I am looking for clarification of who to send Summary Annual Reports to. Everything I see says to send them to "plan participants and beneficiaries." Does this mean current plan participants, or participants as of 12/31/98? I assume as of 12/31/98, but can't find absolute verification of this. Also, what about someone who joined the Plan in April '98 and left the company in Sept '98. Should they get an SAR? These sounds like trivial questions but we have a large plan with hundreds of new enrollees and hundreds of terms each quarter...currently the plan is at least double the size it was as of 12/31/98. So the issue of who to send SARs to will affect hundreds and hundreds of people, and we want to be sure we know the correct procedure.

We are in the process of changing our 401(k) vendor. Our new vendor does not want to recieve beneficiary forms. What requirements are there for maintaining beneficiary forms. Do I have to review them? or will state law apply if an ineligible beneficiary is selected?

Any comments are appreciated.

A Doctor's office has a calendar year PS and MP plan (about 25 participants), with a 1000 hours/last day employment required for contributions. Both plans have immediate entry after satisfying 21 & 1.

Now a large hospital will be buying the office, on 9/30. After that date, all non-doc's will no longer be working for the office, while the doc's will still be considered ee's of the office until 12/31.

A couple questions that I see are:

1. Can/Should the 9/30 be taken as the last day of the plan year for allocation purposes? Otherwise, only the doc's will share in the 1999 contributions.

2. One of the doc's is expected to enter the plan on 12/15/99. Unfortunately, the plan uses full year compensation for allocation purposes. Would this doctor be eligible for a contribution in either plan for 1999?

3. If 9/30 is viewed as the last day of the PY for allocation purposes, should hours/415 limits be prorated for 9 months?

4. Since most of the employees/participants are non-doctors, it would seem that we have a partial termination after 9/30, agreed?

5. Are there good reasons to initiate a short plan year, plan termination, MP accrual freeze right away?

Thanks for any and all comments!!

Mike

Is anyone aware of anything that requires the vesting computation period to be changed when a plan year is changed? DOL Reg 2530.203-2© allows amendments that change the vesting computation period, but I have not seen anything that requires the change, even if the plan year is changed.

Plan has a 5 year vesting schedule. Plan partially terminates and participants from that date are fully vested. May plan be more generous by fully vesting a handful of people before the partial termination date? Violations of any rules?

I've just reviewed last year's 5500 filing for a cafeteria plan. They files a 5500C/R and Schedule F. However, they had 119 employees eligible and 82 employees participating. Oops. (I'll presume they have similar numbers this year.)

1. Should they have filed a 5500, complete with audit, since the 100 participant test is based on eligible participants (like 401k's)?

2. While I forget the specifics of the corridor rule (where under certain circumstances, if you are slightly over 100 participants, you are allowed to file 5500C/R, does this corridor rule apply to cafeteria plans as well as pension plans? (I can check to see if the head counts work for us here).

3. If they blew it, does anyone have experience with this type of amended filing for cafeteria plans?

Any other ideas ...

Does an employer with 50 or less employees

fall under the ERISA guidelines?

An oldie but a goodie. My client hired a new benefits administrator and she's looking to make her mark.

Her concern is there may be discrimination within their Sec. 125 premium-only plan because their Salaried employees enjoy a shorter eligibility period (30 days) than their Hourly workers (90 days). While I've dealt with this issue over and over again, I'm now on my own and until I get my "Spencers'" or "Thompson Publishing" ERISA guide books, I don't have readily-available resources. Can anyone help me out?

Thanks to anyone in advance!!

Would an amendment to eliminate provisions in a 401(k) PSP allowing voluntary employee (after-tax) contributions be a violation of the anti-cutback rules under 411(d)(6) and regs? Attorney says he thinks its okay to eliminate voluntary contributions, but can't point to definitive section in regs . . .

Any help?

