We were looking for operational guidance for EGTRRA regarding the increase from 15% to 25% for maximum annual comined contribution ~ anybody seen it yet?

Thanks!

Under the new regs, are there any restrictions on the rollover of funds from an employer's simple 401(k) plan to the same employer's new 401(k) plan effective 1/1/2002. A CPA is indicating it must be first rolled into an IRA then rolled into the 401K. Is this true?

Can anyone tell me if they have seen a model notice or an example of an adverse benefit determination letter that includes all of the new language and requirements. I'd prefer to make changes to sample document rather than start from scratch.

I have a Section 125 Plan with over 100 participants that includes both pre-tax premium reimbursement and health FSA. A Form 5500 has never been filed for this plan. (Note: A Form 5500 has been filed for the welfare plan, which is required by the DOL)

Clearly, I have to file the late Forms 5500 under IRC 6039D. My question is "Am I also required to file the Form 5500 by the DOL?"

I have always been under the impression that a Section 125 plan is NOT required to file by the DOL; however, someone recently told me that a Section 125 plan MAY BE required to file by the DOL.

This becomes an issue because I need to know if DFVC is an option. Obviously, if the filing is not required by the DOL, then we won't file under DFVC.

Thanks!

Just to let those who took the Fall 2001 c-4, ASPA has the candidates who passed the exam in their "What's New" section. You just need to know your candidate number.

Takeover cross tested profit sharing plan under IRS audit.

Discovered in 2002 that a person was left out of the profit sharing contribution incorrectly for 1999.

Plan is not a safe harbor; general test not done (being done now).

Company will contribute amount that employee should have received. Should the omitted contribution be included in the general test for 1999?

I'm inclined to say no, unless IRS sanctions such treatment as part of audit closing agreement, because it's too late to be considered an annual addition for that year, and too late to be considered a 401(a)(4)(11)(g) corrective amendment.

But, what if not under audit? Need to go through VCO?

Other opinions?

Generally, when do non-required contributions have to be made to be included in general test?

IF A PARTICIPANT IS ELIGIBLE ON 1/1 BUT TERMINATES BEFORE 12/31(WHETHER 1000 HOURS OR NOT), CAN YOU USE THAT PARTICIPANT'S COMPENSATION TO COMPUTE THE 25% LIMIT EVEN THOUGH THAT PARTICIPANT WILL NOT GET AN ALLOCATION?

THANK YOU!!

The revised Special Tax Notice was added this morning to the IRS "drop" directory. There are three changes in the notice for qualified plans and one change in the notice for 457 plans.

Senator Kennedy has suggested mandatory health coverage for employees at companies with more than 100 employees. Is this a workable approach to decreasing the number of uninsureds in the U.S.?

Number of uninsured is likely to be on the increase with the many recent layoffs. I personally feel the large number of uninsured is a disgrace and needs to be addressed. Any other ideas on how to reduce the number of uninsured?

When is a Money Purchase Plan required to attach Schedule B to its Form 5500 Annual Report?

When calculating the 3% match for a SIMPLE plan do you include deferrals under a 125 plan as part of compensation?

The definition of compensation in the code says Wages as defined in Code Sec. 6051(a)(3) and §6051(a)(8).

6051(a)(3) references the definition of wages for income tax reporting purposes under Code Sec. 3401(a). I scanned this code section and I don't think it includes cafeteria deferrals. This would make sense because there is no income tax withheld on pay deferred under a cafeteria plan.

6051(a)(8) references elective deferrals under §402(g)(3) and §457. §402(g)(3) covers 401(k) deferrals, SAR-SEP deferrals, 403(B) deferrals and SIMPLE deferrals. 402(g)(3) doesn't include cafeteria deferrals. Once again, this makes sense since the purpose of 402(g) is to impose a limit on compensation deferred under various retirement plan vehicles and this limit doesn't apply to cafeteria plans.

Based on this I think the match shoudl be calculated on gross minus cafeteria plan amounts. Most of the time I see it calculated on gross including the cafeteria amounts. Does my reasoning look correct. Thanks for any insights you can provide.

Is there anything wrong with the following transaction?

Trustee and participant in a small non-participant directed plan wants to make a loan to his brother (not a participant). The loan amounts to 70% of the total assets in the plan. Is this a prohibited transaction?

My thought it is not because the brother is not a party in interest as defined by the statutute. However, my thought is that it violates some the prudent investment standard, even if the loan is made at a reasonable interest rate and with other acceptable terms.

SECOND REQUEST -

are there any comparable provisions under ERISA and the SEC that deal with PARTY IN INTEREST rules????

Has anyone heard any good HIPAA stories or seen any good political HIPAA cartoons...especially Administration Simplification? I've been asked to dress up a HIPAA presentation with some humor. Frankly, I don't see anything humorous about this, but then again, maybe I'm just too cynical.

Can I transfer my variable annuity funds to

my Roth IRA funds without penalty?

If yes, what form(s) to use?

If not, then what penalty will I incur if I just

withdraw my annuity funds and put them in my

Roth IRA?

Thank you.

Not all state laws automatically conform to changes made in federal law. With this in mind, I'd like feedback about how practitioners are handling the limits in those states which need to adopt conforming laws. Are you going on the assumption that the states will conform? Are you being cautious and not permitting participants to take advantage of the increased federal limits until the state actually adopts conforming laws? Are you still calculating limits using the 3 tiers even though EGTRRA eliminated the MEA portion?

Is there some rule of thumb used on sending compliance testing reports to clients? Which reports are recommended? Which would you not send? Thanks!

My firm is sponsoring a new prototypedocument that has been updated for GUST. Our old prototype document was under a different company (Sponsor) name. Our company name has since changed. Since we are obviously no longer supporting that document, does anyone know if we have to notify the IRS as far as informing them that the old document is no longer supported/used by us? Otherwise, wouldn't it look like we are still maintaing a document that is not updated for GUST.

Any thoughts are appreciated.

Can anyone tell me if they know if the MEA calculation is repealed for the states (specifically California) that do not yet conform to EGTRRA - I would think that it would still apply (as horrible a thought that is). In addition, I think the lack of conformity also stops you from contributing to both a 457 & 403(B) - any words of wisdom on this?

Scott

An employee has medical coverage under his employer's fully-insured group medical insurance plan (Blue Cross).

I realize that the plan is an ERISA plan, because it covers employees.

Here's my Question:

If Blue Cross informs the employee that it will not pay his entire medical claim for "any" of the following reasons ..... then can the employee sue Blue Cross (for payment of the actual medical charges) in state court -or- "must" he only sue under ERISA in federal court ?

1. Not medically necessary.

2. The medical fees are excessive and far above the usual fees charged by other medical providers.

3. The medical services are for a pre-existing condition, not covered by the employer's policy.

Note: The employee only wants to sue Blue Cross for actual medical charges (not any punitive damages, nor pain & suffering).