The new federal tax law allows dual contributions to 457 & 403b plans and my employer has both plans. The old law used to cap contributions at

25% of salary, up the the maximum allowable contribution. It appears that the new law allows

100% contribution of salary up to $11,000, plus catch-up. Under the new law, does it follow that in order to contribute $22,000 ($11,000 to each),

one would only need to earn $22,000 in income?

Would appreciate knowing if this is the case.

Sahara

I understand that governmental pension plans are subject to benefit accruals post NRA under ADEA even though IRC 411 is not applicable. Can I apply the same rule to non electing church plans? I'm trying to get my hands on a copy of ADEA.

I have a summary of ADEA issues put out by BNA. It states that ADEA applies to certain types of employers, one of which being private employers with more than 20 employees. Can I interpret a religious entity that sponsors a nonelecting church pension plan as a "private employer"?

Thanks

I have been employed with the same company for 21 years and during that time, when you are on benefits for more than 30 days that overage time is adjusted from the Retirement credited date. IE 1 year of service-I am on benefits for 6 weeks-so now mo Retirement credited date is 11 months 2 weeks. I was advised that this is ERSIA rules? Is this true and if so, where is this information in the ERSIA web site. I know that FMLA states this is at the descresion of the employer. Please tell me where this information is.

An employer who has maintained a 403(B) pension plan (with employer non-discretionary) contributions establishes an additional 401(a) plan. Does the 401(a) plan have to recognize prior service for vesting purposes because of the 403(B) plan?

I frequently use Benefits Link for reference material and love the site! However, I just noticed a Guest Article which I pulled up on 5/3/02 re: Update on Required Minimum Distributions. The numbers shown for the MDIB table don't match the Uniform Lifetime Table in the Federal Register on 4/17/2002.

Thought I'd mention it - please let me know if I'm in error!

Can anyone think of authority which would permit a plan to disregard hours of service earned while a per diem employee and only begin counting hours of service (towards the 1,000 hour requirements) of full time employees?

We recently acquired a company (stock purchase) that has this "plan" - and I use this term loosely.

Contributions are paid into Trust at $2 per hour worked. The money sits in the Trust until the insurance bill arrives. Insurance bill for fully insured health/dental benefits is paid from Trust. Trust currently has $280,000 in assets - was put in place in 1980.

Since 1996 is has been handled by company in CA. The insurance salesman who handles this for the 22 participants says there is no filing required because the benefits are fully insured.

After many hours of frustrating dialogue we have convinced him that interpretation is wrong. 5500 and 990 must be filed.

Question to all of you out there - how would you handle this? Am wondering about how far back the filings should go? Is EPCRS good idea?

This issue was identified during due diligence - Insurance guy told them nothing needed to be done.

Any thoughts? Any Criticism?

Form 5300, Question 3g asks if a plan benefits noncollectively bargained employees. For this purpose, does the term "benefits" refer only to those employees currently accruing under the plan (as opposed to employees with "frozen" benefits under pre-amendment terms of the plan)? Thanks in advance for any help with this.

Does it violate the non-discrimination requirements of 105(h) for a self-insured health plan to require less (or no) employee contributions for premium payments for some of its HCE key executives than are required to be paid by everyone else? Though this seems to me to potentially violate the non-discrimination rules, I have not located any authority expressly covering this. Any thoughts would be appreciated.

Does anyone think that the new 457(f) regs, shutting down mutual fund options for nonprofits, is a sign that the IRS will be looking at discounted mutual fund options in the for-profit context?

I just wanted to verify that a target benefit plan is considered a defined contribution plan and therefore does not fall under Title IV of ERISA. Can anyone give me a good cite for this?

Our Multi-Employer Welfare Plan is seeking input on potential bidders for our PPO Medical Plan covering bargaining/non-bargaining employees and retirees. We have roughly 5,500 actives and 1300 retirees.

Input on potential bidders capable of this level of service both regionally (Eastern WA) and nationally to cover our retirees would be helpful.

Thanks,

MikeH

Employer sponsors formal severance plan as an employee welfare benefit plan. In the plan document, it clearly states that the ". . . plan does not provide severance pay to any terminated employee as a matter of right." Furthermore, the plan document states that ". . . whether or not severance pay, if any, is to be paid to a terminated employee is a matter soley within the discretion of the company." My question is as follows: If the plan is operated in a manner in which everyone who is terminated receives severance pay, does an employee who is singled out and not provided severance pay have a claim? Presumably based upon the notion that the plan is being operated in a manner other than the quoted provisions above??? If so, do you know of any court cases or other cites to back up the employees claim for severance pay? Thanks!

How does one use the old 5310 with the new Schedule Q and still get the Service's blessing with respect to nondiscrimination testing?

As regards the top 20% paid group election for purposes of determining Highly Compensated Employees, is there an exception from the consistency requirement across all plans sponsored by the employer, similar to the multiemployer exception, available to sponsors of Davis-Bacon plans?

If a spouse is offered coverage through their employer, but elects to waive, a working spouse fee is applied. If they notify late of a change in employment where the fee no longer applies, can this pre-tax deduction be removed mid-year? :confused:

I have a Joint and Survivor 401(k) profit sharing plan. A participant chose a spouse/daughter (50%/50%) benefit split. The spouse falls into the J&S category.

The spouse passed away 6 months ago and no new bene form was completed. The participant recently passed on. The daughter now needs the money immediately to pay burial expenses.

I understand that J&S rules require at least 30 days before benefits can be paid out. Since the wife predecesed the participant is there a wait on distributing the funds to the daughter? How much can be distributed? Does part of the distribution go to either estate?

Thanks in advance,

Jeff

Problems Problems

In 2001, employee contributions were made to the 401(k) in a proper manner (correct percentages). However, the match for some participants was too high. Now, the employer would like to correct the error by returning the excess match amounts to the company and issuing revised W-2s to the effected participants. The plan document discusses return of excess contributions to participants and discusses forfeited matching amounts but is silent on this particular fact pattern.

Employer is concerned that permitted the participants who received the higher match to keep the excess amount would be a discriminatory practice.

Any advice would be appreciated.

we have a client that owns an s corp. their are 2 owners. the current owners want to possibly establish an ESOP. they have 3 key employees that are going to buy stock individually and will also be participating in the ESOP. the point is to have these 3 employees have controlling interest in the company. my question is who has voting rights on the stock owned by the ESOT? could these 3 employees be named as trustees of the ESOT and therefor control the voting rights? could the stock in the ESOT have non-voting rights?

any input will be much appreciated. thanks.

I'm looking at the final 401(a)(9) regulations for the first time and am puzzled about a sentence that was not in the proposed regulations (or if it is, I missed it).

Q/A 5© of (a)(9)-4 states that "the separate account rules under A-2....are not available to beneficiaries of a trust with respect to the trust's interest in the employee's benefit."

Does this mean that if there are 3 individual beneficiaries of a trust, and assuming that the requirements re. the trust are met so that they are deemed to be the designated beneficiaries for (a)(9) purposes, separate accounts cannot be set up for their distributions post death of the employee? What is the rationale for this.

If there was no trust, then separate accounts could be established following the death of the employee (unless again, I am reading this incorrectly), and distributions from the separate accounts could be made to the 3 individuals based on their own life expectance?

Thanks for your thoughts.