If I have a non-safe harbor floor-offset plan am I still permitted to test the DB portion on gross benefits w/o regard to the offset, as I understand I'm permitted to do in a safe harbor F-O? The MP/PS plans have to be included in the avg. ben. test. Any other issues?Thank you.

Is there an inherent contradiction when a plan defaults a newly enrolled participant (who made no investment elections) into one of the plan's fund choices - yet claims to be a 404© compliant plan?

Does HIPAA allow, with a family status change, an employee to change from a High option plan to a Low option plan mid year?

We're putting together a VEBA for retiree health care (okay, I'll admit up front to not knowing much about VEBA's; I'm giving some nominal assistance to the partner I work for who is developing the VEBA for a multiemployer client).

He's asked about the use of QDROs to divide VEBA accounts upon divorce. I'm afraid I'm missing something. It seems possible; anyone have any experience?

Thanks!

Hi Everyone,

The long awaited EGTRRA Revised IRA Model Documents are now on the IRS Web Site.

March 2002 Revised Forms 5305; 5305A; 5305R; 5305RA; 5305S and 5305SA are now available for downloading from the IRS.

These accompany the SEP and SIMPLE Model IRS Forms released late last week.

IRS has not yet updated the title listing of these forms but the March Revisions appear in pdf format even though the Januaary 2000 date remains for the time being in each title header listing.

Remember that these forms need not be used until October 2, 2002 according to IRS Announcement 2002-49 released last week.

Has anyone yet seen specific, official IRS instructions relating to the "Amendment Procedure" for existing IRA customers for EGTRRRA changes. Lots of speculation but I have not seen anything official yet. I hope it is similiar to the 1998 IRS procedures permitting a "negative customer" response.

Cordially,

Dave Hammond

I am quite familiar with how a 457(B) works, however I am interested in the 457(f). I am not entirely clear on how this works - is it entirely salary reduction or can an employer make arbitrary contributions to it? I have a non-profit who wants to make contributions to the CEO and I am not sure if this plan fits the bill. Can someone please enlighten me - I would appreciate it!

Thanks,

Scott Dauenhauer, CFP

It's my understanding that NJ is NOT an EGTRRA conforming state, however the state tax code will recognize the new 401 (k) limits under EGTRRA. So far so good...

Now for the more difficult part of having a business in the Garden State (or any other EGTRRA non-conforming state), can we for example design or make an allocation to a Profit Sharing plan in excess of 15% of covered compensation? Are we dead in the water for permitting other EGTRRA provisions (e.g. enhanced rollovers, increased compensation and 415 limits, etc.) in a plan? Are we risking a plan disqualification at State level? I know at Federal level we're good, but what happens when Federal and State laws collide?

I haven't seen anything written about this subject and perhaps I can be lead to a good source of information. Does anyone have other thoughts about this mess?

Thanks for reading this message.

Woo-hoo, Iowa is a conforming EGTRRA state.

IN YOUR FACE-WISCONSIN!

Client would like to know the latest time frame for filing suit against their former TPA. It relates to the administration that was completed for the December 31, 1998 plan year end.

What does it mean, with respect to the administration of a welfare plan, to have "control administration"? Is this a term of art?

Quick and Easy Question for Someone Smart:

What is meant by "control administration" with respect to the administration of a welfare plan?

Thanks in advance.

I have read as many threads and articles as I could find about this but I'm afraid I am still not confident about this.

Company A sells property and casualty insurance.

Company B sells life insurance, group insurance benefits, retirement planning and financial planning.

Company A owns 49% of Company B.

Both companies regularly refer clients to each other. There are no shared employees or expenses. The only connection between the two companies is the mutual referrals.

Is this an affiliated service group?

i have a top heavy 401k plan that failed the adp test. is the top heavy minimum contribution based on adp deferral percentage prior to distribution of excess contribution amounts? also if qnec is made to correct adp failure, would qnec contribution be counted towards top heavy contribution?

the question on top heavy funding relates to which hce adp deferral percentage would be used to calculate minimum top heavy funding requirement, the pre distribution adp % or post distribution adp?

Does anyone know where I can get copies of old 5500s? I have checked freeerisa.com and planeterisa.com and the most recent info is for 1998.

I have a takeover plan (PYE 5/31/01) and I am unsure of whether or not they filed the 2000 return for 2001 Plan Year end. The prior administrator recently passed away so I have limited information at my disposal.

All participants have self-directed accounts and I am trying to piece it all together but it would be nice to have a total balance to come back to just to make sure I have all the info. The employer has provided all info they have.

Where can I find out when the last return was filed and what the ending balance was?

Any thoughts would be greatly appreciated.

Thanks,

Connie

My husband and I have excess contributions to Roth IRAs in previous years and don't know how to get out of the 6% trap:

In 1998, filing jointly, we contributed $1000 each.

In 1999, filing jointly, we contributed $600 each.

In 2000, filing separately, we contributed $600 each.

In 2001, filing separately, we contributed $600 each.

In 2002, filing separately (we think), we have contributed $200 each.

We qualified for the contributions in 1998 & 1999 since we filed jointly and fell within the AGI guidelines. Since we elected to file separately in 2000, 2001 and 2002, the contributions are excessive.

We have filed Return of Excess Contribution Authorizations to get back the $200 each for this year, but don't know what to do with the $1200 each for 2000 and 2001 since the filing deadline has passed.

You may need to know that we have elected to file separately since my husband is now self-employed and filing separately netted us a larger refund :confused: I have been fairly comfortable completing our own tax returns but with his self-employment and these IRAs, I think it's time to get an accountant!

A Money Purchase 401a amended and restated the plan document to become a 401k Profit Sharing on 3-1-2001.

Question: Do they get 2 5500s (Final year for MP, start up for PS) or 1? If they get one, do both 2c and 2e get input on the plan charateristics? Does the required contribution amount for the first two months get put on the Schedule R?

Are there ANY existing guidelines for this? This is becoming more and more prevalent with the new laws.

Thanks for the assistance!

I've been reading about these new "Bennie" cards for use with an FSA. Anyone out there use them? Do they work with just the medical or Dependent care as well? Does anyone forsee problems? Either post or contact me directly. Thanks!!

I work for a CPA firm that administers defined contribution plans. We have a plan that is now subject to an ERISA audit.

The firm is considering the use of its audit department for the engagement.

The independence rules of the AIPCA permit CPAs to audit plans for which they provide participant recordkeeping services as long as they comply with certain stated requirements.

However, it appears the DOL has the opposite opinion. An accounting firm handling the recordkeeping may not perform the plan's audit (DOL Reg 2509.75-9).

I have been unsuccessful in finding examples of where the DOL has imposed penalties in this situation.

Has anyone had/know of the DOL's actual reaction in this situation?

Any comments would be appreciated.

One more try . . .

DB plans are prohibited from holding more than 10% of company stock - correct?

Are there maximum employer stock limits for DB plans?

What if the plan docs and trust agreement are silent? whats the limit then?

ANY guidance or relevant ERISA provisions would be greatly appreciated

Thanks

My company's part-time employees are currently eligible for health insurance benefits when they work 1000 hours in a year. Only a few actually have these benefits.

I am changing the criteria for eligibility so that the part-time employees must average 25 hrs per week for a 6 month period to be eligible for benefits for the next 6 months. This is, in effect, 1300 hours in a year.

Under Ohio law can I change the criteria for receiving benefits for the employees that already have benefits under the current rule?

Or can I only change it for the ones who don't have insurance yet or future employees?