EGTRRA repeals the coordination of the 457 plan contribution limit with contributions made to a 401(k) or 403(B) plan . Section 615 of EGTRRA says that this is effective for "years beginning after December 31, 2001" Does "year" refer to calendar year? If so, how does this work for a non 1/1 plan year?

I also posted this question on the non-qualified message board.

EGTRRA repeals the coordination of the 457 plan contribution limit with contributions made to a 401(k) or 403(B) plan . Section 615 of EGTRRA says that this is effective fo "years beginning after December 31, 2001" Does "year" refer to calendar year? If so, how does this work for a non 1/1 plan year?

For purposes of determining whether a self insured health plan passes the coverage requirements, I can exclude employees under Code Sec. 105(h)(3)(B). Can those employees be excluded for purposes of determining whether this plan passes the coverage requirements, even if they are covered under another self insured health plan maintained by the employer?

What should a TPA do about a plan where the company has gone bankrupt, the plan sponsor cannot be located and the Trustee is a financial institution that is a directed trustee? Anyone ever had this situation or a similar one?

Eeeeek

We are fighting an internal political battle over "who" has control over the e-mail/internet monitoring policy. We are a financial institution and have recently added Internet access for all employees.

Our IT VP insists that our Internal Control Department should handle (write and monitor) the policies governing this area. Our (the HR department...here we come to save the day!!!!) feeling is that WE should be the ones in charge, as we have to deal with the "fallout" if there is abuse.

How does your company see this issue? Is it a compliance issue or an HR issue???

Has the deadline for GUST been extended for governmental plans?

Are your small municipal plans restating their documents or adopting documents in place of their ordinances for compliance?

In the ERISA OUtline Book, Tripodi says, "to pass 401(a)(4), every rate group must statisfy the coverage requirements of 410(B). Both the ratio test and the average benefits test are available for this purpose."

But what if there's a Safe Harbor 401k Plan involved? The ratio test and the nondiscriminatory classification tests do not include salary deferrals or the 3% SHNEC. I've calculated scenarios for 401k safe harbor cross-tested plans in which each rate group passes both the ratio test and the nondiscrimantory classification test but the Plan overall fails the average benefits test with a ratio under 70%.

Has such a plan passed?

Is there an industry standard for the number of lives a pension plan analyst/administrator should handle? Or, is there any information on the web regarding work loads for analyst/administrators?

Thanks in advance.

What are some basic things to consider before an employer decides to add an after tax source to a plan? What would restrict HCE's to make after tax contributions. Would it make a difference if the plan was top heavy?

New Pru demutualization questions...

How do you intend to deal with welfare plan demutualization compensation derived from employee contributions? Premium holiday, distribute to employees, enhance benefits, etc?

(The plan I am dealing with is a group life plan.)

Does anyone have any experience implementing a premium holiday in in a group life?

How did you define the eligible group?

How did you treat these premium payments for purposes of the section 79 calculation? (Ie did you treat them as employee contributions which reduce imputed income or as employer contributions?)

Thanks-

card

I have some 2 and 3-participant DC plans and have a real problem with the SAR requirement - especially when the investments are participant-directed.

Obviously, it's fairly easy for employees in such situations to figure out the amount of the business owner's plan account (and, potentially, his/her salary) - information which in definitely not "open to public inspection"!

Has anyone else out there grappled with this "privacy" versus (relatively meaningless) "disclosure" issue? Has anyone ever seen/heard the DOL comment on the issue?

Thanks for any and all input!

anyone aware whether the above act has been invoked and if so, whether that means all plan loans to active military personnel are limited to a 6% interest rate?

Does anyone know where I can get a sample employee notice for deleting Joint and Survivor annuity options from a 401(k) Plan?

If a self-employed person wants to establish a SEP-IRA or MP/PS plan but is also a participant in a 403b through an employer (for example, a professor receives self-employed income for giving speeches or writing books). Is the overall $35,000 limit in place, or could the person max out both the 403b deferral and the SEP/ Keogh contribution?

For example, defer $10,500 to the 403b and contribute $25,500 to the SEP (total $36k)

Or defer $10,500 to the 403b and contribute $35,000 to the MP/PS plans (total $45,500).

If anyone has a good reference on this issue, I would be very interested. I only have a very old article called "Beware the 403(B)-Keogh Pitfall" by Mary Rowland. It's from at least 1995, and I don't know if there is any impact on this with legislation since then.

ACCESS RESTRICTIONS AS A BAR TO ROLLOVERS?

By: Joel L. Frank

Under the Code prior to UCA '92, a distribution could be rolled over from a TSA to another TSA or IRA only if (1) is was a total distribution or a partial distribution equal to at least 50% of the balance to the credit of the employee, (2) the distribution occurred because of specified triggering events (death, disability, separation from service or attainment of age 59.5) and (3) the distribution was rolled over in 60 days. Code Section 403(B)(8)(A)-(D), prior to UCA '92.

