For the new small plan audit rules, when does the bonding requirement on nonqualifying plan assets have to be in place? Is it enough for the bond to be effective as of the last day of the plan year? Would it have to be effective on every day of the plan year?

For plan years starting May 1, 2001: if a plan has 15% nonqualifying plan assets as of April 30, 2001, when does the plan need to meet the additional bonding requirement in order to avoid the audit requirement?

Is anyone up to speed on SSAP#8? I have a copy of the statement but would like more information on it. Examples of calculations would be extremely helpful.

When performing a top-heavy test, if active HCE's have received refunds due to failed ADP (and ACP) tests in the past 5 years, do these amounts count as distributions for calculating the top-heavy ratio or can they be excluded?

Also, if, as of the date of the test it has been determined that some HCE's will need refunds due to a failed ADP or ACP test, can those amounts that will be refunded be excluded from their account balances for purposes of calculating the top-heavy ratio?

If ownership of a company is based on A and B shares of stock, with the difference being that B shares are non-voting shares, would that impact HCE determination?

For example, if there are 100 A shares and 100 B shares for a company, and Mr. A. owns 4 A shares and 20 B shares, is he an HCE?

YES: He owns 24 out of 200 shares of a company, which is 12%, making him HCE.

NO: Since only 4 of the shares are voting shares, he only owns 4 out of 100 shares, which is 4%, making him NHCE.

Thanks for any comments.

Is there any type of law in existance that says that employers cannot create a "use it or loose it" vacation policy? I know I remember reading somewhere that it is illegal for employers to do that but now am unable to find it when I need it. Any help would be appreciated.

The plan document says that participant loans are treated as general investments (the interest is shared among all plan participants).

Aministratively, all participant loans have been treated as individual investments (the interest is credited to the account of the participant who took the loan). The outstanding loan balance has been reflected as a portion of the participants account balance.

I'm looking for suggestions on the best way to fix this discrepancy. Thanks for your consideration.

mck

Is the heartscan/lifescane an eligible expense through FSA? We had said no previously, however, now it looks like insurances are covering up to 80%, so I am wondering if that has changed.

Thank you

I have an employer who has exceeded the 15% employer deductibility limit by $6,000 for their 2000 plan year (it's a calendar year). I know that the employer is supposed to file a form 5330 to pay the 10% excise tax. Am I correct in saying that they also need to amend their 2000 tax return to reduce the amount deducted by $6,000?

Also, what if the employer says that they don't want to file the 5330 and just reduce contributions for the next year? What could the ramifications of that be? Is there a dollar amount that upon audit, the IRS would say that the excess is immaterial? Any information would be helpful:-)

COBRA and EAP - I know the issue has been discussed several times, but I guess I would like to find out the trend. Are most TPA's offering COBRA for groups that offer an EAP(if it classified as a medical plan)? As I have researched the topic, it is pretty clear it should be offered, but not really clear that people are actually doing it. What are the potential risks? The real issue for most groups is that the EAP is available to all employees, but the medical plan is by election. Would all of the employees need to be offered the EAP? I am assuming so, and that really is a administraive nightmare for both the TPA and the group. Any help would be appreciated!!!

Law Firm has two plans: one for partners and staff (top heavy) and one for associates (not top heavy and in which no offfiers or owners are eligible to defer or receive allocations). The two plans pass coverage separately and it would appear that they are not in a required aggregation group.

However, what happens when an associate become a partner and either immeditately or eventually becomes a key employee? They are no longer an active participant in the associate's plan but are immediately in the partners and staff Plan. However, the required aggregation group is a Plan in which a key participates in the plan year containing the DD or any of the four preceding Plan Years.

1) Would aggregation be required even though new partner was not a key in the preceding 4 Years in which he or she participated in the associates' plan?

2) If the new partner's prior account balance remained in the associate's plan (although no further contibutions were made) would aggregation be required because the key would be a "participant" in both plans by virute of the account balance remaining in the associates' plan?

3) Would a plan to plan transfer between the plans immediately upon a participant becoming a partner solve the problem because of 1.416-1 T-32?

