We have a relatively new Taft Hartley client who maintains a benefits bank which often produces large $ bank amounts that are not used up by age 65 .... Medicare has indicated tgat the plan not medicare is primary until the bank is used up ... this makes NOOOOOOOO sense to me ... does anyone have experience with this type of medicare ruling??

When rolling over ESOP distributions to an IRA, can a portion of the IRA be allocated to a Section 529 plan (NY) without any taxes and/or penalties being levied? If so, what basis is picked up for transfer to the 529 plan?

If a plan participant is on unpaid leave of absence at the beginning of a plan year, terminates employment during the plan year, and receives no compensation during the plan year, is the participant included or excluded in ADP testing?

The plan document says prior year will be used for ADP testing. Is it too late to elect/amend to use current year data for 2001 ADP testing?

I accompanied another employee on a presentation to a sole proprietorship. The proprietor asked about employer contributions, specifically, can she contribute more than 3% and must she contribute 3% for an employee if the employee only contributes 1%?

As you are aware the standard text says the employer is required to match employee contributions dollar for dollar up to 3%. To her, this implies that if the employee contributes less than 3% she only has to match the employee's contribution, not provide 3%. Additionally, she inferred she could contribute more than 3% if she wants to.

If 2 people are participants in the same qualified plan, and one is the 100% beneficiary of the other, can the participant's account balance simply be transferred to the beneficiary's account balance upon the death (on or after 1/1/2002) of the participant? If the beneficiary is the spouse, does the plan have to provide for accepting spousal rollovers in order to do the transfer? Can the amount be considered a trustee-to-trustee transfer, or would it have to be considered a rollover?

Our outside consultant is reviewing health & dental claims. Our carrier is setting up a link for them to be able to access data right from their website.

I know this will be a HIPAA concern soon; we are for the most part self insured.

Does anyone see a current problem with this?

Should the consultant sign a Confidentiality agreement? Should our carrier,rather than us, be concerned form their end since their website?

Would anyone have a sample Confidentiality agreement or Business Associates agreement

Thanks!

I would like to hear what different interpretations may be out there on when a particiapnt in a standardized plan accrues the benefit.

Option 1:

Day 1 because for participants that do not terminate during the year there is no hour requirement.

Option 2:

After they work 501 hours because if they were to have terminated they would have had to work 501 hours to get the benefit.

We are looking at whether a 12/31 plan year, standardized plan can currently amend its allocation formula to a CT design.

From the ERISA Outlines:

Page 3.227 paragraph 5 they said one interpretation the IRS had was NO benefit would accrue before a participant had 501 hours (or what ever number is in the plan) on a standardized plan. This was just one Key District office from 1998.

Thank you for any experiences or opintions you can offer. Any additional cites are apprecitated!

When I divorced I was granted 36 months of Cobra through my ex husbands employer, the State of Florida. I was then, and still am, disabled and on Social Security disabillity and therefore receive medicare A and B( under age 65). When I inquired into a conversion policy I was told I was not eligible because of medicare. They claim it is because it would duplicate benefits.

But actually it doesn't since I will no longer have the drug benefits

I desperately need. Shouldn't I be entitled to some policy? The alternatives in Florida leave a lot to be desire.

Thanks for this great resource!

We're cross testing a profit sharing plan and it fails badly. Plan has liberal eligibility and some of those "otherwise excludables" are HCEs, so we want to try separately testing otherwise excludables.

Rate group testing for the non-excludables (I'll call them "statutory participants") seems straight forward enough. Ignore the excludables as if they don't exist. Right?

Is rate group testing needed for the otherwise excludables who are benefitting? I assume so. How are the statutory participants treated? Is the concentration percentage calculated by ignoring them? Are they in the rate groups as non-benefitting, non-excludables?

If all rate groups are not at 70%, and we go to average benefits, are both groups lumped together? I think not; I assume you ignore the excludables when testing the statutory participants, but is the reverse also true, i.e. ignore the statutory eligibles when testing the otherwise excludables?

Lots of questions, I know. I did a search and couldn't find anything that addressed these specifics. The ERISA Outline Book comments seemed vague to me. Help would be appreciated!