In general, UCA '92 simplified the rollover rules for TSAs by eliminating (1) the distinctions between total and partial distributions, (2) the mandatory triggering events upon which a rollover could be made, and (3) the requirement that distributions must be made within one taxable year of the employee. Code Sections 403(B)(8)© and 402(a)(5)©, prior to UCA '92.

CONFUSION:

In its Information Letter of May 19, 1995 the IRS laid out its position that the access restrictions found in Code Section 403(B) 11 are a condition precedent to a distribution ---and therefore a rollover---of salary reduction amounts.

On May 21, 1999, however, in its IRM Handbook 7.7.1, Chapter 13, 403(B) Plans, the IRS says at 13.9.2 (1) c.

“Unlike transfers, there must be a distribution event under

the plan or contract to have an eligible rollover distribution”

The various 403(B) issuers have been using the Information Letter and not the Handbook guideline. The early distribution events as enumerated in the Information Letter are quite specific because section 403(B) 11 is quite specific. This contrasts sharply with the Handbook where it says “there must be a distribution event under the plan or contract.”

The Handbook Guideline recognizes that the specified distribution events under section 403(B) 8, the rollover provision of section 403(B) were repealed effective with the UCA '92. The Handbook Guideline further recognizes that section 403(B) 11 is the early distribution provision and, as such, has no application to eligible rollover distributions. The Handbook Guideline, therefore, properly assigns the nature of the distribution event, for rollover purposes, to the “plan or contract”.

The clear intent of the statutory repeal of the rollover events under 403(B) 8 was to eliminate the universality of these specified rollover distribution events by leaving it up to the individual 403(B) plan or contract to decide on the specificity of the distribution events in order to have an eligible rollover distribution.

Is it not ludicrous to require an early distribution triggering event (death, disability, separation from service, attainment of age 59.5 or in the case of hardship*) under Section 403(B)(11) in order to effectuate a rollover distribution to another TSA which is subject to the same early distribution triggering events under Section 403(B)(11)? Is this not the very reason why the UCA '92 eliminated the mandatory triggering events under section 403(B) 8 (death, disability, separation from service or attainment of age 59.5) upon which a rollover distribution could be made?

BIFURCATION:

The use of section 403(B) 11 to govern rollovers results in two sets of rollover rules for section 403(B) 1 annuity contracts:

Rule 1: Pre-1989 Amounts:

The early distribution events under section 403(B) 11 did not go into effect until January 1, 1989, therefore, section 403(B) 1 contract balances prior to that date may be rolled over without a rollover distribution event because the rollover distribution events under section 403(B) 8 were repealed under the UCA '92.

Rule 2: Post-1989 Amounts:

Contract balances subsequent to December 31, 1988 may only be rolled over upon satisfying an early distribution event under section 403(B) 11 because the effective date of section 403(B) 11 is January 1, 1989.

CONFLATION:

Section 403(B) 8 is the rollover distribution provision of section 403(B) while section 403(B) 11 is the early distribution provision; they do not conflate. The use of the early distribution events under section 403(B) 11 to govern eligible rollover distributions under section 403(B) 8 renders the repeal of the rollover distribution events under section 403(B) 8 meaningless.

Is there anyone out there that agrees with my position?

Peace,

Joel L. Frank

rollover@optonline.net

*Hardship distributions are no longer eligible for rollover treatment. Code Secs. 402©(4) and 403(B)(8)(B). Internal Revenue Service Restructuring and Reform Act of 1998.

I have a question on Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA). I would like to know what companies are actually doing now for their employees who are being called into active duty for the National Guard. How are you handling compensation, benefits, etc. I read up on USERRA, but my company would like to know what some actual companies are doing.

Thank you.

Sharon

A controlled group decides to spin off one of the companies in the controlled group. The spun-off company will adopt its own DC plan, and all of the DC accounts in the controlled group will be transferred to the new plan.

Must the new plan credit vesting and eligibility service with the controlled group prior to the spin-off?

Are non-qualified plans subject to minimum distribution rules??

When making my cafeteria election for 2001 we did not know we would be having our third child this year (born 9/11/01, I'm happy to say there was some good news for that day).

Needless to say there are substantial medical expenses we did not consider when making the cafeteria election for 2001.

My wife, who was working part time, is no longer working.

Do either of these events allow us to change the cafeteria election for the remainder of 2001 (so we can get reimbursed for the out of pocket expenses related to the birth of our child)?

A Plan with a Final Average Pay formula defines average compensation as the highest 5 consecutive years within the last 10.

A Participant has the following salaries during the last 10 years:

2000 50,000

1999 45,000

1998 0

1997 0

1996 40,000

1995 35,000

1994 35,000

1993 0

1992 0

1991 30,000

What would you use for the average compensation?

Would it be 1994 - 1998? $74,000 / 5 = 14,800?

Or do you have to recognize that there are years where no salary was earned?

Any sites would be appreciated.

Thanks in advance for any help.