I can't find anything that says an HCE can or can't share in the 3% non-elective safe harbor contribution. Anybody already know this?

Also, I have a client with two plans - a 401(k) and an MP plan. He allows immediate entry for deferral contributions but employees have to wait 1 year to get match and money purchase contributions (MP plan is satisfying the 3% non-elective safe harbor contribution). In order to be considered a safe harbor, do all employees need to get this 3% even if they haven't satisfied eligibility requirements to share in the MP contribution?

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EAC

If a plan allows individuals to put individual insurance premiums through the company cafeteria plan, then the company decides to provide a group plan providing 50% of the premium, can the employees change their election because of a "major change in premium amount"?

Does anyone offer this as a benefit to their employees? If so, how large of a company are you? How much do you contribute to the dues? Do you offer it to everyone or require a certain amount of use per month?

A client has requested that their document require that an employee be employed on the last day of the plan year in order to receive a year of service for vesting.

Currently, they are on a prototype that only requires 1,000 for vesting credit. Could we accomodate their request on an individually designed document?

We have a leveraged ESOP client who is terminating the plan due to sale of the company. The yearly Employer contribution is $30,000 and there are two years left on the note. To pay off the note $60,000 must be contributed by the Employer but the § 415 limit is $28,000. What do we do with the "extra" $32,000. We want to treat it as dividends. Any suggestions? Are there any PLRs or TAMs on this subject?

Does anyone know of a website where I can find survey data on employer practices relating to employee benefits?

Dear Ms Calhoun: Does this Procedure mean that a 403(B)(7) custodial account holder can direct his Custodian to invest directly in publicly traded securities as an alternative to mutual funds? Thanks, Joel L. Frank

[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.