An association of like employers has a single group health plan. Two employers have over 20 employees. Does this make all the employers enrolled in the plan subject to COBRA, or just the two employers with over 20 employees? The association is not a registered MEWA.

Thank-you,

Brenda

Our pension plan requires an employer contribution of 11.11% on all taxable compensation. Employee contributions are not allowed.

At the end of the year, the Company sets aside a dollar amount of company profits for a profit-sharing distribution, which is distributed during the next calendar year. The amount set aside is distributed as 10% pension and the remainder in taxes and cash.

Two questions:

1) Do we need to do anything in our internal bookkeeping to ensure this will considered an "employer contribution" rather than an "employee contribution"?

2) We are considering giving employees the option of contributing profit-sharing amounts to the company 401(k) instead. Some managers feel employees should get the same gross amount for a 401(k) contribution as if they took cash and pension. Accounting is concerned that this methodology could indicate that the employee had control in making the contribution, making it an employee contribution rather than company. Do you see that as being an issue?

In order to receive ERISA §404© protection in situations where the plan allows for investment in employer securities there is a particular "required disclosure." ERISA §404© states, "..In the case of plans which offer an investment alternative which is designed to permit a participant or beneficiary to directly or indirectly acquire of sell any employer security, a description of the procedures established to provide for the confidentiality of information relating to the purchase, holding and sale of employer securities, and the exercise of voting tender and similar rights, by participants and beneficiaries, and the name, address and phone number of the plan fiduciary responsible for monitoring compliance with the precedures. I have only seen this "confidentiality procedure" spelled out in one SPD after reviewing many of plans with employer securities. The trust document outlines the confidentiality procedure but my reading of ERISA §404© would suggest that a separate disclosure to participants would need to be provided. Am I missing something or is this a detail that is not being complied with by most plans with employer securities?

In applying the old look back rule, does an ESOP have to take dividend distributions into account? For example, under the look back rule the present value of a benefit was deemed to exceed the cash out limit if it exceeded the cash out limit at the time of any previous distribuition. Does anyone know if the payment of a dividend from an ESOP would be considered a distribution for this purpose?

I need to know what protections my cash balance pension has against debts and collections.

I am submitting a Demo 5 for a basic cross tested profit sharing plan. Basically I am just going down the Schedule Q, demo 5 instructions line-by line. Two lines I an unsure of:

1. Line 2 asks for a definiton of testing service. I am sure this is simple, but I don't know what they want.

2. Line 8 asks for defintion of 414(s) comp and a demonstration showing that the demonstration as nondiscriminatory. Is it sufficeint to just state the Plan uses a safe harbor definition for 414(s) comp.?

Thanks for any guidance.

Employer is single participant, no employees, and sponsors coupled MP and PS plans. In the past the total combined plan assets have not reached $100,000, and thus no 5500-EZ was ever filed.

Question - For the plan year ended 12/31/01, the value of the assets combined was $83,000. The contribution that was made on 9/13/02 for the 2001 plan year was $35,000.

Does that mean that the plan has assets of $118,000 for purposes of this threshold?

Bottom line - do they need to file a 5500-EZ for 12/31/2001?

Thanks,

Ronnie

Anyone want to run down the compliance testing limits under new tax law for their 9/30/02 plans. Might be a good refresher for everyone.

Annual Compensation limit ?

415© Annual Additons ?

HCE Threshold ?

404 (a) (3) Deductibility of Contributions ? i.e. 25%

Catch-up availability ?

Assume plan is amended for GUST/EGTRRA:)

FACTS:

XYZ, Inc. sponsors a 401k plan. 12/31/01 and prior, XYZ, Inc. was a member of a PEO and all HR functions were handled by the PEO including the 401k plan.

The PEO filed a 5500 encompassing the 401k plan assets of all "employers" participating in the PEO's 401k plan, XYZ being one of them.

1/1/02 and forward, XYZ no longer uses PEO and XYZ handles all HR functions in-house, including transferring the 401k assets belonging to XYZ employees to a different investment carrier and adopting the prototype plan document offered by the particular investment provider.

QUESTION:

Does the 2002 Form 5500 reflect zero beginning of year (BOY) assets and show a transfer in of the dollars that used to be at the PEO for XYZ employees? Seems a little too simple, just want to make sure I'm not missing something. Thanks for any help.

