In the case of an employee losing benefit eligibility mid plan year and then regaining eligibility later in the plan year, can we offer the employee the ability to make completely new elections at the time when they re-gain benefit eligibility - in particular for health and/or dependent care flexible spending/reimbursement accounts. This scenario assumes the employee choosing to continue participation under COBRA while ineligible (or does COBRA participation affect possible re-election?)

Thanks ...

Do 403(B) plans need a formal plan advisory committee and investment policy statement. What is the risk for not having a special plan committee or investment policy statement when we have chosen a bundled custodial fund service provider?

Who should be a member of a committee - is it acceptable for all 403(B) plan decisions to be made soley by a sub-committee from the Board of Directors - in the absence of a formal investment policy?

A DB Plan has a tricky benefits overpayment problem:

A Participant died and the Plan made pension payments to his surviving spouse for many months. However, the company recently discovered the payments were in error because the Participant had elected a Single Life Annuity to which the spouse had consented.

Here's the twist: The spouse who received the overpayment is also a former company employee and is receiving a pension. However, the spouse is a participant in a different pension plan than her husband.

Issue: Can we offset the overpayment amount from the Participant's plan against the amount the spouse is receiving from the other plan??? (I know it would be permissible if they were in the same plan, but is it permissible when there are two different plans at issue?)

What are the rules regarding COBRA if the employer shuts the company down? Will employees currently on COBRA and employees laid off have continuation of coverage or does it go away?

The employer has decided to amend the plan to eliminate the match. What are the options for the forfeiture account? More specifically, can the plan use the forfeiture account to offset the employee contibutions? Is that the same as the money reverting back to the company? Is that legal?

Does anyone know of a good interned source with samples of service agreements or advice on how to prepare one?

Thanks.

I understand the issue where age 50+ participants that are contributing at the maximum deferral % allowed under the plan are allowed to make catch-up contributions over this amount. Say you have a situation where the plan administrator is holding HCEs to a 4% cap due to testing problems as allowed under the plan (but this specific limit is not stated). It seems that these HCEs will not be able to make catch-up contributions since they are not at the prescribed limits. Other opinions? Thanks

I know that you cannot use pre-tax dollars in a cafeteria plan to purchase other insurance that is offerred by a spouses employer. However, can you use pre-tax dollars to purchase an individual insurance policy.

I have a client whose plan has had a severe top heavy problem for a number of years. The client would like to correct, but the cost will be prohibitive - it might force the client out of business. Is there a way to work something out with the IRS? The client wants to correct this, but it can't do it immediately.

i HAVE A LARGE ROTH IRA WHICH IS BROADLY INVESTED IN COMMON STOCKS, PREFERREDS AND BONDS. THE ACCOUNT IS HELD AT A SMALL DISCOUNT BROKERAGE FIRM WITH WHICH I HAVE A LONG TERM RELATIONSHIP.

I HAVE BEEN A PROFESSIONAL STOCK TRADER FOR VARIOUS BROKERAGE FIRMS FOR OVER 30 YEARS. AT THIS POINT, I AM THINKING ABOUT STARTING MY OWN MARKET-MAKING OPERATION WITH THE HELP OF MY TWO PARTNERS. EACH OF US WILL PUT UP $500,000.00 FOR A TOTAL OF $1,500,000.OO. I'M NOT WORRIED ABOUT INVESTING $500,000 OF MY OWN MONEY. WE DEAL IN VERY PROPRIETARY PRODUCTS AND ALMOST ALWAYS MAKE MONEY ON A MONTHLY BASIS.

MY QUESTION IS THIS, CAN I TAKE SAY $250,000 FROM MY ROTH AND ANOTHER $250000 FROM MY BANK TO MAKE MY CONTRIBUTION OF CAPITAL. CAN A ROTH IRA MAKE A NON-TRADITIONAL INVESTMENT SUCH AS THIS ONE? hOW DO I CONFIRM THAT THIS WOULD NOT VIOLATE THE SPIRIT OR THE RULES OF ROTH IRAS???

