Is a change in plan year a "material modification"...?

Controlled Groups Relating to COBRA Example: Company A employs under 20 people offers medical insurance as a benefit Company B employs over 50 people but doesn't offer medical insurance as a benefit Comptroller of both companies which is paid under Company A is terminated and is also member of the employer sponsored medical benefit package. Does this establish a Controlled Group under IRS Reg Number 54.4980B-2 and if so then COBRA would have to be offerd to the Comptroller? *Both companies share common ownership *Company A - Sole Proprietorship *Company B - Limited Liability Company Please email your response to barronvonteak@yahoo.com ASAP! Thanks for your help!!!

If a participant chooses to receive disability benefits on an after-tax basis, can pre-tax deductions such as health care premiums be withheld from the disability payment? Or can pre-tax deductions only be taken from pre-tax disability payments?

I'm wondering how I can invest in non-public companies with my ROTH. I am part of a consulting company (LLC) and would like to know if it would be possible for me to invest via my ROTH?

What action can an employer take to be reimbursed from a terminated employee who has been reimbursed from their FSA for amounts that exceed what has been collected? For example: An employee elects a $1200 yearly allocation and has tax-deferred contributions of $100 per month. Six months after enrolling they've contributed $600 but have been reimbursed for $1200. They quit. Can the employer legally attempt to collect the non-contibuted $600?

Under EGGTRA, safe harbor Plans will not be subject to top-heavy testing if the contributions are limited to deferrals, safe harbor contributions, and matching contributions that satisfy the ACP safe harbor. Does this mean that they can have a discretionary matching contribution, subject to vesting, on top of the SHMAC? I believe you satisfy the ACP safe harbor if the discretionary match is in amounts not exceeding 4% of salary and if no match is made on deferrals that exceed 6% of salary. What exactly can a safe harbor Plan contribute and still not be subject to top-heavy testing? What if there is a discretionary profit-sharing or after-tax provision that is never used?

I seem to recall hearing at a recent ASPA/IRS conference that various proposals were pending to develop a defined benefit plan with a salary deferral feature. Is this true?

Participant completed TEFRA 242 Election - is over 701/2 and a 5%

owner. Started distributions in 2000 - plan allows participant age

65 or older to withdraw fully vested account balance and this person is 100% vested. Plan was a Target Benefit plan - TB plan

frozen & 401(k) added although this participant only has TB balance. TPA not aware of distributions until after the fact. Appears participant never completed any paper work when he 1st requested payments of a monthly amount. Now questions have begun? Did the withdrawal of a periodic amount effectively

rescind the 242 election? Should these payments have been considered RMD amounts? One interpretation has been that since plan allows for withdrawals (subject to QJSA) these payments should be considered "by request" of participant. 242

election is not revoked as participant is still actively employed by sponsoring employer and can delay RMD's until actual retirement. I am just curious about what others may opine regarding this

scenerio. Thanks in advance.

Can you distribute earnings for an in-service withdrawal of after-tax voluntary contributions? How do you report a distribution of after-tax voluntary employee contribtutions on Form 1099-R? For instance, total after-tax account value is 10K, of which contributions are 8k and earnings are 2k. Can you only take the 8k in contributions as an in-service withdrawal of the after tax cont's? Because the part is under age 59 1/2, do you use code 1.

unfortunately, not a 401k issue but don't know where i would otherwise post this:

March 19th, 2002 the client calls and says he sold all assets of the biz to another unrelated company (12/21/01). Now he wants to make a pension contribution. All employees either terminated or went to work for new co. on that date. (Begs the question as to where the money would come from now that company has no assets.)

MP & PS both contained a last day rule. Can last day rule be amended out now? Was 3/15/02 the deadline for the MP Plan with effect on min funding standards? Could PS be amended now (till 9/15) or is that only for disqualifying defects, which this is not....

any thoughts would be appreciated. thanks

Let's say we have a start-up 2001 calendar year Plan. Assume we have an officer that is earning around $90,000. I believe he would be a key employee for determining if they are top-heavy for the start-up year 2001. Wouldn't he then be a former key employee in determining if the Plan is top-heavy for 2002 under EGGTRA? The strange part is that we are looking at the same determination date, 12/31/01, and the same 2001 census data in determining his key employee status for both Plan year's top-heavy tests.

