Facts:

1. Plan already tested ADP/ACP for 2001 plan year.

2. Plan already experienced substantial ACP failure with significant refunds/forfeitures.

3. Sponsor has subsequently uncovered multiple lost deferrals, and adjusted accordingly with applicable match and gains/losses.

Question:

Does the Plan require re-testing under EPCRS or otherwise? Or, should the adjusted contributions (w/applicable match amounts) be tested in 2002?

I have a safe harbor 401(k) plan sponsor who has filed for chapter 11 bankruptcy. The safe harbor employed by the plan is a 3% of comp non-elective contribution. The employer is unable to make the safe harbor contribution for 2001 (and presumably 2002). The safe harbor notice was provided to each participant to the best of my knowledge. All salary deferrals have been deposited.

It seems to me the company is required to make the contribution, but, not being familiar with bankruptcy law etc., what would the ramificiations be if the contribution was not made?

Any thoughts on this matter are greatly appreciated!

I have also posted this on the DB thread, but thought I would also post this on this thread.

What are the cites for not including severance payments in a former employee's compensation for purposes of determining benefits in a DB plan? I understand that severance is paid to a former employee, etc., but is there an IRS cite or other authority?

Along the same line, Labor Reg. 2530.200b-2 provides that an employee is credited with an hour of service for each hour in which the employee is entitled to payment on account of a period of time during which no duties are performed (irrespective of whether the employee has terminated employment), then provides a laundry list of instances. Because severance pay is not listed, I take that to mean an employee may not be credited with service for hours associated with severance pay?

A Participant, past his required beginning date, dies. Beneficiary is his sister. She wants to annuitize to make distribution go past 5 years.

Mechanically, how is this done.

Does the plan have to annuitize her?

Can an annuity be purchased?

If so, is the account distributed to the annuity by the Trustee so the Trustee is responsible for selection of the annuity provider?

Since the money cannot be rolled, can 100% be distributed and an annuity then purchased by the beneficiary? (So she is the one selecting it?)

If so, the plan issues a 1099 code 7, then how would the participant get that money excluded from current income?

If the plan annuitzes her can she be charged every year for the calculations (I think maybe)? for the 1099 (I think no)?

(15 years and no one ever wanted an annuity before!)

When dividing an account with after-tax basis pursuant to a QDRO, what happens to the tax basis. Does the QDRO need to, or can the QDRO, specify this? If the QDRO is silent, is the basis split pro-rata? For example, say you have a 50%/50% split and the participant has $8000 in basis. After the split, does the alternate payee have $4000 in basis and the original participant also have $4000 in basis?

Doctor shut down his corporation in 1998 after distributing all MP and PS account balances (fully vested) to his plan participants but did not distribute assets to himself or wife.

Plan needs to be updated for GUST and terminated. We wanted to request letter of determination for termination but don't know what to do now that we've discovered Corp has been closed down.

Suggestions?

BY LAW, DO WE NEED TO NOTIFY OUR COBRA PARTICIPANTS OF OUR OPEN ENROLLMENT? WE HAVE SO MANY IF ITS LEGAL TO NOT NOTIFY THEM IT WOULD SAVE US A LOT OF TIME AND MONEY!

A participant in a 401(k) Plan died. He is divorced and had not elected a new beneficiary (prior was the spouse). There is not a QDRO pending.

The document states that the next family member is the beneficiary. In this case it is the son (under ten) living with the former spouse.

How can a distribution be made to a minor? The minor cannot sign the forms electing a distribution or a form of payment. What about the tax consequences?

Please provide any insight/sources.

I know this has been addressed on multiple other threads however.... I would like some clarification on a few issues.

What are the cites for not including severance payments in a former employee's compensation for purposes of determining benefits in a DB plan? I understand that severance is paid to a former employee, etc., but is there an IRS cite or other authority?

Along the same line, Labor Reg. 2530.200b-2 provides that an employee is credited with an hour of service for each hour in which the employee is entitled to payment on account of a period of time during which no duties are performed (irrespective of whether the employee has terminated employment), then provides a laundry list of instances. Because severance pay is not listed, I take that to mean an employee may not be credited with service for hours associated with severance pay?

