[Posted by Dave Baker for Sheldon Mike Young]

My client was deliberately fired for policing her ERISA rights. Suit has been brought under ERISA Section 510. The complaint requests damages under ERISA Section 502©(3) as well as 510. At the deposition of plaintiff, the plaintiff admitted she had never asked for the Summary Plan Description; had not known what it was.

Under 502©(3), a request must be made for damages to follow. She couldn't request an SPD if she did not know what one was.

We have evidence in this case that the defendant deliberately failed to issue an SPD. One was not even issued until after the litigation was threatened.

Does anyone know of a case where the deliberate act of the employer to issue an SPD excuses the plan participant from requesting the SPD and 502©(3) damages are awarded? Does anyone know of a case where the plan participant knows the employer is reviewing papers to go to participants but isn't reviewing them and the papers turn out to be the SPD? Were 502©(3) damages awarded in such a case?

Is the request requirement in Section 502©(3) "softened" in determining what is a "request" where there are multiple violations of ERISA? For example, where the employer both fires a Participant for policing her ERISA rights and has deliberately failed to issue an SPD, is P.'s having told the employer that his consultant has asked him to finish reviewuig the SPD so it can be duplicated and distributed enough to be considered a "request" for purposes of Section 502©(3)? Please let me know of any case you may know of that considers these matters.

I would appreciate any information.

Sheldon Mike Young

yomike@asacomp.com

614-898-1096

fax 614-898-7190

We have a company that went from a corporation to a LLC (company is being taxed as a corporation). If one of the principals (now a partner) had an outstanding loan at the time of the company conversion are we correct that the partner has to pay back the loan asap?

The 457 plan in the agency I work for includes annunities and Franklin Templeton and American Century fund families. I would like more fund families (as opposed to annunity sub-accounts) added, but most fund families won't do the necessary bookkeeping for a 457 plan. Does anyone know of no load fund families that participate in 457 plans?

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In determining HCE status for 1999 401(k) calendar year plan: in 1998, the 100% owner sold business, and received distribution of his entire account balance during 1999. He, along with 2 other HCE's,continue to work with/for the business, but as self-employed, they are 1099'd, are considered independent contractors.

Since they "term'd" in the separation year prior to the detemrination year of 1999, are they considered former HCE's for 1999, plus 4 more years? And if so, this is only for TH testing, not ADP, (for 99)?

A dentist is winding down his business. He sold all of the assets of the business and all the employees ceased working for this dentist. They now work for the company that bought the assets.

The dentist is sole remaining employee of his dental practice. He will fully vest all employees due to a partial plan termination. He will continue to collect receivables well into the year 2000. He will have no other compensation from his dental practice.

Can he count the collection of receivables as income for retirement plan purposes? Some might argue that he has no hours of service in the year 2000 that relates to the "compensation" although he will obviously spend some time doing the accounting and actually collecting the receivables. Would this be an agressive move to treat the receivables as compensation for purposes of the retirement plan?

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Under the changes in the SBJPA did this allow 401(k)'s to be offered to Government as well as Non-Profits? I am getting conflicting information, so references would be appreciated.

Thanks

A 53 year-old participant in a 401(k) profit sharing plan (a plan that also allows after-tax contributions)was told by his broker that he is able to roll the "pure after-tax contributions" into his annuity, and the earnings on those contributions into a qualified IRA. I don't think this is right, but I'm not sure. Also, since this plan has been in existence since 1984, I guess it's possible that pre-87 and post-86 somehow fits into this. Can someone explain this to me? And what exactly are this guy's options. thanks so much!

A participant has requested a Hardship Withdrawal from his 401 (k) plan. The document states hardships can be withdrawn from elective deferrals only. The participant has a rollover account that is elective deferrals made through his previous employer. Can the participant take the Hardship from the rollover account?

Thank you.

I am looking at the ADP test for a plan that has a 1 year wait, no age requirement and monthly entry dates. It has 3 employees (over age 21) that were hired 11/5/97 and were elgible to enter the plan 12/1/98. In the ADP/ACP testing, statutory exclusions were applied and these three individuals were excluded from the ADP test. Since these participants were all over 21, I didn't think they could be excluded because the plan had a 1 year wait (statutory exclusions apply to plans with less than a 1 year wait).

