An employer has two defined contribution

plans (401k and money purchase) and would like to administer them under a

single TRUST. This would simplify some audit and filing issues, but create

some new accounting and compliance issues. Is there a practical article, rules of thumb, or first-hand experience on the pros and cons of this type of master trust?

I have a question for anyone who may know the answer involving the HIPAA special enrollment rules. If I understand correctly HIPAA requires that certain individuals be given special enrollment rights in the employer's health plan if they previously declined enrollment because they had other coverage and they subsequently lose that other coverage. Suppose employee terminates employment and loses coverage under his employer's plan because of such termination, fails to elect COBRA because he has other coverage under his spouse's plan, and then subsequently loses that coverage because spouse loses her job. I would assume that no special reenrollment rights must be given to him by his former employer since he is no longer an eligible employee with respect to his former employer. I believe this view is consistent with the statute and regs but would appreciate any other views.

The definition of "matching contribution" in 401(m) states that "a matching contribution is an employer contribution made to a defined contribution plan...." Does that include a money purchase pension plan? I know the 401(k) piece may not be included in the money purchase pension plan.

Hello! I'm the moderator of the Miscellaneous Benefits area of this fine, fine message board. Now I'm in charge of looking for info on internet recruiting. Does anyone have any experience in this area? Please e-mail me at aburnsafcu@earthlink.net or reply to this post if you can help me out.

Thanks so much.

Sheila K

Okay, now it's my turn to ask for assistance. We are in need of a new network administrator and I wonder if any of you have done any internet recruiting??? If so, please contact me at aburnsafcu@earthlink.net to discuss..

Thanks...Sheila K

Under Code Section 3121(B)(7)(F), the wages of an employee of a state or local government who does not participate in a "retirement system" are subject to FICA withholding. Under the regulations, a 457(B) plan constitutes a "retirement system" if a participant defers at least 7.5% of his or her compensation. The Texas Teachers' Retirement System does not cover part-time and temporary employees. A school district desires to establish a 457(B) plan for part-time and temporary employees, under which the employees would be required to make salary reduction contributions of 7.5% of their wages, so that the plan constitutes a "retirement system" and the district does not have to withhold FICA taxes.

It appears to me that this strategy should work, with one possible exception. Section 457(B)(4) states that a plan must provide that "compensation will be deferred for any calendar month only if an agreement providing for such deferral has been entered into before the beginning of such month." If part-time and temporary employees are required to defer 7.5% of their wages as a condition of employment, does this satisfy the requirement of an "agreement providing for such deferral"?

I would appreciate any comments or help from anyone who has looked into this issue.

If a participant in a 401(k) Profit Sharing Plan is called up for Qualified Military Leave, should that participant be credited with hours and compensation as if they had never left? Also, if the participant would have normally worked 1000+ hours, should the participant be credited with 1000+ hours or only 501 hours as to not incur a break in service for purposes of vesting and calculating a profit sharing contribution?

Thank you.

Kim

Situation is a overfunded multiple-employer DB plan(2 employers)where each company now wants to split off and have a seperate plan and investment pool. What special reporting requirements will there be? Is a 5310-A required? What about the PBGC? Would this be treated as two new plans receiving a transfer and therefore a final 5500 required for the multiple-employer plan and new effective dates for the spun off plans? Any guidance would be appreciated.

1st Golbal has set up a program that requires participants to make investment changes and transfers online (no 800 access). I was wondering what anyones thoughts on this approach are?

Not everyone has internet access. COuld this create a DOL issue. At a minimum it will shift additional responsiblity back to the employer to make sure all participants have access to their account information.

Although this may not seem like a retirement related question, it goes to the heart of the long term problem:

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Why do employers continue to provide a coverage that is not a benefit to all but 8 tenths of 1 percent of a group?

Group term life insurance does not work. It does not accomplish the goal of being a benefit. It is a lottery ticket, at best, for someones benefiary.

The reason group life does not work is because no consideration was made for the fact that people are living to be 80+ years of age. When the first group term coverage was written in 1911 the average at death was 49 years old. By 1940 the average was 65. Today, the price of term goes down, but so does likelihood of a benefit being payable when it is truly needed. According to LIMRA, there are 38 million households who do not have life insurance. I would assume this does not take into account coverage through an employer, but again, that isn't much.

Employers/Employess can get Group Universal Life that provides death benefit only or allows for cash accumulation and paid-up coverage, for less than 10% more than group term.

Why is there such a resistance to change?

Can someone tell me the advantages of a safe harbor plan or where I might find some useful information on these types of plans?

