An insurance agent of a client of mine proposes using approximately $400,000 of an $800,000 account balance in a frozen plan to purchase a paid up whole life first to die policy on the lives of the participant and his spouse. No insurance has been purchased in the past, so the $400,000 is available. I believe (but am not sure) that the goal is to take a distribution of the policy in about five years when the cash value is still low, apparently to avoid taxes. Does this seem reasonable? Can the policy be a first to die, thus insuring the life of a nonparticipant (the participant's spouse)? Thanks.

We've been retained by a new client to amend their MPPP to reflect a 6% contribution for participants with less than 10 years of service and 8% for those with service 10 years and over. I assume this will require a volume submitter document. If the plan passes rate group testing each year, does anyone see a problem? Does anyone have suggested language? Thanks.

After leaving my job, I continued my insurance under the Cobra coverage. Is it possible to extend the coverage past the initial 18 months?

A documentation question: Company A buys Company B and Company B's plan will now be merged into Company A's plan. Do both plans need some kind of "merger" resolutions? Does any one know of any sample language? Thanks for any guidance.

Is the following information accurate?

"When Contributions are due:"

1. Payroll deducted amounts, including 401(k) & 403(B) Elective Deferrals, After-Tax Employee Contributions (and loan repayments) are due as soon as they can be deposited to the Trust Fund. (Section 125 "payments'?)

2. Safe Harbor Matching Contributions, calculated on a basis other than annual, are due no later than the end of the plan year quarter following the quarter in which they are calculated.

3. Defined Benefit and Money Purchase Pension Plan contributions are due 8 ½ months after the end of the Plan Year.

4. Profit Sharing Contributions and non-Safe Harbor Matching Contributions are due by filing date of the Employer's tax return, including extensions. Corporations, Partners and Sole Proprietors have different extension periods although Partners and Sole Proprietors end up at the same deadline (Oct 15).

5. Qualified Matching Contributions and Qualified Non-Elective Contributions, used to solve ADP/ACP/MUT testing failures are due by the end of the Plan Year following the end of the Plan Year tested.

End.

501©(6) organization has a for profit subsidiary which

has a broker dealer as a subsidiary. It has been proposed

that the 401(k) plan sponsored by the ©(6) org be

invested through the bd sub. The for profit sub would

receive the commissions on the assets which ultimately

would go to the ©(6) parent. Is this a prohibited

transaction and/or fiduciary issue? As a trustee of the

plan, as well as an employee of the sub, I am concerned

with any potential violations. On the one hand, the

revenue can help keep membership dues and expenses reasonable for the parent org. On the other, we don't

need any violation problems either. Any information,

thought and references to DOL regs would be appreciated.

THANK YOU!!

Let's say you lose 90% of the value of your 401k investment in the year 2000. Are these losses tax deductible?

While most businesses offer employees some combination of health and/or life insurance benefits, virtually none offer employees auto, home, or other personal insurance benefits.

Is there any reason why an employer would not be allowed to offer employees auto or home insurance as part of a benefits package?

Is there any reason why an employer would not want to offer auto or home insurance as part of a benefits package?

Participant, age 76 and prior owner of Company A, says he has valid TEFRA eleciton for the Company A DB plan. He can not produce the election form. What, as plan administrator, is my responsibility when it comes to making MRD. This is a new plan for me - my company recently bought the assets of Company A and assumed sponsorship of the DB plan.

I administer COBRA in-house for my company of 2,500 employees. I have about 20 active COBRA participants. I am having a lot of problems with my "Benenfit Plans System" software. Does anyone know a good software for adminisering COBRA?

What is the HIPPA compliance for Explanation of Benefits information,i.e., who should the EOB be addressed to? Should it always go to the employee or to individuals depending on who received the service? Could an over age dependent receive the EOB if no longer living with the employee?

I am attempting to do some research on employee-pay all VEBAs. Does anyone know of any websites, sources, etc. Specifically, I need to know what happens if the VEBA does not pass nondiscrimination testing. How often does testing need to be done? If a participant leaves employment, I assume that you cannot force a participant to take his money out of the VEBA. Can a participant rollover his VEBA to another VEBA? Can a participant elect to suspend or decrease his contributions? Are there contribution minimums/maximums? Does an employer need to maintain the account for a participant who leaves his employment. What if the participant is missing? Can an employer impose an administration charge on the VEBA for a participant that leaves his money with the employer?

FYI,

Everyone with non-calendar year plans, especially New Comp. Plans, should read the post by Tom Poje on 04-03-2000 titled "limitation year / non-calendar year plans".

I read Sal Tripodi's write-up on the $35,000 limit at his website ("$35,000 limit for DC plans takes effect for years ending after December 31, 2000" at http://www.cyberisa.com/erisa_new.htm ) and was surprised when the new limit can take effect. Tom Poje's posting did a great job of explaining to me why this limit can apply now.

Has anyone else recently received IRS letters on non-filing of plans for the 1997 plan year? I've received at least four faxes from (worried) clients in the past week regarding non-filed 1997 forms. In all cases these were terminated plans that had filed final forms well prior to 1997 (I have copies of the final filings so we're safe - now all I have to do is talk these prior retired clients off the ledge).

What changes in health insurance coverage (i.e. drop coverage, drop dependents etc...)can an employee paying for health premiums with after-tax dollars make as opposed to an employee paying for premiums with pre-tax dollars, outside the open enrollment period?

