Employer sponsors a calendar year profit sharing plan and decides to add a 401(k) feature mid-year (8/1/00). In calculating year-end match and ADP, does employer use compensation only from 8/1 throguh 12/31? Is there guidance in the 401(k) regs? Thanks

I have interest in learning more about prohibited transaction exemptions relative to Financial Advisors that work with Banks and receiving payment from the Bank's retirement plan that is ORDINARY and would be the same if an outside party made the same arrangements.

Does ERISA require that participants receive trade confirmations regarding buy and sell transactions in their participant directed accounts? I see 404© does require that participants have an opportunity to give investment instuctions and obtain written confirmation of such instructions. I read that as requiring confirmation of instructions not confirmation of the trade result. does anyone agree or disagree?

If not required by 404© would it be required in another section of ERISA?

Company A sets up a MPPP effective 01/01/96. There are 6 participants. There is a corporate Trustee. The contribution required is 10%. The allocation formula is integrated at the SS Wage Base. During all years the contribution was allocated 10% pro rata by Company A's accounting firm. Neither the plan sponsor or the corporate trustee questioned the allocation. The new TPA discovers the error.

1) What are the possible correction methods? Can a reallocation be done for the years in question, even though it would remove prior year contributions from NHCE accounts?

2) Is any harm done since the noncompliance favored the HCE's? Is there a qualification issue?

3) From a liability perspective, does the plan sponsor and trustee have an obilgation to review the work of the accountant, who is not a fiduciary?

Thanks.

What are the transition issues to be considered in a 401(k) Plan spinoff?

HELP!! I have been told by the Tennessee Department of Commerce and Insurance that a third party administrator may not contract with Tennessee employers to provide COBRA continuation administrative services unless the tpa is also an insurance company or has a contract with the insurance company to provide the administration (not with the individual employers). Does anyone know if this is correct? If so, Tennessee seems to be the only state that prohibits tpa administration of continuation coverage (without the insurance company relationship).

Can a plan use Current Year ADP testing, Prior Year ACP testing, than use a shift from Current year to Prior Year to pass Multiple Use? 12/31/2000 test. Individually Designed Doc, not updated for GUST yet

Does anyone have experience with establishing or administering length of service plans for volunteer firefighters permitted under section 457(e)(11)? The statute indicates the criteria and $3000 deferral limit, but I was wondering whether these plans otherwise would function like eligible 457 plans (or 457(f) plans) for purposes of plan administration?

Has anyone else noticed that the instructions to the Schedule B are now more specific with regard to labeling of attachments (specs, age/service, etc.). Specific line references are required, and related instructions are in bold.

I don't know if anyone ever worried about this before, but now we wonder if the B will be rejected for 2000 without the more stringent labeling.

So, I guess each attachment needs the EIN and PN, which was probably a requirement before, plus a specific line reference.

It would be very troublesome for us to do this. Anybody else concerned about possible Schedule B rejection?

In 1998 a conversion of a IRA to a Roth IRA was done in a qualified manner. The 4 year tax option was used to recognize the taxable amount of the conversion. If the owner was over 60 years old in 1998 and no other roth activity has occurred before or after 1998, can the owner receive a distribution of 25% of the original conversion amount in 2001 without any added taxable income or tax charge? Further, if the remaining 75% of the initial conversion amount and past and future earnings remain in the roth account until 2003, will all future distributions under present law and regulations be free of federal taxes?

Are the issuance of participant loans in a grandfathered governmental 401(k) subject to spousal consent? For that matter, are distributions of any kind from that type of plan subject to any kind of spousal consent rules at the federal level?

I am a TRP for the Cafeteria Plan. What sorts of privacy policies and procedures should I have in place to ensure participant confidentiality?

Does anyone have a checklist of actions that I should have in place to safegaurd health care information?

Are there certain laws under HIPPA, DHHS, and ERISA? What about the Gramm-Leach-Bliley Act? ...and which ones are fully or partially implemented?

Thanks for your help.

Shawn

The specific situation is:

Illegal aliens supplied false social security numbers to employer. These individuals participated in the plan and received contributions. The plan happens to be an ESOP plan.

Common sense (always dangerous to use in this industry) tells me that the money should be forfeited and used to reduce other contributions. But I do not know what gives the plan permission to do this.

Should this be treated as an operational error and corrected under SCP (Rev. Proc. 2001-17)? The plan did nothing wrong based on the false information provided to the employer.

Has anyone else run into something like this?

Hey everybody,

I've been running into a problem latly,maybe someone knows how to make it eisier on participant's in a Sec. 125 Plan.

Here it is. What can be done when people are billed to their home for medical services? When this is done they write in the amount they are paying (like a phone bill) and send me a copy. Now I know these people paid these bills but I don't have an actual receipt as being paid for reimbursment.

Any advice?

Employer does not make full contribution as required under MPPP document. Employer does, however, make a partial contribution. MPPP does not pass 410(B). If employer contributes the remainder, files Form 5330, and pays the 10% tax associated with the underfunding, will the 410(B) coverage issue be solved?

The plan in question is a target benefit plan. Employer paid premiums on insurance for 3 HCE's but not on 2 NHCE's who were also participants in the plan. Employer says MPPP was terminated in 1997 and that payroll employee just kept paying the premiums as the bills came in. No 5500's filed since 1996. Now the IRS has sent notices regarding some of the 5500's.

Employer adopted a standardized prototype maintained by an ins. co. in 1987. The opinion letter does not consider TRA '86. Doesn't appear that the plan is eligible for voluntary correction programs under Rev. Proc. 2001-17. Thus, thought was to at least get contributions made up through year of termination, file requisite 5330's (and pay the 10% or whatever applies), file all outstanding 5500's and then go from there...?? Any comments or suggestions?

DOES IT COST AN ARM AND A LEG!?

I work for an agency that assists persons with disabilities in finding jobs. Recently I assisted an individual with finding a job, and now he is at threat of losing his job because the employer is afraid that if the employee does not work out in the long run then the employee might claim and receive unemployment benefits which the employer claims will cost him an arm and a leg. The employee has been there just under a month and the employer says that once he has been there for a month then he becomes eligible for claiming unemployment benefits. Is this the case? I really need to know because this individual is in dire need of keeping his job!

DOES IT COST AN ARM AND A LEG!?

I work for an agency that assists persons with disabilities in finding jobs. Recently I assisted an individual with finding a job, and now he is at threat of losing his job because the employer is afraid that if the employee does not work out in the long run then the employee might claim and receive unemployment benefits which the employer claims will cost him an arm and a leg. The employee has been there just under a month and the employer says that once he has been there for a month then he becomes eligible for claiming unemployment benefits. Is this the case? I really need to know because this individual is in dire need of keeping his job!

What happens to unused funds in a Medical Savings Account at the end of a year? Who owns those funds? Are there restrictions on how the employer may use those funds? Can they be bonused back to an employee?

Is a church profit sharing plan organized under 401a also exempt from non-discrimination and coverage rules (like in a 403b)? We only want to cover full time employee, and cover different positions at different percentage rates for the contributions. Thanks in advance.

Rev. Proc. 2001-17 seems to require that a plan have, at the least, an opinion/notification/determination letter that considered TRA '86 in order to correct. What about situation where last letter did not consider TRA '86??? The opinion letter employer has with respect to prototype clearly says it is not considering TRA '86.