A participant has turned in a claim for $1860.00 for Orthodontia. The participant states that all but the monthly checks and removal have been performed. The bill says "mo. charges from 7/1/99 through 12/1/99" and that's all that it says. The Plan year starts 7/1/99. Is it ok to go ahead and pay the $1860.00? Do I need more documentation? It is difficult to get any kind of detailed statement from the dentist. What would you suggest?

Let's say a company has 2 divisions, Division A and Division B, each with a $1 million payroll.

The company has a defined benefit plan which costs 20% of payroll covering only employees of Division A. The company has a defined contribution plan which costs 10% of payroll covering employees of both divisions. The total contribution is $400,000, as shown below.

Division A - $200,000 cost for DB, $100,000 cost for DC.

Division B - no cost for DB, $100,000 cost for DC.

What is the company's total deduction?

1. $350,000 ($250,000 for Division A, because Division A's deduction is limited to 25% of $1 million), plus $100,000 for Division b), with $50,000 carried forward to next year.

OR

2. $400,000 ($300,000 for Division A plus $100,000 for Division b), since the total deduction is limited to 25% of the total payroll of $2 million.

If a company maintains both a DB and a DC plan, its total deduction is limited to the greater of 25% of payroll or the DB minimum. [401(a)(7)]

If the DC plan is a 401(k) plan (with no company match), does the above limitation apply? If so, do the employee deferrals to the 401(k) plan count against the limit?

Example: Company payroll is $400,000, DB contribution requirement is $80,000 and total 401(k) deferrals are $40,000. 25% of $400,000 is $100,000.

Can the company deduct $120,000 ($80,000 for the DB plus $40,000), since the 401(k) deferrals do not count against the $100,000 limit?

Or is the deduction limited to $100,000 ($60,000 for the DB plus $40,000 for the 401k plan, with $20,000 carried forward to next year), since 401(k) deferrals are counted against the $100,000 limit?

Or, ... something else?

(It would seem unfortunate that a hypothetical company with a pension contribution above 25% of payroll could hurt themselves by starting a deferral-only 401k plan; even if it excludes the owners from participating in the 401k plan.)

What is deferred compensation and how does it prove to be useful for employees?

I have seen discussion on using a non-414(s) safe harbor definition of compensation for deferrals then testing the ADP with a safe harbor definition. I have not seen anyone talk about the same with matching contributions and the ACP test.

I have a plan that uses a safe harbor definition for deferrals, but a non-safe harbor for matching contributions (W-2 compensation plus overtime, less bonuses). Can I use the same theory to decide that since the plan passes the ACP with a safe harbor definition, the plan is okay as long as I file for a determination letter disclosing all of this on Demo 3 or Demo 9? How do I pass the nondiscrimnatory availability requirements?

How should a qualified DC plan treat a "QDRO" that an NRA participant undergoes?

If the owner of a SIMPLE IRA account dies before the two year requirement is met, can his spouse beneficiary roll the proceed to her own IRA or would the money have to go to a SIMPLE IRA account in her name?

Can you use your IRA as collateral on a loan in Florida? My initial understanding was no, but when I read on it appears that depending on the state, it is permitted. Does anyone have any experience in using an IRA as collateral? Thanks for your help.

How is that organizations here in Massachusetts can provide a Health benefit to Management staff to Accrue sick leave to better prepare if a future long term illness/injury occurs with paid time off, while other

non-management staff must take their annual allotment of sick days or "lose them" i.e. no opportunity to bank them for any future long term illness etc.???????

Isn't this blatant DISCRIMINATION???

When completing the Form 5500C/R, on the question that asks "Did the plan at any time hold 20% or more of its assets in any single security, debt, mortgage, etc.?", do you consider mutual funds a single security?

We have not, but a book we purchased this year re: completion of 5500's says that mutual funds should be considered a single security for the purposes of this question.

We would appreciate input from other TPA's as to how you answer this question.

I represent a client who is the alternate payee on a QDRO. Can she cash this check without being subject to the 10% early distribution penalty or is this a distribution exempt under 72(t)?

What insurance companies are offering annuities or life insurance products that can be used in a 412(i) defined benefit plan?

See above.

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Susan

Our client is considering whether they should assume the seller's self-insured group health plan. What potential problems/issues should our client be aware of for these types of plans?

Sometime ago I heard of a concept called benefit banking wherein a company would offer a dollar amount per year to employees which could vary based on years of service, hours worked, etc. At an open enrollment-like period in the year, employees could elect how to spend their benefit bank, toward health insurance, paid-time off etc.? Has anyone else heard of this type of benefit, have it in place or have any idea if such a plan presents any ERISA related problems?

Can someone please summarize the tax consequences of early withdrawl of company stock held in a 401K ? Is it true that the valuation for tax purposes is the cost of when the stock was originally purchaced? If that is so, is it an advantage for highly appreciated stock to withdraw the stock, pay the penalty for early withdrawl, then hold the stock for a year in order to get taxed at the lower 20% long term capital gains rate? The 20% rate would be lower than any income tax rate that would be applied at retirement. I would appreciate any advice / insight into this. Thanks.

SINCE I AM IN BETWEEN JOBS, I AM LOOKING FOR THE MOST COST EFFICIENT WAY TO OBTAIN HEALTH INSURANCE. I HAVE READ ABOUT CATASTROPHIC HEALTH INSURANCE THAT HAS HIGH DEDUCTIBLES ($1,000 OR MORE) AND COVERS ONLY HOSPITAL AND SURGERY ETC.. SINCE WE ARE IN GOOD HEALTH,WITH NO PRE-EXISTING CONDITIONS, THIS APPEALS TO US. I CANNOT FIND ANY MORE INFORMATION ON THIS SUBJECT.IF ANYONE HAS ANY ADDITIONAL INFORMATION ON THIS SUBJECT I WOULD GREATLY APPRECIATE IT.--THANK YOU

I'm the CFO of a 501©(3) community mental health center with an existing 403(B) plan. We have 107 eligible employees with about 60 electing to contribute to the plan. We match 50 cents on the dollar up to the first 14% the employee contributes. Could we also maintain a 457 plan that would allow the employer to contribute on the behalf of a certain class of employees such as top management only? If so, could they participate in both plans and would the annual contribution limit be $ 8,000 for the combined plans instead of the $10,000 limit for the 403(B) plan? Where can I find more information on 457 plans?

Are swimming/YMCA membership/enrollment fees for the purpose of rehab therapy eligible for Medical Expense Reimbursement under the 125 Plan?

I know that swimming lessons (even when recommended by a doctor) and health club dues are not eligible, but "physical therapy" is eligible if required for a specific medical condition.

Does every company have their own policies on severence pay for terminated employees?? I'm almost sure that it is something that does not HAVE to be given, but wouldn't most decent, reputable businesses give at least something??