Need some help (case cites especially)on determining permitted uses of dividend or policy surplus funds from group insurance programs. Specifically, have identified excess funds from a plan that is approximately 80% funded by employee contributions and 20% employer contributions. A proposal has been made to refund the money pro rata to the parties who paid in, whether or not they are still employees. (eg. 20% to employer, 80% to current and former employees. The possible universe is 66% current employees, 34% former employees/retirees.) The environment is highly unionized.

Is anyone aware of case law that would either prohibit refunding plan monies to former employees or, conversely, would require refunding plan monies only to current plan participants?

Appreciate any thoughts or leads.

I have a new client who has always reported distributions and withholding under the employer's EIN.

I advised her that she needs to apply for an EIN for the retirement trust and report distributions and withholding under that number. She makes distributions through the plan checking account and wants to deposit the withholding in the company account and use the IRS Electronic Federal Tax Payment System (EFTPS) to deposit the withholding under the company number.

Plan counsel has since advised her that 90% of retirement plans don't have separate EINs for the trust and it is fine to report distributions and withholding under the employer's EIN. I disagree with this, but thought somebody out there might know if there is ever a situation when this would be acceptable.

Also, does anyone have experience with the EFTPS? How difficult is it to set up. This is a small plan and electronic filing is not required.

Would it be crazy to see a call option in an ESOP document providing the employer a right to purchase the stock (purchased with the proceeds of an exempt loan) that has been distributed to the participants? So as to avoid confusion, I am not referring to the Right of First Refusal but rather a full blown call option.

Appreciate your thoughts.

If a hardship withdrawal from a 403(B) plan has been issued and included earnings on the deferral balance after 12/31/1988 in error, what are the penalties, corections that must take place?

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LNM

An employer wants to enter into severance agreements with several highly compensated employees to continue their benefits for several years. The Plan from which they would be receiving benefits is self-insured. This "deal" is not offered to non-highly compensated employees who are terminated. What are the 105(h) implications? These individuals are not "retirees".

Any ideas on how or if this would implicate eligibility testing?

If the amount of severance pay does not make these individuals highly compensated in any testing year are you o.k.?

I have a 414(e) Church with a 403(B)(9) Retirement Income Account Plan. Can this plan be funded by mutual funds within a group custodial arrangement? Does it have to be funded with annuities?

Help! I'm new at this. Is there a special clause in fed regs to override a plan document regarding the deadline to submit eligibleclaims for prior year expenses?

Employee abandons job in 1999, gets called to military duty in Kosovo 2 months later, and later submits medial FSA receipts two months past the deadline in 2000 and claims a military right. Is there such a thing?

Situation: DB Participant is awarded retroactive monthly payments going back 6 years.

Court found that certain service should have been credited. Sponsor decided to drop appeal proceedings.

Should, or can the sponsor pay back benefits with interest? Document says nothing about such a situation. Court did not address interest on back payments; simply addressed service crediting.

Anybody run across a claim for interest on back payments?

A rabbi trust funds a supplemental pension plan. Company wants to pay gratuitous retirement benefits that are outside of the supplemental plan out of rabbi trust assets.

Any issues?

There is no DOL rule for 125 plans similar to 401(k) because there is no transfer of funds. The benefits ARE paid out of the general assets of the employer.

Corp. A sponsors a 401(k) plan in which wholly owned Sub. B participates. In 1999, Corp. A owned Subs. C, D and E in addition to Sub. B. During 1999, all Subs. except B were sold. How does the "transfer of less than 85% of assets of a trade or business" rule apply to the above scenario, if at all?

Participation by the spouse of a 100% shareholder.

If a money purchase pension plan freezes accruals (and complies with 204(h) notice at that time) is it necessary to provide a second 204(h) notice upon subsequent termination of the MPPPlan??

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Does anyone know the Treaty provisions for the taxation of U.S. pension benefits paid to Canadian spouse upon the death of a U.S. participant? The participant resides in Canada but works in the U.S. for a U.S. company.

Can anyone clarify how we are to complete the schedule a form for a defined contribution plan? Part II, #3 and 4. What amounts are supposed to be entered for these questions.

Is there a list of insurance carriers that are approved from whom to purchase annuities? My boss seems to think there is. He thinks the DOL may be involved in this list. It is not the list of state guaranty associations published by the PBGC.

For a CT 401(k) plan, could these be the participant classes:

1. Owners

2. Non owners who have elected not to defer

The employer would then provide a matching contribution to those that defer and a p.s. allocation to those who did not defer.

I'm sure that the employer could not allocate a p.s. contribution to only those that defer; that's the definition of a match. But, can a class exclude those who are deferring?

Doctor is sole participant in a frozen DB plan. The plan is substantially overfunded. Doctor now wishes to participate in a different plan, maintained by a member of the same affiliated service group. Can he do so? It appears to me that there should be no problem especially given the repeal of 415(e). Can anyone confirm this or correct me if need be?

Thanks.

Our pension system automatically is bringing over the amount of the Plan Year contribution and earnings minus the distributions as the Plan expenses. Is this right? I can't locate any instructions for the SAR. Thanks in advance

The employer maintains 401k plan w/ ER match. The plan has a last day rule. When the plan is disaggregated for coverage purposes, the 401(m) portion fails the Ratio Percentage Test. Is this portion (matching contributions only) of the plan tested separately for the Average Benefits test to see if coverage is passed?