However, on one of Tom Poje's messages regarding statutory exclusions he wrote "The law requires employees to enter after age 21 and 1 year of service. (Actually you have to enter 6 months after meeting the requirements)".

So does this mean that these individuals can be excluded from the ADP test, because under Tom's explanation, they wouldn't enter the plan until some time in 1999 (6 months after meeting the requirements)?

I keep seeing conflicting information and need some clarification: When reporting defaulted loans to the IRS do you include interest to the end of the grace period or just report the outstanding loan balance?

My small client employer group (20) wants to increase employee contributions on January 1.

If an employee does not want to absorb the increase - then a qualified event - COBRA would result.

Does there have to be a special open enrollment for this premium increase? The plan renewal is July 1. Thanks. Robkt

Anyone know of a document (custom or prototype(?)) that provides for periodic allocation (e.g. quarterly, monthly, etc., similar to elective and match) of non-elective contributions. Any thoughts about this issue? Our doc only provides allocation at plan year end (aka anniversary date).

the ee is a former owner and retired 11/98. he is receiving deferred compensation in 1999. since he has not worked any hours, he should not be considered a participant. is this a correct assumption?

their new tpa seems to think he should be included as a participant in 1999.

At the DB panel discussion at the ASPA conference, one of the speakers mentioned that a DC plan cannot be amended to have a short plan year (e.g. 11/1/99-12/31/99) so that a DB plan can be established with a calendar plan year beginning 1/1/00 with no 415(e) limitations?

The reason given was that a plan cannot be amended to accelerate the effective date of legislation. In this case, the amendment would be the amendment of the limitation year to the calendar year since the effective date of the 415(e) repeal is for the limitation year beginning after 12/31/99.

Does anyone have a cite for this?

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The plan year is 9/30/99. The plan document specifies that employees can defer between 2 and 5%. Everyone is within this range except for one employee who earned 165,000.00. He deferred 5% of 165,000.00, and should have been limited to 5% of 160,000. His contribution should have been limited to $8,000, but he contribed $8,250.00. The excess contribution is $250.00.

1. Should the money be a)shown on the allocation report and b) included in testing, or should the money be taken out like it was never there?

2. Does the client have an option to do a 1099-R or W-2, since the 1999 calendar year is not yet over?

3. Should the money stay in the plan and be advanced to the next plan year, or be refunded?

4. Should this be handled through APRSC?

Our thoughts at this point have been:

1). Take the money out of the plan like it was never there 2). Tell the plan sponsor to refund the money to the participant. 3). Give the plan sponsor a choice between issuing a 1099-R, or adjusting the W-2 form.

Thanks.

Check your Plan for the defintion of "Limitation Year" That is the period used to judge your 415 limitations. Hopefully they are the same even if your Plan Years are different.

If they are not the same, I believe that the employer generally makes a written resolution of which Limiation Year is controlling.

I am in the process of amending the vesting scheudle to a 403(B), at the sponsor's request. The new vesting schedule will be less favorable (from immediate vesting to a three year cliff, with a one year service requirement). What type of notice do I need to give to the employees about this change?

I have taught over 100 HIPAA classes the last few years and it is amazing to me that so many employers think that their insurance company can send all of their HIPAA certificates for them. There are so many times that only the employer has the information neccesary to complete a proper certificate. What are you all hearing from employers...are they paying attention to the certificates or do they think their insurance company is taking care of it?

I am currently dealing with an organization looking at establishing a 401(k)plan. The organization is a ski resort. They have approximately 35 employees who are considered full-time permanent, approximately 25 employees who are full-time seasonal and aprroximately 200-300 who are considered part-time seasonal. My questions is, if all employees other than full-time permament employees normally and customarily work a 6 month year, can they be excluded from participation if they do not complete a 1,000 hour requirement over a twelve consecutive month period? This questions is different for "seasonal" employees than for part-time employees. I have read 410(a)3 and this seems inconclusive. Anyone have an idea or who can point me in the direction where to look? I have asked many "experts" and they either can not provide a clear answer or disagree with other "experts".

The owners of a LLC were wondering how the comp will be calculated when they were a C corp until July 1, 1999. THey are looking to establish a crosstested plan and maximize their contribution. Would they add their

W-2 wages to schedule K income?