We have an exempt employee who has exhausted all vacation, personal and sick time taking care of two sick parents.

We have notified the employee that his FMLA "Clock" has started ticking last week.

This employee is exempt and we need to know if we can dock his pay. He is planning on taking 2 or 3 days off per month. The days off are going to be intermittent.

Are we able to dock his pay? I have received conflicting information. I have placed a call to the FEHA three days ago and have called everyday. Comments are welcome. Thank you.

The ee will be taking 2 or 3 days off per month to take care of 2 sick parents.

If you have a controled group of employers who each sponsor equal but separate 401(k) plans, but all the plans assets are invested under one annuity contract which provide for directed investments by the participants, is this considered a Master Trust. The financial institutions does not segregate each plans assets nor do they provide individual plan certification. The certify the contract as a whole. The trustees of each plan are employees of the employer appointed by the employer.

A sole-pracitioner has a Keogh which is held by an insurance company whose investment return has not been satifactory. The practitioner would like to move the funds to a SEP-IRA that he established some time ago. The insurance company will allow the pracitioner to withdraw 10% of the assets each year with out penalty. I have the following questions regarding this situation. First, is a rollover between the Keogh and SEP-IRA is not permitted unless the Keogh plan is terminated? Second, is the the practitioner permitted to take a partial distribution from the Keogh and invest it in the SEP-IRA? If so, would the distribution from the Keogh be subject to the standard 20% tax withholding and early withdrawl penalty? Can the practitioner even "nickel and dime" away his Keogh assets this way? Where is this addressed in the Code/Regs?

An employer has a collaterally assigned split dollar arrangement with several key managers. There are fully executed agreements specifying the extent of the employers interest which, in this case, is the employers' cummulative premium paid. The employee owns the policy and designates a benficiary. The question is : How well is the employers interest protected should a beneficiary or former employee fail to act as specified in the agreement. For example: A spouse beneficiary at death of the employee claims he/she is entitled to the entire policy proceeds. Are there examples that can be cited of where this has occurred and the employers' position was protected.

I am seeing post-HIPAA group health insurance policies and plans with the exclusions like -- no coverage for cosmetic surgery unless it is to correct an injury which took place while the person was covered by the plan. I see this as a permanent preexisting condition limitation. How do insurers justify this form of exclusion post-HIPAA? Or is this a pre-HIPAA provision that some insurers and TPAs have inadvertently carried over?

Insurance premium is expressly prohibited from reimbursement under a health FSA.

Dear Ms. Calhoun: Do you know of any governmental DB plans that offer distribution options based upon ANNUITIZATION FOR LIFE EXPECTANCY (RATHER THAN FOR LIFE) with full earnings participation on the invested reserves?

Thanks, JOEL L. FRANK

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Recent retiree from a large publicly traded company has stock and cash in his retirement plan. Cash is $200,000. 10,000 shares of stock has a basis in the plan of $15 per share and a FMV of $40. He can take the stock, pay tax on the plan basis and defer tax on the $25 per share appreciation.

Question 1: Is the $25 capital gain or ordinary income on the subsequent sale of the stock? (I have always thought it was ordinary income, and eventually IRD, but someone has suggested otherwise)

Question 2: If a lump sum distribution of the cash and stock is received, is the 10-year averaging tax based on the total FMV of the cash and stock or the cash plus plan basis?

Thank you

What IRS Regs, or Rulings exist that are proof of the future viability of cross-tested plans? What do they say? Dates written.

I am researching benefits management as a career option for myself and would like any first-hand information about the field. Some of my questions include:

1. What do you find most satisfying or frustrating about your job/field?

2.What skills do you use the most?

3. What kind of person does best at this type of work?

4. What kind of challenges does your work provide?

5. What is a typical day like?

6. What do you find stressful about your work?

7. What is your work environment like?

8. How much time do you spend working with people?

9.Is it a secure field in terms of earning potential and future demand?

10. How much variety do you have on the job?

I would be very grateful for any feedback from anyone who is currently in the field. I'm at Pavson@rcn.com. Thanks.