A partner withdrew more money in 2000 than was eventually allocated to him as income for 2000. His 2000 K-1 shows a negative capital account of $7000. He quit in December 2000.

For 2001, the CPA prepared him a K-1, showing earned income equal to the $7000 negative capital account. He did not work at all in 2001. The doc says that a terminated participant gets a contribution if they work even 1 hour. He worked "0" in 2001. Will they have to make a contribution for him, if this $7000 shows on the earned income line of his K-1. Is this like the severance issue????? Thanks

The highly compensated in this plan only puts in after tax money, I've been told that no adp/acp testing has to be done. Is that right? Based on the ACP test the highly compensated have refunds coming.

3 Safe harbor questions -

1. Notice 2000-3 allows a plan using the safe harbor matching contribution to reduce or eliminate the matching contributions provided the proper notification is met and then test under ADP/ACP.

What if a plan is using an enhanced s-h match but wants to reduce it to the basic s-h match? Seems like if they can do the above, they could do this, provided proper notification is given?

2. S-H match can be made annually or on a payroll basis. Using a payroll basis can avoid the true-up situations as long as that basis is at least quarterly and the match made by the end of the following quarter.

What about a plan that makes the s-h match semi-annually? Is this O.K but they need to take into consideration true-ups at the end of the year?

3. Anyone seen any additional guidance re- corporate or plan mergers and s-h? For example an employer has a MPP and 401(k) and they use the MPP to satisfy s-h but want to merge the 2 plans mid-plan year and have the 401(k) provide the s-h contribution. Doesn't seem like participants would be harmed but the s-h Notice that was given for the plan year wouldn't be correct and would this invalidate s-h?

I have an ADP test failure, which the employer wants to correct using a QNEC. According to the document, "the Employer may contribute into the Plan, on behalf of each Non-Highly Compensated Participant, who elects to defer a portion of his Compensation into the Plan for the Plan Year, as provided in Section 3.02 of the Plan, a discretionary Qualified Non-Elective Contribution equal to a uniform percentage of each such eligible inidividual's Compensation, the exact percentage of which, if any, shall be determined by the Employer." In this particular plan year, 7 participants can be placed in the separate "non-statutory" test, which passes (of course since no HCE's). Three of these participants have deferrals. Do I have to allocate the same percentage QNEC to these participants? Of course it is not helping my test by doing so, but adding the 7 participants and doing one complete ADP test makes it fail worse. Help!

How does one find out what a payer's state no. (line 11 of form 1099-R) is? The 1099-R instructions say, "The state number is the payer's identification number assigned by the individual state." What is the process by which an individual state assigns the number? Does the payer apply for a number (similar to applying for a federal EIN)?

One of my clients called me with this question. He has an employee who has been divorced for 10+ years. The trustee has never seen DRO papers and isn't aware that there are any. The employee has decided to quit, cash out and wants to leave the state. The employer thinks that the employee's ex-spouse is going to try to get more money from the employee & so he wants to leave the state before she can. If the trustee has never seen a DRO, does he have any legal reason not to let the employee cash out his account balance?

Are there any not for profit health insurance companies in Texas?

Blue Cross Bs is a mutual company not a non profit if I understand correctly?

For vesting, my Profit Sharing program requires 5 yrs of employment with the company.

I recently heard there is automatic vesting in Profit Sharing programs if the employee is 55 yrs of age or over, regardless of years of employment. Is that correct?

Thank you!

Please provide some feedback on this topic.

I reviewed the previous post on billable hours and I too am in an environment that has billable and non-billable hours.

My previous experience from other TPA shops involved a fee schedule and a stack of work to complete by applicable deadlines.

I am really struggling with the concept of a fee schedule, a stack of work, deadlines, and a billable hours goal.

I am curious to know how many others are out there with hours goals. Are there a standard number of hours per plan? How many billable hours should a person have? I really need some help on this issue! Thanks!