I have a PS and MP plans that both terminated as of 10/31/00. Plan years end 10/31. The plan term included the GUST amendments, but not total restatement of documents. Final distr of assets took place prior to 10/31/02. Does the document need to be restated in full for GUST or was the GUST amendment sufficient?? Thanks.

Maybe I'll be breaking new ground, so I'll ask the question carefully:

What are market surcharges for administration of cross tested ps/401(k) plans, as opposed to, for example, integrated profit sharing plans, i.e. what might a typical testing fee be? I've seen $250 to $750.

I'm not asking what you charge, just what charges you have seen or heard.

Our company is looking at increasing our current health insurance plan from a $250 deductible to a $1000 deductible. We would still only hold the employees responsible for the first $250, and would reimburse for the $750 beyond that, until the deductible is met. Our plan is a simple 80/20 plan with no co-pays, etc. We would offer this to all employees and dependents enrolled in the health care plan.

Reasoning for this is much greater savings on premium with the high-deductible plan. We are a small company (29 employees, 40 lives on the health plan).

We would like to self administer the plan through employee submittal of EOBs. All personal health info would be blocked out -- we would just have to see the portion that states. "Employee has met X amount of year-to-date deductible" and reimburse for the difference. (Probably on a quarterly basis).

Can we do this as a MERP (Medical Expense Reimbursement Account) under a Section 105?

Is it essentially then an HRA?

Any feedback would be greatly appreciated. I have done a good deal of research, and can't seem to get a straight answer.

I think I read in a thread here, that once a participant reaches $200,000 in compensation for the year, he or she cannot defer to a 401k any more.

is that true?

does anyone ahve a link to that thread? i can't seem to find it.

any help is appreciated.

I am completing Form 5330 for late deposit of employee deferrals. The deferrals were deposited approximately 60 days late. The employer has now also deposited the lost earnings on the late deposit.

I have calculated the excise tax as 15% of the earnings on the late deposit from the date it should have been made until the date it actually was made. Is there an additional excise tax on the deposit of the lost earnings? The lost earnings were deposited approximately 1 year after the deferral. Please note that we used compounding when we computed the lost earning amount.:confused:

Humor me on this. I think I know the answer, but need to "prove" it to someone . . .

We have a rather large employer (partnership) with many partners--such that no partner owns 5% (largest ownership % is 2.6%). Do any of these working partners who are 70 1/2 or older need to take RMDs?

As a matter of law, is the employer/sponsor under a local government plan a fiduciary with respect to the plan?

Is the employer/sponsor of a local government plan legally responsible for its administration?

Are Flex Credits that an Employer provides under a cafeteria plan considered to be plan assets under ERISA if employees have the option to cash out the credits?

We have a plan that terminated the plan effective 7/31/01. Some of the employees spun off into a new plan that we also administer and that was effective on 8/1/01. I have a couple of questions regarding how we should complete the testing for ADP and ACP.

1. Would we test the original plan for the short plan year of 1/1/01 - 7/31/01?

2. Would we test the spin-off plan for the period 8/1/01-12/31/01? If this is the case, would we look at the employee's comp for the original plan to make a determination of who the HCE's are in the spin-off plan?

What are the requirements for FICA withholdings on SAR-SEP contributions? The salary reduction portion? The employer contribution portion?

If this is required and has not been done, what correction program would you recommend?

Thanks!

We have a potential client (DEF) that wants to max. fund a DB plan over 4 to 5 years but wants to take as little comp. as possible. The corp. will be new - effective 1/1/2003. The 415(B) limit (reduced for participation less than 10 years) at the retirement age of the participant is about $64,000. I would like to recommend that he pay himself a salary of $64,000 for 3 years to generate this benefit. However, there is the problem of the reduction in the 100% of pay limit for service less than 10 years.

My question is: Can the Plan credit service with ABC, a prior unrelated (somewhat) employer, so that he does not get slammed by the 415(B) service reduction? Or does predecessor service credit apply strictly to eligibility and vesting? I say they are somewhat unrelated because the participant used to be an officer and minority shareholder (about 5%) of ABC, and ABC will be paying the new company (DEF) for consulting services.

Major Insurance Company does the admin. and investments.

Participants take participant loans. However, the loan comes from the major insurance company and is collaterallized by the investment in the guaranteed interest account.

Therefore, the participant takes the loan from the insurance company and gives collateral rights to his/her interest in their 401(k) account.

This sounds to me like a PT, and an alienation/anti-assignment problem (i.e., grounds for disqualification).

Any recommendations would be greatly appreciated.

There is a company that offers the SHNEC 3% accross the board contribution. The company also offers a $1 for $1 match on the first 6% of deferrals. The match is subject to a 3 year cliff vesting schedule. My question is, does the match need to be tested? I know the SHNEC absolves you of ADP testing, and the 6% is within the confines of an enhanced matching formula, but do you still need to run the ACP test on the 6% match?

Thanks,

Kevin

Several years ago Gary Lesser mentioned that it is prohibited to make SIMPLE IRA eligibility more restrictive for the current year under tempory and final regulations. Can anyone tell me what code sections or regulation numbers cover this area?

A PARTICIPANT IN A PLAN NEEDS A HARDSHIP DISTRIBUTION TO AVOID FORCLOSURE ON HER HOUSE. THE PLAN HAS A LOAN PROVISION. DOES SHE HAVE TO TAKE A PLAN LOAN 1ST BEFORE SHE CAN TAKE THE HARDSHIP? WE KNOW SHE WILL NOT BE ABLE TO PAY THE LOAN. IS IT NECESSARY TO HAVE HER DEFAULT ON THE LOAN BEFORE SHE TAKES THE HARDSHIP? OR CAN SHE JUST TAKE THE HARDSHIP SINCE WE KNOW SHE CAN'T MAKE LOAN PAYMENTS?

We have a health plan that has medical, dental and vision tied up in one option. We have received a QMCSO which requests dependent coverage for purposes of dental benefits only. Can anyone give some ideas on how to handle this? Do we reject the QMSCO, or do we enroll the dependent in the health plan, even though medical and vision was not ordered? I don't see this issue addressed anywhere. Any help would be appreciated. Thank you.

A client has inquired as to whether municipal employees can make pre-tax contributions for future retiree health benefits. An insurance company tells them this is permitted under the Code, does anyone know the authority for such?

Person, age 71, requests $40,000 distribution from IRA account with $2,000 federal withholding. He is told that if he wants to have withholding, he must have at least 10% - or $4,000 - withheld. His projected tax liabililty is $2,000. He is not required to have any withholding but if he chooses to have withholding it must be at least 10%.

Can anyone address why there should be such a rule - or even if the above rule is true.

Folks - I am interested in getting some basic info on this plan and perhaps a good referral as well.

Q: I am independent contractor in IT and had income in 2001, 2002 and perhaps in 2003 - but not sure about future years, it could be zero in 2004.

1. In this situation, does a DB plan make sense/allowed (not surity of income in future years)?

2. What happens when the business is terminated, money rolls over to IRA?

3. What are the annual costs of administering such a plan (going with an admin is recommended? as oopsed to DIY - services of an actuaty needed, right?)

Thanks for any help

If a majority-ESOP owned company goes through a Type C reorg (exchanges its assets for stock in the acquiring company) does the ESOP exchange its "selling company stock" for that of the "acquiring company" like other shareholders and become "Acquiring Company ESOP" ? FR