Is there an interpretation out there as to whether a NQDC plan should be offered to a select group of HCE's or just to HCE's. the issue here is my client wants to offer the plan to all HCE's and I dont want them to run afoul of the exemption from having to comply with ERISA.

Are Split Dollar plans considered ERISA funded plans simply because the SD policy promises to deliver retirement income?

How does a corporation reconcile proxy reporting for a Split Dollar arrangement that was not disclosed in the previous years?

- Restate past compensation figures in the next proxy, or

- Disclose past proxy amounts in a lump sum amount this year.

A 401k Participant is continuing to see loan repayment deducted from bi-weekly paycheck. The Employer changed payroll systems mid-loan and although the new system continued to withhold loan payments on schedule, the system did not report the loan information on the remittance data sent to the recordkeeper; therefore loan payments were not ACH'd from Employer account for this participant.

The TPA and employer eventually discovered where the error occured. The employer sent in a lump sum check to cover the missed payments (unfortunately after the official cure period). The participant was still sent a 1099-R for deemed distribution.

If the participant was completely under the impression that he was meeting his loan obligation and the mistake of fact actually occured due to an HR system problem, is the loan really in default? Shouldn't the TPA be able to use this information to issue a corrected 1099? At this point, the TPA refuses to issue because they do not recognize that a mistake of fact occured and stress that the payments were not applied...the loan is defaulted no matter what the reason.

One other point to mention: when the ER lump sum was remitted last year, the TPA led the ER to believe that (because of the particular circumstances) they would take the lump sum and apply to amort. as if the payments had arrived on their due dates - this obviously did not happen.

Your expert opinion is greatly appreciated!

A defined contribution plan had a full plan year from 7/1/00-6/30/01 and a short plan year from 7/1/01-12/31/01.

Employee A worked 400 hours each 6 months - 7/1/00-12/31/00, 1/1/01-6/30/01, and 7/1/01-12/31/01, but terminated employment 12/21/01 and did not receive a contribution allocation for the short plan year due to a last day requirement.

For coverage testing purposes, is Employee A an excludable employee for the short plan year due to being a terminated participant with 500 or fewer hours of service? or does the 500 hour level have to be prorated (to 250 in this case), so that Employee A would not be an excludable employee?

Mind has suddenly gone blank - when is the GUST amendment deadline for a non-calendar year prototype plan? EX: Plan anniversary 3/1 - is (or was!) the GUST amendment deadline 3-1 or can it be done effective 1-1-02 allowing for the extension to 12/31? Thanks.

Are there any regulations against allowing a terminated employee to continue to make loan repayments if no distribution is taken from the plan.

A plan provides that matching contributions are discretionary and are made to a maximum % of pay. The plan makes matching contributions on a pay period basis and has always done so. However, neither the plan nor the SPD states that the match will be made on a pay period basis. Given how the plan is operated, a participant whose elective deferrals cease before the end of the year because of the 402(g) limit does not receive the full match they are eligible to receive under the plan--there is no true-up. Is there a problem with operating the plan in this manner when the plan document states that matches will be based on pay? Could the way the plan is written require a true-up, or is a true-up only required when the plan document includes one?

I have a Governmental Hospital which maintains dual status as a 501©3. They currently offer a 403(B) as their supplemental retirement option. They now desire to offer a 457(B) as a governmental (not top hat plan) in additon to the 403(B) for all of their employees. Is this OK?

Can anyone give some basics for a TPA in administrating a Non-qualified Deferred Comp. Plan.

We currently recordkeep an existing plan and calculate the figures for which the participants are entitled. The Company makes contributions to the trust to meet its obligations. There are two types of contributions. One from the Participants, to have cash compensation from bonus or commission etc. and the other is tied to the 415 limits and comp. limits in their DC plan.

What do most TPAs provide as a service. Thanks

I have a new 401(k) plan with an effective date of 1/1/2001. The first date that participants could actually defer into the plan was September 2001. When calculating the ADR's for the participants, do I include only their compensation paid from September through December or the enitre plan year?

