I seem to recall that employers can prohibit employees with outstanding 401(k)loans and/or(?) who have taken hardship withdrawals from making additional elective contributions. Can anyone clarify when the elective contribution freeze can apply and where to find the legal/reg. provisions that allow employers to impose them?

We're closed on both Friday 12/31 and Monday 1/3, however, key IS personnel will be required to work over that 4-day weekend.

We've been kicking around various compensation ideas for that weekend but would like to hear how other folks are handling this situation. Both exempts and non-exempts will be working; the non-exempts are a relatively easy answer. Suggestions have ranged from comp time (how much?) to premium pay (again, how much?).

Any thoughts are appreciated.

The IRS permits/requires a plan to be amended within 9 1/2 months after a PYE in which the coverage requirements of 410(B) are failed. The retroactive amendment must permit the plan to meet the coverage and nondiscrimination requirements under 401(a)(4). If the plan is a 401(k) plan with a match and it also has a profit sharing feature, would you agree with the following conclusions:

1. The retroactive amendment will permit the previously excluded employees to share in all the features of the plan. They will receive profit sharing contributions and this will enable the P-S feature to pass coverage.

2. The employer need NOT restore salary deferrals for the employees that are included retroactively.

3. Because these retroactively included employees didn't have any salary deferrals for the year, the employer would have no matching contributions to restore.

4. Because the hourly employees are retroactively included, the ADP and ACP tests would still be performed without these hourly employees under the rule in the 401(k) regs that says you only include those eligible employees that actually had an opportunity to make salary deferrals. If this is true, it really makes the retroactive eligibility sort of a myth for the k and m portions of the plan.

Anyway, your thoughts and references are greatly appreciated.

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Client will adopt 401(k) plan effective January 1, 2000. Client will be using the safe harbor rules as per Notice 98-52. Could client wait and submit plan for a determination letter re 401(k) as well as the safe harbor provisions closer to December 31, 2000? (This assumes the IRS would've approved safe harbor language by then.) Otherwise, client would need to get a determination letter re qualification under 401(k) and then get another one re safe harbor provisions. That would probably be the more conservative approach although, if possible, it would be easier to do it all at once. Any comments?

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Southern User Group Meeting on Friday Nov 12,1999 in Columbia, South Carolina

8:30 - 4:00

Terry Connelly from Corbel will be doing the training.

if interested, please contact Maggi Heffernan at (770) 641-1429 for details.

This should be very helpful if you are customizing your reports for report writer.

My client has opted to terminate their DB plan in favour of their DC plan. What penalties/taxes will participants under 59 and 1/2 be subject to?

A 401(k) Plan which is subject to joint and survivor requirements provides for immediate distribution upon retirement, early retirement or disability but also provides that a participant who retires or is disabled will receive a profit sharing and match contribution at the end of the year.

If a Participant elects a distribution prior to the end of the plan year can you subsequently distribute the additional profit sharing and match for that plan year using the original spousal consent or do you have to start the process again?

My clients are looking for samples of notices sent to participants on the MRDs. Any suggestions?

If a financial service provider provides a break in fees as a result of aggregating ERISA and non-ERISA assets under management together, is that a prohibited transaction by virtue of the indirect use of ERISA plan assets to lower fees on non-ERISA assets managed? I can't seem to find any good authority here....

Does anyone have a sample participant notice announcing the adoption of the 401k safe harbor? Thanks

I'm looking for a list of broker capabilities for selecting a broker for health and welfare plans.

Can an employer reimburse employees (as a tax-free amount on their normal paycheck) for group medical insurance premiums being paid by the employee on a pre-tax basis under a Section 125 Premium Conversion Plan?

Any citations that address this question would be helpful.

Does anyone know if IRS has stated when they will begin accepting applications again for approval of prototype plans? IRS Announcement 99-50 stated that effective May 10, 1999 they will no longer accept applications but I do not know if they have begun accepting applications again.

Thanks

I am a Benefits Administrator in search of a Benefits Roundtable group that would get together to discuss current trends in Benefits, what benefits they are offering to their employees, etc.

Does anyone know of such a group? Your feedback would be appreciated.

Thank you.

I am a benefits administrator in search of a Benefits Roundtable group that would meet to discuss latest trends in benefits, what their company offers for benefits, etc.

Is anyone aware of such a group?

A company is sitting on forfeitures of about $65,000. Can they use that money as a retrospective credit for FSA administrative services rendered in the early 90's. For example, if they could produce invoices for FSA related admin going back to 1990 that add up to $65K could they take the forfeitures as a reimbursement for these expenses that were originally paid in full?

The regs seem to never answer my questions completely. Are we required to send a HIPAA certification (automatically) for those employees/dependents who voluntarily cancel their coverage - e.g., during open enrollment or mid-year because they have other insurance (an employee would want one in that case - but maybe not for open enrollment). I can't find voluntary terms of coverage.

Client takes an inservice withdrawal in 1999 (partial distribution-cash). Three years down the road the client retires and wants to use the NUA stratagy on the ER stock in the plan. To use NUA, the employee must take a lump sum distribution. Is NUA still available since the client took a previous in-service withdrawal?

Can anyone answer the question below:

Can we allow an existing children to enroll if you marry or just the ones you're gaining?

Info on Special Enrollment Rights - HIPAA

Because of a New Spouse or Dependent

If you marry, then you, your spouse, and any new dependents you get as a result of the marriage have special rights to enroll. If a new child is born, you adopt a child, or a child is placed for adoption with you, then you, your souse, and the new child also get special rights to enroll.

To be entitled to special enrollment on account of a new spouse or dependent, you must either be covered under the plan or be eligible to be covered under the plan. The plan has to give you as least 30 days after the marriage, birth, adoption or placement for adoption to request enrollment.

If you get married, the plan must cover you, your spouse, and any new dependent by the first day of the month after the plan receives your completed request.

If you have a new child, the plan must cover you and your spouse and the child from the date of birth, adoption, or placement for adoption.

We have a client who, without our knowledge transferred all assets to individual IRA's, my question is how would I complete the Form 500-C/R, considering there are no participants at the end of the year and zero assets? Apparently no amendments had been drawn up to terminate the plan.