Does anyone have a bonus program set up exclusively for their maintenance employees? We are considering this option since our maintenance employees are responsible for purchasing most of our parts and scheduling services that we cannot perform in-house. They are making great efforts to reduce costs and we are looking for a way to reward them. Please help!

A California city client's city attorney has asked the following:

Will the City's financial capability be impaired in any way in the event that "leased employees" who lack sovereign immunity are utilized in job functions ranging from jail guards to parks and recreation employees?

His concern lies in the possibility of a California deep pockets suit in which the City is found liable over the amount of insurance carried by leasing contractor. How would revenue and/or bond counsel view this?

Is anyboby know if the ROTH IRA would be in anyway available to american expat with no residence in USA. If yes how to proceed

I have a client that presently have a Profit Sharing Plan. They would like to set-up a SIMPLE IRA plan. "MUST" they terminate the Profit Sharing plan before setting up the SIMPLE IRA or can they just not make any additional contributions to the P/S but keep it open? (They would be required to pay surrender charges on the P/S if they must terminate it.)

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When is the Plan Administrator supposed to distribute the Individual Benefit Statement to employees. I know that it is once a year, but I thought it was to be sent no later than 8 months after the end of the fisical year ending December 31st.

With the new HIPAA regs, can self-funded plans still exclude dental care for congenital anomalies except in children who were covered under the plan from either birth or the date of placement for adoption? Or is the exclusion period limited to only six months? Your advise is greatly appreciated.

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Judy

Has anyone found a vendor that has a program for calculating and testing allocation formulas?

We are not really interested in a full blown administrative package. More of just a calculator for determining allocations and testing the allocations for 401(a)(4) compliance.

What are the potential penalites for late filing of a 5500? The plan has more the 100 employees.

the new 5.0 disks should be arriving at your office soon. we got ours today, though since we loaded the original version it is not going to help us.

somewhere soon you are going to need to load the latest version. I would guess you want to be done before the new year, just to get use to things before the ADP processing begins. Being realistic, I would hope you can target doing this within the next month.

All that being said, watch out for the following:

vesting tables. if you can set your plan to a predefined table, do so! e.g. if you have code a 2/20 schedule and plan specs says 'predefined table 'none' ' then change it to 2/20. you do not have to rerun eligibility at the warning prompt.

probably the easiest thing to do is create a crystal report and selct out those plans where predefined table is set to 'none'

obviously you will have some tables that can't be named, but believe me, you won't regret setting these.

there was nothing in the update documentation, nor in the fix list, but it is recommended by support to not use the new user defined fields.

distribution logic has not been fixed yet. this is noted amongst the fix list. in other words, don't code someone term & fully paid out, and then run a distribution. the person will be treated as 0 vested.

you MUST make sure your custom reports are updated before converting to 5.0, and then again afterwards if you used vesting percentages in any reports. the general process of updating them is not bad (the documentation is improved), however be aware that Crystal has changed quite a bit.

suppressed items are no longer grayed out, and you should not have your report open in Quantech and then try to make changes/save the report in Crystal. the report will be saved as a Temp file. not sure why Crystal made those changes, but I have found them to be a real pain. Just moving things around seems a little more difficult.

good luck!

I don't know if this question has been asked before, but when the employer maintains separate medical and dental plans does the issue of Medicare Eligibility come into play with regard to the separate dental plan? In other words can we assume that regardless of a person's Medicare Status(i.e.,covered or eligible for coverage)if the person is age 65 can we refuse to offer COBRA Dental and/or automatically cancel COBRA dental at age 65?

By the way, what is the real answer to not offering any COBRA to an employee who terminates employment at age 65 or older? Do you even have to offer COBRA?

I have a question on how cross testing is affected by the safe harbor provision. What is the value of cross testing in the following example:

NHCE payroll 3,000,000

HCE payroll 3,000,000

Benefit formula: 401k $.50 up to 6%

MPPP 3% safe harbor

3% additional

Permitted disparity

IF the example is not helpful, some +'s and -'s please. Thanks in advance.

If a cafeteria plan has a short first plan year, are the contribution limits prorated? For example, if the first plan year is 11/1 to 12/31, are deferrals for DCA limited to $800 rather than $4,800?

There are penalties for filing Form 5500s late. Anybody have experience with late filing where you were assessed penalties? If so, what were they?

Any good authority for determining whether a partial termination has occurred for a 401(k) plan? Successive asset sales in a year has left a plan sponsor with 25 of its original 122 participants.

[This message has been edited by wwest (edited 09-17-1999).]

It depends on the state law applicable to incorporated law firms. Many state professional corporation laws would prohibit having a non-lawyer as a beneficial owner of the stock (as would be the case if a non-lawyer were an ESOP participant).

You might consider using a non-ESOP stock bonus plan to cover the lawyers, with a comparable profit sharing plan for the non-lawyers. An ESOP under IRC Sec. 4975(e)(7) may not be used in this manner, as an ESOP cannot be combined with a non-ESOP for purposes of testing under Secs. 401(a)(4) and 410(B). A non-ESOP stock bonus plan is not subject to the special ESOP nondiscrimination rule.

A private company maintains an ESOP. The ESOP portion of the plan is frozen (i.e., participants are no longer able to invest in company stock), and the plan becomes a 401(k) plan with several other investment alternatives. The plan continues the diversification requirement under Code Section 401(a)(28(B) with respect to the company stock fund.

Subsequently, the sponsor of the plan is acquired by a publicly-traded company, and the sponsor's stock held by the plan is exchanged for cash and stock of the acquiror. The plan will be continued, and participants will be able to exchange between any of the investment funds, including the publicly-traded stock. Must the plan continue to apply Code Section 401(a)(28)(B)?

I think that there is a distinction between being a union member and being "collectively bargained." Typically, owners cannot be part of a collective bargaining unit. If the "union" plan is not doing so, I would think that the owners must be disaggregated from the rest of the bargaining unit and tested separately. (No automatic 410 pass) However, there are certain "bargaining unit alumni" rules for multiemployer plans where someone who was once in the bargaining unit will be "deemed" to still be in the unit. If this is a multi, you may want to check the alumni rules.

I don't think that the alumni rules apply to single employer plans. To the extent that the owners are not truly collectively bargained, you could set up a separate plan for them and exclude all truly collectively bargained individuals from the Plan. However, since they participate in the union plan, watch out for top heavy aggregation and aggregation for 415 problems.

Upon hard times, my company has announced the divestiture of my division.

The summary plan description for our ESOP says that distribution will commence on the fifth plan year after terminating employment for reasons other than normal retirement age, permanent disability or death. Also no distributions will be made until any loan obtained to acquire stock is fully repaid. The employees are afraid there won't be any money left in five years. Is there anything we can do?

We have a client that has set up a 401(a) plan to receive matching contributions(410(m)) (they match elective deferrals under a separate 403(B) plan). They have drafted the plan to allow "hardship" distributions, using the 401(k) rules for allowing such hardship distributions. The plan does not contain 401(k) provisions, however. The plan also specifically precludes any "pre-retirement distributions". This seems weird to me--but I suppose it's okay to utilize the 401(k) rules relating to hardship distributions for deferral amounts and apply them to 401(m) amounts? They don't need to put such stringent restrictions on the 401(m) amounts, for pre-retirement distributions, but I don't see anything wrong with it? Any thoughts?

A participant in a defined benefit plan is currently in pay status. While on pay status, the plan distribution provisions were amended to allow lump sum distributions. May the plan be amended to permit participants who are in pay status to revoke earlier distribution elections and elect a lump sum for the remaining value of their annuity?

Thank you for any insight (and authority).

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