You are correct.

I have a client who just started with our 401(k) service, and after reviewing their prior plan years I have found that they failed the 1998 ADP testing. I have been in contact with the companies prior recordkeeper, and i have been trying to get them to give me the earnings associated with the Excess Contributions and any GAP earnings. The other recordkeeper claims that GAP earnings must be calculated from the 1st day after the plan year until the day the excess contributions are removed. I am under the impression that you only include Gap earnings from March 15th forward. If anyone can give me some guidance or point me to the right section of the code, I may be able to resolve this situation.

I have a group of doctors that want to go with a safe harbor plan for 1999 and were told they could make the plan effective 10/1/99 and could defer the full 10K as long as they gave the NHCEs the 3% nonelective.

Under what circumstasnces can this or can't this be done. There is no PS component to the plan. If we added one and the client din't make a PS contribution could they go ahead with the above scenario.

Obviously, we're fishing here.

When doing a top heavy calculation for a defined contribution pension plan (i.e., money purchase or target benefit plan), it has been my understanding that contributions due as of the determination date are included even if they are not actually made by that date. However, for non-pension plans (i.e., profit sharing plans), only contributions actually made by the determination date are included (except for the initial plan year). Do these same rules apply to 401(k) contributions? Initially, I thought that since 401(k) contributions are required to be deposited in a timely manner, that any 401(k) contributons deposited after the determination date for the prior period should be included when doing the top heavy calculation. However, after reviewing 1.416-1, T-24, it appears that this is incorrect.

I understand that we have to offer COBRA participants the same medical options as we do actives during open enrollment.

the question is this: "we are eliminating 1 of the medical plan options during OE and want to know if we can set a default plan if the COBRA particpant does not respond by electing another plan?" we will be doing this for our actives. does anyone foresee any problem(s)with us doing this? at least we're not cancelling their coverage.

Is anyone aware of rules for IRC Sections 105 or 125 analagous to the QSLOB rules?

Each year our small business gives raises. Some people elect to have a greater portion of their insurance premiums paid by the company instead of directly to them. Is it legal for a company to pay 75% of one employees medical and 95% of anothers?

One section of the document provides: An Employee must have completed 6 months of Service with the Employer prior to an Entry Date. Another section provides: An Employee will enter the Plan on the first Entry Date on or after the date the Employee satisfies the eligibility requirements set forth above. These provisions only conflict for an employee who satisfies the eligibility requirements on an Entry Date (the first provision would make the employee wait until the following Entry Date while the second provision would not). Can this be fixed by amending the plan so that the sections no longer conflict? Does it matter which section is amended? Should an IRS correction program be used, and if so, which one? Thank you.

I have 3 companies, all owned 50-50 by the same two people. They want identical plan provisions for all 3 corporations. Can I put all 3 on one prototype document, with each corporation signing a signature page and a board resolution? If I can, then what Tax-ID number do I use when filing the 5500C/R form? Or, do I need 3 documents and 3 5500 filings (realizing that I have a controlled group and the plans need to be aggregated for testing purposes). Thank you.

Plan year 7/15/99-6/14/00. All employees meet hours requirement in first 12 months of employment. All employees are over 21. Employee A hired 7/14/98. Employee B hired 7/15/98. Employee C hired 7/16/98. Employee D hired 7/17/98. What are the latest entry dates possible under 410(a)(4) (assume plan document is written to provide for latest possible entry dates)?

In a cross tested plan with a 401(k) feature, the salary deferrals must be included when determining whether or not the plan satisfies the average benefits test. Questions: (1)A company has a SARSEP and during 1999 wants to start a Safe Harbor 401(k)(3% QNEC, no match). Is the SARSEP considered an existing p/s plan? (2)Assumung the answer to (1) is no, must the deferrals to the SARSEP prior to the effective date of the 401(k) plan be included in the average benefit test?

How do you correct an excess annual addition when the participant has received a full distribution of their account? The excess occurred in the last plan year so I believe the correction method should be the placement of the excess in a suspense account described in Reg. 1.415©-6, but in this situation are we required to have the former participant give back the excess annual addition (without offsetting for withheld tax)? Any guidance would be much appreciated!

Are you aware of any recent complaints about student medical and life coverage from the Department of Education (Office of Civil Rights)?

We are trying to develop a strategy statement that identifies our company's goals in developing, enhancing, and changing our benefits (both welfare and retirement). An example would be to "provide employees with a package of benefits that offers sufficient choice and is considered competetive for the marketplace, while also being reasonable in cost." I'd like to hear from anyone who has such a statement in place as to how yours is worded. Thanks!

How long must an employer of a self funded benefit plan keep the records of the claims activity and the addresses of the participants?

Can a pension or profit sharing plan invest in futures contracts? (In futures contracts, a deposit is made that is akin to a margin account, and is adjusted similar to buying stocks on margin. Hence, I suspect these investments cannot be made.)

Can a pension or profit sharing plan invest (long, not short) in options? (With options, the entire purchase price is paid for up from. Also, the maximum loss is the total price paid for the options. Hence, I suspect these investments can be made.)

For this purpose, let's steer clear of all diversification/appropriateness issues.

Thanks.

Does anyone out there know of a "list" of businesses/corporations that provide a reimbursement for employees who adopt children?

I work for a child placement agency and we are interested in finding out about this topic. We are beginning to keep anecdotal information, but do not want to "reinvent the wheel" if such a list is already being done.

Thank you!

If an employer provides a tax-free reimbursement to employees of $1,500 a year for unreimburesed medical expenses but does not do so in a Sect. 125 or 105 plan, is this illegal? For example, the employee submits claims to the employer (up to $1,500/year) and the employer cuts the employee a check for the claim amount. Seems to me this should be run as a formal cafetria plan with a document, 5500, etc...

Is there any way to roll over assets currently in a Canadian Retirement Savings Plan in to an IRA?

Corporation X maintains separate Profit Sharing and 401(k) Plans. They sell 85%+ assets to an unrelated corporation, Y. Y maintains a 401(k) Plan as well. Most employees of X will go to work for Y doing the same job. They will be immediately eligible to participate in Y's plan.

X wishes to terminate the 401(k) Plan, but wants to keep the PSP open for the remaining employees.

I know that the employees remaining at X must have their 401(k) balances transferred to the PSP as it is a successor plan.

I am pretty confident that we do not have a same desk rule issue or a successor plan issue (Y's plan) for those being transferred (but correct me if I'm wrong).

However, is X's PSP a successor plan for the employees being transferred to Y? If so, why?

Thanks.