I am doing some online benefits work for a client and discovered the need for data on the California Statutory Disability Insurance for workers who incur off-the job accident or sickness. What are the benefits, how long can a disabled employee collect? Is the plan contributory? Whom do I call for more info.

Thanks so very much

Rob

A controlled group consists of Company A (parent) and Companies B and C (wholly-owned subsidiaries). Each of the three companies has its own 401(k) plan and trust. Company A's plan allows participants to direct their investments into a number of funds, through Investment House 1. The plans for Companies B and C are virtually identical and allow participants to direct their investments into a number of funds (which are the same as each other, but different from Company A's plan), through Investment House 2.

For reasons not relevant to this question, Company A wants to merge all three plans within the next few days. Ultimately, the trusts will be merged and only one Investment House will be retained, but the decision has not been made as to which Investment House, recordkeeper, trustee, etc. will be retained for the merged plan.

Can the plans be merged and then, for a temporary period, can the merged plan continue to utilize the two Investment Houses, with different investment funds available for different groups of employees, and with three separate trusts, until the plan assets can be consolidated into one trust and one Investment House?

Any thoughts would be greatly appreciated.

I haven't been able to find the official version of this document on the IRS website. Call me paranoid, but I'm reluctant to rely on secondary sources for official notices. Does anyone have a link or cite to the official document?

An employer matches with company stock that is restricted. EEs can't sell or diversify unless they die, become diabled, retire, or terminate.

The stock price has fallen from $6 to $2 7/8 in one year.

The employer believes "we don't even have to match, so what's the problem if the stock price falls?"

What is the employer's liability for thinking this way?

Are there existing cases of employee suits against employers for being held captive by a match that cannot be changed and losses value daily?

Currently company pays 100% of employee and (after 1 year) dependent health insurance premiums (choice of 3 plans); 401k contributions by employees only -- up to 17% of salary; small disability policy and a token life policy provided. Firm is owned by a married couple. Wide range of employees in age and marital/ kids status. Profit sharing plan --max is currently paid into annually by firm. No pension plan.

Question: What are the pros and cons of a cafeteria plan in terms of:

-- flexible/ egalitarian benefits (some would like to have tax-free spending accounts for childcare, dental etc.)

-- max. limits in firm's tax-free dollars and how they are distributed

-- other issues such as the costs of administering such a plan in house and in fees.

-- Could we get some of the flexible benefits like tax-free childcare costs without a cafeteria plan?

(excuse my very basic questions but our financial and personnel committee chairs dumped this on the business development person!)

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Ann Trowbridge, AIA

I am trying to find out how people are handling plan language for a new 401(k) safe harbor plan. We use Corbel's document (individually designed documents) and the language provides that the employer will make an election to contribute either a matching, enhanced matching or nonelective contribution intended to satisfy the safe harbor requirements of 401(k) and 401(m). Notice 2000-3 seems to indicate, however, that the plan must be amended to state that it intends to satisfy the safe harbor requirements and the plan must specify the 401(k) safe harbor method being used. I am a bit concerned that our language is not sufficient. Any thoughts on this matter would be appreciated.

In the adsence of GUST Amendments from prototype providers how are people terminating DB Plans with the Service?

We are currently transitioning from an accrual environment to a daily envirnoment. In order to make this transition, we are investigating trade software packages. I would appreciate any feedback on the Sungard Trade Expediter.

Thanks,

Corey

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Corey M. Matis

I am receiving conflicting information about the permissibility of in-service distributions from money purchase plans. Is it o.k. to allow in-service distributions after a participant has reached "normal retirment age" as defined in the Plan, even though the participant is still working. Thanks in advance for your response.

Does a self employed person qualify to open a Roth IRA?

