We have a self-funded medical and dental plan and I am new to the organization that is considered the "administrator." Our TPA states we must legally request via subpoena medical records to be considered in a claim that is being contested. The employee (not our employee, but another covered company) is presenting information of which we had no prior knowledge. I am very concerned that we (my Executive Director and I) are being asked to make a final decision on a claim where we don't seem to have full knowledge. Is this correct that we must subpoena to be certain of what our TPA has indeed received on this case? Also, is it extremely critical that the final decision be made prior to the surgery which is scheduled for December 28?

Must a plan administrator give notice to an inusred prior to cancelling COBRA coverage due to late payment of premium? Does the fact that the administrator previously accepted late payment (after the 30 day grace period) affect this? The insured was out of the country and inadvertently forgot to pay his premium. The insured did not receive any notice concerning the late- or non-payment or cancelation. On making the next month's premium payment, the insured realized he had not paid the prior month's premium and submitted payment for both months' premiums (timely for the 2nd month, 10 days outside the 30 day grace period for the prior month). The premiums were returned with a letter stating coverage had been canceled because of late payment. The administrator had previously accepted payment of premium beyond the 30-day grace period and continued coverage.

Male - 35 years old. Wants to use his Roth funds for his master's program.

It's a bit off-topic, but in the past we have held a big all-staff meeting to discuss broad changes in compensation figures. This year, we're going to send a letter to staff, as we have gotten too big to effectively communicate this information to a big group. Does anyone have a sample letter that would explain changes, including: Your position has been moved from grade x to grade y and the new salary range is a-b; your position has not changed, but your new salary range is c-d.

Just would like to get a good idea of some wording...

Please reply here, or e-mail me personally (MSWord attachments greatfully accepted!) at smkarizona@techie.com

Thanks so much.

Sheila K

Sections 401(a)(11)(D) and 417(d) of the Code have a optional one-year hold out rule which allows a plan not to treat a participant as married unless the participant have been married for a year. If a plan does not utilize this one-year holdout rule, will amending the plan result in a prohibited 411(d)(6) cutback of an protected benefit? The regs say that a protected benefit may not be eliminated merely b/c it is payable to a spouse. The regs also allow the elimination or reduction of a protected benefit if it has not already accrued. Therefore, assuming (for the sake of argument) it is a protected benefit, it could be applied to all future plan participants who get married. Correct?

[This message has been edited by RMM (edited 12-27-1999).]

ESOP is borrowing $ from bank in order to purchase employer securities from a shareholder. The loan will be guaranteed by the employer. The loan documents provide that the lender, under certain circumstances, can call the loan on 13 months notice, and require the guarantor to repay the loan in full. In that event, if the guarantor does not fully repay the loan, it's considered a default under both the ESOP loan agreement and the Guarantor agreement. Will this provision violate 54.4975-7(B)(13)?

Is 25% the max funding (including employee/employer match)for LLC members that also have guaranteed payments. The LLC members are really like GP's in a P'ship. If the LLC loss for 99 is eg ($100,000) that includes a 300,000 guar. pymt expense is the income (100,000)plus 300,000 or 200,000 profit for 401k purposes? Assume 2 LLC members each now with 100,000 profit can they dump 25% or 25,000 (10,000 and 10,000 match)maximum? Any advice is greatly appreciated. Thanks in advance.

Looking for information regarding employer contributions as it relates to retention, average amounts, increase in participantion...etc.

What are my alternatives if I have contributed $2000 to my Roth IRA, and expect to be over the $110K income limit at this point?

If an investment in the IRA has lost significant value, can I do something that will be tax favorable to me? Do I need to act before year-end? Thanks.

The sponsor of a 403(B) plan basically merged into another entity. The majority of participants rolled their 403(B) accounts into a plan of the new entity. The old entity was covered by ERISA and so is filing 5500s. There are a few employees who have not yet gotten their money out of the old 403(B) plan. One of these employees has a segregated account, the rest are in a pooled account. Can the trustee of the 403(b)plan force the participants to either roll the money into a new plan or take a distribution?

The trustee wants to file a final 5500 ASAP.

Cafeteria plan will be effective January 1, 2000. All employees employed as of that date will be eligible to participate. Election period is 30 days after entry date, i.e., January 1. Employees are paid semi-monthly. Assuming that all employees made their elections and returned them to the employer on January 2, would the elections be effective as to the payroll period beginning January 15 or February 1?

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My employer sent out a memo to certain parents at our "company-sponsored" child care center that states "if you are contributing to the Dependent Care Flexible Spending Account and utilizing child care benefits by a (our) corporation, the value of your benefits in excess of $5,000 is taxable as imputed income". They were not clear on how this is calculated and I am not familiar with this child care regulation, only imputed income for group term life. I believe it applies to those parents that might be receiving a discounted price on child care services based on family income. Is anyone familiar with this or knows where I can find details on this regulation?