I have been receiving disability benefits through my former employer since Sept. 1995. I have recently been awarded Social Security Disability Benefits, effective date 9/96. I received a check from Social Security for back benefits. The disability company through my employer says I have been overpaid since Social Security is paying me for the same benefit period, and I must send them the check from Social Security. Can this be done? Also, I have been receiving benefits totalling 60% of my salary and recently read that it should be 80% of my salary. The discrepency between these two percentages came from 1. The policy sent to the employer regarding coverage limits (they said 80%) and 2. The benefits statement I received the day I began working for the company (they said 60%). The disability company is saying 60%, they do not agree with the written test in the policy guidelines. Another problem. Since the employer paid the premiums on the policy, I have had to pay income taxes on the benefits I received (at the end of the year I receive a W-2 with no taxes deducted). Now I am supposed to pay taxes on the Social Security benefits. How do I deduct the taxes from the lump sum check from Social Security if it does indeed have to go to the disability company? I certainley don't want to pay Fed. taxes AND then give the taxes back to the disability company. The disability company is reducing my benefits by the amount that Social Security will pay me monthly. For some reason, I feel that disability insurance is provided above and beyond Federal funds. Why do we (in this case the employer) pay for this insurance just to have it taken away? Is this disability coverage not a "perk" when you decide to work for the company? It sure hasn't been a "perk" for me recently, Major Headaches.........

Is this correct? If anyone can help me understand all of this (if anyone CAN understand all this) I would greatly appreciate it. Many Thanks,

Dolores

I guess I'll answer. The simple answer is because a) it is 10% cheaper and b) it only offers a benefit so long as the individual is employeed and giving a benefit to the employer. And changes in logevity mean that it costs less to provide as mortality goes down (the reason for the recent changes in the PS-58 tables).

I don't know about you, but it seems to me that when there is a death of a wage earner (which someone covered by group term is going to be by definition), there is a need for the benefit that is fulfilled.

As a CPA in a tax practice, I've seen this "worthless" benefit used a number of times just in the past year.

An employer makes group term life insurance for spouses and dependents available in the amount of $5,000.00. If the employee selects this coverage, the employee pays for this coverage out of after tax dollars. The employer does not pay any part of the cost of the coverage. Is there any tax effect to the employee of purchasing this coverage?

Most disability plans that I have seen pay 2/3 (or between 65-67%) of regular salary. The only plans that I have seen that pay higher than this are those negotiated by union contract, especially fire/police contracts. I know that in Phoenix, the police contract used to be for 100%, because so much overtime pay was lost if an officer went out on disability that paying 2/3 of regular salary would be a severe cut in pay. This was 3-4 years ago and a new contract may be in place, but that is the information I had at that time.

Have you asked your HR department about the discrepancy or are YOU the HR department!!!

Good luck.

Sheila K.

I have a PSP that allocates contributions and forfeitures to each eligible participant in the same proportion to which his or her Hours of Service bears to the total Hours of Service of all eligible particpants. I think I've got a design-based safe harbor under 1.401(a)(4)-2(b)(2)(i) --allocation of the same dollar amount for each uniform unit of service (not to exceed one week) performed by the employee during the year. I've got someone questioning whether this is a design-based safe harbor--who is right? Any help is appreciated.

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LKP

Do e/ee deferrals under 401(k) count against e/er's 15% contribution limit?? In other words, where e/er maintains PSP with 401(k) salary deferral, would deferrals by other e/ee's keep highly compensated e/ee's from getting to 30K limit because of overall 15% deduction limit on e/er's contribution??

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I attended a seminar in which the presenters said that by "rule 72t" I could take after-tax contributions from my 401K, and roll them over into a Roth IRA. I questioned them about this, and they said they would cover that later in the seminar, but they did not get back to it, and I did not get a chance to question them after the seminar was over.

I called Fidelity (my 401K administrator) and asked them about this. They said that I could do this type of rollover. I then called Waterhouse, where I have a Roth IRA, and asked them the same question. They said there was no such thing. I figure I can open a new Roth with Fidelity, and let them roll the after-tax money into that Roth (they said they could), and then transfer it to Waterhouse later, but I want to make sure its legal. I'm talking about moving roughly $15K, and I'm 42, so if it can grow in a Roth vs a 401K for 17 years, I thinks its a great deal.

All the searches I've made about rolling money into a Roth, find discussions on the conversion from a traditional IRA to a Roth. I cannot find anything "official" that says I can do what I'd like to do.

Does anybody know anything about this?

If there is any info, please e-mail me at megsdad@lucent.com

Thanks

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Mark Johnson

Do e/ee deferrals under 401(k) count against e/er's deduction limit of 15% of compensation??

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My company has four non qualified defined benefit plans, however, they just established a 401(a) plan and a 457 plan. They want these plans to meet IRS qualification status. There is also consideration being given to allowing employees to roll their DB monies into these new plans. If the DB monies were all withheld on a pre-tax basis, even though the DB Plans' were not qualified, would rolling those monies over into the new DC Plans affect the qualification status of the new plans?