We have mandatory plan enrollment (participants cannot elect "No Coverage"), and participants with other comprehensive coverage typically take our $10,000 deductible Cat plan in order to take advantage of our liberal "cash back" allowance. When they lose their comprehensive coverage through their spouse, they want to switch to one of our higher-level plans. We permit them to add their spouse and/or other dependents, but do not permit plan changes. Searching for cites to HIPAA regs that would permit a participant to make a mid-year election change from a Catastrophic type health plan to a comprehensive plan, based on the occurrence of a qualifying status change event (eg. spouse loses coverage under other plan, birth of a child, etc.). We'd like to permit the change, if we could find something in the regs to "hang our hat" on. Thanks.

Two state-funded universities merged in 1997 into a separate entity, while the original universities still had employees working exclusively for themselves. The non-merged employees were allowed to continue contributions to their own separate 403(B) plans administered by the universities; the merged employees were allowed to contribute to a separate 403(B) plan with an employer match (up to 5%).

The entity de-merged in 2000. The merged employees again became university employees no longer allowed to contribute to the entity's 403(B) plan, under the "same desk rule", but were once again allowed to contribute to their individual university's plans.

Now...comes the fun part.

Because of the de-merger, some employee's have over-contributed to the plan, exceeding the $10,500 for PY2000.

The dispute lies in who should refund to the employee the overpayment amount: the merged entity or the individual universities.

Both are claiming that the other is responsible, but, as the end of year looms mightily on the horizon, someone (one of the the entities) must come up with the funds so that the affected employees are not penalized for over-contribution.

Any thought on who is responsible for this?

Has anyone heard of the practice of state insurance commissioners requiring COBRA administrators to obtain third party administrator certificates?

I believe this is required here in California.

I have a question concerning MRD for a 401(k) and an IRA.

Husband and Wife are both past age 70 1/2 and Husband has been taking MRDs out of his 401(k) plan. Husband dies in March of 2000 and Wife does a spousal rollover to a new IRA with her daughter as DB. Wife then dies in October of 2000. 1. Is there an MRD from Husband's 401(k) in 2000?

2. Based on some Private Letter Rulings I've read, I believe that Wife, if she had survived, would not have to take an MRD until December 31, 2001. Is that correct and is there an MRD from Wife's new IRA in 2001?

3. What distribution rules apply to Daughter and what distribtuion must she take in 2001?

Thanks.

The situation is this: a company had a severance "package" it offered to those employees they have had to lay off. Recently the company has downsized tremendously, placing them under the requirements of the WARN Act. Because of this, the company adopted a formal severance "plan" which says that those employees falling under WARN will have their severance benefits reduced by the amount the employer has to pay them under WARN. Is this fair? How can 2 employees be treated differently under ERISA just becuase one employee falls under WARN? And what about WARN, does the statute say you can reduce payment if the employer has set up some sort of severance package for the outgoing employee??

What is the 2001 employer limit for SIMPLE Plans. I realize that $6,500 is the employee limit, but have not seen anything regarding the employer limit.

Thanks in advance for your assistance.

A hospital with a 414(h) pick-up provision has now been bought by a for-profit organization that has a 401(k). Can the assets be transferred to the 401(k)? Is so, are there any rulings or IRS guidance supporting this?

Do SAR's have to be distributed to terminated employee's? We have a Section 125 Premium Only Plan, Medical and Dependent Care FSA's and a 401(k) Plan.

Can they be distributed electronically?

We are considering various pension document software. I have heard through the grape vine that there is a program called Doc Man that is very good. Has anyone heard of it? If so, where can I get more information about it? Is it worth the price?

Employer purchases business and agrees to continue SARSEP retirement benefits employees had received with predecessor company: 5% salary deferral and 10% employer matching contribution. However, employer later learns that predecessor maintained only a SEP, not a SARSEP. IRA custodian has been depositing deferrals and matches into IRA as undifferentiated lump sums.

Is there any way to convert this arrangement to a SIMPLE IRA so as to preserve the salary deferral feature? If not, and employer maintains SEP, what is the best way, from a tax reporting standpoint, to make the employee whole?

Leverage ESOP note matures in two years and the Employer wants to "reload the plan" with a new ESOP note. If the employer wants to continue the ESOP, is a new loan permissable and what are the requirments? How soon is the plan allowed to purchase new shares from the employer with a new leverage loan?

Is anyone considering converting their health plan to a defined contribution plan? If so, when and how? If not, why?

Is it possible for a 457 plan to limit distributions, both in-service and after separation, to a participant's attainment of normal retirement age? As I read the regulations under section 457, the one-time, irrevocable election to choose a different distribution date and emergency withdrawals are permitted (i.e., they won't result in amounts being made available to a participant), but are not mandatory. However, I haven't seen any plans that do not permit the one-time election, or that don't allow emergency withdrawals.

Section 457(e)(11)says that the one of the only forms of compensation a bona fide volunteer can have is "nominal fees". Is there a specific amount that is considered to be nominal? Would $10,000 per year be considered nominal? Section 457(e) says volunteers can receive "reasonable benefits (including length of service awards)" and it limits the accrual in a length of service award program to $3,000. Which is bigger "reasonable" or "nominal"?

I am already 59, wy wife is 57 and we both work. Does it make any sense to initiate Roth IRAs at this age, with only a few years left til retirement? We each have traditional IRAs (to which we have not contributed in recent years since we can no longer contribute pre-tax money).

With current income over $1000000, conversion of the existing ones to Roth has not been considered.

Thanks

An employer missed out a HCE to be able to enter the Plan on July 1. The employer did catch their mistake in September. The employer realizes that they will have to make a QNEC in the amount of the average deferral percentage. However the question arises whether the HCE can still max out his full $10,500 as well as receive his QNEC on top of it. I feel that the total can not be more than $10,500 (including the QNEC) since he is a HCE. If it was a NHCE then QNEC+$10,500 would have been feasible. Is that correct?

Thank you & Happy Holidays to all the members!

My 70-year old friend converted a Traditional IRA to a Roth in 1998. He elected to pay the conversion taxes over 4 years. He wants to make a withdrawal from the Roth this year but was told he would have to pay taxes on the entire withdrawal amount (not just the earnings). It would be treated as accelerated income. Is this correct or can he apply the withdrawal to the amount he already paid conversion taxes on in 1998 & 1999? Please advise.

An employer has a cash balance plan and wants to provide vested participants who leave employment prior to early or normal retirement age with a "portable" benefit by allowing them to rollover their accrued benefit into their new employer's plan. The only form of distribution under the plan eligible for rollover is a lump sum. The plan sponsor does not want to allow terminated participants to receive annuities until early or normal retirement age.

Can a cash balance plan (or any DB plan, for that matter) provide that a vested participant can elect a distribution upon separation from service prior to his early or normal retirement date, but ONLY if the participant waives the QJSA (with spousal consent) and elects a lump sum?

To take it a step further, could the plan condition the payment of the separation benefit upon the election of a lump sum AND an election of a direct rollover?

Could anyone explain what timely payment regulations (and possible penalties) apply to a TPA processing claims for self-funded group health plans?

I am wondering what the obligation would be for a self-funded health plan that never came into compliance with the MHPA (with no exemption claimed). Even if the plan amended retroactive to the deadline, what about all the claims improperly subjected to dollar maximums?

Could anyone tell me what agency or agencies enforce the MHPA, and what form that enforcement might take?