Need clarification on the Form 5500 instructions for Schedule H, 2b(10).

Plan's only investment type is mutual funds. Are all gains and losses reported on line 10 or are the realized gains reported on line 2b(4) and the unrealized on line 2b(5)? Thanks!

An City employee has been on FMLA for twelve weeks due to her spouse's serious health condition. She requests an extension of her FMLA for an additional month to care for her spouse plus an additional 6 -8 weeks for recovery of an upcoming surgery that she has scheduled for herself for Carpal Tunnel Syndrome (CTS). The employer has a leave of absence policy which is reviewed on a case by case basis which may extend up to a six month period. Her employer has denied the extension of FMLA as well as the additional leave of absence for her surgery stating that more time off will be detrimental to her work unit. The CTS is not being handled as a work related injury as she never filed a claim for workers' comp benefits stating that she has had this problem for a long time due to prior jobs. Does the employer need to look at something else in this case? Can FMLA by denied beyond the 12 week period? Can the employee request 12 weeks of FMLA again the next year for the same reason? In this case, it seems the employee will either resign as a result of the denial for the extension, or will be separated without prejudice in accordance with the leave of absence policy.

Just wondering if there is something more here that someone could shed some light on.

Simple question: are EAP programs considered Welfare plans subject to a 5500 filing? I did a search on BenefitsLink and got some background on EAP, such as does COBRA apply, but I was hoping someone has already done the research for 5500 purposes.

What is the maximum contribution a public employer may "pickup"? Does this maximum change for 2002?

Best wishes,

Joel L. Frank:)

I have a client who is interested in possibly terminating their defined benefit plan. The plan is overfunded. It is a very small group (5 employees) and the concern is that as top staff leaves the group, a defined benefit plan will be a difficult sell to new management. They would also like to decrease their administrative expense. What are the options available and what is the time line associated with making these changes?

What are the administrative challenges if a 401(k) plan is modified to have the company stock fund designated as an ESOP in order to deduct the dividends. All contributions are participant directed.

1. Does ADP/ACP testing have to be done separately for the ESOP and non-ESOP based on where the contributions were initially deposited?

2. Are there distribution restrictions on the ESOP money? If so, can a participant just transfer their money out of the ESOP/stock fund and move it into the 401(k) investments in order to have access?

3. Does the dividend have to be counted towards the 402(g) limit if the participant elects to have the money deposited into the plan?

Are there other complications?

Thanks

I am going through the processing of my first potential hardship withdrawal. The employee is facing foreclosure.

I know one of the requirements is that she prove to me she's used all other available resources before applying for hardship....she is not eligible for any employee loans, she can't take a 401k loan (her balance is too low)....does she have to prove anything else?

Also, the foreclosure is on the house that she lives in with her boyfriend (they are the parents of a small child and have lived together for years). She can verify that this is her permanent residence but the mortgage is in his name only...is this a problem?

I'd appreciate any help....I'm learning the ropes here!

Hi, I'm currently a full time student at UC Riverside in California. I'm only 19 and am planning to begin investing soon. I'm still looking into options for long term investments and have decided that I will be opening a Roth IRA to begin with. I've been looking around for investment firms to open it with, any good ideas?

Also, I am curious as to how my account will gain interest? When I invest my max. of $2,000 annually, $3,000 starting next year, does it accumulate in the IRA and gain interest in itself. What I'm asking is, is the Roth IRA an actual account that pays interest? Or are my annual deposits going into CDs, stocks, mutual funds, etc. that are under the IRA? This is where my confusion is. When I deposit $2,000 into my IRA, do I have a choice as to where it is going to be invested? Thank you for reading this post and if you have any information or advice for a young, new investor, please contact me at MGutie3957@aol.com.

We have a client that set up a "cafeteria Plan" for 2000, which consists of premium coversion, med reimbursement and deendant care reimbursement.

The only portion they have utilized so far is the premium only portion.

