Can medical expenses incurred in a foreign country be reimbursed under a medical FSA? Please assume that the expense would otherwise be reimbursable (not cosmetic or illegal). I cannot find a resource that says one way or the other. I specifically looked to IRS Pub 502 for an answer but could not get ahold of my Thompson's Guide.

Thanks,

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Steve Moss

Benefits Administrator

On the Form 5500, question 7, we are ask to indicate number of "active participants" I am confused with the instructions, could someone help explain who I need to include?

Would active participants include all eligible participants during the plan year, even if termed prior to PYE, as well as termed participants (prior to PYB) who have an account balance and have not incurred a break in service? What about participants, who terminated, cashed out, were not fully vested and still have not incurred a break in service (those who forfeited and still have rights to those monies)?

On line 7c, we are asked to indicate retired or separated participants entitled to future benefits. Is it possible that these participants are also in the "Active Participants"? If so, why are we subtotaling and adding these two groups together on line 7d? Wouldn't we be double counting?

I know I am missing something, if not plenty, could someone let me know how they calculate? Thanks in advance.

If two plans are created, each covering a dif ee group, each with one HCE, the ave ben test is passed for coverage by aggregating the plans, does each plan seperately have to pass the general non-discrim test? Or can a safe harbor formula, etc. in each plan avoid the gen test?

Exempt employee becomes non-exempt and pay is reduced. At a later date he is paid vacation balance (we pay all unused vacation at anniv date)

I paid at CURRENT pay rate. He thinks he should be paid at the higher rate prior to his reduction.

Employer wants to amend its MP plan to lower the contribution for the existing plan year. There is a last day requirement in the plan. Assuming an appropriate 204(h) notice is given, can this be done? I am aware of some guidance in the area of a profit sharing plan, but not aware of what guidance exists, if any, in the money purchase plan arena. I know there are practitioners who will make these types of amendments arguing that there is no entitlement to an allocation until the last day of the plan year (which I personally think is a good argument). Is there any authority directly addressing this issue? Are most practitioners allowing such amendments, or is this considered a very risky approach?

I have an active plan participant who would like to payoff a loan he has through a DC plan. The loan policy in force does not have a provision for early payoff. From the materials I have read, I do not see where this item is specfically addressed other than to state the loan must be paid off through payroll deductions.

So, can an active participant payoff a loan early using a personal check? Any citations out there?

Thanks in advance.

The ESOP's plan language is going to determine the answer to this question. However, an amendment that cahnges the Plan from allowing distributions at termination of employment under any circumstances, to allowing distribution only after severance payments cease will violate 411(d)(6).

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I want to better understand using a Roth IRA to fund a credit shelter trust. For example:

I have clients who are husband and wife in their early 60's. They have approx $1M in qualified money (all in his name) and another $300K in other assets. I'm going to recommend that they convert to a Roth (they are eligible based on their AGI). Can someone point me to an article or publication on estate planning with a Roth? What is the best way to fund the credit shelter trust in each case (husband dies first, wife dies first). Once the $ is in the credit shelter trust, how is the best way to hold it? Taxable account? Variable annuity? Or, is the deferal potential so great for their 5 kids that I should ignore funding the credit shelter?

Any comments or pointers to books or articles would be appreciated.

Best Regards,

Jeff

There was a 1992 DOL Publication entitled "MEWAs Multiple Employer Welfare Arrangements Under ERUSA: A Guide to Federal and State Regulations." On pages 26 and 27 its discusses "common control" and then refers to 25% or more ownership and then 50% and 80%. Does anyone have the definitive answer (with a cite - e.g. DOL Opinion LTR) as to how much ownership you need to be under "common control" and thus not a MEWA.

Thank you.

In response to some of the IRA and Roth allocation questions here, I suggest you check out the Investor Workshop at http://www.americancentury.com/workshop/index.jsp

This page has tons of objective, helpful links to information about retirement plans including the answers to rollover, to-Roth-or-not-to-Roth, IRA loans, tax shelter and other related questions.

The Northeast Independent School District has posted an RFP for a 403(B) or 401(a) provider.It can be found on their website at: www.northeast.isd.tenet.edu

The Northeast Independent School District has posted an RFP for a 403(B) or 401(a) provider. The RFP can be found on their website at www.northeast.isd.tenet.edu

Can a plan require, as a condition of employment, that an employee participate in a 414(h)(2) pick-up plan?

If a former employee receives a back pay award under ADEA, can that person defer a portion of the award into the former employer's 401(k) plan? (Apparently, the person talked to someone at the IRS who said that the deferral could be made as long as the award related to lost wages.) The document defines "compensation" as that which is paid to an employee. Do we treat this person as if they were an employee, since they would have been able to defer if not for the fact they were terminated in violation of ADEA?

I am looking for someone to audit our TPA for a self-funded health plan. We average about $35 million in claims paid each year. Our management does not want to use our normal auditors for business reasons. Does anyone has a references that have performed this type & size of audit for your company before? Thanks!

Have the employer adopt 2 profit sharing plans:

Plan 1 covers the "targeted group" and excludes everyone else.

Plan 2 covers everyone else and excludes the targeted group.

Aggregate the plans for 410(B) and 401(a)(4) (most likely utilizing cross-testing).

Would the IRS debunk this based on their proposed Regs?

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Andy Treece

Employee chose to let her coverage lapse during FMLA, spouse lost eligibility for his coverage due to employment termination. Employee returns to work from FMLA and is reinstated for coverage. Is the Special Enrollment period extended past 30 days because the employee was on FMLA at the time of the HIPAA Event?

I understand the maximum contribution is $2000 or up to the earnings for a given year.

How about non-working spouses? Do they get

to contribute $2000 even though they had no

earnings?

The only cite I can find for a participant being able to elect more than 10% withholding on a nonperiodic distribution is IRS Publication 15-A - January 2000 Employer's Supplemental Tax Guide." Does anyone know of a more permanent cite (like an IRS requlation)?

Can allocations of ESOP stock from an existing ESOP Trust be considered as "contributions" to meet the 401(k) safe harbor for matching contributions?