I was curious if anybody knew of a cite or reference on how to properly handle this. I would lean to the more conservative approach and use the full year compensation, but this seems unfair to the two HCE's in the plan. Particularly considering there were a few employees that would have been eligible to defer if they hadn't terminated before September 1st.

Thanks

Steve

I have a DB plan with three participants, who are also the only three employees (husband, wife, and 22-year-old daughter). The husband owns 90% of the business, and his wife owns 10%. The business is not a "professional service employer."

Under section 1563(e), the daughter is not attributed any ownership since she is 21 or older. However, the "substantial owner rules" in ERISA 1322(B)(5), it states that an individual will be treated as a substantial owner w/r/t a plan if he or she was a substantial owner within the 60 months preceding the determination date.

Since the daughter only turned 21 in late 2000 and would have been attributed her parents' ownership before then, does this mean that the plan is exempt from PBGC coverage until late 2005? I think yes, but I've never needed to use this rule before, and I'd appreciate an expert opinion.

Thanks.

Employer has an ineligible 457 plan for an employee. Plan provides for installment payments (monthly for 60 months)following termination of employment for any reason at any age. Plan has a no-compete clause (assume for argument sakes that this works) that runs for 36 months. No other risk of forfeiture clause following that. Is employee taxed on the balance (remaining 24 months) at the end of the 36 months?

Thanks.

I have seen several references to using the idea of simply sending

small account balances on participants unable to be located directly to the IRS for credit to the respective taxpayer's account.

The term "100% back-up witholding" is the phrase I've been hearing. This sure would simplify matters alot and who could complain?

Any thoughts on this are appreciated

Anyone know if government agencies are exempt from the written plan document requirement for cafeteria plans (125 plan). I believe that government agencies are required to have a written plan document, but someone tells me otherwise. Also, are government agencies required to file a form 5500 schedule F? I understand that governmental plans are exempt from filing a form 5500 for pension and welfare plans but not a form 5500 schedule f for fringe benefit plans. Thoughts anyone?

My understanding from Notice 2000-3 is that an existing 401(k) plan cannot convert to a safe harbor format in the middle of a plan year, but that the employer can create a "new plan" with a short plan year and institute safe harbor testing, SO LONG AS (a) the short plan year is at least 3 months long, and (B) the new plan is not a "successor plan" as defined in Notice 98-1.

Now, the definition of successor plan in Notice 98-1 is very broad. I thought I recalled a narrower definition of successor plan that required that the predecessor plan and the successor plan have the same plan year.

If this is the case then can't an existing plan with a CODA start a new plan, with a new plan year, and use safe harbor rules for a short plan year of at least 3 months?

Hello again...the question I have today is this:

When adjusting claims for daycare expenses, our policy has alway been the same as for medical expenses: Claims can only be reimbursed AFTER the expense has been incurred (dates-of-service NOT date-paid). HOW would you suggest handling pre-registration fees for summer daycare programs? Often the provider requires the registration fee over a month before the program begins. To complicate this more, most of our accounts have a July through June year...which means the pre-reg fee is required in one year and the dates-of-service fall within the following year. And to play devils-advocate...are registration fees even eligible since they are not the actual fee for care?

I look forward to all of your replies. Thanks!

Is it permissable to have separate plans or plan years for the premium conversion vs. unreimbursed medical/dep. care portions of a 125 plan? The employer's health plan renews in August and will require an adjustment to the premiums withdrawn pretax from employee salaries. They would, however, like to continue allowing employees to make changes to their flexible spending accounts on a calender year. Any information on what the regs say about this? Believe it or not, their current 125 administrator doesn't know the answer to this.

I received a request from an employee to cease Dependent Care FSA contributions because a relative will now be caring for her child and she will not be incurring day care fees.

Is this an eligible change? According to the final regs it may not be since the cost change was not "imposed by a dependent care provider who is not a relative of the employee"?

I'd appreciate your opinions on this.

I have had two employees now that are not getting in their required minimum of 30 hours per week to receive full time benefits. At what point do you reduce them to part time and revoke their benefits? Are there any legalities involved in this? This particular employee would lose paid vacation, holidays, and health insurance benefits. Thank you for your help.