After speaking with a COBRA "firm", several providers and a Section 125 administrator we are not getting clear answers. First, the assumption here is that the vision program is purely a discount and is absolutely not insurance.

1) Does a discount vision plan fall under COBRA?

2) If the employee pays part of the cost, is it eligible for inclusion in a premium only plan (Section 125)?

3) Is a 5500 filing required?

Your feedback with any supporting information would be appreciated.

Thanks!

Upon my retirement 5 years ago, I instructed my employer to roll over my 401k and pension plan funds into an IRA. I was told the entire amount was transferred. 2 days ago, I learned that the entire amount was not transferred and $10k remained in the plan. I have never received a statement regarding any benefits remaining or whether there were additional funds in the plan. Now, my former employer just wants to give me the remaining balance. In the interim, I have lost the use of this money. The IRA I rolled the initial proceeds into has done very well and I would like the difference in interest between the plan interest(more like a loss in interest)and the interest I would have made if all the money was rolled over, as instructed. Do I have any recourse? Can anyone refer me to specific ERISA provisions to review before I consult an attorney. Also, the same thing happened to several former employees.

i know of a participant who was employed with employer 1, terminated & rolled employer 1's monies into qualified plan of employer 2, has now terminated employment with employer 2, rolled monies out from employer 2's qualified plan (including monies from employer 1's plan) and into ira. she is now re-hired with employer 1, and wants to roll monies from ira (qualifed plan 1 and qualified plan 2) into employer 1's plan again. the participant's tpa states that the ira monies are not pure (plan 1 and plan 2 have been mixed)and cannot be rolled back to employer 1's plan; however, other parties disagree, as both sources are qualified plans. any thoughts on the status of this 'conduit' ira & the feasibility of rolling the ira monies back into employer 1's plan?

[This message has been edited by amy darnell (edited 05-24-2000).]

[This message has been edited by amy darnell (edited 05-24-2000).]

We all know that governmental plans are not subject to ERISA. We administer plans for municipalities and have tried to create a customized template plan that extracts all the ERISA language that does not apply. There are a couple of problems with this: 1) The attorney fees that are associated with the writing and annual review of these plans are significant 2) finding a qualified attorney that understands the differences between a governmental plan and an ERISA plan 3)The pension administration software available is tailored towards ERISA plans and requires major customization to make work for non-ERISA plans.

Interested to know what other governmental plans are doing. I am finding out that the majority of plans - especially at the local government level - are just using the "boxed" erisa plans anyway.

I think this is especially true for those governments who have turned to participant directed investments for their 401(a).

Even though this opens the governmental agency to rules and testing that they are not required to do, it offers other advantages. We are interested in finding a Document Service that can provide annual IRC updates and help with plan amendments, but can only find through and ERISA plan.

Would appreciate any comments on this matter.

Here's the scenario. Employer gave a safe harbor notice indicating that the 3% safe harbor contribution would be made into the monoey purchase plan. The MPP, however, has an integrated formula, 3% base w/ 3% of excess. The employer intended to use the 3% base as the safe harbor contribution. The employer, however, has passed the ADP/ACP tests w/out consideration of any Safe Harbor provisions. Can we simply consider our Notice as "bad" and leave the 401(k) plan as it is w/ passing the ADP/ACP tests and leave the MPP contribution as it is? Of course, the 3% base MPPP contribution should be 100% vested because of the notice to the employees. We would like to avoid the ER having to put in another 3% into the MPPP.

What rules apply with respect to return of mistaken employer contributions under a 457 plan? Are the rules the same as for a qualified plan subject to ERISA?

My organization is seeking to contract with an online custom investment advice provider to benefit a growing portion of our 165,000 401(k) plan participants . We are considering Morningstar, MPower and Financial Engines. Would anyone care to share experiences/opinions on these providers? Also, if you have any recommendations of other potential providers, I would be grateful for your input. Thanks.

For the past several years, the employer has not withheld enough from participant's salary for the cafeteria plan. A new controller has taken over and discovered this error. Can the employer now withhold the additional amount needed to cover the cafeteria plan deductions?

A plan had a short plan year from 1/1/99 to 8/31/99, so the 1999 5500 was due 3/31/00. A 5558 was filed to extend the due date to 6/15/00. Without the 5558, the plan would qualify for the automatic extension to 10/16/00. What is the correct due date for the plan at this point?

For purposes of determining the top hat group, is it possible to look only at one branch or division of an employer (for instance, a separate branch doing business under a DBA) for purposes of determining the top hat group, or must all employees of the employer be considered?

For instance if the employer wants to set up a plan for the manager of a branch that is just a DBA, can the manager comprise his own top hat group or must all of the employer's employees be considered?

Any comments would be appreciated

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My organization is seeking to contract with an online custom investment advice provider to benefit a growing portion of our 165,000 401(k) plan participants . We are considering Morningstar, MPower and Financial Engines. Would anyone care to share experiences/opinions on these providers? Also, if you have any recommendations of other potential providers, I would be grateful for your input. Thanks.

Hi, all. I have an idea that I think will help tie benefits to individuals instead of employers, resulting in more portable and flexible benefit plans. The idea is a modified Cafeteria Plan administered not by employers, but by third parties called Flexible Benefit Organizations (FBO's). You can think of an FBO as a credit union for benefits: employers, instead of offering their own plans, would issue pre-tax benefit credits that could be "spent" at any qualified FBO. When employees change jobs, they wouldn't have to disenroll and reenroll in plans, because their FBO membership would not change -- only the source of their benefit credits. Likewise, independent contractors could collect benefit credits from multiple clients to obtain full-time equivalent benefits.

