What are the maximum number of days that can be taken in a grace period for claims from the previous plan year?

Is there a set limit?

I have a client whose plan allows for voluntary after tax contributions. There is a participant who would like to withdraw a specific dollar amount from the voluntary account. She would like not to withdraw any of the interest, just the pure contributions. I advised that we are required to distribute proportionately the contributions and the earnings. Well, I just received a call from my client requesting a cite and I can not find one. Does anyone know of the cite that states this.

I have been administering plans this way for so long that I have no idea where or when I became aware of this 'staple' in administration.

Thanx in advance for your help!

If a city that does not fall under a Section 218 agreement, acquires an employer (in this case a water district) that does fall under a Section 218 agreement, what happens to those employees who were covered under the Section 218 agreement--is the agreement still in place as to those employees only?

I just heard that Nationwide has a plan document that some how gets around the Public school being the owner of the 457 plan? I thought the entity that hosted a governmental 457(B) plan had to be the owner of the plan, did that change with EGTRRA and if so where does it say that? Any help would be great!

If a hospital submits an appeal to a payer/insurance company(and it is timely pursuant to the contract between the two parties) and the payer/insurance company responds the appeal is untimely based on the plan participant's document, which document prevails? Assume this issue falls under ERISA. Also, the hospital has an agreement with the payer/insurance company for discounted rates and no agreement with the employer for discounted rates.

We have a 2 participant defined benefit client that had a profit sharing and money purchase pension plan. The PSP and MPP were frozen and terminated before the DB started.

Two years ago, the client wanted to distribute benefits from the terminated MPP and PSP. At that time the prototype sponsor did not have a GUST approved document so we requested a determination letter from the IRS. As part of the request, we submitted an "amendment to meet the requirements of GUST for a terminating plan". It took the IRS over 18 months to respond. Even though we provided copies of TRA-86 documents, they want to see all pre-TRA-86 documents. The client cannot find documents going back to 1984 DEFRA/REA.

We have now received GUST/EGTRRA documents from the prototype sponsor. We were thinking about simply giving up on the determination letter request and having the client adopt the new documents. As far as we know, the plans have always been properly administered.

Does anyone disagree with this approach?

Thank you.

Here are the facts:

Top heavy 401(k) profit sharing plan

plan year is 10/1/01 - 9/30/02 (they want us to do a projection)

participant has contributed 23.61% of compensation

top heavy minimum contribution is 3% of pay - which if you add this to the 401(k) % is 26.61% of pay - that exceeds 25% for the year.

the document states that any amounts contributed in excess of the annual additions must be held in a suspense account and allocated in the next plan year. now this isn't talking specifically about top heavy contributions - it's talking about employer contributions in general.

my question is this - doesn't an employee HAVE to receive the top heavy minimum? - i.e., 401(k) would have to be refunded in order to make sure that the employee received the 3% top heavy minumum? let's say you put this money in a suspense account, what happens if they terminate employment and don't received the amounts in the suspense in the following year.

my problem is - there is nothing in the document that addresses this.

any info, sites or additional questions would be appreciated!

A participant wants to know if the purchase of prinicipal residence qualifies as a hardship if she is using the proceeds to 'buy out' the equity on her current home from her ex-spouse?

A participant in a premium reimbursement account wants to drop the account in the middle of the cafeteria plan year and take the group health offered by his employer, paying for it with pretax dollars. I can't figure out if this is allowed - can anyone point me in the right direction? I've looked in the EBIA manual for direction.

Thanks.

Carolyn

A PEO sets up a multiple employer, non-union 401(k) plan in 2002. More than 10 employers sign on as sponsors, but 2 employers later terminate their contracts with the PEO and want to withdraw from the multiple employer plan (also in 2002 - the same year that the plan was started).

Treas. Reg. 1.413-2(a)(3)(iv) states that "the failure by one employer maintaining the plan...to satisfy an applicable qualification requirement will result in disqualification of the Section 413© plan for all employers maintaining the plan."

1.401-1(B)(2) provides the permanency requirement and requires "business necessity" if a plan is terminated after a few years.

Question: Since a single employer plan would violate the permanency rule under these circumstances (barring business necessity), would the qualified status of the entire plan be in jeopardy as a result of a termination of sponsorship of the plan by one or more of the participating employers?

