I know that under current law that if an employee does not render services to the employer at any time during the five year period ending on the determination date his/her balance is disregarded from the top heavy test. We have a situation where the owner of an s-corp took herself off the payroll five years ago. She still is somewhat involved in daily operations, she just doesn't take a salary. Can we exclude her from the top heavy test?

With the call-up of the reserves, we have a lot of companies asking questions of continuation coverage. I know it has to be provided under USERRA and that it is very similar to COBRA. Couple of questions: Is it OK to use a modified COBRA notice to provide notice? If the employer voluntarily contributes partial or total cost of coverage, are there any discrimination issues I should be aware of?

Recently purchased Relius Adm System and attended training seminar. Encountered several unexpected problems, such as:

1. Apparently the program can not solve for net compensation in the case of a Sole Proprietor or Partnership.

2. Because the above, it seems impossible to run New Comp PSP for such plan sponsors.

Multiple conversations w/technical support confirmed the above.

Can hardly describe our frustration and disappointment. If anyone was able to run plans for SP or Partnerships....pleaseet us know how did you manage it. Thanx...AC

I was laid off by my company and they are withholding HCSA deductions from my lump-sum severance. I read somewhere that once there is a severance of employment, the company can no longer withhold pay. Does anybody know if this is true? I can't convince them, and I thought a cite would help.

As a result of EGTRRA. For death distributions after 2001 will the surving spouse of a 457 plan participant be eligible to roll such distribution to an IRA ?

Any good links, websites, previous posts, books, etc. to find out more information on the proper way to start a TPA. Things to consider, pro's and con's, type of organization, yadda yadda yadda.....

Thanks,

JimJ

PS - daily environment, web & vru capabilities. DC only.

Question: If an employee is called to active military duty and has an outstanding loan in his 401k, what are the ramifications?

Do we just pick up where they left off when they return to work (assuming they do return)? Is there any time frame? (i.e.- in the case of a normal LOA, if they return within the quarter and make a loan payment, the loan will not be defaulted.)

Also, are there any other special considerations re: Benefits for military leave?

We are a TPA in Missouri and have a client who does not have an Actively-at-Work clause in the plan document. Here is our situation:

Employee's date of hire was 5/9/01. The plan has a waiting period of 90 consecutive days, then they are eligible first of the month. Therefore, his effective date would be 9/1/01.

He worked from 5/9/01 to 8/17/01 at which time he was diagnosed with a brain tumor and has not returned to work. The client has already deducted a month's worth of premium from his payroll check.

Regarding the new HIPPA nondiscrimination regs which were effective 7/1/01 - I have a couple of questions:

1. Do they have to let him on the plan effective 9/1/01, and if so what would be his termination date as he is not going to be returning to work?

2. With the client not having an actively-at-work clause in their plan document, how do the new regs affect this situtation?

Thank you for your responses.

does holding a promissory note for a benefit plan qualify as having custody within the meaning of kennedy and the SEC

Barry,

I know you live in New York.

I hope you and yours were not affected by the attack.

My best wiskes to you and all those who were affected.

Shelton

If IRA holder is already taking RMD and dies this year without taking this year's RMD, then the RMD must be reported under the tax ID number of the beneficiary.

My question is, since the beneficiary can be determined by 12/31 next year and the RMD has to be taken by 12/31 this year, how do we know who to distribute the assets to, since the beneficiary can change next year?

The elective deferrals described in s. 402(g)have a per-person per-year limit, not a per-plan limit. Thus in 2002, an employee can contribute up to $11,000 to all of the following plans combined: 403(B), 401(k), SEP, and SIMPLE IRA. The same limit applies whether the employee has one or more than one employer. Deferrals to a 457 plan are not included in this definition, so an additional $11,000 could be contributed to that plan.

The over-age-50 catch-up in s. 414(v) is described as an "additional elective deferral." The definition of "elective deferral" provided--in s. 414(u)(2)©--includes 457 plans as well as the others listed above. Is the catch-up limit per-person per-year, or per-plan?

