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.

My company (approximately 4,000 ees nationwide) is finally thinking about creating a healthcare strategy for the future. One possibility we are exploring is a standalone prescription plan. At present, our mail order program (for participants in our self-insured POS) is with one vendor and our retail program is with a different PBM through our TPA (an insurance carrier). We are also considering carving the prescriptions out of our 15+ HMO plans (about 50% of our employees are enrolled in HMOs) so it seemed natural to create a standalone plan. By having one vendor we would finally gain some control over the formularies, dispensing fees, co-payments (and/or co-insurance if we make that move), etc.

However we are having second thoughts now simply due to economics. If both the mail order and retail programs were serviced by the PBM of the TPA as part of our POS, would it make more sense than creating a standalone since the TPA undoubtedly has greater price leveraging power than us alone? I am just wondering if anyone else has experienced this issue and what the results were. Thanks.

Can a participant in an ineligible 457 plan have concurrent substantial risks of forfeiture? I understand what rolling risks are, and I am not referring to this. I am not able to locate anything regarding having more than one substantial risk at time. Each substantial risk is valid, and has a different lapse time period.

Thanks,

RIK

a plan makes an amendment to the early ret factors. the age 55 factor is changed at 1/1/95 from 0.5 to 0.3.

a person retires on 1/1/02.

the plan makes no specific provision for protecting the old subsidy.

at retirement the plan compares the 1/1/95 accd ben with a erf of 0.5 v. the 1/1/02 accd ben w/ a erf of 0.3. it turns out that the 1/1/02 accd ben w/ an erf of 0.3 is the larger one. and thus the plan says that the old benefit was preserved.

the question is that w/ no specific provision as to how to handle the protected benefit is it reasonable to use their technique or s/ the benefit be the 1/1/95 accd ben reduced at 0.5 plus the accrual after 1/1/95 (1/1/02 accd ben less 1/1/95 accd ben, thus giving the same total accd ben at 1/1/02) using the 0.3 factor. clearly this would produce the largest benefit, but the plan was silent as to how to handle this. any comments?

gary