I am hoping my agency qualifies as a "health and welfare" organization which is listed as one of the qualifying entities in 402g but I haven't been able to find this term defined anywhere.

Any help with this would be much appreciated.

Say you have a client who has plan participants with loans. The participants are supposed to make timely loan payments. For the most part they do but one or two get posted late during the term of the loan. As a result, there is a de minimis amount of interest on the books $5-$25 when the loan is thought to be satisfied by the plan participant. Can I wipe this out, must I force the participant to pay this amount (and receive the ensuing gripes from the client), or do I have to 1099-R the participant for the amount. Tx for any assistance.

One of my clients was delinquent in stopping pre-tax payroll deductions for a participant who took a hardship withdrawal from their 401(k) Plan in August. The client just realized the error. Thus, 4 bi-weekly payrolls were contributed to the participant's account. Can you please suggest some appropriate corrections on how to handle these payrolls that were erroneously contributed into the participant's account? Thanks!

How do you process excess contributions (ADP/ACP and/or 415) following the death of a participant? Are they distributed in the same manner to the beneficiary of the account??

Tried posting this and was kicked out.

A lot on the message board relates to payment options for restricted participants. My question has to do with determining whether a participant should be restricted.

I have a general understanding of the rules under 1.401(a)(4)-5(B), but the rules do not address when the current liability and plan assets should be valued other than they must be valued as of the same date and they must use reasonable assumptions.

Here is my dilemma: Several "25 high" participants want to retire and take their lump sum. They will be leaving in the same year.

Is each person's expected lump sum distribution tested against the last published liability and asset information (example Schedule b) or does the test have to be done as of the person's expected distribution date, taking into account anyone who left before? If the first approach is used, then it doesn't matter who leaves first in the year since only his liability is being tested vs. plan assets and liability as of the beginning of the year. If the 2nd approach is used, then it implies "first come , first served" which seems ridiculous!

My other related question- it is my understanding that when checking the 110% rule, you subtract the CL for individual from the total CL and subtract his expected lump sum distribution from the plan assets and then see if the net result meets the 110% rule.

Would appreciate any comments!

Local private company in Missouri is partially owned by an ESOP. Plan is not currently subject to audit. Their insurance broker is saying that no one wants to write new fidelity bond coverage for non-public ESOPs post-Enron. The only insurance carrier who is showing any interest will only provide coverage if the plan is audited. That seems ridiculous if there is no ERISA audit requirement. Any alternatives? Any else experiencing this?

Is loss/gain of coverage thru spouse's employer a qualifying event for electing/dropping benefits during any time of the plan year?

Reading the regulations effective 01-10-01, it seems it is.

Are there any special circumsatances I need to be aware of?

Do state & local governmental plans have plan numbers (ie - 001) even if they do not file Form 5500's?

It was announced to be 87,000, but do you know how that value was determined?

1994 Base $60,600

1992 avg wage index $22,935.42

2001 avg wage index $32,921.92

60,600 * (32,921.92 / 22,935.42) = 86,986.34

round to nearest multiple of $300

next year simply substitute the 2002 avg wage index into the formulas. the other numbers are locked in place.

...just another useless mathematical calculation brought to you by me.

The owner of the company takes a large withdrawal from the Plan Trust. (The withdrawal is less than the amount of his account balance in the Plan). Is this a prohibited transaction reportable on Form 5330?

The sole participant in a MP plan made a rollover (with notarized spousal consent) of his entire acct bal to a rollover acct within his DB plan. Question 15b on the 5500-EZ says "did the plan make distributions to a married participant in a form other than a qualified joint and survivor annuity".

It seems like the correct answer would be yes but that seems like a huge red flag.

I'm wondering how other administrators answer this question or if anyone has any information on this. The instructions don't say much. Any input is appreciated.

In a plan with a cross tested design, must the SPD provide a breakout of the employee groupings?

For instance, in the section of the SPD which describes the Non-Elective Contribution, would it be necessary to say that, "Your contribution is based on the relationship of your compensation to the total compensation for all participants in your employee group. Employees are grouped as follows:

Group A doctors

Group B physician assistants

Group C nurses

Group D administrative & clerical

Is that too much information, or is it required?

How is this situated handled by the IRS rules:

An employee has family coverage for her and husband in local HMO plan. Husband moves to another state where there is no HMO coverage. Employee and husband are separated, though not legally separated. Plan on eventually getting a divorce.

Employee wants to drop husband from HMO plan since he no longer lives in service area.

Employer also maintains a PPO plan which covers all states.

Is the employee allowed to drop husband since he is no longer in service area?

Or should the employee be allowed to enroll in the PPO so that there is coverage for the employee and husband?

Thank you.

I have also posted this on Retirement Plans in General, but just in case..... I have a client that maintains a church plan. The client regularly acquires new organizations and wants to credit eligibility and vesting service for employees which worked at newly acquiried entities prior to the entities' participation in the plan based on the elapsed time method. May the plan simply state something along the lines of the following: "vesting service will be determined in accordance with the “elapsed time method” of calculating service pursuant to Treasury Regulation Section 1.410(a)-7(a)(1)(ii)" or must the plan fully explain the elapsed time method?

I have a client that maintains a church plan. The client regularly acquires new organizations and wants to credit eligibility and vesting service for employees which worked at newly acquiried entities prior to the entities' participation in the plan based on the elapsed time method. May the plan simply state something along the lines of the following: "vesting service will be determined in accordance with the “elapsed time method” of calculating service pursuant to Treasury Regulation Section 1.410(a)-7(a)(1)(ii)" or must the plan fully explain the elapsed time method?

Does anyone know if the Service has made any statements about ruling on a cash balance feature in a determination letter?

I know that one of the options available when a plan terminates is to change the plan anniversary to the plan termination date which creates a short plan year. If this is done, there will most likely be a 2nd short plan year beginning the day after the termination date and ending at the end of the month in which the final distribution occurred.

We had previously been advised that a plan cannot have 2 short plan years in a row. I would like to know if anyone can verify that that is correct. My thinking was that the 2 short plan years in a row would apply to a plan changing it's plan year and that a plan that is terminating would be an exception.

Any input would be greatly appreciated.

I have a client with a participant that is ready to take her pension, but the participant does not have a birth certificate as she was born at home and one was never issued. I suggested a baptismal certificate or passport, but no luck there either.

Has anyone run across a similar situation?

Are SIMPLE IRAs eligible for EPCRS yet? It looks like Rev. Proc. 2002-47 includes SEPs but not SIMPLEs.

But my real question concerns an employer who has not made matching cntributions for 2000,2001,and so far for 2002. Employer is willing to self-correct using the priciples of 2002-47 if not formally covered by the proc.,but Smith Barney (DFI/Custodian) won't accept the corrective contributions without a PLR. Any idea why? Any alternatives? Might another DFI be more flexible? Or is the PLR required?

For purposes of determining how much a minister may contribute to a 403(B) plan, has the 20% of compensation gone away? I notice now that the limit is the lesser of $40,000 or includable compensation. But I don't see anything about 20% any more.