Since the IRS raised the 402(g) limits on 403(B) plans for qualified educational employees to 10,500 starting in 2000, does the special election under 402(g)(8) raise to 13,500? Yes seems to be the answer, yet I have been unable to find the number in any published tables? What about other special election limits?

Client terminated employment and tells me that he requested a distribution check from employer's 401(k) plan with no taxes withheld because he was going to deposit the funds into his IRA account.(I realize he should have done a direct to direct rollover.) However, when he received his check taxes were withheld. He has not cash the check. Can he return the check to the Plan Administrator and ask for either a new check or decide instead to do the direct rollover? Or is it too late? He does not remember receiving his options for methods of distribution or having signed a form indicating his choice of distribution options. Thanks!

Client is 57 and has been taking 72t distributions for more than five years. Client now qualifies for disability and could take amounts that would be exempt under 72t.

Question is, does client have to wait until attainment of age 59 1/2 to take additional amounts over the 72t amounts currently being taken? I believe client does since 72t payments need to extend the longer of 5 years or 59 1/2.

(HHS Press Release 10/29/99) -

HHS Secretary Donna E. Shalala proposed today the first-ever set of national standards to protect the privacy of Americans' personal health records. The standards will apply to medical records created by health care providers, hospitals, health plans and health care clearinghouses that are either transmitted or maintained electronically, and the paper printouts created from these records.

"The privacy of Americans is protected in their bank transactions, their credit card statements, and even their video rentals. Yet, until today, Americans had no federal privacy protections for their medical records," Secretary Shalala said. "These proposed standards are an important step forward in protecting the privacy of some of our most personal information."

Shalala noted that Americans are increasingly worried that the privacy of their medical information will be violated. Some have even taken action to avoid creating a medical record, including withholding information from their doctors, changing doctors, or even avoiding care altogether. "We cannot allow the absence of privacy protections to compromise the quality of care in our nation," Secretary Shalala said. "Our proposals will provide Americans with greater peace of mind as they seek care, yet they are balanced with the need to protect public health, conduct medical research and improve the quality of health care for the nation."

The bipartisan Health Insurance Portability and Accountability Act of 1996 (HIPAA) -- also known as the Kassebaum-Kennedy law -- called on Congress to enact comprehensive national medical record privacy standards by Aug. 21, 1999. If Congress was unable to meet that deadline, HIPAA required the Secretary of HHS to issue final regulations by Feb. 21, 2000. Today's proposal marks the beginning of that regulatory process.

The proposal reflects the five principles outlined by Secretary Shalala in September 1997 as part of her Recommendations for Protecting the Confidentiality of Individually Identifiable Health Information:

Consumer Control. The standards provide consumers with important new rights including, the right to see a copy of their medical records; the right to request a correction to their medical records; and the right to obtain documentation of disclosures of their health information.

Accountability. The statute includes new penalties for violations of a patient's right to privacy. These penalties include, for violations of the privacy standards by the persons subject to them, civil monetary penalties of up to $25,000 per person, per year, per standard. There are also substantial criminal penalties applicable to certain types of violations of the statute that are done knowingly: up to $50,000 and one year in prison for obtaining or disclosing protected health information; up to $100,000 and up to five years in prison for obtaining protected health information under "false pretenses"; and up to $250,000 and up to 10 years in prison for obtaining protected health information with the intent to sell, transfer or use it for commercial advantage, personal gain or malicious harm.

Public Responsibility. Privacy protections must be balanced with the public responsibility to support such national priorities as protecting public health, conducting medical research, improving the quality of care, and fighting health care fraud and abuse. For example, public health agencies routinely use health records in their efforts to protect the public from outbreaks of infectious diseases. The new standards put in place how such information should be released.

Boundaries. With few exceptions, an individual's health care information should be used for health purposes only, including treatment and payment. For example, a hospital could use personal health information to provide care, teach, train and conduct research and ensure quality. However, employers who also function as health care providers or health plans would be barred from using information for non-health purposes like hiring, firing or determining promotions. Similarly, insurers could not use such information to underwrite other products, such as life insurance.