Our public sector labor union maintains its own dental, vision and life insurance benefits programs. Funds for these benefits are negotiated for during contract negotiations between the union and the municipality. However, costs for dental and vision services have outpaced the annual amount that the municipality provides. Short of cutting back on the levels of benefits provided, can funds that are DONATED to the union, FROM THE PUBLIC, also be used to pay for such benefits? Recently the union began a letter writing campaign to its citizens soliciting donations for worthy charitible causes that it supports. However there was no mention of using the donated monies for its welfare benefits plans also. Can such donated funds be used for such purposes legally/ethically? If this other purpose (to use the donations for the union's dental & vision expenses) was included in the solicitation letter, would it still be legal to do even though the benefits are being funded from the municipality through its contract?

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If a plan allows loans for the purchase of a principal residence that meets all the requirements for having the interest be tax deductible to the borrower, is the trustee required to issue a 1098 Form for the loan interest paid to the plan for the year?

The instructions to the 1098 form clearly state that the form only needs to be filed by those who are "engaged in a trade or business" and who received the at least $600 of interest during the year.

Is there a requirement for the trustee to file a 1098 form if the loan interest exceeds $600 during a calendar year?

Thanks.

A terminated DB plan sponsor has adopted a new profit sharing plan as a qualified replacement plan. Can the transferred surplus assets from the DB plan be allocated to ALL eligible participants in the new plan or is the allocation limited to only those participants who were covered under the terminated DB plan.

Any cites would be appreciated.

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Nadyne Nelson

Nadyne@iname.com

ICQ 2484855

Hello to all, My name is Sherry Jurach. I'm a group benefits specialist with xxxxx

[This message has been edited by Sheila K (edited 01-10-2000).]

1) A Plan has decided to use a 3% NEC safe harbor for the first time in 2000. It sent a notice in late November 1999, as previously required, saying that the 3% NEC will be made for 2000. Can it now send the "maybe" notice? If not, those who "missed the boat" would seem to have flexibility for 2000 while others who complied with prior guidance do not.

2) The remedial amendment period aside, it would appear that a Plan still has to be amended prior to the Plan Year for the matching safe harbor. Are there 411(d)(6) implications for the "out" that the Service is giving? Obviously, there is no last day/1000 hour requirement for the safe harbor match and the IRS has previously said you cannot make a "mid-year" amendment after all requirements for a contribution have been met. Should the safe harbor amendment be drafted with the "right" to take away the match during the year?

This may be a unique situation. I just started with a company with 3 sites in 3 different states. An ee started 11/22, was eligible to sign up for the Health and Dental plans and December 1st, and was fired a month later for poor performance. This particular ee was in charge of filling out Medical and Dental Forms. They did not fill one out for themself and therefore, did not have coverage. How do I offer COBRA to this person or do I? What are the requirements?

Based on the research I have done, it appears that an employee ("X") who works for two different employers ("Y" and "Z")and has in excess of $170,000 in comp from each, can get a 30K DC 415 limit twice - once for each plan. So effectively 60K can be funded - 30K into each plan. Y's plan is a 401k plan, I realize if the 401k deferrals are maxed in Y's plan that no deferrals can occur in Z's plan (because the deferral limit is one 10.5K limit from all employers for the employee for the year). The two employers are not a controlled group. Am I correct about the 60K 415 limit aspect?

Anyone have the recent guidance issued by the IRS with respect to safe-harbor 401(k)'s? If so, what's it say?

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I think a terminating employee has submitted dental expenses for the 2000 plan year that were either:

a - incurred before the plan year began.

b - for service to be rendered after the termination date.

c - not submitted to the insurance company before submission for reimbursement, although the employee has dental coverage on our policy.

How far reaching is my responsibilty and authority to verify my suspicion?

Carole

Outside of the cutbacks permitted by SJBPA, in connection with eliminating in-service distributions pursuant to the new definition of required beginning date, can other RMD options be cut back following a plan merger.

For example, does the new plan need to allow employee to calculate the RMD based on the methods permitted under the old plan (e.g., single vs. joint life expectancies,option to recalculate life expectancy annually, etc.).

I cannot find IRS guidance on this subject and am in the process of merging a number of plans. Any thoughts and citations are appreciated.

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