THANK YOU FOR YOUR VIEWS AND INFORMATION

Several interesting articles in the media today, re the Massachusetts Secretary of State's interest in prohibiting employers from locking employees into company stock in a 401(k) plan ...

http://www.boston.com/dailyglobe2/339/busi...k_policy+.shtml

http://news1.iwon.com/article/id/191722|po...28|reuters.html

Does anybody think such a law would have more than a snowball (in hell)'s chance of avoiding ERISA preemption?

I work for a small non-profit 501© 3 organiztion that has a 403(B) plan. I have talked to several people in small non-profit organizations that have SEP plans. Is this something that is possible for us or even recommended? Since contributions are not availble through payroll deductions in a SEP plan, what are the options for a payroll reduction plan as well as an employer contribution.

I hope someone can answer this for me.

What is the law regarding the calculation of the present value of an accrued benefit that is limited by 415(B)?

What interest rate do you use, and what mortality table?

I've read several messages regarding the amendment of 403(B)/457(B) plans to comply with EGTRRA/GUST and such plans' application of the new proposed 401(a)(9) regs. Just for the sake of year-end "feel good" closure (and additional comfort as to several governmental 403(B)/457(B) plans that have just landed on my desk with insufficient time for boards to adopt amendments before 2002), I'd appreciate any comments/observations on the following:

1. Although there is no remedial amendment period for EGTRRA/GUST changes, will my late clients still be okay if their boards adopt GUST/EGTRRA provisions during 2002? I see that Tom Geer, on 10/8/01 raised the issue of IRS arguing that a plan has not been administered in accordance with its terms if EGTRRA/GUST provisions are not added by amendment before they are applied. Do any other issues come to mind?

2. I've seen conflicting commentary on whether non-qualified plans (403(B)'s, 457(B)'s, etc.) must affirmatively adopt (before 2002) the IRS model amendment for the new proposed 401(a)(9) regs when those regs have been applied for 2001. Tom Geer's observation (see above) seems relevant. Are there any other problems with waiting until 2002 to amend to specify that the new proposed regs were applied during 2001 (and/or will be applied for 2002 and later years)?

Thanks.

I can't find this answer. We want to put in a brand new Safe Harbor 401(k) Plan (no prior plans) with non-elective contributions for a calendar year plan. It's past December 1, 2001. Will the notice requirement scotch the deal?

An employer changed their plan's eligibility from 1 year to 6 months. She is now faced with having to allow part time employees who are not eligible for any other benefits enter the plan. Is there a way around this? Can she change her eligibility back to 1 year for all employees hired after 1/1/02 without violating any protected rights?

IRC 530 (B)(1)(A)(ii), states

(A) No contribution will be accepted -

(ii) after the date on which such beneficiary attains age 18.

This seems to suggest that contributions should not be accepted AFTER the day on which the individual attains the age of 18.

IRS Form 5305-EA as well and IRA publication 570 states that “You may be able to contribute up to $500 cash each year to an education IRA for a child UNDER age 18.”

This seems to say the contribution must be made BEFORE the 18th birthday.

Would you agree there is a conflict?

I know it is just one day’s difference, but…

A new not for profit org. was established in july 2001. it was created from combining 2 other organizations which had 403b plans. The new not for profit is setting up a 401k planasap. It has been found that payroll from the new company has been continuing to pay 403 deferrals into the accounts of employees who were former employees of one of the old groups that are now in the payroll in the new company. (in summation, they mixed oil & water)... Can these deferrals be returned/refunded as a mistake of fact and run through payroll correctly for 2001 in the new not for profit? any comments/help is appreciated. fortunately our company is only working on the new plan, not the termination/dissolution of the old plans.

Has the IRS issued the year 2002 compensation limit (401(a)(17)) for pre-96 grandfathered participants? Thanks is advance for any responses.

Under the 410(B) transition rules, if a new member of a controlled group joins the controlled group Jan 1, 2002 and the plan is a calendar year plan, is there effectively a 2 year transition period? Can you take the position that the first day of the plan year after the company joined the controlled group is January 1, 2003? Or does that read the rule too agressively?