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

A current SPD I am reading says that in order to elect COBRA continuation of your FSA you must also elect to continue medical, dental and vision plan.

This doesn't seem right to me - shouldn't you be able to elect everything individually?

A newly established plan wants to provide that anyone employed before the effective date of the plan is automatically 100% vested in account balances. All other participants must follow 2/20 vesting schedule. The part I'm having trouble with is that of 5 employees who were employed before the effective date of this plan, 4 are owners. Is this a situation that must meet the 401(a)(4) testing requirements?

I'm wondering if others can provide information on how their companies deal with a situation I am currently experiencing with my employer's health plan. The situation has resulted in the plan denying coverage for my newborn.

Recently my wife and I had a second child. My wife and I and our first child were enrolled in my employer's health plan at the Family coverage level, for which premiums are independent of the number of children. The pregnancy was being covered by the health plan also. Following birth, the newborn received treatment by the hospital and by our regular providers, who filed claims with the insurance company.

Approximately 50 days after birth, we received a notice from the insurance company stating that the newborn was not covered because he was not enrolled. We realized that we had neglected to enroll the newborn within the 31 day period stated in our plan booklet. We hadn't previously thought about enrollment because we were already at the Family coverage level and because the insurance company already had notice of our child’s birth and care. The plan refused to enroll the child at this point, since the 31 day period had expired, and we were told we would have to wait 10 months until the next open enrollment. In the interim, the plan would be covering me, my wife, and just one of our two children! We would therefore have to find (and pay for) interim coverage from another source for the newborn.

We filed an appeal with my employer's ERISA committee requesting that they add the newborn immediately, using the committee to review our special circumstances and grant an exception to the normal 31-day rule. It seemed to us that our appeal should be granted since, given the circumstances of our case, there was no material difference to the company whether the child was added late or not, and since it was clear we had intended him to be enrolled when we had our regular plan-affiliated providers treat him and file claims for him after birth. Furthermore, there is no way in which we could have benefited by intentionally not enrolling the newborn, so it seemed obvious that our actions were a simple mistake.

The company's benefits supervisor who reviewed our appeal agreed that our case had merit and that our request was reasonable. However, the appeal was rejected on the grounds that all "similar" appeals had been rejected in the past, constituting an unwritten policy with which the company must maintain consistency. No explanation was given of the origins or purpose of the policy. (In my understanding, and as confirmed to me by others, this policy is not required to comply with HIPAA or Section 125.) The implication is that the company's appeals review board feels unable to distinguish between cases in which the company's interests could be legitimately harmed and those in which they would not, and therefore they reject all appeals.

The benefits supervisor explained to me that he felt the current policy was misguided and told me that it was under review within the company, hopefully to be replaced with a more flexible process.

I feel the company's current policy and actions are indeed misguided, and that they furthermore act against the company's interest by denying promised benefits to employees and therefore hurting employee retention. (Apparently there are many cases similar to mine within the company, which is a very large employer.)

I'd like to help the process of my company's review of this policy by gathering some information from members of this site.

Could others comment on how their company would deal with this issue? What new revised policies would you recommend? I'd like to get feedback from as many people as possible. Thanks for your input.