Do any of you out there have procedures for handling untimely COBRA notifications? Let's say you send out a late notice (e.g., you weren't notified the employee terminated for example until three months after the term date) and the employee calls and is upset because he/she must now pay for three months past COBRA premiums. Do you allow the employee to only pay prospectively? Do you pick up the three months or the time period that was untimely? If this has happened to you, I'd be interested in how you handled (not that this has ever happened to me - wink).

We did an amendment to freeze a 403(B) plan effective 12/31/98 and then established a 401(k) plan for the employees. It is our understanding we cannot terminate the 403(B). I am wondering now if the 403(B) monies should all be considered 100% vested, does anyone have an opionion? Also, aside from filing the 5500, should we be providing an annual statement to all the participants in the frozen 403B plan? They are receiving a statement from the insurance company that reflects gains etc. Please help. This is our only 403B plan and we are really in the dark with all the rules and regs. Thanks.

I am interested to find out how other organizations handle part-time employees' benefit contributions. Are part-time employees at the same cost sharing percentage as full-time or do they pay an increased percentage?

I have a 403(B) plan which I am fairly certain is not covered under Title I of ERISA, but, I understand, may still be covered under Title II. What does this mean for my plan? What tax code requirements will I still need to follow? And, since I have been filing 5500s in the past, can I just stop, or should I send the DOL an explanation?

Hi, I'm interested in finding out the popularity of Chiropractic Coverage especially in the Technology Industry. Can anyone tell me where I can get the information such as the percentage of company that carries Chiropractic coverage in their employee benefit plan, etc.

Thanks

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Ming Hoe

Did you see the link to the newspaper article on Gloria Moebes, the employee whose group health insurance was cancelled when she attained age 65? I think 42 USC 1395y(b)(1)(A)(i) would prohibit this practice by any employer with 20 or more employees. (I don't think this is mentioned in the article.) For a smaller employer, would there be an issue under the general principles of ADEA?

Any guidance on permitted beneficiaries for survivor annuities (subject to appropriate spousal waiver)? Trust ok. Entities like charities?

What is the status of changing the basis for 420 transfers from maintenance of cost to maintenance of benefit?

Client doctor has account balance in PSP. Doctor is also MAJ s/h, director of P.A. and is trustee on the PSP. Doc is looking at terminating the PSP. Doc has recently hit his RBD and has taken his first RMD. Doc wants to terminate PSP and rollover his account into IRA. Also, doc wants to name his kids as ben's of the rollover IRA. His spouse is currently ben of his plan account balance. His naming different ben's (e.g., his children) after his RBD seems to be O.K., but it appears that he will be stuck with having to use his spouse's life expectancy to figure future RMD's from the IRA. See Prop Reg §1.408-8, A-6, Q & A (second sentence); Prop Reg §1.401(a)(9)-1, G-2, Q & A, (B), and Prop Reg §1.401(a)(9)-1, E-5, © and (d). Any comments or suggestions.....Thanks

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help, trying to get what is my fair share without much coop from spouse. He has 3 pension plans that I don't understand. He works for the local township where we live and has a defined benefit plan fully funded by the employer. He says it has no cash value and if he leaves employer he longer is eligible to collect from this. He says it has no cash value and is not covered by ERISA. He also has 2 personal plans he pays into, one he calls a PEDC and the other an annuity. I don't know where to start. He refuses to talk about a post marital agreement unless I sign divorce papers and I cannot do this. I didn't want the divorce and cannot condone it. He can get a divorce anyway in two years with or without my signature. If it helps I am in the state of Pa. UAN5@aol.com

I have found myself in the middle of a messy ESOP where no allocations have been done for several years. The ESOP is leveraged but the note was paid off.

Does anyone know or can send or point me to good information on the basics of allocating an ESOP? It's been way too many years since I have looked at one of these.

Thanks.

I think the first place to check is the plan document. How does it define compensation for testing?

If the service crediting method of a plan is changed from elapsed time, which includes fractional years, to hours of service, which is whole years only, how are service accruals converted? For example, if a person has 2 years and 8 months, how much service would the person be credited with under the new method?

Would you assume an hours equivalency, for example 190 hours for each month, in determining service for the partial years?

I have 2 medecal groups, A & B. Both are LLP's with MD, PA's as partners. No partner is a partner of both. Another LLP exists, C, which handles all medical billings and collections for A & B, remitting each one their respective collections. A & B each own 50% of C. Except for billing and collecting, A & B are autonomous and unrelated to each other. One more exception though....C also holds the provider contracts for both A & B in it's name so physicians from A & B can participate in all contracts. All other resources for providing medical services to the public are provided by A & B including salaries, rent, management, etc. Question, is A, B & C a controlled group? If C provided only billing and collection services, I would say definitely no. However, I am not certain since C holds the contracts for the doctors.

Thanks for any help.

Have a client who owns 100% of a C Corp and 100% of an S Corp. One employee in the C, 90 ees in the S Corp, a restaurant.