If these questions are too broad, please let me know and I will try to narrow the focus. When a plan sponsor of a 403(B) plan ceases to exist, who has responsibility for assets remaining in the plan? What responsibility does the financial institution holding the assets have?

Does a spouse have to waive beneficiary designation if the 403(B) Account Holder wants to name someone other than the spouse as beneficiary. I know this requirement holds for qualified plans such as 401(k) but am not certain about 403(B)

Can a trade association provide a profit sharing (or other retirement-type) plan for its members? If so, what are some of the design, administration, legal issues?

In the situation I have in mind, the members are individual business owners (typically with no employees). The trade association is not a union, so a multiemployer plan won't work. I suspect that here a multiple employer plan could potentially apply.

If so, what would be the difference between one multiple employer plan covering participating employers, and having each employer set up separate profit sharing (or DB) plans for himself?

How common are these types of plans? (I remember working on one about 15 years ago, and one key issue was whether or not screw-ups are the individual participating employer level could jeopardize the other participating employers or the overall plan.)

Thanks

former employer cancelled all healthcare benefits the week after I left. I signed up for cobra, then found out the policy was cancelled for the entire office.

If the company enrolls with a new healtcare company am I entitled to cobra benefits?..Help Please!

I have contributed $2000 this year to my traditional IRA. I would like to convert this year's contributions to a Roth IRA but am unclear on the law. My income is greater than $100,000 meaning I am ineligible to convert previous years' contributions, but is less than $150,000 meaning I am eligible to contribute to a Roth IRA.

Is it possible to convert these 1999 contributions with my income status?

We've been retained by a plan sponsor to review an excluded participant issue. The person in question is a former owner/participant who terminated employment several years ago. His current compensation consists of $1,000 a month contracted "consulting" fees and $50,000 under a deferred comp agreement. The plan is a bank standardized master master plan.

The company has not been including this person in the allocation since his retirement. Under a nonstandardized plan, there would be ways to exclude him. Under the standardized version, must he be included? Is he an employee? Are his consulting fees income under the plan? I'm assuming that the deferred comp is not comp under the terms of the plan, but don't have a copy of the core document. Thanks.

A client filed its corporate return for the fiscal year ended 8/31/1999. The plan is a money purchase plan and the contribution for the plan year ended 8/31/1999 has already been deposited. The compensation for one of the employees was reported incorrectly and the participant is now due an additional contribution of $1,237.50. It is my understanding that for minimum funding requirements, the client would still be required to make the deposit but for deduction purposes, would the client be able to file an amended corporate return and get the additional deduction for 8/31/1999 or can the client deduct the additional contribution for the fiscal year ended 8/31/2000?

I have just completed this month a direct rollover of my 401-K plan with a previous employer to a Rollover IRA. I would now like to convert either all or a portion of the Rollover IRA to a ROTH IRA before the 1999 year-end. My AGI (not counting the amount that would be converted to a ROTH) is less than $100,000 in 1999, and I am single; but I have no taxable compensation in 1999. I know that I would have to pay taxes on the amount that I would convert to a ROTH IRA. I would like to know the following:

1. Am I allowed to make a rollover contribution from my recently-established Rollover IRA to a ROTH IRA in 1999 even though I have no taxable compensation in 1999?

2. If the answer to #1 is yes, what is the dollar limit of the amount I can convert to a ROTH IRA in 1999?

3. If the answer to #1 is yes, am I allowed to make a partial conversion from the Rollover IRA to a ROTH IRA and keep the rest in the Rollover IRA? (It seems that Publication 590 implies that I could, but I cannot find anything in Section 408A of Title 26 that would allow a partial conversion.)

4. If I were to convert all or a portion of the Rollover IRA to a ROTH IRA in 1999 and then later find out that such a conversion (rollover contribution) is not allowed, would I be allowed to recharacterize the ROTH IRA back to a traditional IRA in the year 2000 before the due date (including extensions) of my income tax return for 1999 and suffer no adverse repercussions (i.e. taxes, penalties, etc.)?

5. Section 408A©(7) and Section 219(f)(3) of Title 26 say that a contribution to a ROTH IRA for a particular year must be made no later than the due date (not including extensions) for filing the return for such year....but I have heard people say that a rollover contribution for 1999 must be made before the end of 1999. Which is correct?

A key point to consider in answering the above questions is whether a "rollover contribution" (i.e. "conversion") is considered to be a "contribution". The very term "rollover contribution" implies that it IS a "contribution".

Section 408A©(2) (including its reference to Section 219) of Title 26, the Internal Revenue Code, basically states that the Contribution Limit is the lesser of $2000 or one's taxable compensation for the year (assuming one does not contribute to non-ROTH IRAs). It does NOT distinguish between a regular yearly contribution and a rollover contribution. That would seem to imply that the above-mentioned limit does indeed apply to a rollover contribution. Separately, Section 408A©(3) deals with limits based on modified AGI. Section 408A©(3) DOES make a distinction between a regular yearly contribution and a rollover contribution...but again, Section 408A©(2) on Contribution Limits DOES NOT.