Certain entities have claimed that cash-balance pension plans are illegal because of age discrimination due to the "reduction of the rate of an employee's benefit accrual, because of age." Would this same challenge apply to a Money Purchase Pension Plan? It appears that a Money Purchase Plan has this same age discrimination attribute because the benefit formula is basically the same.

Has anyone been receiving DOL notices on 1999 5500s regarding the fact that the plan did not fill out Schedule R information regading minimum funding when the plan is clearly not subject to minimum funding?

We have received these on 3 of our ESOP clients so far. We called the DOL and they said that any 5500 that did not indicate a code 2E for profit sharing will be expected to be subject to minimum funding and they will be looking for that information on Schedule R.

So now, to avoid a notice, we are supposed to include a profit shairng code of 2E for our ESOPS! Doesn't make a lot of sense to me.

Anyone else?

Help- need to prove to my client (or find out now rather than later if I am wrong) that a welfare plan sponsored by a U.S. corporation to cover U.S. citizen employees who are posted abroad (plan does not cover U.S. based employees) is subject to ERISA. I believe it is- but I can't find any cite for direct support- I need a cite!

Thank you

BACKGROUND: 401(k) Plans are subject to an Average Deferral Percentage (ADP) test. Test failure usually results in Excess Contributions being distributed to "Highly Compensated Employees". 12/31/2000 test corrections – refunds - made before 3/15/2001 exempt Employers from paying excise tax on excess. If refund is made within 2-1/2 month correction window, Recipient must report excess for year deferred (2000 this example.)

Payor reports the refund of excess contributions on year 2001 IRS FORM 1099-R which isn’t issued to Recipient until January 31, 2002.

To avoid Recipients having to go back and amend the 2000 tax return, we advise Recipients of prior year tax liability at time of distribution, giving identical information that will appear on the 2001 IRS form 1099-R. This information usually includes the IRS Distribution Code "P", identifying on the 2001 Form 1099R that the distribution is taxable in the prior year, 2000.

PROBLEM: We have received complaints from Recipients (or their CPAs) that some 2000 tax software packages do not accept the "P" code. Has anyone else experienced this problem and if so, which software and what was the solution?

I am currently on short term disability from work. My employer says I am liable to pay my entire monthly premium on my health insurance. I feel as if I should only have to pay my normal monthly deduction.Are there any laws about this issue?

A Plan adopts the safe-harbor hardship definition.

The plan has allowed elective contributions to a 401(k) arrangement for a participant that should have been suspended due to hardship reasons.

I think as long as the hardship suspension of one year OCCURS it is okay that elective deferrals are allocated to the participant's account subsequent to taking the hardship w/d. But how long can contributions keep coming?

When looking at the regs. I believe it states that the suspension must occur as soon as administratively possible.

What is the timeframe for as soon as administratively possible?

At what point would the elective deferrals be treated as prohibited transactions?

Anyone know where I can get a copy of a sample cafeteria plan claim form?

I am currently analyzing the feasibility of changing our 401(k) vendor. With respect to vendor solicitations, including broker sponsored introductions, what are some of the top questions/priorities/concerns you have when meeting with prospective 401(k) vendors? Have you implemented the Plan via a broker, or independent negotiations? Why have you changed 401(k) vendors? Can you also share your employers match methodology, including vesting and deposit cycle.

Does anyone know of a financial institution that will accept an involuntary rollover from a terminated 401(k) plan to an IRA, where the participant does not sign anything establishing the IRA (either because the participant can't be located or doesn't respond to requests to take his/her distribution). The 401(k) plan has the individual's name, address, Social Security number, etc, but doesn't have a signature authorizing the establishment of the IRA. The IRS issued guidance in 2000 permitting the concept of involuntary rollovers to IRAs, but we are having difficulty locating a financial institution that will create an IRA without the owner's signature. Any references would be appreciated. Thanks.

Can employee charitable contributions to an employer (a 501©(3)) be excluded from taxable wages under the employers cafteria plan?

Does anyone have a good source (loose-leaf service, etc.) for sample IRA documents, IRA disclosure forms etc.?

We have a 7 life case with 5 TV's and 2 active (key). There is enough $ to pay out the 5 TV's . I'm assuming we can't waive benefits to keys to satisfy minimum funding. Somehow on this takeover case the plan "misplaced" $500,000. I'm also guessing the for PGBC termination the keys can waive benefits to the extent necessary to satisfy the assets left in the plan after the TV's are paid.

I NEED TO KNOW WHAT IS THE LAST DAY FOR THE YEAR 2000 THAT A PERSON COULD OPEN A ROTH IRA. I KNOW YOU CAN CONTRIBUTE UNTIL 4 15, BUT WHAT IS THE WRITTEN RULE ON OPENING ONE????

Does anyone know the citation to the rule that if an employer does not comply in full with all aspects of ERISA Section 404©, then the exclusion from fiduciary liability is not available??

I am taking the exam in May. Is anyone interested in starting an Internet Review Session?

There is a partnership which is losing a partner and adding a new partner. They are dissolving the old partnership and starting a new partnership. As I understand it, they are filing for a new EIN.

They have a 401(k) plan. What are the effects of a change in partnership on the plan. Do they need to terminate the existing plan once the old partnership is dissolved? If so, does the same desk rule apply? Or can they just amend the plan to change its name?

I am trying to confirm when employer profit sharing non-elective contributions are deemed credited to a participant's account for a particular limitation year.

The regs say:

An amount is an annual addition if it is credited to a participant for a limitation year. An amount is credited if it is allocated to the account of a participant under the terms of a plan as of any date within that limitation year. See Reg. 1.415-6(B)(7)(i).

In general, EMPLOYER CONTRIBUTIONS are not deemed credited to a participant's account for a particular limitation year unless they are actually made no later than 30 days after the IRC 404(a)(6) period for the tax year within which the limitation year ends. See Reg. 1.415-6(B)(7)(ii).

Is is correct to inerpret this to mean that a plan has until 30 days after the due date for their 2000 tax return to make non-elective contributions that are deductible for 1999 and also count as annual additions for 1999?

A county government formerly had a contributory DB plan and converted to a DC plan (discretionary profit sharing) about 8 years ago. Some employees did not contribute to the DB plan and, therefore, got no county contribution for those years of service. Now the county wants to make a contribution to the DC plan for those affected employees. The county will contribute a sum that would be shared by the affected employees only based on a formula that would consider pay and years of service. Can the county do this within the framework of the DC plan for the affected employees only. Any other ideas as to how to accomplish the goal of giving those employees something for the years they got no contribution in the old DB plan?"

A client of ours is starting a cafeteria plan where the company is paying 90% of medical premiums and the employee is paying 10%. However, the client has a doctor who is considered an employee, but has an employment agreement where she is responsible for 100% of her medical premiums and the client does not want to pay anything on behalf of her health insurance. Can you set up a cafeteria plan that excludes a certain class of employees such as doctors? If you exclude these employees, any health insurance withheld from their pay will be after tax dollard through a separate contract, right?

What notices are required to be sent participants who are receiving involuntary distributions (vested account balances less than $5,000)?