I'm conducting an informal market analysis relating to the interest among HR and Benefit professionals for and about information on Integrated Disability and Absence Management issues. As a fairly new subscriber to BenefitsLink, I had posted a similar message at the "Voluntary Benefits" message board. Specifically, I'd like to know if there are any formal or ad hoc discussion groups on the web or within your ranks dedicated to this subject. Likewise, might there be interest in forming such a group? My background is in the Occupational Health field and, although the protocals are similar, the current topic of WC/STD/LTD claims integration has not been fully explored. Thank you for your assistance.

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Robert J. Ayers

Regional Director

Integrated Disability and Absence Management

GatesMcDonald

800-423-1846, ext. 3581

Hi Everybody,

I operate a business as a sole proprietor and donot have any employees. I want to setup a Money Purchase Plan. Which is a good place to find information on how to go about doing this. I am completely new to this field and have just read the IRS Publication 560. Would appreciate recommendations of books, web-sites, reasonable priced options for professional help.

Thanks,

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Independent

If a participant permits his/her spouse to direct the investment of the participant's account under a 404©plan, does that in any way violate the anti-alienation rules under Code Section 401(a)(13)? Does the person who can act under the power become a plan fiduciary either in general or with respect to the participant? Thank you.

Anyone seen any type of fee study/survey on governmental pension plan administration - including all aspects of pension administration. Desprately looking ...

I just returned from a pension software usergroup meeting. This software is mainly designed for the private industry, so the it is hard to decifer what information is applicable to governmental plans. They referred to the GUST amendment period. Any information on exactly how this applies to governmental plans?

Has anyone seen a fee study on retirement plan administration?

At the time of my divorce I was granted one half of retirement benefits accrued from the date of June 20, 1989. I would like to know what happens if he passes away first? Can I recive the amount due me in one lump sum and if not who sends me the monthly payments due me?

Does anyone know where I might find a survey, by industry and company size, of the average employer cost (in dollars)for employee benefit packages in Arizona?

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I just read Notice 98-52 in its entirety and have a few questions.

1) What exactly has to be done to the plan document if a plan sponsor wants to adopt safe harbor provisions at 1/1/2000. Profit sharing plan w/ 401k provision was installed in 1991. I know a notice must be timely delivered to all participants and that the document has to contain the safe harbor provisions prior to 1/1/2000 in order to be effective 1/1/2000. Does an amendment have to be adopted? Is there any model language out there? Or is the participant notice enough? The Notice seems to suggest that the document actually has to be amended and I'm trying to figure out how to do this for a standardized prototype.

2) Does a plan sponsor have to choose to grant either the QNEC or the match and stick to it from year to year? Or can the sponsor calculate both, and use the lowest number from year-to-year? If the plan sponsor is allowed to switch, can the plan document specify that the match is discretionary (yes, we will make sure the formula meets the safe harbor when the match is actually contributed).

3) The Notice continually talks about making match to NHCE's. It also talks about the ACP test being automatically satisfied if the rate of match for HCE's does not exceed the rate of match for NHCE's. However, I am aware that match outside of the safe harbor formula has to be tested under the ACP test and does not automatically satisfy the ACP test. I just want to make sure that if the plan sponsor grants a, for example, 100% match on the first 4% of pay, to both NHCE's and HCE's, that that formula will satisfy the safe harbor. This match satisfies the minimum formula and does not cause 6% of pay to be exceeded. My concern is about giving the HCE's the match.

4) What if a plan sponsor every year gives a 5% of pay 100% immediately vested profit sharing contribution. This would seem to satisfy the 3% QNEC requirement. Does it? Since there are restrictions on the amount of match that can be applied and have the safe harbor requirements be met, is there any restriction on profit sharing contributions (e.g. doubling as QNEC's).

Sorry this is so long. I really appreciate any help anyone can provide. Thanks.

My understanding is that a distribution greater than $5,000 generally requires spousal consent if the plan contains joint and survivor annuity provisions.

This would apply to loans too, say from a 401k plan.

If the plan is not a DB plan or a DC plan that has a required contrib (like MPPP), I am under the impression that the plan does not have to contain a joint and survivor provision, e.g. lump sum can be the only form of benefit if the plan sponsor so desires.

