I have an EOY valuation for funding and FASB 87 purposes. Assuming that the only decrements considered are interest and mortality - how is the service cost and PBO calculated??

The reason for the question has to do with the presentation of information for FASB purposes.

IF I run the valuation as of the beginning of the year (with perfect foresight - knowing what the compensation will be for the upcoming year) versus and end of year valuation - my service cost and accrued benefit at the start of the year are equal. However, the present values are computed one year apart.

Is it acceptable to present the service cost for an end of year valuation equal to the present value using interest and mortality (at valuation date) and have no interest adjustment to year end?? OR must the benefit be valued at the beginning of the year with interest and mortality and then brought forward with interest ONLY to the end of the year?? (You would obviously get 2 different numbers and I required all my old clients to have beginning of the year valuations so never got into the issue)

Again, any help is appreciated. Thanks in advance.

I have a client with an Entry Age Normal valuation. The assets have increased enough so that the total unfunded accrued liability is negative.

I believe this is one of the prohibited situations for a reasonable funding method.

An actuary wants to maintain the entry age method and just automatically set the unfunded liability to zero. They claim to have done this in the past. Union negotiations are involved - therefore, they are confident that after the next round of negotiations that the unfunded liability will be positive again - in a year or two.

Doesn't the IRS require the change to the aggregate funding method (or something similar) in this situation??

Any help is greatly appreciated. Thanks in advance.

Two plans (A&B) are permissively aggregated in 2001. The test is performed by excluding all employees who do not meet the statutory minimums. For 2002, plans A&B are tested separately. Plan A uses prior year data, Plan B is now safe harbor (deemed to be using current year data). How do I determine my prior year NHCE averages under plan A? Do I use the prior year averages of the aggregated plans, or do I need to re-run the 2001 test just to determine what the prior year averages would have been for plan A if it were tested separately in 2001?

A friend of mine has a small company of about 9 employees. She wants to set up a profit sharing plan and contribute about 50,000 per year in company contributions. Can anyone recommend an institution that caters to small companies to provide a plan document, administration and government filings preparation?

I've been asked to respond to a comment from a software vendor that

"most documents don't provide for more than 2 groups resulting in substantial extra charges for those clients who end up with more than 2 groups"

Are there major document providers that limit plans to 2 allocation groups or discretionary classes?

Is having 2 groups the most common?

It would surprise me if either were true. Comments please?

Rather than paying retiring employees in cash, as is the current practice, for their accumulated sick and vacation days and other compensatory time Pinellas County of Florida is about to establish a 401(a) plan for the express purpose of sheltering these amounts from income tax. The employee will not have the option of receiving a cash payment. Is this permitted?

Assume a 401(k) profit sharing plan has all plan assets in a "daily" or allocated type of investment arrangement using an offering of mutual funds. The plan wants to offer separate money-managed accounts or self-directed brokerage accounts to participants with account balances of, say, $100,000 or more. The plan's HCEs would be the participants most likely to satisfy this requirement. Is this a problem? Does it create a benefits, rights and features problem? If so, is there another way to provide for an option like this?

Anyone up on this legislation as it relates to eb plans? What is the possible rational for treasury including financial institutions, but NOT hedge funds in the rules covering anti money laundering practices?

We have some employees who would like to have their unused sick/vacation leave deposited into their 401(k) plan.

If we do not have a use-it-or-lose-it policy , is there a problem?

We allow employees to carry-over some vacation and sick time. Also, I had read something about it being futile in certain states like CA which

has specific rules vesting al vacation pay?

Also, I understand since treated like an employer nonelective contribution is subject to benefits, rights & features testing?

For anyone who has implemented this, I'd like your input.We have 1/2 dozen bargainning units with varying leave policies.

Thanks

I've got a participant (still employed) with a defaulted loan in his 401(k) account. He's suffered a deemed distribution already, and now, he would like to have the loan written-off entirely. The problem is - the participant has not experienced a 'distributable event' with respect to the 401(k) account.

On the other hand, the plan allows a defaulted loan held in a profit sharing account to be written off via a 'setoff distribution'.

Can any one think of a reason why the participant could not sell the loan from the 401(k) account to the profit sharing account, and thereby open the door to a setoff distribution without violating the distribution restrictions that are applicable to 401(k) amounts?

There's nothing prohibiting it under the plan document or procedures. I, also, don't think it constitutes a 'prohibited transaction' because it is not a sale to a prohibited party.

What do you think?

Thank you very much.

What type of claims and appeals language belongs in a cafeteria plan document that also houses a medical FSA? My understanding is that the recent claims & appeal regulations for group health plans will apply to health FSAs on 1/1/03. However, should the claims & appeals process for the rest of the cafeteria document be the same since the cafeteria document generally wouldn't be subject to the ERISA claims & appeals regulations.

I have a top-heavy profit sharing plan that only allows after-tax contributions and a discretionary profit sharing contribution. Both NCHE & HCE's contribute the after tax contributions. The profit sharing formula is integrated w/ SS

I know you have to complete testing for ACP, but how do you figure out what the top-heavy contribution is to be? Do you take the lowest HCE's after tax% or give them the flat 3%?:confused:

Does your company ask employees to sign promissory notes which require employment for x number of years as a condition of paying tuition?

What is the maxium dollar amount most companies allow for yearly tuition reimbursement per employee? Does it differ from undergraduate to graduate work?

What type of agreement or promissory note do employers have to retain emloyees when they pay for education? What is the number of years an employee must remained employed, or owe the note?

Hi folks. I have a daughter that would like to invest in IRAs. She is 20 years old and is working part time while in College.

I assume(since her income is low) that she could open a deductible IRA(for the upfront tax relief) and then later on(what is the time period) convert it to a Roth IRA for tax free purposes at retirement.

Appreciate your help.

a plan provides interest credits using the nov 30 yr rates and a lump sum based on the april 30 yr rates.

thus it is possible for the interest credit rate to be higher than the lump sum rate.

so in theory the pvab could be higher than account balance.

can a plan pay lump sum equal to account bal, citing that the interest credit rate complies w/ a 96-8 safe harbor rate and thus automatically doen't violate 411 or 417(e)?

any thoughts?

gary

i have a client that just came to me with a SARSEP that was established in 1993. It was established using a local bank's prototype document. They have had no updates, amendments, or restatements since the plan was originally established. We don't deal with SARSEPS that often, and i would like to be able to help my client. Does GUST or EGTRRA apply to them? They now want to make catch-up contributions. Are they still limited to 15% of compensation for deferrals? Any input or suggestions is appreciated-i know this is a loaded question. thanks.

Does a plan participant in a non-governmental 457 plan who continues to work beyond age 70-1/2 have to start taking minimum required distributions before employment terminates? If so does this constitute a one-time irrevocable election on distributions?

What guidance is there on the specific plan document requirements for a VEBA? Should the document state if the trust classifies as a 501© organization? Should the document have been updated with legislative changes as qualified plans? I'm working with an audited VEBA plan and the last document is dated 1987 and has not been amended.

I've read everything I can find about Leave of Absence, but can't find a direct answer to this question. I'm a TPA - how do I treat Medical FSA participants who go on a LOA? If there are no contributions, do I change the election to reflect that? Typcially they come back and pay back, but now, for the first time, I have a participant that went on LOA for two months, no contributions during that time, and now they have terminated. So I am really left wondering what is the total election, and what is their period of coverage. Our document doesn't seem to answer that question. Thanks for any help you can provide.