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LKP

The Taxpayer Refund and Relief Act of 1999 (TRRA '99)(recently vetoed, but pension provisions expected to be passed in future legislation) contained a repeal of the 403(B)(2) "exclusion allowance". I was informed at a recent conference on employee benefit plans of tax-exempt employers that the legislation would similarly repeal the "A", "B" and "C" elections under 415©(4) but would leave intact the 15-year catch-up election under 402(g)(8). Is this correct? And, if so, could the 402(g)(8) 15-year catch-up be used in conjunction with the catch-up for employees who are age 50 or older that was also contained in TRRA '99? If so, employees who are 50 or older and who have at least 15 years of service at a "qualified organization" will be able to defer large amounts (402(g) limit potentially increased to $25,500 in the year 2005, for example, if the pension legislation survives in some form and my math is correct!) into a 403(B) arrangement.

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Mike W.

I know that transfers are statutorily permitted from one 403(B) arrangement to another, via Revenue Ruling 90-24, and that plan documents and annuity contracts/custodial agreements can restrict such transfers. However, I am confused as to whether such transfers can be made from a 403(B) ERISA plan to a 403(B) program that is not subject to ERISA. If such transfers are permissible on their face, couldn't an employee circumvent the spousal consent rules that may apply to his/her ERISA plan by simply transferring the assets under 90-24 to a Non-ERISA arrangement (spousal consent would not be required for this transaction, since 90-24 indicates that such a transfer is not a distribution), and subsequently receive a distribution (when permissible) from the Non-ERISA account where no spousal consent is required?

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Mike W.

What are the estate plannign benefits of starting an esop for a company? Also, are there any income tax beenfits to starting an esop and giving up approxiamtely 20% of corporate securities to key employees by an owner who owns 100% of the corp? Will it lower taxabel income?

Can partners participate in a dependent care assistance program? If so, how would this work? Can the partner elect to have a certain dollar amount set aside in a reimbursement account with the partnership reimbursing him/her when expenses are incurred, similar to common law employees? Are there any tax disadvantages to the partner?

A 401(k)plan currently under audit has been asked to correct an error in which a matching contribution was made to a HCE based on total comp., not comp. limited by 401(a)(17). The IRS has not identified two similar occurences that took place in the year under audit. Due to the size of the plan (over 200 participants) and the small amount involved (total overage is less than $3K), the two combined errors probably constitute an insignificant error which could be corrected under APRSC, despite the audit. Presuming the employer corrects under APRSC, shouldn't the employer disclose the two additional, corrected errors to the IRS?

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I have a 401(k) plan with a participant who is 100% vested, terminated during 1999 and is 60 years of age. The distribution paperwork submitted to the asset custodian did not indicate to the custodian to withhold the required 20% as it should have. How can I "fix" this error? When the participant files his 1999 1040 should he go ahead and pay the tax at that time or perhaps he should cut a check to the plan sponsor for the 20% so that they can make the necessary deposit and prepare Form 945? Also, does the above scenario lead to negative consequences (ie: penalties) for the plan sponsor?

A C-corporation with an existing ESOP plan became an S-corp for the 1998 calendar plan year. The S-corp has Schedule k-1 income. Does the income need to be allocated to the ESOP plan as a shareholder? If the income is allocated in the ESOP, on what basis is it allocated? Is it allocated on ending shares? Is it deposited in the cash account? In this case, the company is not wholly owned by the ESOP.

Does anyone have language for bottom up qnecs that they have submitted to IRS and gotten approval for.

I see plenty of language in plans that say a qnec(or qmac) will be made to a plan in an amount sufficient to pass the test. I'm concerned that this language is very loose language for doing a qnec that only goes to, for example, 1 person in the nhce group.

Any thoughts out there???- THANKS

Our company is looking at our mileage reimbursement for our employees. Currently we are paying 28 cents per mile. We are trying to see what the rest of the market place is doing in the Northern Virginia/Washington area on mileage reimbursement.

Does the State of Wisconsin allow individual health policies, which are written in the state and cover residents of the state, to be non-renewed because of a change in the insured's health status?

As Dave Baker has noted, BenefitsLink and I have collaberated on an expanded Employee Benefits Library of legal research links. Members of this board may be interested to know that one of the pages in the Library deals specifically with governmental plans research links and another deals with church plans research links.

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Employee benefits legal resource site

[This message has been edited by CVCalhoun (edited 09-27-1999).]