are employees that are part of an excluded class of employees such as "leased employees" or "associate attorneys" considered "participants" when filling out item 6 and 7 on a 5500?

I don't think they are but the number can have an impact on whether a plan is audited so i want to be certain.

Is anyone aware of any "classes" or "continuing education" seminars pertaining to new comparability/cross tested plan design?

I am reviewing the federal Newborns and Mothers Protection Act. The Act requires certain minimum stay provisions and says a plan cannot "restrict benefits for any hospital length of stay in connection with childbirth for the mother or newborn child" to less than 48 or 96 hours, depending on the type of delivery. A client has a plan that does not provide well-child coverage of any kind. Question: does the federal law require the plan to cover all hospital stay expenses for a healthy newborn? Is there a valid argument that the stay is "in connection with childbirth" and thus any such expenses should be covered? Or would the expenses covered be just for the birth itself and not expenses thereafter for the newborn? Could failure to cover the newborn be deemed an incentive to get mom out of the hospital early (i.e. to avoid incurring uncovered baby expenses) that runs afoul of the federal law? The state insurance department tells me there is no state law mandating the well baby coverage, and I cannot find any other guidance on this issue. Does anyone have any idea whether the federal law essentially mandates healthy newborn coverage for the 48 to 96 hour period of minimum stay? I would appreciate your thoughts.

Does New Jersey still tax salary reduction contributions to cafeteria plans?

If yes, do you have a cite to the law or regs?

Thank you.

Subject pretty much says it all. I am trying to maximize my HC's in a scenario for 2002 plan and confused is putting it lightly.

My plan is a 401(k) plan with a 3% match, the plan is top heavy and is integrated at 100% of social security wage base.

My object is to get my HC's to the max of 40,000 using deferrals of 11,000, match of 6,000 and 23,000 in profit sharing.

The 23,000 would equate to about 11.70% oveall for the HC's.

1/3 of that 11.70 would be 3.86%. If I post this 3.86%, will I still need to post an additional 3% to the ee's who did not defer and did not receive the 3% match which is being used to satisfy part of the top heavy. So in other words would a NHCE who defers nothing have to receive 6.86%? Or can the 3.86 satisfy both top heavy and the gateway. This is not a safe harbor plan.

I was in a Corbel seminar last week where the presenter said that the 3% safe harbor contribution could satisfy the TH, Gateway and Safe Harbor but could not be integrated?

Now I am confused. Any help

The IRS has issued revenue procedure 2002-29, within which she has outlined the general requirements for QRPs to be amended with respect to the proposed and final RMD regulations.

Revenue procedure 2002-29 is attached.

An employer rehired an employee and was required to restore forfeitures to the participant. The balance in the forfeiture suspense account was not sufficient to cover the required restoration, so the employer had to contribute the rest.

I'm trying to figure out how to report this on the Schedule H. I'm leaning towards using the employer contributions line. It doesn't seem exactly right, but I don't see any other lines on the form that are better.

Does anyone agree or disagree?

Am merging three DB plans into one. Each one has different year end. All three require audit.

Question the actuary and auditor are still researching - One plan is 10/31 year end. New combined plan is 12/31. So I have a 2 month plan year for the final filing. On the audit - can we do a 14 month audit - and just attach to both 5500's. You can do this on the front side when first plan year is short. Can't find any information on if you can do this on final plan year.

Time is running out - extension of full year ended 10/31/01 is coming fast.

Anyone been through this? Provide cite?

Our 401(k) plan wants to increase the maximum deferral rate from 15% to something higher, but what? We only allow pretax contributions. I've heard Hewitt survey data shows 50% is the most common maximum. 100% seems excessive and complicates withholding for FICA, other benefits (i.e. medical), garnishments, etc. What maximums are other plans using?

Is a fiduciary of a collective trust necessarily bound under ERISA?

May an employee who participates in a qualifed retirement plan and makes a catch up contribution to such retirement plan make a catch-up contribution to a nondeductible IRA in addition to his/her nondeductible IRA contribution?

Does the risk of bankruptcy constitute a "substantial risk of forfeiture" within the meaning of Sec. 3121(v)(2)(A)-FICA Special Timing Rule, given an unfunded, unsecured promise to pay money in the future of which the NQDCP is still subject to the Employer's general creditors? Does Sec 83 apply? What else defines a "substantial risk of forfeiture" for unfunded, unsecured promises to pay money in the future?

Company B is owned 50% by JB and 50% by Company A. JB does not own any portion of company A. Company B is starting up a 401(k) plan and wants to move same participant balances from Company A's plan to Company B's plan. Participants will no longer participate in company A's plan. Supposedly company B was spun off of company A even though company A still owns 50%. Can company A's plan move assets to Company B's plan with or without paperwork from participants?

There is an amployee who is being terminated this week. The Company has made an arrangement to continue paying this individual for 1 year. The Co. has a 401(k) Plan and this individual has been contributing. He would like the Co. to continue withholding 401(k) from his paychecks. Is this allowed? What are the pos and cons? Does it need to be spelled out in the severance agreement?

Under the old & current catch up provisions, both refer to the "Normal Rtirement Age". Is this as defined in the plan document? Is there any limitations on what the age/can must be?

401k plan participant died in 2002, having designated as beneficiary of his account a family member (not spouse). At time of death participant had significant unrelated federal personal income tax liabilities. Is account balance now distributable to surviving named beneficiary exempt from levy/seizure by IRS for participant's tax liabilities? Code/reg and other citations wd be useful. Tx.

401(k) plans of employer exclude a class of employees who happen to be HCE. Is this class considered "eligible" for purposes of ADP test and hence, given a rate of 0? Would result be different if this class of employees are eligible to participate in another plan of the employer that does not have a CODA feature?

Does anyone else think that there is an error in the second part of the solution for the "Practical Example of Concepts Learned" in Chapter 7 regarding the top heavy determination? In the first part, they determine that for 2001 (based on the 12/31/2000 determination date) that there are two key employees - Bill & Lisa. Then in the second part, they determine that for 2002 (based on the 12/31/01 determination date) that using the new rules under EGTRRA there is only one key - Bill. It is my understanding that as a "former key", Lisa's account balance would be disregarded in the determination for 2002, but they have included it in the total account balance for all participants & in their calculation. Lisa's balance should not be included, correct?

For Cafeteria Plans, how do we know when to write new Plan Documents or just amend them? (Mid-year change in status, ERISA regs effective 7-1-02, etc.)

Perhaps this is as simple as it seems, but none of the reference materials specifically addresses the topic.

Plan sponsor is presented with what appears to be a validly notarized Durable Power of Attorney (POA) and the appointed Power of Attorney is requesting paperwork for full distribution of the participant's account.

1. Plan sponsor in inclined to accept the POA as it does not appear Federal Law preempts this document and I would agree. Any point of concern from your perspective?

2. Would you require check payable to "POA Name, FBO Participant"?

3. Since POA has full power, they can change anything on the participant's account, including requesting PIN and mailing address, would you agree?

Thanks in advance for your insight.

Sincerely,

Andmik