This question has to do with the nondiscrimination requirement of 1.414(s)-(d)(3)(i) pertaining to an alternative definition of compensation.

The average percentage of total compensation included for HCE's cannot exceed the average percentage of compensation for NHCE's by more than a de minimis amount.

Has anyone had any experience with the IRS that indicates what they might think a de minimis amount is?

MY FORMER EMPLOYER TOLD ME HE WAS DROPPING THE GROUP PLAN HE HAD AND THAT I COULD NOT GET COVERAGE UNDER COBRA. DO YOU KNOW HOW TO GET IN TOUCH WITH SOMEONE IN THE STATE OF SOUTH CAROLINA ABOUT THIS?

I'm looking at a plan that failed to prohibit participants from making elective deferrals after they took hardship distributions. The mistaken deferrals incurred losses. If the plan kicks these deferrals back out, should the losses be taken into account in the earnings calculation? Rev. Proc. 2001-17, Section 6.02(4)(a) says that "the corrective allocation need not be adjusted for losses." Do others read this to mean that the plan has a choice as to whether to take losses into account? What have other plans done in this situation?

I have a participant in a 457 plan that has exceeded the maximum dollar limitation by $3,000 in 2000. I was wondering if any penalties (participant or plan)are generated (similar to a 402(g)) when this money is paid out. Any help would be appreciated.

The end of the remedial amendment period is the end of the plan year starting in 2001. However, prototype plans get an extension to 1 year after receiving a favorable IRS letter. So let's say a prototype gets the IRS letter on August 1, 2001, so that the Remedial amendment period for the plan using that prototype ends August 1, 2002.

Say the plan is a calendar year plan.

Does that plan have the choice of current year or prior year ADP and ACP testing for 2002 no matter what was done in 2001, or is 2001 the last year that the choice is "free?"

What's the worst that can happen (in terms of penalties or other legal ramifications) that could result from the plan administrator approving/processing an un-qualified hardship withdrawal? Our TPA told me it could put our plan in default, but what does that MEAN in layman's terms?

i have cleint who wants to be able to defer vacation and sick that employees have accrued above certian number of hours to a 403(B) plan with an employer contributions. The vacation and sick pay is not in a 125 flex plan. Does anyone see any problems with this. they are gov't hospital unit.

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?