I have only done 5500s for premium only plans, ie page 1 5500 and Schedule F.

Would the filing requirements be the same?

Do you think there are some serious fiduciary problems with the following? An employer requires employees who invest their 401(k) deferrals into employer stock must hold that stock for three years before they can sell? Just doesn't smell right to me.

I have a cross-tested money purchase plan with quarterly allocations. Contributions are 5% of aggregate compensation for employees employed on the last day of each quarter; these are then allocated on age-weighted basis.

The key individual takes quarterly compensation of $32,500. However, in the second quarter he received a $68,000 bonus, which he won't receive in quarters 3 and 4. 1.401(a)(17)-1(B)(3)(iii)(A) seems to indicate that I can't consider more than $42,500 per quarter. As a result, he will get less for the year with the quarterly allocations than he would have with an annual allocation.

Am I reading the reg correctly? The result makes no sense to me.

We have found that TPAs have differing interpretations regarding which divisor to use under the new 401(a)(9) regs. Some say you use the divisor from the MDIB table based only on the participant's age if the beneficiary is not more than 10 years younger (beneficiary in this case is three years older). Some others say you should take the divisor from the Sec. 72 joint annuity tables based on the beneficiary's age and the participant's age less 10 years. Who is right? Any clarification on this would be greatly appreciated.

Can a Plan Sponsor that sponsors a 403(B) plan and a 401(k) plan, merge the 403(B) plan with the 401(k) plan in light of EGGTRA?

Assuming they want to terminate the 403(B) plan, what are the main issues to consider?

Can the participants be directed to roll their 403(B) money into the 401(K) plan in light of EGGTRA? Will the termination constitute a distributable event?

Can a Plan Sponsor that sponsors a 403(B) plan and a 401(k) plan, merge the 403(B) plan with the 401(k) plan in light of EGGTRA?

Assuming they want to terminate the 403(B) plan, what are the main issues to consider?

Can the participants be directed to roll their 403(B) money into the 401(K) plan in light of EGGTRA? Will the termination constitute a distributable event?

Situation: Client maintains a 401(k) & a 403(B) plan. They are considering terminating the 403(B) plan and then allowing participants to roll their distributions into their 401(k).

If a participant, with a 403(B) rollover in his account, terminates from the 401(k) plan, can his entire account be subject to 10 year forward averaging?

Does anyone know a good source for information on the applicability of the provisions of EGTRRA '01 to church plans? For example, I recently was informed that the new vesting schedule for matching contributions does not apply to church plans, but none of the published EGTRRA overviews that I have seen thus far make this distinction.

My thanks in advance to anyone who can assist me in this regard.

I have an underfunded DB plan. An HCE wants to retire and take a lump sum. The plan does not meet any of the exeptions of 1.401(a)(4)-5(B)(3)(iv). The HCE's benefits are as follows:

annual benefit=$100,000 single life annuity

actuarial equivalent PVAB=$1,000,000

417(e) PVAB=$1,250,000

everything is within the 415 limits

I told him that he'have to post a bond or put up security based on the difference between his lump sum and his annual benefit,i.e.,$1,150,000. He went to another actuary who told him the bond/security only had to be baesd on the difference between the PVABs,only $250,000.This is a new approach. Anyone have any comments?

Hypothetical Situation: A 401(k) participant has contributed $1000 to the Plan in the year since he was hired. The company contributed a match of $500. The participant has a qualifying financial hardship. The hardship regs say he can only withdraw the money he has contributed; he cannot withdraw earnings on that money. But what if his earnings were negative? For example, what if his $1000 is now worth $900? Can he withdraw the $1000 or can he only withdraw $900?

Is anyone selling indemnity insurance for deferred compensation plans? AIG? Lloyds?

Has there been any discussion regarding the application of Employer Match to the "Catch-UP" contributions authorized in EGTRRA? Some promotional information from some benefit/HR firms, have indicated that this is something employers should investigate. Any thoughts regarding how this will affect testing?