling into questions whether or not this is permissable. I know a large portion of administrators process this fee? Is this correct? More importantly, if this is acceptable, when the participant has a vested account balance of less than the administrative fee, can that fee be charged?

I recently heard about the ROTH IRA deal... I know just about nothing about them, except that it would seem a bit better than my currenc templeton fund wich, over the last 6 or 8 years has done Nothing, or even lessend in value.

currently i have about $1500 in that, and woulbe able to throw in another $500 for somehthing that was a bit more promising.

I understand that a Roth IRA is a LONG-term investment, which is why at teh present time i couldnt throw in more than $2k.

Also, there seems to be so many different things to read...

If someone could point me two one or two good sites or articles that sum up ROT IRA and anything associated with it, i'de appreciate it.

If anyone has any suggestions heres a few more details:

I'm 21.

$1500 in Templeton Growth fund

I own my car and bike.

I rent a small apartment.

I NEVER carry a balance on my credit cards.

I've got about $300 left over every month after bills etc, but that usually goes to upgrading my car or bike (weekend hobby - i autocross my car)... some of which COULD be re-directed into a savings fund of some sort.

about $6k in a Money Market account through my bank - not making much interest (3%?) but its there because ONE day (soon hopefully) i'm planning on using it to go back to school. Therefore, it needs to be accessible w/o penalities.

I'm open to suggestions of any kind, including getting into owning rental property etc.

Thanks!

Eric

I'm looking to locate registered TPA's in the Syracuse, NY or Middletown, NY area. Any leads would be appreciated.

I currently am a TPA looking to possibly move to one of those areas.

I am under age 59.5 and I have some after tax contributions and some pre-EGTRRA rollover contributions in my 401(k) account. If the plan allows me to withdraw this money, what amounts are subject to the 10% penalty?

We have a 401(k) plan that wants to prospectively exlude hourly employees from participating in the Plan. I am trying to figure out if this is a 204(h) notice event. I seem to be finding that if it is not a 411(d)(6) protected benefit (or if is but none the less can be eliminated or reduced) then a 204(h) notice to this group of employees is not required. Can anyone help me out?

Thanks

Lori

The definition of a disqualified person includes a person who provides services to an ESOP. Is a lender a disqualified person as a result of loaning money to the ESOP? I can see an argument that loaning of money is providing a service. However, I have seen some commentary that seems to imply simply loaning money is not enough to be considered a disqualified person.

We have an employee whose status was changed to PT (making them ineligible for coverage) and then within 14 days the status was changed back to FT. Would this be a qualifying event allowing the employee to enroll in benefits? They were not previously enrolled in benefits. I am thinking that this is not an actual qualifying event, similar to the termination and return within 30 days, but wanted to get someone else's opinion.

Any thoughts?

One of our clients received information on a VEBA that is referred to as an employer-sponsored medical, parking, education, public transportation and dependent care reimbursement plan. It purports to save the employer up to 35% of benefit costs, while increasing employee take home pay. It is accomplished with no needed change in insurers. It appears that the total cost of benefits is moved to employees, who then pay for these benefits pre-tax and then receive reimbursement. The brochure says to fill out a few forms and pay a set up charge per employee. Does anyone have any experience with this product? The brochure references an article in the 6/27/02 Wall Street Journal that appears to discuss DC health plans.

If someone was out, say, for 1 year on Military leave--1/1/2001 thru 12/31/2001. What compensation should be used when determining a Profit Sharing contribution? Does she even get one?

The plan uses w-2 wages for comp.