Plan sponor wants to vest all current participants 100% and then subject new employees to the vesting rules. Does anyone see a problem with this? What would be the best way to go about this?

What are the coverage requirements for an employer-contribution only, nonelecting, 403(B) church defined contribution plan? Is it possible to exclude groups of employees (pre-school employees paid from the church's payroll, bookstore employees paid from the church's payroll, part-time employees, etc.) from getting a contribution while all other employees get a uniform percent (like 5%) of compensation?

When do you determine the participants age when making an MRD calculation? Is it the beginning of the year the MRD is being paid for, or is it the end of the year the MRD is being paid for, or is it something else?

1) Do the final and proposed COBRA regulations issued in February 1999 make similar changes to continuation coverage for plans sponsored by government employers?

2) Are the notice requirements for continuation coverage for government employers "exactly" the same as COBRA? That is, if a government employer uses the model notice provided by COBRA, will that meet the minimum requirements of the Public Health Service Act? Does the "model" notice provide more than the minimum necessary for government employers?

If a client decides to make a QNEC rather than distributing excess deferrals to correct a failed ADP test, may HCE's receive a portion of the QNEC? If yes, then does the HCE portion of the QNEC need to be included on the ADP test?

If the HCE's may receive a portion of the QNEC and it needs to be included on the ADP test, how do you calculate the QNEC? It seems like it would be mathematically impossible to calculate, but I may be missing something.

It is valuation time again for my office (09/30) annual plans. Only the second year on Quantech some we have some pretty basic questions.... I have a date of hire of 03/03/98 - date of entry is first day following one year of service which should be 04/01/99, but the system is calculating 03/01/99. I made sure that the "credit full month for any service" is NOT checked. The system calculated correctly on all but one person on two plans? Any suggestions?

A defined contribution plan defines Valuation Date as "the last day of the Plan Year or such other date as agreed to by the Employer and the Trustee on which Participant accounts are revalued ...". The Employer has always paid distributions based on the last day of the preceding plan year. A participant with a very large balance (much larger than most other participants) is threatening to sue the Employer if the Employer does not revalue his account shortly before making his distribution. What are other TPA's advising their clients in this situation? Is anyone aware of actual court cases similar to this? (Note: I posted this same question on the Retirement Plans in General message board - I wasn't sure which place was more appropriate).

A defined contribution plan defines Valuation Date as "the last day of the Plan Year or such other date as agreed to by the Employer and the Trustee on which Participant accounts are revalued ...". The Employer has always paid distributions using the value as of the last day of the preceding plan year. A participant with a substantially larger balance than most terminated in 1998 and is threatening to sue the Employer if the Employer does not revalue the account shortly before making the distribution. What have other TPA's advised their clients in this situation? Is anyone aware of actual court cases similar to this situation?

Does anyone know how to contact Mr. Benefish? We're looking for someone to run our Benefits Department and he seems to be extremely competent. Please advise. Maybe Mr. Benefish could identify himself?

I have a client that has a 9/30 Corporate fiscal year end and a 12/31 Plan year end. I will be preparing a preliminary ADP test shortly and it is likely the test will fail. If the test fails, the client's accountant is going to recommend they make a QNEC by the due date of the 9/30/99 Corporate year end in order to reduce their taxable income.

My question is whether a contribution made for the 12/31/99 Plan year end is deductible on the client's 9/30/99 Corporate return.

Has anyone figured out what the dollar limits are for tax-exempt parking and mass transit for the year 2000?

We have two issues we need some help with.

1. Dependent was cancelled from our pre-tax medical plan because he was not enrolled in school. Now the dep is back in school and parent wants to enroll him. We can't find reason under Section 125 (e.g. he is not a "newly" eligible dep.") to allow him to enroll now. We are thinking that the dep can be enrolled during open enrollment.

2. We have a dependent who turned 18 and moved out on his own. His parent's want to drop his coverage. Our plan states that you may cover "an unmarried child under the age of 19." We are wondering if the parent can drop the dep simply because the dep no longer lives with them. Or, do they have to wait until open enrollment.

A small client requested 2 distribution checks from their investor.

1 for 80% of the acct. balance to participant

1 for 20% as IRS w/holding

The IRS w/holding check is made payable to IRS not to a Fedral Reserve bank.

ANy ideas on how the client can deposit this check payable to IRS along w/tax deposit coupon (8109B)? Will a bank take the check if it's made payable to IRS? Is there an IRS address that will accept the w/holding check and coupon?

thanks for any help

I have a client with a floor offset plan who wants to terminate the DB portion of the plan and let the MP portion continue.

His issue is that only 2 participants now have a benefit under the DB portion of the plan, the rest are fully offset.

These 2 participants are low paid new hires (this is a takeover, I have no idea why the plan was designed this way, but that's how it is, total DB plan assets are less than $12,000).

The client really doesn't want to make distributions to these 2 participants since it will cause him PR problems with all his other employees (all of whom are long service).

Question: If accruals are ceased under the DB portion of the plan but the plan is not terminated, are the DB benefits offset by the MP balance as of the date of the cease, or by the MP balance at the date of distribution?

If the benefits can be offset by the then current balances of the MP plan, it is likely that the benefits of all particpants will be fully offset by their MP balances within 2 or 3 years. The client would terminate the DB plan at that time (assets will be about $10,000 or so since he will pay administrative expenses from the plan assets for the next 2 -3 years), transfer 25% of the potential reversion to the MP plan and then pay the 20% reversion tax and ordinary income tax on the remainder.

What do you think? I haven't found anything to say one way or the other what a cease of accruals means in a floor offset plan.

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I would like to understand what a 414(h) plan is. I see it shown on an employee's W-2 form. In box 14d, the label is N.Y.C.E.R.S. 414(h). The amount show in the box has been deferred, like the amount in box 13e, for a 403(B) plan. The employer is New York City Health & Hospitals Corporation

can you attach a last day rule to the 3% profit sharing contribution for a safe harbor 401k?

Any thoughts on whether COBRA or Public Health Service Act (for governmental entities) completely preempts state insurance

laws regarding continuation coverage?

Basically, Illinois has continuation laws that apply to fully insured plans only. These laws are both more restrictive and more liberal than COBRA. For example, employees only get nine months of coverage under state law after employment terminates. At the same time, no administrative fees may be charged, and any spouse 55 and over can get coverage until Medicare kicks in (after employee's death, retirement, etc.). A recent Supreme Court case (Unum Life) seems to indicate that state laws that expand, and do not otherwise conflict with, ERISA would not be preempted.

The end result is that employers may have to apply the most liberal provisions of both (an administrative nightmare). Perhaps one notice could integrate both COBRA and Illinois laws. Any thoughts from the experts?

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We would like to send letters out to our participants that qualify for 70 1/2 MRD's. Does anyone have a sample they could share? Thanks.

My organization administers approximately 500 401(k) plans with participant directed investments. We are planning to change the investment options on 4-1-2000. New options will be added and some will be eliminated. Can anyone offer suggestions on the timeline for notification and the types of notices that should be provided to our participants?

I know that this must be a fairly common practice, but I have been unable to locate any authoritative written guidance. Any references would be very much appreciated.

My organization administers approximately 500 401(k) plans with participant directed investments. We are planning to change the investment options on 4-1-2000. New options will be added and some will be eliminated. Can anyone offer suggestions on the timeline for notification and the types of notices that should be provided to our participants?

I know that this must be a fairly common practice, but I have been unable to locate any authoritative written guidance. Any references would be very much appreciated.