A client of mine has a participant in their Healthcare Reimbursement Plan that stores blood "just in case" his children may need it in the future. Is this considered a reimburseable expense? Thanks.

My wife and I started 2 AMEX Roth IRA accounts at the beginning of the year - and we now question whether AMEX is the best source for these IRAs. We currently have AXP innovations, AXP small cap, and AXP growth dimensions funds. Can anyone shed a little light and let us know of the best (or most reasonable) source for IRAs?::confused:

The COBRA wording states the COBRA will/ may be terminated if the member BECOMES covered under another group insurance plan.

Is the emphasis on becoming covered, or having other group coverage? If the member had secondary coverage through a spouse's group plan prior to and throughout the qualifying event, may COBRA be "denied" due to other existing group coverage: Or, since the member's intent was to have dual coverage, would the member have to BECOME covered under another group plan as a member to be COBRA terminated?

JBaker

An employer has a 401(k) plan with a safe harbor match. Currently, all employees are immediately eligible to make salary reduction contributions and receive the match.

For next year, the employer would like to impose different waiting periods for two groups of employees: A waiting period of 6 months for one group of employees and a waiting period of 1 year for another group of employees. After satisfying the applicable waiting period a new employee will become eligible to make salary reduction contributions and receive the safe harbor match.

Assuming each group of employees satisfies minimum coverage, can this be done and still stay within the safe harbor?

Is the flat benefit safe harbor of 1.401(a)(4)-3(B)(4)(i)©(2) still satisfied if the top heavy minimum accrual is granted to HCEs (assume HCEs=Key Employees)?

My 401(k) plan would like to change how it makes its matching formula from a mandatory match from a discretionary match. It would also like to change the plan year from a fiscal year to a calendar year. It would like to make the amendments effective as of October 1, 2001, though the amendments would not actually be adopted until about 1 month later. During the interim period, participants will receive the current matching contribution even though the match is now discretionary so that participants would not lose any monies (there would be no retroactive take-away). (My 401(k) plan matches as it goes along). Is it a problem to retroactively change a matching contribution as long as participants do not actually lose anything -- is that a 411(d)(6) issue? Also is it a problem to retroactively amend the plan year after the plan year has already started to make a short plan year -- I am desperate for any guidance on this issue.

Can an employer terminate its existing 401(k) plan as of 12-31-01 and establish a SIMPLE IRA as of January 1, 2001? Is there a problem with the IRC regs. that prohibit distribution from a terminated 401(k) plan where the employer establishes a defined contribution within 1 year?

Assume that an employee receives a distribution from an ESOP, where there has been no appreciation in the stock since the date on which the stock was acquired by the ESOP (so there is no Net Unrealized Appreciation). The employee then requires that the employer repurchase the stock pursuant to the put option rules. The employer elects to pay the price in installments over 5 years.

Many people only report as income the cash amounts as they are received from the employer. However, it seems to me that the employee is taxed upon the full value of the stock when he or she receives the distribution. Thus, the fact that the employee enters into an installment sale immediately after receiving the stock does not preclude taxation on the full value of all of the shares that are received.

Does anybody have any citations of authority (or well-reasoned opinions) that would justify a different result?

Have been advised by my Sar-Sep agent that I cannot transfer (or roll over) any funds out of the plan into an IRA unless I transfer (or roll over) the full value and that if I did so, I would have to do so into another Sar-Sep if I want to keep the grandfathered rights to future contributions. If this true and if not, please advise why.

Thanx.

I am a plan administrator for my company. We have three 401(k) plans that do not cover union.

I am interested in how the EGTRRA provisions will be adopted by other plans who have ee's over 50. We have a couple of choices:

1. Limit the deferral % under the plan so participants can use the catch up provisions. Plan says limit is 12% - participants do the 12% allowed and use the catch up provisions to max their

contributions.

2. Do not limit the deferrals - let people defer up to 75% of their pay. This cenario would only allow those who defer over the 401(g) to use the catch up.

I would like some feedback on what you think the majority of plans will do.

I understand the USERRA applies to 457 plans. Does that mean that the deferral limits for a returning employee allow him to do "make-up" deferrals for a prior year while still making the maximum deferrals in the current year?

Let's assume:

The employee goes into the military for the entire year of 2002 (when the max deferral limit is $11k/100% of includible compensation).

The employee returns to work for the entire year of 2003 (when the max deferral limit is $12k/100% of includible compensation).

The employee qualifies for coverage under USERRA.

Can the employee then defer a total of $23k/100% of includible compensation* in 2003?

* 100% of 2002/2003, or just 2003 includible compensation?

Does the USERRA require employers to "make up" contributions to 414(h) pick up plans when an employee returns from military service?

If, yes, does the employer make up "employer matching contributions" only, or "employee" non-elective contributions as well (with no reduction in the employee's compensation)?

I'd appreciate any information on what, if anything, other firm's cross tested plan documents will say about the gateway rules.

I'd be interested in any insight into how Corbel's volume plan will deal with this, plus anybody else who sponsor's volume submitter plans.

My company intends to have two versions, one discretionary ala Corbel's volume, plus another with defined allocation factors. But in each case we're trying to figure out whether there should be any 3/1 or 5% language in there as a backstop.

Another issue is what to do if a plan doesn't use 415 comp for allocations. Either they change to 415 pay (my preference but not that of some clients), or have some rules in the plan document requiring either a minimum of 5% of 415 pay or a maximum disparity of 3/1.

Any comments or thoughts would be welcome.

I've got a small firm (2 owners, 1 full time employee, a couple of interns) setting up S/H 401(k) prior to 10/1. Due to time constraints this year they will just do a Std. Prototype. The full time employee was hired in May 2001. Various interns were employed throughout the year. For this year we want the full time employee eligible, but not the interns (future years we will just do 21 & 1 to avoid the intern problem). On July 1, 2001 there were no interns. Could I make the plan effective July 1, 2001 (this would make a short plan year 7/1 - 12/31), define compensation over the full calendar year and then make the entry dates 7/1 and 1/1? This gets me the full time eligible an no interns. Any thoughts?

I am looking for input on types of packages that are available for flexible spending account administration. Please let me know any success and/or horror stories that you may have.

We have a multiple employer plan. The plan in total has over 100 participants, but each participating employer has less than 100 participants. Is an audit required for the Plan or is it exempt since none of the employers in the multiple employer plan has exceeded the 100 participant rule? Any advice is greatly appreciated.

Thanks

I have a plan in which some participants have chosen to purchase variable annuity contracts. My question is are Schedele A's required for variable annuity contracts. It appears that they would be required but we have had a hard time getting insurance companies to provide Schedules A for these contracts. Also they don't seem to fit into any particular section on the Schedule A and we're not sure if we are to complete Section 3 or Section 6. Any thoughts would be greatly appreciated.

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?