Security. Organizations that are entrusted with health information must protect it against deliberate or inadvertent misuse or disclosure. The proposed standards would require each covered organization to establish clear procedures to protect patients' privacy, designate an official to monitor that system and notify their patients about their privacy protection practices. In addition, those who get information and misuse it would be subject to the penalties outlined in the proposal.

The proposed standards would enhance the protections afforded by many existing state laws. In circumstances where the federal rules and state laws are in conflict, the stronger privacy protection would prevail. The proposed privacy standards would apply to consumers whether they are privately insured, uninsured or participants in public programs such as Medicare or Medicaid.

While the privacy standards proposed today are a significant step toward protecting patients' confidentiality, HHS does not currently have the authority to protect all medical records. Under HIPAA, HHS does not have the authority to protect records that are maintained in paper form only. HIPAA also does not allow HHS to issue standards for records that are maintained by other insurers, or by employers for worker's compensation purposes. The proposed rule does not establish appropriate restrictions on the use or redisclosure of such information by likely recipients, such as researchers, life insurance issuers, marketing firms, or administrative, legal and accounting services.

HHS also lacks the authority to provide Americans with the right to take action in court when their medical information is used inappropriately -- a critical consumer protection that only Congress can provide. The Clinton Administration has called upon Congress to close these important gaps and enact comprehensive national legislation to ensure that all medical records are protected.

The proposed rule will be open for comment from the public for 60 days.

[This message has been edited by Dave Baker (edited 10-29-1999).]

well, rumor has it if you are running NT, there are certain printing problems that you may encounter. we can not print any standard reports in landscape no matter what we do, they all come out portrait. supposedly there is a way to set the your environment, but I haven't heard back from Quantech yet. I will keep you informed as soon as I find out more. I just dont want anyone else who may encounter printing problems with 5.0 and NT to spend time trying to work around this problem.

Client is a large national home builder. Reviewing retirement program. Wants info on what other similar organizations provide. Main focus is on 401(k) and level of match, and indication other plans, with specifics if possible.

Any info or suggested sources of info?

May a municipality establish a SIMPLE IRA for its employees if it meets the other requirements, e.g. number of employees?

Facts: X worked for U.S.-based ABC Corp. for several years, received U.S. earned income, and received deposits into his profit sharing account for several years. ABC was bankrupt about 7 years ago, plan is just now being terminated (all required 5500's were filed). X is not a U.S. citizen and returned to his home country some time ago.

Question: Can X roll his profit sharing balance to a U.S. IRA? Can he do so tax-free, the same way a U.S. citizen would?

Thanks for any input.

We are a small consulting firm in Texas with plans to expand soon.

We need a benefits package BEFORE we recruit so that our potential new staff know what is available. No one we have talked to so far is willing to give us information without specifics about our staff, which or course, we don't yet have.

Can someone give us VERY GENERAL information about benefits packages, what they might look like/cost and how they are administered?

Samples would be nice.

Steve Evans

Evans Technology Applications

steve_e_eta@hotmail.com

I work for a small government relations firm in Washington, DC. We are looking into changing from a traditional vacation and sick leave accrual policy to a Paid Time Off policy. I have never worked for an organization where a PTO plan was used and could really used some assistance and direction on where to begin. I'm looking for HR professionals who are willing to share copies of their PTO policies (you can forward to my e-mail address listed above.) In addition, any input or feedback on what to do and not to do would be appreciated!

Thanks,

Sandi

This started as a response to 'Other 'perky' benefits'. IF you are comfortable allowing a financial services firm into your company… you can work with a financial services provider to negotiate reduced minimums and fees. The only cost I can see would be to set up the direct deposits.

This is my first posting. I have opened another topic under Misc. Benefits. I would be interested to hear comments from anyone else who has looked into these services. Why did you decided not to go forward? If you did go forward, do you have any tips?

Thank you!

I guess the employer figures the office employees aren't about to unionize, eh?

Besides the fact that the plan design seems intended to tick off office employees and field employees who did contribute, I'd be concerned that it violates the contingent benefit rule in the 401(k) regulations. Treas. Reg. 1.401(k)-1(e)(6)(i).

