Say somenone receives a lump sum of 50,000 at 1/1/99. and on 1/1/2000 they discover they s/ have received 70,000. As a result the person is given an extra 20,000 plus interest from the original time of payment. What is a reasonable interest to credit the makeup payment from 1/1/99 to 1/1/2000 (i.e. the date the makeup payment is made)? Since lump sums can be computed using variable rates of interest.

Are participants in 401k plans entitled to the rights under ERISA 104(B) as pension participants? That is can they request all plan documents of the Plan?

And how does an individual review their account balance to ensure that it is accurate, when they leave or during employment?

I am looking for a Web site where I could download the proposed regulations addressing the standards under which a cafeteria plan may permit a participant to change his or her group health coverage election during a period of coverage.

There are two areas regarding rollovers to qualified plans (not IRA's) that I would like some opinions.

First, if "plan A" does a Direct Rollover to a former employee's new plan (plan b) and plan B turns out not to be qualified, what are the penalities (if any) to the Trustee of plan A?

Second, what types of steps are taken before a rollover such as this are made? Do you require a copy of an IRS determination letter? Simply a letter from the recipient plan stating that it is qualified? Or nothing at all?

Any input would be appreciated.

Does anyone have a good method for tracking the death of retired particiants receiving annuity or periodic payments? For instance, if the spouse of a former participant receiving a 50% survivor annuity doesn't notify the payor, either through neglect or design, the higher benefit could be paid for some time. Thanks.

We have a client who has turned in a reimbursement request for some claims. She sent in cancelled checks as the documentation showing she had the work done. I wrote her and told her that we cannont accept cancelled checks and she needed to submit the actual doctor bills or the EOB's she receives from us. She called and said she had filed for bankruptcy and did not have any of the bills. We are at the end of our run-out period and I still have not received anything from her. (These were for 1999 claims.) Does filing for bankruptcy have anything to do with reimbursing her for these claims? Or do they get paid for her because she filed for bankruptcy?

Any advice out there on how to comply with truth in lending disclosure requirements after a participant's return from a leave of absence has resulted in reconfiguration of his or her loan repayments?

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A plan says that the mortality table s/b the 1983 GAM table. I am reviewing the plan as an independent actuary. It does not say if it is male or female rates. My position is that it is reasonable to say that the appropriate table s/b the 50/50 blended rates. The employer uses male rates. This interpretation clearly can lower lump sums paid from plan. Any thoughts. This is plan documentation prior to GATT amendment.

How do service providers handle the gain on forfeitures when either reallocating or using the forfeiture to reduce employer contribution? Does most plan documents address this issue, if yes, how do you handle this situation if your document is silent? Is the gain just added to the forfeiture amount and reallocated or reduced according to the plan document? If the gain is added to the forfeiture used to reduce employer contributions, is it acceptable in that the gain may reduce the total amount the employer must contribute? Finally if the gain is not added to the forfeiture, how is it handled in

a daily environment. Any regulation cite would be helpful.

A 401(k) plan would like to raise the Normal Retirement Age from 60 to 65. I would think that any current participant would have to retain the age 60 NRA. Can the plan change to 65 for new participants?

Can anyone tell me if the eligibility requirement of working 1,000 hours per year is mandated by an IRS law, or a requirement that the employer determines, and lists in an individual SPD?

One of our admin clients is opening a Canadian subsidiary, paying the sole employee in Canadian dollars, etc. They would like to offer him a pension plan and asked us for assistance. Does anyone know of a Canadian pension design/admin firm and/or a website where I might look further? Thank you.

I suppose we have until 12/15 to sort this out for calendar year plans, but how is everyone handling the summary annual report format that corresponds with the "new" 1999 Form 5500 structure? Has anyone seen IRS/DOL guidance or just continuing to use the "old" SAR format (eliminating the "Disclosure" version that corresponded with the 5500-R's)?

Thanks in advance for any comments!

Hi mspencer! Welcome to the ESOP message board.

Under IRC Section 415©(2), "annual additions" is defined to include employer contributions, forfeitures and employee contributions.....although Section 415©(6) excludes certain contributions and forfeitures in the case of a leveraged ESOP. Dividends on employer stock owned by an ESOP constitute earnings on trust assets, and such earnings are not "annual additions" under the IRC.

However, the IRS regulations under Section 415©, at Reg. Sec. 1.415-6(B), provide that certain transactions between an employer and a plan may give rise to annual additions. This would apply to dividends only in an extraordinary circumstance when the IRS could "recharacterize" certain dividends as employer contributions. For example, if the ESOP were the only holder of a certain class of employer stock and an extraordinary amount of dividends were paid on that class, this may be an appropriate circumstance for such a recharacterization. The IRS would have to establish that the dividends were designed as a means to avoid the Section 415© limitation.

If the dividends are "reasonable" in amount and/or if the ESOP is not the only shareholder receiving such dividends, the dividends cannot be recharacterized as "annual additions" under Section 415©(2).

The conversion deadline for any given year is Dec 31st, therefore you can not convert now for 1999. If you are getting contrary information from your accountant, you need to find a new accountant. This Roth reg is almost as basic as knowing April 17 is this years tax deadline.

The conversion deadline is mentioned in IRS documents, on the WWW.rothira.com web site, and in virtually every article ever written on the subject. Every accountant should know this info, it is not an obscure reg but a very basic Roth rule.

Scenario: Employer has a Cafeteria plan with group health, dental and the Health care FSA and Dependent Care FSA, all are components of the Cafeteria plan.

Question 1: Under what circumstances, if any, is it necessary to extrapolate out the Healthcare and Dependent Care pre-tax amounts that go on line 6 ("Enter total cost of the fringe benefit plan for the plan year"). In other words, are there any requiremnts that these amounts MUST be reported separately on 2 other 5500, Schedule F's. I say NO.

Question 2: Now assume that the FSA are NOT components of the Cafeteria plan (becuase of poor drafting or some other reason) and the FSA documents have enough language that they each constitute a Cafeteria plan. I say YES, but why would you ever want to do a total of 3 filings when you only need one. Fix the Cafeteria plan document to include both FSA as components.

Please confirm: You need a Schedule A for a Healthcare FSA with more than 100 participants. The cost entered on Schedule A also goes on the Schedule F. I say YES.

THANKS!!!

If a money purchase plan permitted some post-tax employee contributions to be made, what should/does happen to those funds when the plan terminates?

my claim for 150.00 has been approved by the FLEX One account manager for my 1999 account.

the employee has been contacted twice by FLEX One and the employer refuses to issue my check.

What is my next step in order to get my account reimbursement from the employer?

Looking at adopting a safe harbor method (3% nondiscretionary) in an existing 401(k) Plan. I can't interpret Notice 2000-3 to my own satisfaction. Section III A-1 seems to be saying that if you amend in the current year, you still have to pass the ADP for the year. So what good is vesting a 3% contribution when it's useless in the current year.

It looks like A-9 lets you off the ADP testing hook if you get notices out before May 1, 2000.

Thanks for comments.

Employer wants to offer a choices for nonelective vacation balance (1) cash out (up to 3 weeks); (2)rollover to next year; (3)or using the vacation. Election will be made in August for following calendar year. What constructive receipt issues, if any. Cites?