Or would the partial termination rules apply to the plan as a whole, whereby there should not be a problem so long as no more than ~ 20% of the employees cease participating in the plan as a result of the withdrawal of the employers from the plan? Only a few employees of the 2 withdrawing employers participate in the plan.

Any other possibilities?

Thanks in advance for any thoughts.

I am a bit concerned about the beauty of the Roth. Right know I can pay the taxes upfront on a Roth and withdraw later tax free.

My fear is that Congress may change the rules in 30 years. Is there a 100% guarantee that I can withdraw my Roth tax free in 30 years?

Sometimes I feel I should switch solely to my 403b because I know I can get the tax deduction for this tax year....I can't get screwed by Congress. I am afraid I will get screwed by Congress in 30 or so years because they might change the rules on Roths.

Anybody out there that know the answer.....what do you think?

gracias,

Ethan

A client has raised concerns regarding the use of the ssn as an ID (along with a PIN) over the web to access participant accounts. The concern is primarily that a person could intercept the web transmission to steal the ssn- not for purposes of taking 401k account money, but for the purpose of identity theft.

Do any of your RK firms use an ID other than ssn for web access?

My experience is the ssn is a standard industry practice.

Premiums for active ee's are due to health carrier the 1st of ea. month for the coming month. Health carrier is saying COBRA premiums must also be paid by the first (in advance). Health carrier is telling me COBRA is an employer law and not subject to COBRA law allowing COBRA participants the 30 day grace period to make premium payments. I say the HC is subject to ERISA and therefore subject to COBRA law. Do I have to pre-fund COBRA premiums? Shouldn't HC allow COBRA premiums to be paid to them at the end of the grace period? They are terming COBRA participants at the first of each month. I'm conterned this will

backfire on us. Any suggestions; referral in regs to support our position? Thanks!

The preamble to the DOL regulations on SPD contents issued in Nov., 2000 state that existing disclosure rules require "a reasonably comprehensive and clear description of the provisions of a cash balance plan and how a prior conversion may have affected benefits that classes of participants may have reasonably expected the plan to provide." 65 Fed. Reg. at 70227.

Is anyone making SPD disclosures of this nature? If so, is it only in the case of recent conversions? What about a conversion that took place over 10 years ago?

Comments appreciated.

If the owner of an IRA dies in 2002 before taking his RMD for the year must his spouse who is over 70 1/2, as designated beneficiary, take a distribution from his IRA? If so, is the amount based on his RMD or her RMD?

Thanks

Does anyone know whether forfeitures can be used to make (or offset) the amount of corrective contributions an employer is required to make to a 401(k) plan where the plan has improperly excluded eligible employees from making pre-tax deferrals and receiving matching contriubtions? Rev. Proc. 2002-47 indicates that forfeitures may be used to make "corrective allocations" but it is unclear (to me) whether "corrective allocations" and "corrective contributions" are interchangeable terms. I fear that corrective allocations are only intended to correct failures related to the improper exclusion of otherwise eligible employees from receiving profit sharing contributions.

Thanks in advance for any insights.

An employer offers a self-funded POS plan, plus 38 fully insured HMOs, all funded through a VEBA.

When filing the 5500, does a Schedule A need to be completed for each HMO, or does the VEBA audit and Schedule H being completed exempt the employer from all of the Schedule As?

Does anyone have a ready source that defines "amortization" in a DB plan context? I understand it to be how quicKly the unfunded vested liability is paid off, i.e., funded. Has anyone got a more detailed definition on this?

One of my plan's did a force-out distribution for a participant and the check was returned as "Adressee Unknown." After some investigation, the client found out that he had moved back to Africa. Any suggestions on what we should now do with this check (other than redepositing it in the plan)?

This may be a dumb question but what really would be the difference between an "employer-funded fsa" where the employer put $500 into everyone's account or a Section 105 Merp document that says the employer will reimburse up to $500 for eligible expeses.

It appears that it mainly would have to do with the timing of the reimbursement. In other words, if the fsa plan had a debit card, payment is made up front versus an "old" style fsa reimbursement (filing a claim manuallywith no debit card) or a merp. Am I missing anything here?

Pagogi usually has some good insight to these things!