Employee X, running the restaurant, gets 25% of profits through a handshake arrangement. Doesn't want stock because of capital gains?

I've found Code Section 1563(e)(1), pertaining to options.

If my guy gives this Employee X an option to buy 25% of the S Corp, I'm thinking I wouldn't have a controlled group.

Plan year ends 12/31, conversion expected to be 2/1. Are there any considerations when doing this type of conversion (i.e. non-discrim. testing, 5500), as opposed to a 1/1 conversion? Thanks.

A non-governmental DB plan is terminating and amending the plan to offer a lump sum to current retirees and beneficiaries. If the annuitant wants the monthly benefit to continue, then the plan will purchase a commercial annuity. The lump sum will be calculated as the present value of all future payments, using the form of payment in effect and the definition of actuarial equivalent in the plan.

The question is what spousal signoff is required for those who want the lump sum?

1. If retiree was not married at date of retirement, is any spouse signoff needed? I suggest NO, even if currently married. However, if retiree elected a J&S with a non-spouse contingent beneficiary, would that beneficiary need to signoff?

2. If retiree was married at original annuity commencement date and spouse is still living

a. J&S was elected, spouse signoff is required, whether now married or now divorced? Presence of a subsequent spouse is not relevant.

b. J&S was waived in favor of a single life annuity. Any signoff required?

c. J&S was waived in favor of a 10C&C with spouse as beneficiary. Signoff required if still within 10 years? Signoff required if now beyond 10 years?

d. J&S was waived in favor of a 10C&C with nonspouse as beneficiary. Signoff required if still within 10 years? Signoff required if now beyond 10 years? Signoff by spouse AND by beneficiary?

Do the applicable regs [i think 1.401(a)-20] require the plan to offer a J&S upon the offer of the lump sum, which might effectively create a new annuity commencement date (I don't think so, but looking for cites and reasoning)? If so, this might create a new requirement for the retiree who was single at DOR but is now currently married.

By the way, if the original election was a J&S and the spouse is now deceased, then the lump sum will be the present value of the single life annuity to the retiree. Anyone disagree?

A somewhat rambling question, but would like any other advice related to the offer of lump sums to retirees. Thanks.

[This message has been edited by pax (edited 11-09-1999).]

The IRS Code provides that a plan can "buy back" the 1.0 for 415(e) by providing a 4% DC contribution. See 416(h)(2)(A)(ii)(II) below.

IRS Regs say that a plan can "buy back" the 1.0 for 415(e) by providing a 7.5 DC contribution. See IRS Reg 1.416-1 M-14.

Can the Code be used or does the IRS Reg have to be used?

Does anyone have experience using the 4% in the Code to do the buy-back? Does anyone have experience using 7.5% to do the buy-back? Can anyone tell me if there are specific situations that call for one or the other?

I realize 415(e) is going away soon, but I'd still appreciate any information on this. I have been curious for a long time.

Section 416(h)(2)(A)(ii)(II) is as follows:

(h) Adjustments in Section 415 Limits for Top-Heavy Plans.*

(1) In general.

In the case of any top-heavy plan, paragraphs (2)(B) and (3)(B) of section 415(e) shall be applied by substituting ``1.0'' for ``1.25''.

(2) Exception where benefits for key employees do not exceed 90 percent of total benefits and additional contributions are made for non-key employees.

Paragraph (1) shall not apply with respect to any top-heavy plan if the requirements of subparagraphs (A) and (B) of this paragraph are met with respect to such plan.

(A) Minimum benefit requirements.

(i) In general.

The requirements of this subparagraph are met with respect to any top-heavy plan if such plan (and any plan required to be included in an aggregation group with such plan) meets the requirements of subsection © as modified by clause (ii).

(ii) Modifications.

For purposes of clause (i) --

...

(II) paragraph (2)(A) shall be applied by substituting ``4 percent'' for ``3 percent''.

IRS Reg 1.416-1 M-14 Q. says:

M-14 Q. What minimum contribution or benefit must be received by a non-key employee when he is covered under both a defined benefit plan and defined contribution plan (both of which are top-heavy) of an employer and the employer desires to use a factor of 1.25 in computing the denominators of the defined benefit and defined contribution fractions under section 415(e)?

A. In this particular situation, the employer may use one of the four rules set forth in Question and Answer M-12, subject to the following modifications. The defined benefit minimum must be increased by one percentage point (up to a maximum of ten percentage points) for each year of service described in Question and Answer M-2 of the participant's average compensation for the years described in Question and Answer M-2. The defined contribution minimum is increased to 7-1/2 percent of compensation.

Is there any public agency that enrolls its public employee via the internet? If so, I would like to discuss privacy issues with you.

I have been asked to assist a start-up company establish its full benefits program.

My experience has been with large corporations and this is fairly new to me. Can someone suggest a good starting place -- are there independent agents who handle this sort of program. Appreciate any help you may provide. Thank you.