Plan failed multiple use test by 0.05%. I've decided it's best to refund ACP money. Failed ACP test by 0.32%. Can I do the refunds so the plan passes multiple use test or must I get it to pass ACP test? Thanks!

Suppose an employer was formerly self insured, then ends that plan and goes out and purchases group health insurance. As a result of the market for group insurance if he wishes to purchase insurance he can only cover 50 of his 67 employees. In order to obtain the insurance he rewrites eligibility by effecting a "mangement carve out" (i.e., he covers 50 salaried employees and excludes from the new,insured plan the 17 non-salaried employees who had been covered under the old self insured plan) Is there a COBRA qualifying event for the 17 who have lost benefits? I think not. Although they did have a loss of coverage, it was not associated with a job loss or reduced hours. Does anyone think this is a COBRA qualifying event?

Client adopted individually designed plan effective 1/1/98 and executed a document that was drafted and executed at that time to include applicable GUST provisions. No DL was requested. Last year, the plan was restated to use "new and improved" (finally after the guidance, etc.) plan document for submission and both plans (the "interim" plan and the final plan, retro to 1/1/98 for GUST provisions, were submitted for DL. Now IRS is asking for amendments to the initial plan document, even though the issues are "corrected" under the newer document. For example, regarding HCE determination and election for "top paid group," the first document didn't state how the plan was operating--the language states that "if employer elects . . .". However, the second document does state that no elections have been made to apply top paid group for any year. I don't think that amendment is necessary to the initial document. Any thoughts?

Is anyone aware of a published Prohibited Transaction Exemption involving a commercial mortgage broker who sells and services loans to a qualified retirement plan or IRA? I am aware of Class Exemption 88-59 involving residential mortgages; my question involves commercial real-estate backed loans.

Is anyone aware of a published Prohibited Transaction Exemption involving a commercial mortgage broker who sells and services loans to a qualified retirement plan or IRA? I am aware of Class Exemption 88-59 involving residential mortgages; my question involves commercial real-estate backed loans.

Does anyone know if there is specific wording the DOL likes to see on Schedule C, when there is a change in plan auditors?

Hello,

We have several clients who have decided to merge their pension plan into their profit sharing plan as a result of EGTRRA. The pension plans has QJSA provisions and the profit sharing plans do not.

Since the QJSA rules apply to the pension money and not the profit sharing money, it is my understanding that the pension money should be accounted for separately from the profit sharing money. If so, how are folks handling the separate accounting in terms of valuation, distributions etc.? Any comments or thoughts would be very appreciated.

Thanks,

Charles

Hopefully someone can help me out here. I own a small company and am planning on installing a high deductible plan with an MSA. Can I use any insurer with a high deductible and set up the MSA with my bank or does it have to be an insurer that designates the plan as an MSA type plan?

Also, if I set up the high deductible can we have a co-pay card for physician visits such as $15 per office visit card?

Thanks for any help.

The ESOP purchased shares of stock from two individuals who were the controling shareholders in exchange for a promissory note from the ESOP itself (making payments to the two shareholders each month). The Company is not financially doing well and wants to discontinue making monthly contributions to the ESOP and thus they would default on the promissory notes. (The only collateral for the promissory notes are the stocks purchased). What will happen if the Company stops contributing to the ESOP (25% discretionary) and thus the notes are in default? I understand that the notes may not be accelerated but are in default only as the monthly payment comes due. What recourse do the two individuals have against the ESOP, company, stock, and employees? What happens to the rest of the employees since no stock will be released (since no loan payment will be made) and thus the employees will not recieve stock in their accounts? What liability does the company, ESOP and fiduciaries have with regard to this transaction. May the employees sue the Company. The promissory notes and the ESOP language is silent as to the remedy. Thanks for any help provided.

Calendar Year 401(k) Plan. Deferrals and Match only. Employer wants to calculate match as follows:

1) quarterly computation period, i.e, based on deferrals by Participant during quarter;

2) The employer will make matching contributions only to participants employed at the end of each plan quarter.

3) Employer will only match elective deferrals not withdrawn during the quarter.

Does this plan design require additional testing beyond the normal annual ACP or Percentage Coverage Test?