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.

We have a case where the beneficiary was contested through an interpleader action. Our question revolves around the withholding rules on the plan distribution. If the funds are paid into the Court and then paid to the beneficiary and the attorney (us), at what point, if any, do the withholding rules apply? Is it viewed as a plan distribution when the money is paid to the court? Or when the proceeds are paid from the Court to the bene? What about if the bene had intended on rolling over?

I have seen one question on this on the board, but not much response. Does anyone have any good info. We have tried to research it but are coming up with dead ends.

Thanks

Three individual registered invesment advisors form an LLC for the purposes of providing investment advice. Those same three individuals are also the only members of another LLC (a large hardware store... which has 25 employees).

The hardware store LLC has a 401(k) plan (& employer matching) with 22 participants. All accounts are "participant directed". The three members of the hardware store LLC are participants in the hardware store's 401(k).

The hardware store 401(k) needs a trustee and an investment advisor .... so it appoints one of the hardware store LLC members as trustee and he hires the RIA LLC (which he is a member of) as the 401(k) plan's investment advisor.

MY QUESTION:

Is the fact that the trustee and or RIA, LLC are being paid by the 401(k) considered a prohibited transaction .... or does the fact that all the 401(k) accounts are participant directed prevent this arrangement from being prohibited ?

Question -

If a 401(k) has an early retirement provision, does that mean that anyone terminating after the early retirement age is fully vested at that time?

Even if they were involuntarily terminated?

Thanks!!

Robyn

On Form 5500 question B Part 1. Plan is new. Effective date of plan is Feb 2000. Plan has elected 12/31/2000 as the plan year end. Would you check off box B(1) first return and b(4) short plan year or Just Box (1)

I had coverage under Cobra Law after resigning to a company in December 2000. In February, I started to work with another company that had a group insurance with the same Health Ins. Co. I did not asked to be removed from the Cobra Plan nor requested it, but the insurance company canceled my participation in the Cobra plan at the moment they activated me with the new group insurance policy. I was terminated by the end of March by my employer and now I find that the insurance company excluded me from Cobra and doesn't wants to reinstate me in the plan. I have an ongoing medical condition that requires treatment and would be excluded from an individual plan. What can I do?

I am looking for some guidance and good reference material to teach me how to calculate a bottom's up and "straight" QNEC. Any suggestions?

For tax purposes, how do your plans report qualified payments made to a participant's estate?

Specifically, we're questioning:

For benefits paid a participant's estate, does the pension plan administrators have the responsibility to report the payments using the estate's EIN or can it report the benefits using the deceased's SSN/EIN?

Does the answer change if the benefit is paid as an annuity or lump sum distribution (IROD) vs. life insurance payment made from the pension plan?

IRS Publication 559 has some information on the duties of payers of interest and dividends. However, I'm unclear on the duties of db plan administrators.

When determining the maximum 5-year repayment period for a participant loan, does the 5-year period start on the day of the first payment, on the origination date of the loan, or on some other date?

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?