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?

We have a money purchase plan funded with an insurance company annuity. Each year the fund withdraws for contingency and expense charges. The charges are shown as expenses to the trust on the Schedule A. The client wants to reimburse the plan for these expenses.

This is a small 3 life case, the contribution is around $25,000 per year. If the contincency fees are $5,000, can the client contribute and deduct $30,000?

Steve

Does anyone know of any rules governing the timing of ESOP contributions?

For example, ER has set up an ESOP with a plan year end of February 28. It is now 75 or so days after the end of the plan year. By what time is the ER required to purchase stock for that plan year? Can stock received after the end of the plan year through a 1042 election be contributed to plan for the plan year ending on February 28?

Any help that anyone could provide would be greatly appreciated.

Past 401(k) vendors I have worked with have provided the employer with a "checklist" to help the employer determine if a QDRO was acceptable.

The new vendor we work (Putnam) with tells me that they offer no such guidance.

Where can I find instructions for administering a QDRO?

Does anyone have any thoughts on this question.

Q&A-12(a) of the proposed regulations states that "An election to reduce compensation for a period by a set amount for such period may be automatically renewed for subsequent periods."

Q&A-12(B) states "An employer may provide under its qualified transportation fringe benefit plan that a compensation reduction election will be deemed to have been made if the employee does not elect to receive cash compensation in lieu of the qualified transportation fringe provided that the employee receives adequate opportunity to choose to receive the cash compensation instead of the qualified transportation fringe."

Are these talking about the same thing, or is (B) talking about initial elections and (a) talking about continuing elections already in place? Can an employer with monthly election periods require an affirmative election to get into the plan, and then automatically renew salary reduction elections each month without sending out notices to everyone who is participating. The participants would be told at the outset and probably periodically that they always can cancel their election at the beginning of any month, but they wouldn't be told this each and every month.

What do you think?

[This message has been edited by HIPAAdrome (edited 05-22-2000).]

Section 1056 of ERISA states that plan distributions should begin the later of:

termination

NRA

10th anniv of participation

Age 65

However, I've recently noticed many documents, including prototypes, state age 62 instead of age 65. Has the age changed and I just missed it along the way?

Under which circumstances must a self-insured plan hold employee health insurance contributions in a seperate trust account?

I am seeking advice about this question:

In a self-insured health plan,

when must deductions from an employee's wages be required to be held in a seperate trust type account?

Company A acquires Company B through stock or asset purchase and then merges the plans of both companies into one plan. Are the participant accounts from Company B's plan before the merger counted towards top heavy.