I'm looking for interested HR professionals to join an electronic discussion group to take the idea apart and see if it's worth pursuing. I've created a personal website and posted a concept paper on it; everyone is welcome to come take a look and let me know what you think. The site is: http://www.flexiblebenefits.org

Once on the site, click on the Library link, then read the abstract or the full paper. Feel free to forward the link to anyone you feel may be interested.

Thanks in advance,

Bob Watkins

I have a client that wants to use the proposed loan regulations for a loan repayment after default. I understand that the payment must be put in an after-tax source. Does the plan need to be amended to accomodate this source? (The plan does not have an after-tax source now) Should the withdrawl restrictions be the same as for the elective deferrals and company match that the loan originally came from or can it be only subject to the after-tax contribution rules? Does anybody know of any articles or regs that address this?

Thanks.

Under a dollars follows the man reciprocity agreement, can transferred hours be treated as Section 203(a)(3)(B) service (i.e., the basis for a suspension of a retiree’s pension from the home plan)?

Case 1: Single GTL plan

=======================

I = (C - $50,000) * R - D

I partial imputed income

C coverage amount

R rate in $/1000$

D premimums paid by the employee

partial imputed income:

If = f * I

f fraction of the month

An employee with anual salary of $80,000 is paid semi-monthly and has one GTL plan. His coverage amount is 2 times his annual salary. Group term life is imputed in the last period of each month. For the second pay period in April he receives a pay rise to $85,000 anual which impacts his imputed income.

Problems:

a) The premium for the first half month is based on an amount of ($160,000 - $80,000)/1000 * $0.17 = $18.70 for April. How to calculate the first half months premium?

(I) $18.70 / 30 = 0.623333..., $0.62 * 15 = $9.30

(II) fraction of the first half month is 15/30 = 0.5, 0.5 * $18.70 = $9.35

Case 2: Multiple GTL plans

==========================

Is this formula correct?

I = (C - $50,000) * R - D

I partial imputed income

C = Sum(C_i) total coverage amount

C_i coverage amount per plan i

R rate in $/1000$

D = Sum(D_i) total premimums paid by ee

D_i premimiums per plan i paid by ee

Total imputed income for the month:

If_tot = Sum(If_i) = Sum(f_i * I_i)

with extra condition for the fractions:

Sum(f_i) = f_1 + f_2 + ... = 1.0

If_tot total monthly inputed

If_i monthly imputed income per plan i

f_i fraction of the month per plan i

An employee with anual salary of $80,000 is paid semi-monthly and has a GTL plan A which covers 1 time anual salary and plan B covers for 2 times anual salary. Group term life is imputed in the last period of each month. For the second pay period in April he receives a pay rise to $85,000 anual which impacts his imputed income.

Does this compute compliant to the regulations?

For plans that are drafted to contain a true-up matching provision (ie, matching contributions are based on annual compensation rather than payroll period compensation), does the Employer have to wait until plan year end to make the true-up matching contribution? I have always seen it done at plan year end once the annual compensation is exactly known. However, I have a client who wants to make the true-up at the time the participants hit the 10,500 limit all at once based on projected compensation for the year, or alternatively, to true-up each payroll rather than waiting to the end of the year. Can this be done? Any comments would be appreciated.

A company sponsors two plans, a P-S and a MP plan. The trustee (not the participants) controls the investments in both of these plans. The broker mistakenly liquidated investments and paid a distribution for a particpant out of the wrong plan.

Can the broker truly fix this problem by simply transferring assets from one plan to the other? Is there a 5310-A filing required or any other notification to the IRS?

Any cite would be greatly appreciated.

Does a 403(B) require an annual 5500 to be completed and submitted to the IRS, like a 401(k)? Does discrimination testing need to take place?

DB is significantly overfunded. They want to freeze and/or termate the plan. Considerations are the following:

1) NRA = 65. Plan currently has a 50% reduction in benefits at ERA of 55, a 33% reduction in benefits at ERA of 60. What issues should we consider if they want to eliminate these reductions and allow full benefits at age 55 or 60 with a certain number of years of service - say 20 or 25? They have considered this previous to the freeze/terminate issue. I assume we would have to prove that this amendment was nondiscriminatory. How is this done? Just examine affected participants at the time of the amendment. If we freeze the plan will that eliminate further service accruals? What about someone who is age 54 with 25 years of service and then next year while the plan is frozen they reach age 55. I assume they will get the unreduced benefits. So how is nondiscimination measured if the number of affected participants is changing.

2) Considering using a 401(h) account to use part of the overfunded amount. Assume we would just have to freeze for now to allow for the 5 year window.

3) Considering adding a lump sum payout option for balances over $5,000. How will this affect the overfuneded status as most participants will choose to take lump sum and rollover to 401(k).

4) Timing of GUST amendments with amendment to termiate. Does it really matter which comes first. I have always done GUST amendments before amendment to terminate, can they be done after?

Any other thoughts I am missing.

A plan has a favorable determination letter by the Puerto Rico Treasury Department (La Hacienda), not the IRS. Is this sufficient or must the plan also obtain a determination from the IRS?