Is it possible that a hospital be allowed to pay the COBRA premium for a patient who is eligible for COBRA (either during the election period or during a payment period) so that the hospital stay would be covered by the COBRA medical plan - rather than the patient having no coverage at all?

If this is possible, I would appreciate any direction to find a legal basis.

tks

Is there a limit on the amount an employee may contribute to a Health FSA?

Is the contribution limit on a Dependent Care Assistance Program still limited to $5,000.00?

Do you know of any companies that are graduating the employee health insurance premium contribution levels based on compensation - the lower the compensation, the lower amount of premium to be paid by the employee? As an example, employees making less than $20,000 pay 10% of applicable premium; employees making $20,000 to $29,999 pay 15% of applicable premium . . ., etc. I believe this is allowable (even in a self-insured plan); it discriminates against HCEs. It could impact cafeteria plan testing if the premiums are paid pre-tax. Assuming this is legal, is anyone doing it?

I found a large (~6%) deduction in May 2002 from my 401k

with a company that I had left in Aug 2001. The company

(plan trustee) says this is an administrative fee that was

supposed to have been deducted all along but wasn't, so far,

that got deducted now. My plan contribution started in

last quarter of Y2000, so effectively 7 quarters to date.

The 401k provider said the plan trustee elected now

to have these deducted from the assets !

I felt that a $1000+ deduction for a $17000 of asset (all

in money market type fund) was rather steep. Ofcourse

there was no notice of this impending deduction or how

this was arived at, etc. Had I known, I'd have rolled

it over to my new (current) 401k.

Should I just accept this ? Do I have a recourse ?

I read other articles in this forum concerning lack of

disclosure requirements on employers & 401 providers.

Any advice ? Thanks.

The Plan Sponsor has adopted a resolution to merge the MPPP into the profit sharing plan, the assets in the MPPP would be transferred to the profit sharing plan and then the MPPP would be terminated.

The notice provided to the participants stated that the MPPP will terminate and all benefit accruals will cease.

Q1. Do I have a merger or termination?

Q2. Since the notice to the participants states termination, are they 100% vested?

Q3. If it's a termination, can the employer mandate that the assets must be rolled into the profit sharing plan, or does the employer have to provide the distribution options provided for under the MPPP Plan Document?

Q4. If it's a merger, same question as above?

I've read other related threads, but remain unclear as to the answer.

A group has a 457(B) DCP plan. Somehow a participant who has an annual limit of $12,000 this year (age 50+), has already overcontributed by $600. However, taxes were taken out of this $600, i.e. it did not come out pre-tax. The group is now asking how to handle this excess deferral. I thought we could just ask the TPA to return the money and because taxes were already paid the W-2 would be correct. However, the group is not liking this. I don't know any other option. They are concerned about double taxation. Do you know the proper way to handle?:confused:

I'm looking for some help.

I have an employee who delivered a stillborn child. The employee is stating that because its a birth, she should be covered under FMLA and be out for 12 weeks.

While I understand that she is grieving, I'm not sure if this would qualify as a reason under FMLA. I've searched through some references and came up with nothing.

I'm hoping that one of you may have the answer or have heard of a DOL advisory on this matter.

Thanks in advance!

My firm is in the process of creating an investment statement for our 401(k) plan and I have been charged with leading the process. I have a couple of examples from other firms. What resources did you find most helpful when creating your statement? Thank you.

Can a self-employed person maintain a 412(i) plan using only insurance as the funding vehicle (as opposed to an annuity)?

A sole proprietor has average compensation for 3 years of 200K and in the fourth year has comp of 50K. The funding obligation for a DB Plan is 80K. I believe that Code Section 404(a)(8) provides a deduction limit of 50K in this situation, but what happens to the extra 30K? Does the deduction carry forward or is it a non-deductible contribution that won't be taxed upon retirement?

An employee is promoted to and becomes an equity partner on June 1. The company's cafeteria plan is on a calendar year. The employee has participated in the 125 plan, and has made YTD salary deferral contributions in excess of claims submitted for the DCAP and Medical FSA portions of the plan. Can this person, after promotion, submit claims that pertain to child care and medical services after June 1 in order to use up the remaining funds in his spending accounts, or can he only submit claims for pre-June 1 medical and child care?