The employer also has issues about whether the amount exceeds employees' IRA limits and (considering they are eligible for a 401(k) plan) whether employees make deduct IRA contributions. The employer might also convert the IRAs into an ERISA plan (there's some DOL guidance that addresses what the borderline is).

Not a great idea, all in all.

If the QDRO value is rolled into a 403(B) and mixed with the person regular 403(B) account, it is possible the 10% early distribution penalty will apply to the money. Care is needed so the the QDRO money remains as QDRO money to be exempt from the new plan's distribution restrictions and adverse taxation.

I am trying to determine the importance of prospectuses for distribution to employees in employer-sponsored ERISA retirement plans (401(k), 403(B), etc.) At first glance, it would seem logical that each employee would need a copy of a prospectus for each fund offered in an employer plan. However, since the plan sponsor is ususally the client the purchasing client and is acting as a fiduciary, it may only be necessary to obtain prospectuses for the employer and provide prospectuses on demand for the employees.

Other issues are the cost of mailing, difficult of getting adequate supply from each independent fund company and the logistical nightmare of distributing them. For instance a 1000 employee plan, with 10 investment requires 10,000 prospectuses be delivered and distributed. This is difficult and expensive, cutting into resources and profitability.

Can anyone tell me the DOL position on the use of prospectuses and the most logical course of action (e.g.supply at enrollment to all, supply electronically on a website, deliver after enrollments but before contributions begin, or other)???

Thanks

If during a plan year a participant has a change in circumstances and finds the dependent care allocation is too much and medical is too little, can money be swapped between these two categories without a trigger event?

If not, is there any congressional bill in process which would allow a mid-year change in allocations without a trigger event?

Does anyone know of any cases or how to deal with a situation involving a scrivener's error where the drafter of a restated plan document, which is restated to meet the requirements of TRA 86, fails to put in the specific effective dates (e.g., certain TRA changes had to be effective 1/1/89) and instead has everything effective as of the date of restatement (e.g. 1992)? Thanks.

In calculating the 1999 Top Heavy test for a plan with a 12/31 plan year end, I have the following calculations in which I am confident of the calculations:

12/31/98 Balances for Key EEs = 3,096,677.97

12/31/98 Balances for ALL EEs = 7,193,148.80

Withdrawals made from 1994 to 1998 Plan Year

Key = 80,303.40

Non Key = 118,353.20

Which calculation below is correct?

1)

3,096,677.97 / (7,193,148.80+80,303.40+118,353.20)

OR

2)

(3,096,677.97+80,303.40) / (7,193,148.80+80,303.40+118,353.20)

Since it passes no matter which is used, it is not critical in this example but where the ratio is close to the 60% thershold, it could make the difference.

I personnally believe that formula (2) is correct but would appreciate others input.

Thanks

John Armknecht

I am 75 and now into my 403(B) grandfathered money. VALIC is using a "50% Rule" [taking 51% (yes, 51%) of the pre-'87 money and using the annuity due formula with my single life age (as time) instead of joint with my wife as the divisor]. TIAA/CREF has never heard of this. Is there such a thing (i.e. 50% Rule)?

I am contemplating moving my 403(B) from VALIC to TIAA/CREF and would like the same benefit and if I could locate the citation, etc., I might have some foot to stand on.

HELP.

------------------

Al

I am in the frequent position of accompanying many life insurance agents on their pension sales calls. I try to limit this because I'm afaid I won't be adequately compensated for my time.

I can see it two ways:

1. If we sell the case, I get the administration. Many times, I leave a bill for the administration or the plan document and they pay immediately.

2. Lawyers and other professionals charge for their time. We are professionals (although lawyers like to think of theselves as THE ONLY professionals on the planet.

If I am charging $500 on a case, and it takes me 2 hours each way travel time plus an hour meeting with the client, I have not made any money. And, if the agent blows the sale, we have all wasted our time.

Steve

What is the usual practice, if there is one?

What has anyone experienced in requiring a year-end bonus to be paid back if the employee leaves within 6 months? Thanks