In other words:

1. Employees at my public, state-sponsored university can make voluntary contributions to both a university 403(B) and a state-sponsored 457 plan. Can a participant over age 50 make the full catch-up contribution to each plan, or is she limited to just one catch-up contribution, $1,000 in 2002, to both plans combined?

2. The over-age-50 catch-up is not available in the 457 plan when the employee is using the more generous provisions of s. 457(B)(3). Would it be available in the 403(B) plan during that year?

Client is considering merging their money purchase pension plan (MPPP) into their profit sharing (PS) plan as of September 30, 2001 (last day of both plan years). As the surviving PS will be updated for GUST before the remedial amendment period (on a prototype, so by 12/31/02), I am assumming that the MPPP does not require GUST restatement prior to the merger.

Any agreement or disagreement?

Does everyone read Announcement 2001-77, the way I do, namely, that through December 31, 2001, a determination request for a collectively-bargained plan cannot be submitted on Form 5303, but may be submitted on either the old or new Form 5300?

I'm very confused - I've been trying to find out how to start a qualified pre-tax parking benefit program for employees parking at or near the office. Can you help?

EGTRRA amended section 404(a)(3) to increase the amount of deductible contributions to a profit sharing plan from 15% of compensation to 25%. This change elimates the need for both a profit sharing and money purchase pension plan. Does anyone have any thoughts on whether it would be better to merge the two plans or to terminate the money purchase plan and allow participants to make rollovers into the profit sharing plan? My specific concerns are as follows:

I believe merger would subject the profit sharing plan to the qualified joint and survivor annuity requirements. However, I believe a merger would probably be more cost effective than a termination, especially if a favorable determination letter is sought.

Finally, if the profit sharing plan does not permit rollovers, could it be amended to permit rollovers only from the specific terminated money purchase plan?

Any thoughts are appreciated.

We are recordkeeper on a large quarterly-valuated 401(k) Plan that has approx 1000 employment termination distributions per quarter. The terminated participant sends their withdrawal form to us, then we instruct the trustee who to pay, and how much.

Our withdrawal form says that, if the participant is doing a rollover, the rollover must be to another qualified plan or an IRA. We are curious about our duty to make sure the rollover institution is either a qualified plan or an IRA. It is obvious when the rollover institution is, for example, Charles Schwab, or Joe Blow 401(k) Plan, but what about when it is something not obvious like "Golden American" or "Lutheran Brotherhood"? (These are two real-life examples from this quarter.) Do we have a duty to contact the participant or try to investigate this ourselves somehow to make sure these are qualified plans or IRAs?

401(k) plan fails ADP/ACP testing in 1998 (no remdial action taken at that time), and is top-heavy for 2000 plan year (barely). Is it possible that the corrective measures taken now to remedy the first defect can throw the plan out of top-heavy for 2000?

Any help is appreciated.

I have a 401k plan which has contributions (deferrals & match) of 22 % of adjusted comp for the 1999 and 2000 Plan years. Major Insurance Co has been handling the Administration. Here is question, an employee was terminated & paid in Feb 2001 with money he is not entitled to, How can this be corrected? If no one was paid I could correct 1999 & file 5330, correct 2000 & file 5330, correct 2001 & file 5330. Any insight would be appreciated.

my hospital is implementing a PTO plan to replace the current one. Until now, minor sick leave has been accrued per pay period in the extended sick leave bank. On the employee's anniversary they could roll over the minor sick leave accumulated. In instituting the PTO program, all minor sick leave in each employees extended sick leave is not going to be rolled over into the PTO bank but will stay in the extended leave bank, converting it to extended sick leave. Access to extended sick leave is being changed from 3 days out to 5 days. We do not have a contract or any group representation. So some employees - those with anniversary dates just after implementation - are being told they will lose almost all minor sick leave accumulated for almost a whole year into extended sick leave. Extended sick leave not used by the employee at end of employment will revert to the employer. Is this legal?