Trial attorney with 2 heart attacks; his doctors recommend he no longer do trial work as the stress would aggravate his heart disease, causing another heart attack/death. Is anyone aware of any reported decisions under ERISA where employee can physically perform the duties, but only at a risk of death?

A 457 plan sponsor asked me if the fact their plan was funded by annuities (issued by an insurance company) didn't already meet the new requirements of the SBJPA? Perhaps we left this line of business hastily? We did withdraw from this line of business due to our understanding of the new requirements of the SBJPA.

Would a simple plan amendment on the part of the plan sponsor (we provide only the plan funding vehicle) to their plan - combined with the fact that they are already using annuities - have made the plan compliant with the SBJPA?

Could the withholding/reporting requirements remain the responsibility of the plan sponsor/administrator - or would the SBJPA require these duties be transferred to the insurance company that issued the annuity?

We need some advice on your process for calculating the FSA healthcare premium for COBRA. I have read that an employee's COBRA premium for FSA is based on, plan year election, minus reimbursements to date, divided by the number of months left after the qualifying event date. Problem is, we have a payroll system bringing over the term with FSA info, a TPA who administers FSA who has the reimbursement amount, and a COBRA system, Travis that has the COBRA info. We don't see these three systems mingling to give us all the info we need. One idea I had was to have the COBRA beneficiary indicate that they want the HC FSA on their COBRA form and then we contact them with the premium so that we don't have to manually calculate the premium for everyone - just those who want to elect?? Any comments, suggestions?

Can the Company exclude health/dental coverage from its self-insured plan for spouses of employees who have access to health coverage through their employer?

I have seen a lot of press lately on projections for the 2000 rate brackets, standard deduction, and tax credit amounts in the individual tax area. Although I know that these numbers cannot be finalized until later in the year, has anyone heard about the projections for retirement plans?

I understand that the following limits are indexed: annual compensation limit, annual limit on elective deferrals, highly compensated employee threshold, the defined contribution plan contribution limit, and the defined benefit plan contribution limit.

Does anyone know what the most current projections are?

I have seen a lot of press lately on projections for the 2000 rate brackets, standard deduction, and tax credit amounts in the individual tax area. Although I know that these numbers cannot be finalized until later in the year, has anyone heard about the projections for retirement plans? I understand that the following limits are indexed: annual compensation limit, annual limit on elective deferrals, highly compensated employee threshold, the defined contribution plan contribution limit, and the defined benefit plan contribution limit. Does anyone know what the most current projections are?

OK, the limitations have been released and they do match the values calculated below!

based on the CPI-U values, you take the average of the July, Aug, Sept values and divide by 145.7667 (the average values for the last quarter of 1993.)

Sept value will not be released until mid Oct.

however, using June, July, Aug

166.2, 166.7, and 167.1 = 500/3 = 166.67

166.67/145.7667 = 1.14338

1.143380 * 150,000 = 171506.94 so 170,000 for $ limit

1.14338 * 9240 = 10,564.83 so 10,500 for deferral

1.14338 * 30,000 = 34,301.39 so still use 30,000. (but maybe 2001 we will hit 35,000!)

1.14338 * 120,000 = 137,205 so use 135,000 for DB limit

the HCE limit is 85,000

and the taxable wage base is 76,200

cpi-u can be found on the web

ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt

[This message has been edited by Tom Poje (edited 10-20-1999).]

[This message has been edited by Tom Poje (edited 10-20-1999).]

Former Participant takes cash distribution of entire vested account balance. 20% mandatory withholding is mistakenly not withheld. Looking for suggestions on how to correct. Will try to get former participant to return 20% to trustee so that it can be remitted to IRS. If not, Employer may have to "make participant whole". If this is the case, how does Employer do this? On what amount is 20% determined? The total amount that the participant received (mistakenly) or the original amount that he should have received? What are penalties for late payment of mandatory withholding? Where is this addressed in Code/Regs?

Is it ever permissible to roll funds from an inactive SEP to a qualified Profit Sharing Plan?

I have a plan that is in the process of terminating. The owner has a cash value life insurance policy for himself in the plan. How do I distribute that to him? He will be taking a direct rollover into his IRA, so can the insurance be rolled over also?