We have a 401(k) plan that would like to amend to a SEP plan. Is this possible, or would the 401(k) plan have to terminate and then start a new SEP. It is my understanding that SEPs are not considered a sucessor plan so that shouldn't be an issue. Any cites would be appreciated. Thank you.

I've seen several messages making reference to "new rules/ regs regarding cafeteria plans effective 01/01/2001".

What is this all about ? I havn't herad anything about it. Can anyone shed some information on these new rules?

I just caught a CFP on CNBC who had stated that the funding limits for IRAs had been increased to $5,000. I was under the impression that legislation had not yet been passed to increase the funding limit from $2,000.

Please let me know if the funding limits for a traditional IRA and a Roth IRA have really been changed, or if this person is out to lunch.

Thanks.

Bob Predaina

Twenty years ago, I drove a cab for a living. It was a cowboy's life, a life for someone who wanted no boss. What I didn't realize was that it was also a ministry.

Because I drove the night shift, my cab became a moving confessional. Passengers climbed in, sat behind me in total anonymity, and told me about their lives. I encountered people whose lives amazed me, enobled me, made me laugh and weep. But none touched me more than a woman I picked up late one August night.

I was responding to a call from a small brick fourplex in a quiet part of town. I assumed I was being sent to pick up some partiers, or someone who had just had a fight with a lover, or a worker heading to an early shift at some factory for the industrial part of town.

When I arrived at 2:30 a.m., the building was dark except for a single light in a ground floor window. Under these circumstances, many drivers would just honk once or twice, wait a minute, then drive away. But I had seen too many impoverished people who depended on taxis as their only means of transportation. Unless a situation smelled of danger, I always went to the door. This passenger might be someone who needs my assistance, I reasoned to myself. So I walked to the door and knocked.

"Just a minute," answered a frail, elderly voice. I could hear something being dragged across the floor.

After a long pause, the door opened. A small woman in her 80s stood before me. She was wearing a print dress and a pillbox hat with a veil pinned on it, like somebody out of a 1940's movie. By her side was a small nylon suitcase. The apartment looked as if no one had lived in it for years. All the furniture was covered with sheets.

There were no clocks on the walls, no knickknacks or utensils on the counters. In the corner was a cardboard box filled with photos and glassware.

"Would you carry my bag out to the car?" she said. I took the suitcase to the cab, then returned to assist the woman. She took my arm and we walked slowly toward the curb. She kept thanking me for my kindness. "It's nothing," I told her. "I just try to treat my passengers the way I would want my mother treated".

"Oh, you're such a good boy," she said.

When we got in the cab, she gave me an address, then asked, "Could you drive through downtown?"

"It's not the shortest way," I answered, as we pulled away from the curb.

"Oh, I don't mind," she said. "I'm in no hurry. I'm on my way to a hospice".

I looked in the rear-view mirror. Her eyes were glistening. "I don't have any family left," she continued. "The doctor says I don't have very long."

I quietly reached over and shut off the meter. "What route would you like me to take?" I asked.

For the next two hours, we drove through the city. She showed me the building where she had once worked as an elevator operator. We drove where she and her husband lived when they were newlyweds. She had me pull up in front of a furniture warehouse that had once been a ballroom where she had gone dancing as a girl. Sometimes she'd ask me to slow down in front of a particular building or corner and would sit staring into the darkness, saying nothing.

As the first hint of sun was creasing the horizon, she suddenly said, "I'm tired. Let's go now."

We drove in silence to the address she had given me. It was a low building, like a small convalescent home, with a driveway that passed under a portico. Two orderlies came out to the cab as soon as we pulled up. They were solicitous and intent, watching her every move. They must have been expecting her.

I opened the trunk and took the small suitcase to the door. The woman was already seated in a wheelchair.

"How much do I owe you?" she asked, reaching into her purse.

"Nothing," I said.

"You have to make a living," she answered.

"There are other passengers," I responded.

Almost without thinking, I bent and gave her a hug. She held onto me tightly. "You gave an old woman a little moment of joy," she said. "Thank you."

I squeezed her hand, then walked into the dim morning light. Behind me, a door shut. It was the sound of the closing of a life.

I didn't pick up any more passengers that shift. I drove aimlessly, lost in thought. For the rest of that day, I could hardly talk. What if that woman had gotten an angry driver, or one who was impatient to end his shift? What if I had refused to take the run, or had honked once, then driven away?

We're conditioned to think that our lives revolve around great moments. But great moments often catch us unaware--beautifully wrapped in what others may consider a small one.

PEOPLE MAY NOT REMEMBER EXACTLY WHAT YOU DID, OR WHAT YOU SAID, ...BUT THEY WILL ALWAYS REMEMBER HOW YOU MADE THEM FEEL.

(Author Unknown)

I am hoping someone out there can help me and my co-workers. We are covered under a "self-funded health" plan and are having a lot of problems. The first of which is claims that just don't get paid, sometimes for three months or more.I know lots of people in collections from this.

When we call the insurance company, they say call the employer, and vise-versa. We are also all being told on the phone that our plan is not subject to any time limits for our claims to get paid, something about they are exempt from all of that.

I also know lots of people in our plan geting their claims denied for a "pre-existing condition". There doesn't seem to be any rules for this in our plan except if its a big bill its pre-existing and they wont pay. We cant get any help calling the insurance company or our own employer. Can anyone tell me who or what agecny to call for help or to lodge a complaint?