Under 105(h) nondiscrimination test as to benefits, is a requirement that some employees pay a higher premium than other employees (newly acquired sub paying full cost, while current participants cost is subsidized) discriminatory?

I am sixteen and will be seventeen in August. I would like to set up an IRA but I only work around 2 days a week, as part time. I was wondering if there is a minimum amount to put in each year (I know that you can put the maximum amount of $2000), and each month can you just add an amount? How does the whole system basically work?

I'm aware that there have been several threads on missing participants. However, I have looked through several and have not found what I am looking for.

A plan sponsor has one participant left to pay to complete a plan termination. The participant is due less than $25 and the plan sponsor has gone through has exhausted the means of trying to locate the participant.

In this situation, what should the plan sponsor do (try to find a bank that will take the assets)?

Does the amount of the distribution to the missing particiapnt affect what you would tell a plan sponsor to do?

Is anyone out there familiar with this scenario: a plan provides coverage for pre-x conditions, but will only pay at the benefit levels provided under the old (credited) coverage? Naturally, this will only be applied where the old benefit is less rich than that provided under the new plan.

THIS IS A NEW ONE ON ME.

In a D.C. plan containing QPSA/QJSA provisions a participant names his wife as the beneficiary for his entire account balance. The participant then divorces his wife, remarries, and dies several years later while still employed and without changing a beneficiary designation.

It would seem that spouse No. 2 is entitled to the QPSA benefit of 1/2 of the account balance and the prior election regarding spouse No. 1 for the entire account balance would be invalid as to the QPSA benefit. What about the other 1/2 of the account. Is the entire beneficiary election invalid so that the other half goes to his estate-- the "default" beneficiary under the Plan when their is no designated beneficiary. Or, does spouse No. 2 get the other 1/2 because the particpant was still free to name a beneficiary for the non-QPSA portion?

Are employers required to permit employees to pay back loans that are in default(that is, loan payments were not made on time and were not made during cure period)? If so, what are the repayment requirements? Cites would be helpful.

I have a large corporate client with a number of smaller wholly owned subs. The subs participate in the parents NQDCP. The plan provides that each sub is liable for the payments to its own employees. But the parent generally makes payments and then seeks reimbursement from the subs.

The parent would like to establish a rabbi trust. Clear the most significant part of the total liability will relate to the parent's employees. The contributions to the rabbi trust will come from the parent.

Does there need to be separate accounting for the sub liabilities? What happens if there is no separate accounting, and a sub goes bankrupt? I'm assuming this should have no real impact so long as the sub has not contributed dollars directly to the rabbi trust.

Thanks for any guidance-

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In 401(k) plans, do any employers vary the matching contribution level based on employee's performance? We currently match at 50% of the first 6% of pre-tax deferrals by employees. The survey information indicates that this is probably the most common matching level. However, we see that the "2000 Hay Benefits Report" posted at 2/16/2001 indicates that while 42% of companies match in this way, 46% match at a greater level, some even more than 100%.

We might consider this, but only if the additional match were to be tied to some measurable personal on-the-job performance measures. Can a plan do this without running afoul of discrimination rules? Does anybody know of any companies which do this, and how do they do it?

Has there been a change in the legislation regarding unused portions of a medical reimbursement account?

I asked a similar question before but I think the question was too hypothetical so here is a real scenario:

Employer discovers that for a large group of employees it has failed to count a certain bonus payment that was clearly covered under the plan's definition of pay.

This failure occurred in 1998, 1999, and 2000. Assume the employer has determined that in the aggregate this failure is significant.

The question is this: Am I precluded from self-correction because the initial failure occurred in 1998, outside the 2 year correction period? Or can I still self correct 1999 and 2000, and then "revisit" whether the 1998 portion alone is still "signficant?"

I think Rev. Proc. 2001-17's discussion of multiple defects and aggreation of defects is unclear.

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Just need to confirm that contributions to a dependent care account are also included in the annual additions calculation (along with elective deferral, match, profit sharing, forfs., etc.)

My only source of compensation is foreign earned income. I usually deduct all of this via form 2555 and line 21 on form 1040. Can I still contribute to a roth ira? Or can I leave $4000 "unclaimed" as foreign earned income even though it was all earned overseas and then contribute the $4000 to my Roth IRA and a spousal Roth IRA. I have read Publication 590 (specifically page 4) on this, but a Roth IRA in not deductible like a regular IRA. I would appreciate some clarification on this and also if the IRS has heard any cases involving this question. It seems to penalize US citizens that work and live outside the USA.

If a Plan Sponsor is unsure as to whether or not a Top Hat notification was ever filed with the DOL, what is the best course of action? Is it best to proceed with the Voluntary program of delinquency and pay the $2500? Is there any way to determine whether or not a filing is on record with the DOL without raising a red flag with the DOL? Is anyone aware of an actual instance where the DOL has gone after the Plan Sponsor of a DCP requesting 5500s in arrears due to the absence of a Top Hat filing?

Does anyone know what will happen to the 457 distribution rules if the "Retirement and Pension Act" becomes law. If my understanding of the current rules is correct, a participant in a 457 plan can begin to receive distributions from the plan without penalty at any age if they terminate employment. I have read somewhere that the rules may change to the method of other plans, whereby a participant would be assessed a 10% penalty if under 59 1/2 years old and begins to receive distributions from the 457 plan. Can anyone clarify this?

I'm looking for surveys related to DB and DC pension plans broken down by industry. Looking for ideas in plan design by industry. Any suggestions?

Is a plan required to give COBRA participants a 30 day notice of a rate increase? A self-funded plan did not complete rate negotiations until the anniversary date. Can the employer require the higher premium for COBRA participants at the anniversary date or is there a requirement for a 30 day notice.

One of our clients appears not to have notified a number of part time employees that they were eligible to participate in their 401(k)plan. I could swear I've read in an official (or at least semi-official) source how to correct this. But I can't find any reference to that now in my books (or on this BB). I believe the company must contribute the average contribution rate during that time to those eligible people.

Can anyone confirm this or (preferably) guide me to any relevant citation about this issue.

Thanks.

I have trouble totally understanding the BIS rules, if an employee only satisfied the YOS, so never contributed to the plan before termination does he retain the YOS at rehire, also, does he retain the YOS if the rehire is greated than 5 years. thanks for the help

Plans normally require that related matching contributions are forfeited if corrections are necessary as a result of failing the ADP test. But, would the following scenario affect this requirement such that forfeitures are not necessary?

A plan contains a match formula of 50% of deferrals up to max of 9% of eligible compensation. The plan fails the 1999 ADP test and refunds are processed (ACP test passes). Refunds are only necessary and distributed to participants who reached the '99 402(g) limit of $10,000 (and, some of these participants were paid comp in excess of the 401(a)(17) limit). If the ADP refund was small (less than $100 including allocable earnings), can an argument be made that a participant who deferred 9% (matched at 4.5% of comp) does not need to have match forfeited since his or her match only represents 3.13% ($5,000 match/$160,000 comp) of comp, less than the plan's maximum match of 4.5%? Or must the match on the deferral refunded be forfeited, no matter what percentage of comp it represents? I think what makes this result different than in prior years was most HCEs receiving refunds were those just over HCE comp limit and not those whose comp exceeded 401(a)(17). Your thoughts?

When running snap-shot nondiscrimination testing on a plan, how are employees who were highly compensated in the look-back year but no longer employed by the company treated? Are they disregarded for testing purposes since they are no longer eligible to participate in the plan?