Does anyone see any problems with an employer paying the COBRA premiums to an insurer for some terminated employees and not others.

Could this actually be construed as creating a new plan with additional COBRA rights? I would think that as long as the COBRA notice was given, no benefits need be offered after the 18 months no matter who pays the premium.

Company A acquires Company B in 1999. Company B maintains a SARSEP. A SEP has to cover all employees of the controlled group, but Company A has more than 25 employees and does not want to have any SEP.

The SARSEP rules say Company B is ineligible to have a SARSEP after 1999. But if Company A is not adopting the SARSEP, does it have to be shut down immediately to avoid violating the basic rule that it must cover all employees in the controlled group? Is there any grace period like that for SIMPLE plans in 408(p)(10) or qualified plans in 410(B)(6)? Or can Company B still make an employer contribution to the SARSEP for the period in 1999 before it was acquired?

DOES A PLAN DOCUMENT NEED TO BE DRAFTED IN ORDER TO ALLOW FOR THIS BENEFIT TO BE OFFERED? IT MY UNDERSTANDING THAT ONLY A BOARD RESOLUTION AND POLICY/PROCEDURES NEED TO BE IN WRITING TO PROPERLY IMPLEMENT THIS BENEFIT OPTION. I KNOW IT CANNOT BE PART OF A 125 PLAN.

THOUGHTS?

Is a governmental plan subject to the nondiscrimination requirements of Code section 117(d)(3)? Code section 117(d)(3) references 414(q), which is of limited applicability to governmental plans due to the inapplicability of 401(a)(4) to most governmental plans under TRA 97. Thanks.

Can an employer contibute both a matching 3% and a non-elective 2% in the same year for his simple plan.

Employer hires seasonal employees each year for a period of four to six months April to September. Many of these employees are over age 21 and work over 1000 hour in the season.

If these employees are rehired in the next season, when must they participate in the plan( date of rehire or next entry date July 1)? From prior posts on the BB I see that exclusion of these employees is difficult because of an IRS Field Dirrective and 410(B) coverage rules.

Has anyone come up with any approaches to exclude these employees other than:

1) Write HEC's out of Plan and establish non-qualified program for them.

2) 410(B) carve out to exclude enough HEC's to pass coverage.

Do limited liability partnerships have the same issues regarding loans and earned income as do self employed individuals?

I am trying to secure statistical information about how long a company with "x" number of employees makes their employees wait before they receive the company contribution toward health insurance. Does anyone know of a website that could provide such information? Also, if anyone reading this can tell me how long the wait is at their company (please provide number of employees). Thank you.

I would like to open up a discussion about employee benefit considerations when a merger or acquisition occurs. More specifically, what are the implications associated with the merging of two benefit plan(s) into one or the acquiring company company and their benefit plan(s) vs. the acquired company benefit plan(s)? Does anyone out there have experience with either type of business transaction related to this topic?

In looking into establishing a Flex Spending program for our company, I was informed that the company owner nor his family can participate because the company is established as a S Corp and "otherwise" already has the benefits of the Flex account. How is this? and how can he excercise these benefits to pay for medical expenses (pre-tax) not covered under the our health insurance? Thanks

If a plan determines benefit accrual service using the elapsed time method, do you have to credit partial years of service? You don't have to credit partial years for vesting (1.410(a)-7(d)(1)(iv)), but what about for benefit accrual? And if you do have to count partial years, how do you calculate the service? Days between employment commencement date and severance from service date divided by 365? If you have a cite to a reg, I'd appreciate it.

Thanks.

Does anyone have an IRS cite (Code or Reg.)which specifically says that employees may change their deferral election mid-year, so long as the total amount of their annual deferrals does not exceed $10,000 or the amount specified in the plan document (i.e., 15% of compensation).

I know that such changes are allowed (and our prototype plan allows such changes), but I've got a client that wants to see it in writing from the IRS!

It is clear to me that the IRS is holding off on enforecment of filing requirements for certain "specified fringe benefit plans" under Section 6039D until more guidance is issued. However, it is unclear to me what 5500 requirements may still apply. If an employer is maintaining (1)a group term life insurance plan (self-insured); (2)weekly sickness and accident benefits plan(self-insured); and (3)$1200 death benefit payable (out of the employer's general assets)only to employees who reach a certain age before dying, and each of the foregoing plans has more than 100 participants, which, if any, are required to file a 5500?

Note: It is my understanding that the death benefit is a welfare plan under ERISA.

In determining the number of participants in the death benefit plan, would it be all employees since they are all potentially eligible for the benefit?

A company with a 401(k) plan is 100% owned by a trust. Two employees of the company and one non-employee are trustees. What effect does this have on the 401(k) plan and how is ownership determined in this situation?

We have a few employees past age 70.5 who are receiving annual distribution of their RMD with no withholding being taken. All of these employees were set up on the distribution payout in the 94 and 95 years. It is our understanding if the payout started prior to '96/'97 years, we're ok not withholding. All distributions are based on life expectancy, recaluation basis. Are we ok on these payouts because they start so long ago, or should we start withholding?

I understand that this bill (which extends the exclusion for educational assistance) has passed both House and Senate. Does anyone know if the president signed/vetoed?

I understand this legislation (which extends section 420 transfers through 2005) was passed by both House and Senate. Does anybody know if the president signed/vetoed?

Does anyone know of a regulation/guidance stipulating time limits for an administrator to make a distribution from a qualified plan once a plan participant submits proper paperwork for distribution?

Thank You

Many of the school districts in our state are using a flex spending administrative plan that was devised by a former attorney. One of the procedures that the school districts are using is to pay any claims that an employee writes on the outside of a sealed envelope. The contention is that as long as the school district does not open the envelope, they are not liable for paying reimbursement of inelegible claims. I say that they are the administrator of the plan and have the fiduciary responsibility to review the claims before reimbursing the employee. Does anyone know any tax code that would support this? I think they would be held liable for aiding and abetting tax fraud if ane employee is turning in fraudulent claims and they are paying them without a proper review for eligibility!

My client is 55 years old. He has a $900,000 traditional IRA and is thinking of converting it to a Roth IRA. He has been taking periodic distributions for the last ten years of about 33,000/year.

If he converts to a Roth, will the $33,000 distribution in the year of conversion count toward the $100,000 AGI test?

Can he spread the conversion out over three or four years to take advantage of lower marginal rates without incurring the 10% penalty for modifying the distribution series, and will the 33,000 periodic payment in those years count toward the 100,000 agi test? Thanks for any guidance.