Does anyone know of a "third party administrator" for stock option plans? I have a client that wants to outsource all of the administration to a third party. I am aware of software for in-house administration but do not know about parties doing complete outsourcing.

Our plan states that children can only be enrolled in same HMO option as parent. However, very often the custodial parent and children live in a different state/HMO service area than the parent-employee. In these cases, some of our HMO's will enroll the children without covering the employee-parent, and some won't. Does anyone know if the parent lives in a different service area whether an HMO in the child's area MUST enroll the child or not? What experiences have you had regarding this?

I gather that it is possible to transfer accumulated savings from a 403(b) to a 403(b)(7) custodial account (set up, for example with a mutual fund company). My understanding is that this cannot be done with funds contributed by one's employer, but does this mean one can differentiate between funds contributed by the employee and those contributed by the employer (and still transfer the funds contributed by the employee)? My question is driven by the desire to find ways to get better returns than those many annuities offer.

A non-qualified plan defines the employer as the parent, or any of its subsidiaries, and there are participants from several different subsidiaries. Does the parent company (sponsor) get to book the assets on its books even though it is not the one actually paying the specific employees salary? In this case the employees get paid by the subsidiary that employs them.

If, for example, a plan has 10 HCEs benefitting, is there automatically 10 Rate Groups?

What if three of the HCEs all have the same Equivalent Benefit Rates (EBRs), are there then only 8 Rate Groups?

The Ratio Percentage Tests and the Average Benefits Ratio Tests of the three separate Rate Groups of the HCEs with the same EBRs will produce identical results. So does it make any real difference (to the client or the IRS) whether results are presented as 8 Rate Groups vs 10 Rate Groups?

I've seen such test results presented one way vs. the other by different TPAs.

Twice in the last two weeks, I've had an auditor tell me that they cannot perform a limited scope audit if a plan is self trusteed. The first auditor was from a firm that I'm usually sceptical of anyway, so it didn't give the issue a lot of thought. Now the issue has come up again and I can't help but wonder if I'm missing something.

My understanding of the limited scope audit was that if the assets were in the CUSTODY of a bank or insurance company or similarly regulated entity, that the auditor could perform a limited scope audit. The assertion that has been made to me is, that if one of these types of entities is not the TRUSTEE of the plan, a full scope audit must be performed.

I've read 29 CFR 2520.103-8 and do not see the word trustee anywhere. I guess I'm looking for a little reassurance that I'm not off my rocker.

Any input would be appreciated.

Is it expected that when completing Top Heavy Test for 2002 for a calendar year plan (determination date 12/31/01) that we will use the new rules (like what happened for the HCE rules in 1998)?

Under existing law the 415© limit applies to plan year's ending in that year:

For example in a plan with a 2/28/01 year end I have applied the $35,000 limit.

When will the $40,000 limit apply for this plan?

If an employee's family member becomes ineligible for coverage under the health insurance plan for which the employee has been making payments under a cafeteria plan, and the employee begins making COBRA payments to cover the former dependent, can these COBRA payments be paid pre-tax through the employer's cafeteria plan? Reg. 1.125-4©(3) seems to say that this can be done. Is it possible to pay these COBRA premiums through the cafeteria plan only if the family member is still a dependent for purposes of federal income tax exemption?

Anybody else notice that the vested percentage on the loans in the employee census shows 0%? When I run the summary of account detail that I use, it also shows 0% in the percentage column, but applies the current vested percentage to the loan principal balance. In other words, if the participant is 100% vested, the vested balance is correct; but if the participant is say 40% vested, the software applies the 40% to the loan principal balance and shows that as the vested balance (while still NOT showing vested percentage). I believe this is WRONG! I talked extensively with Tech Support on this issue, but they do not seem concerned. I believe that all loan account balances should show as 100% vested and the vested loan balance should be 100% of the dollar amount. The vesting on the account was already determined when the loan originated. I expressed my dissatisfaction with the response and the software, but was left feeling that they were not concerned! Is anyone with me on this?

A plan failed to prohibit participants from making elective deferrals during the 12-month period following their hardship withdrawals. The preferred correction method is to refund the elective deferrals plus earnings and forfeit the matching contributions plus earnings. (See Q&A 21 in the Correction of Plan Defects column and Q 9:31 of Reish's Plan Correction Answer Book).

