I am working with an employer who currently pays for all benefits and is contemplating putting in a Cafeteria Style program. Assuming the employer intends to give each employee "benefit dollars" as credits to be applied against the cost of the employee selections,

1) Is there any restrictions as to the amount of benefit dollars that may be applied to each employee?

2) Can the employer require via the plan document that all "benefit dollars" allocated to an employee must be spent on a benefit option (ie insurance, FSA or 401k?) or must the employer allow the employee to take the unused allocation as cash.

Can a participant in a qualified name a charitable trust as beneficiary?

start by looking at a non 401(k).

15% of compensation is only 56,700. That is the maximum contribution for the plan. (If you add deferral option, that figure will go down.)

If the intention is to get the owners 30,000 contrib, you would have to have a money purchase plan as well. Since the plan(s) would probably be top heavy, you could put in a 3% (or more) money purchase to cover that end of things. This would free up enough room under the 15% ps limit to possibly get the doctors a combined plan total of 30,000.

If you add a deferral feature, you better hope your 2 rank and file ees defer something worthwhile, otherwise you will fail the ADP test.

If the owners don't care about getting the 30,000, then small plans might best be run as a safe harbor or simple 401(k). You are guarenteed passing the ADP test.

We're considering engaging the services of a TPA for a 403(B) plan - any recommendations for an outfit servicing the Los Angeles/Southern California area and contact names would be much appreciated.

Can a multiple employer plan make distributions to ps when an employer ceases to be an adopting employer of the plan without first getting a favorable IRS determination? The plan sponsor is telling us that we don't need one. It's my understanding that at least a Form 5300 has to be filed but I'm not sure if this is enough.

I am currently researching bridge in service policies for new hires. I am looking for any information concerning benefits given to re-hires. Also, what are the minimum and maximum number of months used to determine what benefits will be given and how to calculate the adjusted seniority date/

Thank you in advance for your assistance!

I am currently researching birdge in service policies. Any information/policies you can provide regarding what benefits are given to re-hires and how you calculate adjusted seniority dates would be greatly appreciated.

Thank you.

In October 1997 we switched from sick leave and vacation leave to Paid Time Off. Employees sick leave balances were grandfathered. Employees are allowed to use Grandfathered sick leave after 5 consecutive day of personal illness or injury. Sick Leave is no longer accrued.

PTO is accrued each pay period with carry over to the maximum allowable carryover. Once an employee meets the maximum carryover they stop accruing PTO until PTO is used. Since 1997 we are having a significant number of employees hitting their maximum on PTO and are no longer accruing PTO leave.

We are trying to address this situation so employees are not penalized for not taking Paid time off. Any suggestions?

Is there a restriction on making the amendment to use the new rates after the sponsor has already adopted the resolution terminating the plan?

My employer currently has a PTO program. It has been proposed to allow employees to elect prior to the 1/1/2000 plan year to sell PTO that will accrue during the 2000 plan year to pay for benefits the employee elected for the 2000 plan year. The PTO will be deducted out of each paycheck. There will be no restriction that the amount of PTO sold be equal to or less than the cost of the benefits elected. Have you seen this before? What rate of pay is used for the PTO value? The current one?

We've all heard that the IRS would object to a plan sponsor changing the plan formula each year. What cite can they use (or have they used)?

How frequent can a plan sponsor change the formula?

Does anyone know of any situations where the IRS objected to frequent plan formula changes, and what was the result?

(Do I want to be a test case? No!)

We have traditionally provided turnkey service on a balance forward basis for a variety of plans. We use Quantech to generate census, employer summary, and participant statements as well as discrimination testing and do distribution work, etc.

Over the past few years, we have accepted a number of engagements involving alliances with Manulife and Kemper. We periodically import data from the recordkeeper and do strictly compliance testing and the 5500.

We are considering segregating these two types of engagements between our two offices for various reasons, and would like input on software packages suitable for "compliance-only" jobs. Quantech will do the job, but is there anything better and/or less expensive?

Any other comments on segregating the jobs this way?

Do contirbutions made to a SEP count towards the maximum contribution (15%) for a Profit Sharing plan or are they separate from the PS plan

A Participant with an outstanding loan is being called up to reserve duty for the next 9-12 months. The plan permits a grace period for non-payments to not extend beyond the last day of the calendar quarter following the calendar quarter in which the required payment was due. It is likely that the participant will not make payments by the end of the grace period.

Since the participant is on a qualified military leave, must the outstanding balance be considered in default following the end of the grace period or can payments be suspended.

Plans of Professional Service Employers with fewer than 25 active participants are not covered by the PBGC.

How broad can one define Professional Service Employer (ERISA 4021(B) and © have the statutory language.)

Any cites?

Thanks

Company has a Simple IRA (with 100% match up to 3%) in effect for calendar 1999. Decision has been made to replace it with a profit sharing plan effective 1/1/2000. Simple IRS will be terminated 12/31/1999.

1) Can profit sharing plan be adopted in late 1999 with an effective date 1/1/2000, or must is be adopted during 2000? (I suspect the former is OK.)

2) Other than no new money going into the Simple IRA after 1999, what happens to the existing money?

3) The plan sponsor would have preferred to have the profit sharing plan in effect 1/1/99. It is prevented from doing so because of the Simple IRA. Can the Simple IRA be retroactively "converted" into a profit sharing plan? (I suspect any

solution in this area would be complex and not worth the trouble.)

Thanks

Does anyone know if a C2-DB study group is going to be held in Phoenix for the Dec exam?

Any ideas or sites that give ideas on how to communicate to employees that if they don't watch their own costs/utilizations then cost are going to keep increasing (premiums)?

An employer failed the do the 20% withholding for a harship distribution in 1998. How is this reported to the IRS (945)? Is there a excise tax penalty and how is it reported to the IRS (5330)? I believe that employee will have to amend their 98 return to reflect excise tax due on permature distribution. Any comments or thoughts from those who may have encountered this.

I need to determine whether the term SAS 70 Type 1 or Type 2 Employee means anything. Please let me know your thoughts. Thanks Ed