What are the consequences to the employer/plan sponsor if the employer terminates a plan that is no longer qualified (due to plan document failures) and distributes the assets? The employer, of course, is not seeking a favorable determination letter from the IRS regarding the termination.

Anyone attended the ABA Employee Benefits Committee midyear meetings before? I've gone to IFEBP stuff, never ABA and wanted to know what anybody thought. . . It looks good!

OK, this is not a new question, but I'm looking for other folks' experience. Lets say you have a 401(k) that permits self-direction among a group of mutual funds. Additionally, if your balance exceeds, say $20,000, you can invest through a brokerage account, where you can buy individual securities. My feeling is that the ability to invest through an individual brokerage account is a BRF and by attaching a condition such as a rather high minimum you've probably got a discrimination problem. Nevertheless, there are investment institutions that are suggesting this approach and contending that it shouldn't be a problem. I don't agree, but I am not aware of a case or DOL or IRS opinion that specifically speaks to this issue.

What do you think?

A client has nonvested Profit Sharing and Employer Match forfeitures at year-end (6/30), both which are supposed to be used to reduce future contributions.

The Employer is depositing a QNEC at year-end to correct failed testing. Can the Employer apply the forfeitures to the QNEC to reduce the amount he has to deposit to the Plan?

Can anyone provide, or direct me to, statistical information as to what percentage of profit sharing plans permit in service withdrawals (other than hardship)?

Thank you.

Has anyone ever looked at whether the new HIPAA administrative simplification requirements apply to self-funded multiemployer plans? It appears that they might; I was just looking for other people's thoughts.

I understand that IRS proposed regulations stipulate that COBRA premiums for partially self-funded plans are actuarially determined. Can an employer or TPA determine COBRA premiums to charge participants without using an actuary? Is there an acceptable formula for determining this and for determining claims reserve.

When amending a DB M&P Plan for GUST, what must be included in the "snap-off" section of the adoption agreement as required by Rev. Proc. 2000-20 (Sec. 5.12)?

With so many at the ASPA conference, I know it is next to impossible to actually find someone there, but is anyone else going to the conference? It is kind of nice to attach a face to a name.

I look every day on the Qtech website, but haven't seen anything regarding problems, issues and the like, so here are a few i have encountered:

1. Undocumented change. At least I couldn't find it anywhere.

Plan limitation table - all data after the year 2000 has been eliminated. There is now an 'add' button, and you are able to add the info for 2001. Once added, it is across the network, so you only need to update one machine.

sorry, it still does not look like you can have system use 35,000 as an annual addition (or 40,000 if the bill passes Congress) for plan year begin 2000 and end in 2001 at this time.

2. Print out of Database tables - a few of them are missing from the report (RPTEE and RPTEEACCT)[There may be more]. this does not effect processing, because they do exist, they simply do not print at this time. I mention this because I threw out my stuff from 5.0 after I printed the 6.0 reports - it just makes looking up fields for Crystal reports a little more difficult. They are working on this one.

3. 15% report. While the 15% calculation appears to be okay, the report includes ineligbles and does not cap comp at the dollar limit on the report. Unknown sort order. Again, I would emphasize the 15% calc appears to be ok, it is just that the employee listing at this time doesn't help much. I was told the fix is plan for service pack 2.

4. printing crystal reports- some reports, such as Distributions (whether custom or Quantech crystal) will print no employee data. you have to first select 'additional selections', don't need to do anything else on the next screen, simply click 'ok' and then the report works fine. Again, a fix is supposed to be available soon - probably service pack 2.

5. Undocumented change - employees includabe and not benefiting do not appear on the nondiscrim reports. they are included in the calculations (e.g. your avg benefits % test might show 6 NHCEs, but if you have 2 more NHCEs that are includable and not benefitng, then the system correctly includes 8 NHCEs in the calculation) The reports used to show the with E-Bar= 0.

......

Things seem to be running smoothly. Certainly a lot better than what we encountered at 5.0. certainly worth switching over as soon as possible in my opinion. Its a lot easier to find/choose a particular plan or employee.

I'd be curious to hear what others thinks or if someone has encountered other problems I should be looking out for!

Is it possible to satisfy the 50% participation rule for SARSEPs at any point during the plan year (e.g., the last quarter or last two months of the year), or is it necessary that the threshold be met at all times during the plan year??

All the assets and employess of an LLC are being merged with another Corporation to form a new Joint Venture in which the LLC will own a 50% interest. Assuming that the employees job change substantially in scope, responsibility, and job location, do you think a distribution can be made by reason of a separation from service? Do you think Rev. Rul. 2000-27 would cover this situation (i.e., can a the creation of joint venture qualify or do you need a sale). Do you think I am under 401(k)(10)? If an employee does have a separation from service, can an employer force a trustee to trustee transfer (spin-off) (any problem with anti-cut back)?

Employee A participates in a medical FSA. During the coverage period, Employee A's spouse loses his job and his employer-based health plan coverage. Employee A wishes to revoke her medical FSA election prospectively. She claims the loss of her husband's job is a change in status (under the old proposed and new final regulations). We believe that while this is true, the election change (ie, revocation of medical coverage through the FSA) is not consistent with the change in status and therefore the change is not permissible. We believe that if her husband loses his medical coverage, the consistent change would be to add more coverage in the FSA, not revoke. Her reason for wanting to revoke is they need the money given the husband's loss of job. We would like to help but don't think we can. Any ideas?

Anyone know how I could obtain rev rul 71-446? And is there a website where one can pull up rev procs, rev rulings, IRS notices, etc.?

An LLC is forming a joint venture with another Corporation, in which they are both contributing assets and people to form another LLC. The job of several of the employees will be changing substantially in scope and responsibility. I have the following questions:

1. Is a sale required under the IRS recent guidance relaxing the same desk rule for sales of less than 85% of a companies assets?

2. Is the same desk rule an all or nothing rule?

3. If someone is deemed to have separated from service because of a substantial change in jobs, must an employer allow a distribution or can the employer force a trustee to trustee transfer to the new joint venture?

I have several other questions, but this should be a good start. Any input appreciated.

Are fees associated with gathering, registering and storing cord blood and stem cells from a newborn at a cord blood bank a reimbursable expense under a FSA? My response would be no, but would like other opinions.

Thank you.

Can a plan exclude some, but not all, collectively bargained (union) employees? If so, can the plan exclude all union employees not covered by the plan for 410(B) coverage purposes, and include all union employees participating in the plan? What other issues should be considered due to the plan including some, but not all, union employees?

All of our health care options are geographic based HMO coverages. We have an employee who shares custody of her children with her spouse who lives out of state and out of her service area. She has elected to pay for the cost of her health care coverage on a pre-tax basis under the 125 flex plan. She would like to add the children to her health care coverage when they are with her and take them off when they are with her spouse. We are trying to determine where or even if this fits in the new 125 regs. Can anyone help or offer an opinion?

My daughter was born Oct. 6th and will probably not have a Social Security Number before the start of the new year. Is there a way to contribute to a Roth IRA in her name without her SS #?

An easy question (from someone not in this field) follows:

Does the annual compensation limit (currently set at $170,000) mentioned in Section 401(a)(17) apply to earnings only in the tax year 2000 or to previous earnings as well?

Specifically, if a company has a db plan based on final average earnings (an average taken from the last xx years of earnings), should each year's earnings be compared to that year's limit or to the present limit?

If the former, do earnings prior to 1982 face no annual compensation limit?

Thanks in advance,

Brian Mason