With market conditions the way they are, many people who are taking substantially equal payments are depleting their assets much faster than was orginally intended. Does anyone know if a new calculation would be permitted under these circumstances?

An employee is telling us that in Texas we are required to offer 24 months of cobra not 18 for a termination.

Is this correct?

Working with a plan that has had no testing since 1997. When calculating the top heavy test each year how would we treat the corrective distributions for the ADP/ACP that should have been made.

Since the test is "cash basis" it appears that these would have no effect.

In other words, the key employee's cash basis balance as of the determination date would be the number we base the ratio on, plus any distributions they made in the 5 years previous.

Thanks,

Ronnie Wasel

I'm a TPA considering increasing the setup fees for participant loans. I am curious as to how much other TPA's charge for this service. I currently charge a $100 fee. By the time the documents are prepared, funds liquidated, trustees are tracked down for signature, checks issued, numerous phone calls from participant, etc... it seems like I spend 2-3 hours setting up every loan (not to mention the extra time to administer throughout the life of the loan).

How do others handle this dilemma? Thanks in advance for your responses.

I am considering amending a plan's NRA from 60 to 62. There are two participants in the plan. Both are at the Hi3 comp 415 limit for both Accrued and Projected benefits. Is it possible to actuarially increase above the Hi3 comp limit as long as I don't exceed the 415 dollar limit?? Thanks.

A lot of the RFP's my firm has been getting have asked if we could provide a Web based Pension Benefit Calculator. I was wondering if other TPA's provide this service, and if so, how they developed it. If there is some company that does this type of work, I would rather use them than spend my time creating one from scratch.

Any ideas?

A profit sharing plan puts in salary deferral component effective January 1, 2002, but deferrals do not begin until about February, 2002. The maximum limit imposed by plan document is 15% of pay.

A NHCE participant defers 15% of pay in February and continues to defer 15%. Is she eligible to make a catchup contribution?

Technically, she hasn't deferred 15% of pay.

It has been a while since I have performed some new comparability projections. Would someone mind looking over these for me and let me know if I doing it correctly. Thanks.

If a plan wishes to permit in-kind distributions, must "in-kind" language be in the plan document?

I have an employee who has been working around his children's school schedules so he can take them to school and now he is having to change his hours from 9:00-6:00 to 8:00-5:00 and this now puts a bind on the family because they will have to put their child in before school day care because of the change in hours.

Can he enroll in Dependent Day Care Reimbursement mid-year?

Is this an eligible Change in Family Status?

Greetings all,

I am wondering if anyone can steer me in the direction for some sources on open enrollment communications, i.e. cost sharing, strategic direction, benefit expense trends, etc. I thought I would be able to find a draft communication. We are looking to initiate a cost sharing premium in 2003.

I have an LLP that has a 401k plan (6/30 PYE).

1. One of the partners (owns 1.5% of the partnership) had a compensation amount of $90,500 BEFORE contribution adjustments in 6/30/2001. After adjustments compensation was $83,000. Is this partner considered an HCE for 6/30/2002?

2. The majority partner's (37%) spouse is now working for the LLP. Is she considered an HCE and key for testing purposes? If yes, is her comp adjusted by contributions as well?

Thanks for any help.

One of our client's utilizes a "common paymaster" and wants to offer a cafeteria plan. In researching, a common paymaster is "two or more related companies employing the same individual at the same time and paying this individual through a common paymaster, which is one of the companies, the corporations are considered to be a single employer." (IRS website, Special Rules for Paying Taxes) From a fringe benefit standpoint, is it possible to offer a cafeteria plan under this arrangement? Would the companies have to be part of a controlled ownership group or affliated service group? I don't believe this would be a MEWA since the companies are related, however the concept from a benefit standpoint seems a bit confusing. Has anyone encountered this before and if so, could you point me in the right direction?

Thanks! :confused:

Under what circumstances do we need to amend cafeteria plans for EGTRRA?

I have an employee who submitted a reimbursement for his flexible spending account, listing OTC items. Example, after-bite lotion , Tylenol, Pepto Bismol. Would these be legitimate expenses? Thanks for the help.

I have two companies with a fully funded health plan. This past year, the companies no longer have common ownership and will have to obtain separate health plans. Is there any way we can keep the companies under one health plan even though there is no common ownership. The firms are owned by two brothers each having 100% ownership in their respective company and separate tax ID numbers.

I have one insurer who is underwriting the groups together while other carriers tell me it's not permissible. If it makes a difference, the larger firm is handling all of the administrative tasks for both companies.

Any help is appreciated. Please reference your answer.

Thank you.

An employer has an existing calendar year profit sharing plan and wants to implement a defined benefit plan in 2002. The plans would be tested together for nondiscrimination and coverage. The only participants in the DB plan would be the 2 owners. The other 2 participants would benefit in the PS plan.

My question is: because the two owners are currently participants in the profit sharing plan, would the 404(a)(7) limits have to come into play in 2002 or would an amendment to the PS plan at this time eliminating their participation be allowable to have the 404(a)(7) limits not be considered? I would think they were stuck except for the fact that the employer could always implement another PS plan and achieve the same results.

Employer considering freezing its MPPP. There is a last day of the plan year employment requirement regarding a participant being entitled to an allocation. There is no "500 hour " rule, however, there is an exception to the employment requirement for those participants who die, retire or become disabled. Currently, no participants meet that exception. Can an amendment be made to freeze the plan, ie. amend allocation formula to 0% of comp., such that no contribution will be made for the plan year, or must the e/er carve out for potential participants who meet the death, retirement, disability exception prior to pye?

A terminated, partially vested particpant who received a full distribuition in 2001 (calendar year ps plan) was then rehired later in 2001 and entitled to a contribution. Would they also be entitled to share in forfeiture allocation??

I'd appreciate any help on this issue. I haven't seen it addressed anywhere (which probably means I'm out of luck).

If I take an early distribution from my Roth IRA (to buy a house, but not a first house), can I later re-pay or refund the amount of the early distribution back into the Roth IRA -- even though my income would otherwise disqualify me from making contributions? In other words, can I "loan" money to myself from my Roth IRA?

Thanks in advance.