A participant terminated in 2001, was paid his balance in 2001. He was eligible for a contribution for the PYE 12/31/01 which he received in 2002. His contribution was deposited into his last investment election on file. Approximately 3 months after the 2001 contribution was made, his final distribution was processed and he was paid out his final balance. In the 3 months time, his account lost value do to the decline in the market. His initial distribution was deposited in a fixed income rollover account. The participant is now claiming for the loss on his final contribution from the time of the deposit to the distribution plus earnings based on a fixed income account. The participant is claiming that his election in the plan was no longer valid.

Does anyone think he has a case?

We are in process of setting up a KSOP for a new "S" corp. Certain issues have arisen that I would like responses to. Unfortunately I am in a smaller market and there are no firms specializing in ESOPs here, so we have to try to come up with the answers:

1. Have the securities offering issues relating to offering stock to employees through a KSOP? For unregistered stock, is an offering circular required? Is registration of stock required if there are more than 35 participants?

2. Are the ERISA 404© protections wiped out when employer stock is offered as an option under a 401(k) plan?

Thanks for any guidance you may provide.

I have a plan who is terminating. When I do non-discrimination testing, is the testing done upto the end of the plan year, or upto the date of termination?

Have there been further developments on the interaction of Sec. 83 and Sec. 457(f), now that the public hearing on the new regs has taken place (was scheduled for Aug. 28, 2002)?

My understanding was that the 457(f) reg, if finalized, would prevent nonprofit employers from using options on mutual funds and other property to compensate executives.

Any comments appreciated.

As always, questions lead to questions.

We're wading through the process of merging MPPs with PSPs, and I have a question about timing, particularly since we are beginning the process so late in the year . . .

I assume it is too late in 2002 to draft an amendment to reduce the MPP contribution formula to zero. For the most part, participants in all plans will have satisfied requirements for receiving a contribution under the current MP formula for the 2002 plan year by now.

In the meantime, if we are choosing to amend for GUST through the *PSP only* after the two plans are merged, we've got to have that done by 12/31/2002.

Is it okay to merge the MPP and the PSP on paper prior to 12/31/2002 even though in fact the MPP is in existence for the duration of 2002, and the plans wouldn't really physically merge until some time during 2003?

Because of the timing circumstance, is it more appropriate to restate each plan separately for GUST, and then merge?

If we failed to send a COBRA notice and do not realize the mistake until after the benificiary is no longer entitled to COBRA benefits, should we send a late notice? In addition, are we liable for penalties up to $110 per day for the time until notice is actually sent or only for the time period the beneficiary is entitled to COBRA benefits?

Our firm is preparing a proposal for a multiple employer plan consisting of sole proprietor investment traders. What are our options for appointing a Sponsoring Employer if we don't want to single-out any one trader? Can a trust be the Sponsor?

This does not seem to be available when testing a DC on a contributions basis. Seems to be plan year only. Is that right?

And a similar rule seems to apply when testing a DB plan on a contributions basis. Seems to limit you to the current plan year.

Can an Order/Notice to Withhold Income For Support, that was issued by the state to a local government employer, require the plan administrator to withhold the payments for child support from the former employee's pension benefits being paid from a defined benefit plan? This withholding (for child support) was not referenced in the Domestic Relations Order currently being administered to make payments from the pension plan to his former spouse.

Company A (C-Corp) is owned by Mother-100%. Son and daugher-in-law work with her.

Company B (S-Corp) is owned by Mother - 79% and Daughter-In-Law 21%.

In applying the brother-sister test, I understand that family attribution rules are used.

The son is not a direct owner, but under attribution rules AND community property state law, he does have some ownership. I understand that double attribution cannot exist.

Would the Son assume ownership in Company A from his Mother? Then would Daugher-In-Law assume ownership from Husband?

Would Son assume ownership in Company B from his Mother? Would Daughter-In-Law assume ownership from Husband in addition to her existing ownership? What about Husband's share of Wife's ownership (community)? Wouldn't this be double attribution?

I would very much appreciate assistance in clarifying ownership/attribution in this case?

Is it fringe or health?