We're hoping to self-correct, and I'm trying to figure out how to implement this correction method with respect to former participants who terminated and took distributions of their mistaken deferrals.

I'd appreciate your thoughts on whether Section 6.05 of Rev. Proc. 2001-17 applies. That section provides that where an Excess Amount has been distributed, the Plan Sponsor must notify the recipient that the Excess Amount (a) was distributed and (B) was not eligible for tax-free rollover.

Whether Section 6.05 applies appears to turn on whether these ineligible elective deferrals are "Excess Amounts." The Rev. Proc. defines that term to mean:

* an Overpayment

* an elective deferral or employee after-tax contribution returned to satisfy 415

* an elective deferral in excess of the 402(g) limit that is distributed

* an excess contribution or excess aggregate contribution that is distributed to satisfy 401(k) or 401(m)

* an amount contributed on behalf of an employee that is in excess of the employee's benefit provided under a SEP

* an excess contribution that is distributed to satisfy 408(k)(6)(A)(iii)

* an elective deferral that is distributed to satisfy the limitation of 401(a)(17) or

* any similar amount that is required to be distributed in order to maintain plan qualification.

So, any thoughts about whether the ineligible elective deferrals are Excess Amounts? I'm thinking the "any similar amount that is required to be distributed" prong may capture them. Although they are no longer in the plan and therefore need not be distributed going forward to maintain qualification, if they were still in the plan they would need to be. And Section 6.05 seems to expressly contemplate that Excess Amounts may have already been distributed (i.e., that the mere fact that they have already been distributed won't keep them from being Excess Amounts).

I'd appreciate any thoughts you might have. Thanks in advance for your time.

Is it true that the catch up for over age 50 participants is available even if the participant has had the maximum 402(g) limit in all prior plan years?

Seems odd that they are calling it a "catch up" if the participant can take advantage of this even if they've maxed 402(g) in the past.

Am i missing something or is this really available to anyone over age 50 regardless of prior contributions?

Thanks

DLM

Lets say a fiduciary selects proprietary mutual funds that are essentially made up of numerous managed accounts with each fund having multiple money management firms running the assets. (these funds are managed by a well known consulting firm). the funds are still mutual funds by definition but the managers are hired and fired based on their performance.

Does this type of monitoring (even though not being done directly by the fiduciaries, meet the monitoring requirements of 404©? I believe it does not since what goes on behind the scences in invisible to the participants. they are still stuck with the same investment option and it should be replaced if it is underperforming.

Any views either agreeing or to the contrary would be appreciated.

:eek:

We want to give our non-exempt ee's PTO benefits. The problem is that we are a small company of about 70 ee's. Our CEO does not want it because he is worried it will have an impact on productivity. Is there any sites I can go to or information that I can obtain to find out what are other small private hi-tech manufacturing industries doing about PTO.

I would really appreciate your help,

Is anyone out there advising their clients with weekly payroll to make weekly 401(k) deposits?

Are ADP/ACP refunds issued during the 5 year look back period considered distributions for puposes of performing top-heavy testing?

Does anyone know (or know where I can find) the total amount of assets in all qualified retirement plans in the USA (how many trillion)?

The instructions for the Schedule R seem to indicate that the Schedule R does not need to be filed for plans without Money Purchase provisions and all distributions being made in cash using the employer's EIN. Any comments?

I ran into a company that has a 419 Plan that is making large deductible contributions that only benefits a few selct employees of their company. Through some of the research I've done I have uncovered "warnings". As a salesman of employee benefits I would like to be able to offer prospects this benefit if it is legitimate. My question is who can I hook up with that is reputable to offer these benefits? Has anyone offering these plans ever had any favorable rulings? Who? I'd like to work with the best here.

Hi Everyone, I just have a quick question regarding the withdraw from a ROTH IRA. I opened a Roth last year ($2000) and now it has lost 25% of its value. I recently had to purchase hearing aids

that I just put on my credit card (over $2k). And now to my question...Can I use what is left in my Roth account to pay for my hearing aids without there being a penalty?

Thanks in advance.