We have a university client with a TSA that requires faculty & admin staff to contribute to a TIAA-CREF plan and must be go to the Retirement Annuity Account. This account requires money stay in this account until the participant reaches 62 and terminates. They have been told that under TAMRA, there is a benefit to the highly compensated ees, ie increased deferrals if all ee ctbns go to the RA and in fact the maximum deferral opportunity would decrease if contributions are made to the Supplemental Retirement Annuity. They are considering allowing ees to put their money in either the RA or SRA. The SRA allows access to funds at 59 1/2 while employeed and also provides for loans. Is the TAMRA reference real or is this a "ploy" to keep the money with TIAA-CREF as long as possible? If it is real can I get a TAMRA reference? THANK YOU!

I have a situation where a participant just recently rolled money into his current employers 401(k)plan. He was planning on using some of the money for a down payment on a new house. His current employers plan does not allow for loan. Is there anyway that he can take a distribution? The employer does not want to amend the plan to allow for loans.

Any thoughts on this would be greatly appreciated.

Thanx John for all your information, its was very useful for me. and if i spell anything wrong well... I'm not that good of a speller. Anyway thanx John I have begun looking for the right place and trying to get that mag. you suggested, also that stock idea is quite tempting to do prehaps you can could give me some more information on that propersition you gave me. please send them to my e-mail at Gator_43_2000@yahoo.com

Chris G

Has anyone heard about general results of using negative elections in 403(B) plans? We do get survey results for 401(k) plans which indicate more participants when negative elections are used - but no news on the 403(B) front. As an independent consultant, I generally become aware when something is "hot", but there is a singular lack of comment about this issue relative to 403(B).

Our 401(k) plan is currently with Mainstay/New York Life with administration by Trustar. I really need to move our plan elsewhere. New funds and a new administrator. I want something with various namebrand selections (Vanguard, Putnam, etc.) without breakig the bank. Does anyone have any suggestions? Any great companies out there?

If a plan fails the ratio percentage test, it may still pass using the Average Benefits Test. However, the plan document may specify that if the plan fails 410(B) coverage testing, then additional participants will share in contribution until 410(B) is passed.

Before bringing in additional participants, do you generally do the Average Benefits test on both a contributions and benefits basis? Do you do the Average Benefits test both with and without permitted disparity? Do you do all the methods, including the Accrued to Date method?

Do you use Excel to do Average Benefits testing? What software do you use?

Thanks for any input.

Our very small company (around 25 right now) would like to make domestic partners eligible for health coverage when our health plan contract comes up for renewal late this summer. But according to our insurance broker, most health plans don't extend domestic partner coverage to small employer groups-- you have to be at least 50 people to get this feature and even then it's difficult and can raise premiums significantly.

Has anyone else had experience looking for this as a small group? Does the above match your experience? And does anyone know of particular companies that offer domestic partner coverage to small groups?

I was surprised that this coverage was something that would cause difficulty.

Thanks,

Liss

Can the proceeds from an ESOP be rolled into a qualified plan?

Thanks Tim

Am trying to prepare a Schedule A for a client with variable annuities with Sun Life of Canada (U.S.) based on their canned report for Schedule A preparation. As usual, I have to go hunting for most of the information I need. I am hoping someone out there has SunLife of Canada's EIN and NAIC code.

Thank you in advance!!!!!

(Any chance Schedule A's will not be required anytime soon, especially since insurance company's feel no obligation to provide the necessary information to prepare them?)

Question number 4(B) on the 5310-A form requires me to attach an actuarial statement of valuation showing compliance with Section 401(a)(12) and the regs under 414(l).

For a DC plan, is this simply referring to the statement that states "Each participant in the plan will recieve a benefit immediately after the transfer of assets that is equal to the benefit he or she would have been entitled to receive immediately before the transfer of assets."

P.S.

Please don't respond by saying I probably don't need to file the form. The instructions to this form are so crappy that it appears easier to just file this one page form and be done with it and not worry about the penalties for failing to file.

Thanks.