:confused: I have seen in the 401(k) Answer Book that the safe harbor 3% nonelective contribution may be used for a cross-tested plan, but it may not be used for the first tier when a plan uses permitted disparity. (It does not list a cite.) I am wondering why it can't be used with an integrated plan. Any input is appreciated.

XYZ Company has, for decades, had employees pay only toward family plans. (Employee-only premiums were paid in full by XYZ Co.)

In the interest of saving money, XYZ is now demanding that employee-only participants begin paying a portion of their premium.

Catch: There will be no change for those employees in the family plans.

Example:

Fred, who is married, pays for his wife/kids insurance, but gets his own coverage free. (As it has always been...)

I'm not married and have no children, so, unlike Fred, I have to pay for my coverage.

Is this discrimination against single employees?

Employer has two plans: 401k with one year wait for salary deferral and 4% safe harbor match. Post EGTRRA, no discretionary match and no discretionary profit sharing in the 401(k) Plan. The second plan is a Money Purchase Pension Plan with a two year wait for entry and a 7% formula. EGTRRA now exempts from top heavy a safe harbor 401(k) using the safe harbor match. The MPPP provides the TH minimum (by election) in the MPPP. So post EGTRRA, would you agree that there is no TH contribution required in the 401(k) Plan for a nondeferring participant not yet eligible for the MPPP, but eligible for the 401(k) plan, even though under old rules the combined plans test topheavy?

Since the IRS requires the 401(k) Safe Harbor Notice to contain a description of certain plan provisions, do you think it would be satisfactory to indicate in the Notice that it is deemed to be part of the SPD and attach the SPD to the Notice or advise the participants to refer to the SPD for the Plan's details?

Rather than re-creating the wheel, would someone be willing or able to share a "boilerplate" request for proposal that we could use in a search for a vendor to provide 403(B) and 401(a) plan communications and educational services that would meet the requirements of 404c?

Please reply to kerryb@waushosp.org.

Thanks much!

An employee is hired 8/18/98 and terminated employment on 6/27/01. He was 25% vested upon his termination and took a distribution of his vested balance at the time of his termination. He was rehired on 11/9/01. On 11/16/01 the employer sent in the year end match - a portion of which went to him. Is the match paid out to him at 25% and he forfeits the rest or does it stay in his account and continue to vest? :confused:

I am looking for the 2002 compensation limit for grandfathered governmental plan participants. Earlier this year, a consultant indicated it would be $290,000...is this correct??

Two issues.

1. Plan provides enhanced early out. Enhancement includes an additional 5 yrs for pension accrual and for early ret factor. Plan then pays lump sum based on immediate benefit.

Would one expect the lump sum to be computed based on current age (i.e. actual age) or age plus five years. Plan is not specific on this matter.

2. The lump sum interest rate used is the applicable interest rate as described in 417(e) for the month of December preceding the first day of the Plan year (cal yr) in which the distribution occurs ...

Would one interpret this to mean the 30 year rate for December or the 30 rate published in December, which is thus the November rate? Or something else? The Plan is no more specific than this.

anyone know if qualified plan assets or even deferred compensation is eligible to be deposited into a QDOT?

We normally send out a benefits summary letter to the beneficiary of a deceased employee informing them of what benefits are due (ie, life insurance, 401(k), ESPP, etc...) A letter was sent out to the spouse of the deceased employee with an incorrect basic life insurance amount. The employee was 80+ years old, and according to our SPD, there is a reduction in life insurance benefits. However, the amount in the letter stated the full amount ($22,000). Now we are getting a letter from an attorney stating to send the balance that was promised in the letter. Are we held liable for a typographical error and do we have to pay?

Any thoughts on whether it makes sense to continue doing the MEA calc, or at least gather the data on annual basis, until we know for sure that the MEA repeal does go away permanently?

Any experience discussing this with the plan sponsors?

I have seen this question posted quite frequently on this Website, i.e., can IRA losses be deducted.

This article provides a detailed explanation

See the attached link

http://ira.mpower.com/commentary/feature/feature.xsp

a local school district contributes money into a health plan for employees. They have a 125 plan. They do not allow employees to spend that money on other benefits or take the cash. Is this legal? The benefits book we are using in our class indicates there must be a "cash" option.

Client is privately held company but thinking of starting some type of stock option or stock award plan to allow a broad range of employees (not just top management) to purchase stock shares and be the "owners" of the shares for purposes of receiving dividends and having an interest in any increases in value and even selling the shares (if they could find a buyer) with the company having rights of first refusal. The employees, however, will not otherwise be able to sell the stock back to the company while employed. Upon termination of employment, the company will buy-back the shares at the then "market value" provided the employee has worked a certain number of years, and at a somewhat reduced value if the employee has not yet worked the set number of years. I am concerned that this Plan could be subject to ERISA because there is no realistic opportunity to sell shares and realize any appreciation on the shares until termination of employment. (And concerned because I do not think the Plan will be able to easily meet all ERISA requirements.) Any thoughts as to whether this would be an employee benefit pension plan under ERISA due to deferral of payment for the shares being postponed until termination of employment? Any comments will be greatly appreciated. Thanks.

We are a Home Care Agency. We are in the process of revising our LOA Policy and return to work process. Is it appropriate to ask an employee who takes a loa for medical reasons to submit a medical note that details their functions as a home health aide and not request the same for others who are returning from medical leaves that we determine would not affect their ability to perform their duties. Are there any legal ramifications and how does it apply to ADA.

Scenario:

There are participants in plan who are only eligible to defer and haven't met eligibility requirements for ps contribution. Employer is makeing a ps and I originally only considered participants eligible for the profit sharing portion of plan for the top heavy minimum. Do I have to give participants who have only met eligibility requirements for the deferral portion of plan a th minimum?

An IRA owner ( widower)named his live in girlfriend as the beneficiary of his IRA. Instead of using her last name, he used his last name as hers. Example, he was John Doe and he put her name as Jane Doe. Doe is not her legal name. Her social security number was included on the form.

Now that he is deceased, his children and trying to lay claim to the IRA. They claim she is not the beneficiary and are also using the fact that her correct name was not on the form.

What should the custodian do?

I work for a home care agency. Can we request that an employee returning from certain medical personal or work related disability LOAs have their doctor fill out "our" form that asks if they can perform specific duties related to their functions as a Home Health Aide?

We are a worker owned home care agency. What is an employer required to do when an employee has an untimely death with last paycheck, sick & vacation and worker owner investment if a beneficiary is not designated? Can we use the beneficiary who was designated in the life insurance policy?

Will this plan design be qualified? It has 5 possible sources of contributions.

1 - Safe harbor 401(k) deferrals

2 - 3% nonforfeitable employer contribution to a Profit Sharing A Account

3 - Discretionary employer contribution to Profit Sharing B Account allocated solely on pay

4 - Discretionary employer contribution to Profit Sharing C Account allocated solely on pay but integrated

5 - Discretionary employer contribution to Profit Sharing D Account allocated based on age and pay, not integrated

For each year, the employer might declare contributions to any one or more of Profit Sharing B, C or D Accounts.