What responsibility does an employer have to educate defined contribution (401(k) and ESOP particularly) participants as to diversification when the employer match is company stock? Is there a different answer if there are no restrictions on selling the company stock, even for matching contributions?

Class action suits may answer these questions.

Our company health care plan states that "employees who reach age 60, with 30 years service, are eligible for continued coverage at the same premium, until age 65 (when they are eligible for Medicare)"

We now have an employee who is retiring and his spouse is age 69 and already on Medicare. Under present law, she has been covered primary by our Plan and secondary by Medicare. As our employee will now be "not active", I have taken the position that his spouse will now be offered COBRA and at the most be entitled to secondary coverage under our Plan. The spouse has countered that if she is secondary on our Plan she should be eligible for Dental and Prescription Drugs, just like an active employee, even though she will be filing her regular medical claims through Medicare as her primary payer. I am drafting a letter to tell her she is not covered for Dental and R/X.

Am I OK here or should I reconsider?

Terry O

I just want to be sure I understand this correctly. Will someone please confirm.

If 12/31/01 is the determination date for the plan year beginning 1/1/02 I use $130,000 officer comp, 1 year look back and ignore ten largest owners for test.

If 12/31/01 is the determination date for the plan's first plan year, I use $70,000 officer comp, 5 year look back and include ten largest owners.

When originally offering COBRA continuation to a qualified beneficiary (QB), is an employer required to give the QB the option of changing health plan options? For example, should we give rates as well as the option to enroll in any of the three health plans we offer or can we just give them the rates and information for the plan that they are enrolled in as of their termination date?

Do Statutory Employees have to be included in a 401(k) plan?

For former resident aliens of U.S.- 401K distributions sourced to U.S. job received when individual is resident of Great Britain (country of residence)- is that taxable at time of receipt (after U.S. residency ended). Are there any exclusions?

Hello All! Just a qucik survey type question. What are the ranges you are planning to charge to restate documents for GUST. And will it also include the EGTRRA amendments.

We are sponsoring our own prototype for the first time and would like to see if there is a "normal" range for this process. Any answers are greatly appreciated.

A calendar year 401(k) plan has its December, 2001 401(k) contributions deposited in January, 2002. Must these contributions be tested in the 2001 ADP test, or can they be tested in the 2002 ADP test?

I've always assumed that they get tested in the 2001 test, but what about so many daily and bundled providers that do plan admin. on a cash basis? If you are recordkeeping on a cash basis, does it make sense to test on a cash basis as well? I doubt it, but I was hoping someone could confirm.

Thanks

After being terminated from a privately held company with an ESOP plan, was told because of the termination the plan manadated distribution within sixty days of the end of the plan year. Plan year ended November 30, 2001 therefore by January 31, 2002 I had to notify them with how the funds were to be distibuted. They now tell me that I'll have to wait another sixty days until after an auditor calculates a new share price. In my opinion the reason for the wait is because the share price is likely to go down. Can they legally wait when the plan MANDATES distirbution?

If an employer already sponsors a 125 Plan (calendar year) that currently offers Dependent Care FSA, and employees have already enrolled for the current plan year, can the employer amend the plan during the current year to allow for Health Care FSA with out effecting the election of the Dependent Care FSA?

Thanks,

Joe

I made contributions totaling $2250 in 2001 towards a ROTH IRA. I didn't realize that I contributed too much until I recently reviewed my checkbook.

I believe I have to take a disbursement and pay some penalty and then report this on my 2001 tax return. If I don't fix it now I will have big problems in the future.

Can anyone tell me what I actually need to do?

Thanks in advance for your assistance.

J.

I have a client that is employed by a state university and has access to both a 403b and 457 plan. I know 403b and 401k annual deferral limits of $11,000 are coordinated for 2002 but am unclear on whether or not he can defer into a 457 plan over and above what he is putting into the 403b plan. In addition this person is eligible for the enhanced 457 catch up available to those within 3 years of retirement. Can he do the 403b PLUS the 457 plan and not be held to one $11,000 limit?

I have a client that is employed by a state university and has access to both a 403b and 457 plan. I know 403b and 401k annual deferral limits of $11,000 are coordinated for 2002 but am unclear on whether or not he can defer into a 457 plan over and above what he is putting into the 403b plan. In addition this person is eligible for the enhanced 457 catch up available to those within 3 years of retirement. Can he do the 403b PLUS the 457 plan and not be held to one $11,000 limit?

A Flexible Spending Account plan client has asked me to administer their self insured vision plan for 1100 ee's and 3000 dependents.

What legal issues should I be concerned about, that are not present in my 125 administration practice.

And does anyone know of an affordable software program that will handle the administration. It would need to be able to track individual limits as well as family limits, something not required of my 125 administration software.

I would really appreciate any thoughts you may have.

In other words, can a professional service corporation with 5 doctor shareholder/employees and no other employees set up a cafeteria plan? Wouldn't appear to be any discrimination because there are no non-highly's employed by the corp. Am I missing something or is it time to call it a night?

I'm preparing to audit a plan that was merged into another plan at the end of the year. (The employer was purchased by the other employer). Does anyone have any suggestions on what items specifically I should ask for from the client in auditing the merger? (Corporate/plan minutes, etc.)

I have just joined a company that has used a self-funded health plan, with $15,000 individual and a higher aggregate stop loss limit, for several years. The fixed monthly premium to the administrator, who is the stop loss insurer, have risen dramatically in the last few years, to the point where I think any savings they might have over a regular health plan no longer exist. It is a small company, with less than 75 employees.

What really makes me uncomfortable about continuing with this type of plan is that the HR mgr takes the monthly reports and keeps a log of the dollars paid out for each employee and family member. If they were just monitoring how many people were approaching stop loss or something like that, it would not bother me too much. But, if an individual suddenly spikes up to $2,000 paid claims a month, the mgr and CEO use whatever subterfuge they can to find out what the claims are for. They claim honorable intentions, and I have no reason to not believe them, but it makes me very uncomfortable. To my knowledge, no one has ever been fired for health reasons, but the appearance alone bothers me. Am I worrying needlessly?

I am new to this; I net $2500 per year in self-employment (reported under Schedule C) and my husband earns less than $100,000 per year. Can we each buy a Roth IRA or are we limited to one? Also, do we have until April 15 to purchase one for taxable year 2001? Thank you.

an old question, but given EGTRRA, any new thoughts?

client discontinues participation in a 403(B) plan ( were 2 employers in the plan). can employees who are still employed transfer balances to an IRA? i understand that there is no defined procedure for terminating a 403(B), but what are plans doing in practice?

Under the new proposed regs, who has the onus for sending a 70.5 distribution notice to a terminated participant from a non-Title I 403(B) arrangement.

It would appear that under the new regs, the plan sponsor is off the hook at termination of employment and that the custodian of a rollover IRA has such responsiblities.

However, assume for this argument that the new notice was provided at termination by the plan sponsor, but the participant leaves the 403(B) account intact and does not roll it into an IRA.

Does the account custodian have to onus to remind the terminated participant of his/her obligation to distribute from the 403(B) account at 70.5?

OR

Does the onus fall on the plan sponsor, since the account is still a "plan asset" as it never was removed and is technically, still part of the plan?