I recently heard two things from a respected speaker at a conference, that concern me. There was a great deal of discussion about this issue among the speaker and conference participants, it was not just a passing comment.

The speaker said that:

a) the IRS would not issue a favorable determination letter on a DC plan (assume no required contribution e.g. a straight 401k plan w/ no profit sharing provision) if the plan document contains no joint and survivor provision.

b) Even if a plan does not have a joint and survivor provision, spousal consent must still be obtained on all distributions in excess of $5,000.

Several conference participants disagreed w/ the speaker. Anyone have any thoughts? Thank you.

My divorce states I am entiled to one- half of retirement benefits at his actual retirement accrued to the June 20, 1989 date.I have just learned that he took an early retirement starting Sept 28, 1998 and had not informed the State of the divorce judgement. The judgement reads: at the time of his actual retirement from the State Employees' Retirement System, in accordance with the formula for the establishment of retirement benefits in effect on that date. I would like to know am I entiled to any benfits if he should die first?

[This message has been edited by BDivocee (edited 05-06-99).]

[This message has been edited by BDivocee (edited 05-06-99).]

Seeking HR consultants or HR managers to interview for article on voluntary benefits (auto, home owners, etc.) offered to retired workers. Deadline: May 21. Please e-mail response and availability.

I have a client who wants to match 100% of salary deferrals from 6% to 8% and nothing from 1% to 6%. This is a highly paid, professional employee group, so ACP might be ok. However, I doubt it will pass IRS muster. Any thoughts?

first, this is how Qtech calculates vested balance.

Ending balance + prior distributions

multiply by vesting percentage

this is ees vested balance (as if he hasn't received a distribution)

then system subtracts distribution actually received.

Any difference is remaining distribution.

If ee has forfeited money, system is not smart enough to add that back into the equation, so things get messed up.

Possible workaround would be to enter distribution as a positive number in prior yr distribution field via DER.

This will 'negate' the distribution, so like the forfeiture it will be ignored.

Since you are running confirmation required, that implies share accounting, and therefore compounds the problem.

Again, the real problem is the forfeitures. they don't get readded to the equation.

example:

ee has balance of 1000, is paid 700 so ending balance is 300.(someone goofed)

system calculates as follows

end balance = 300

distribution= 700

toatl = 1000

vested at 80% or 800.

has been paid 700, so vested balance is 100.

printout shows ending balance 300, 80% vested, but vested balance = 100.

That actual maked sense, but looks extremely funny.

If forfeitures were involved, the numbers really get messed cuz system ignores them.

hope that helps.

I submitted a cross tested plan for det. Instead of using % of comp for each class, I used something like "each year the employer will notify in writing the trustee as of the amount of $$ to be allocated to each class. Within each classe $$ will be allocated proportionally with each participant compensation (comp on comp)", etc.

The $$ allocted to class A was (or intended to be)equivalent to 25% of comp for each participant. However, since the salary of one of class A participants was 160,000( the others had comp of $100,000) his allocation was limited at 18.75% (30,000).

The IRS agent called and claimed that in analizing demo 6, he reached the conclusion that the above violates the "comp on comp" allocation within members of the class. He suggested I go back to % definition of allocation, giving to class A "up to 25% of comp." Or to add another class for that individual.

Any comments? Especially keeping in mind that such can hapen to an initially homogenous group when compensation from one year to another can vary.

Thx

Recent

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If an existing profit sharing plan, with vesting, amends to SIMPLE 401(k), can the vesting schedule be maintained for the pre-SIMPLE employer contributions? (Forfeitures are used to reduce contributions.)

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I have a 401(k) plan that excludes bonuses, vacation pay, and sick pay. I ran the 414(s) test. The test failed with hce inclusion % of 95.4 and the nhce % of 89.2. I know there is no stated deminimus amount. Is it best to try to argue a deminimus amount, or should the employer give a QNEC, or some other correction method?

Company A sponsors a Section 125 plan and self funds health claims. Are the company contributions to pay claims included on the Form 5500 like the employee premiums are?

I can not find any guildence on if a ER can use a Simple IRA for any EE's that they do not provide benefits for under the Davis-Bacon Pervailing Wage Act. That is, are they prohibited from using a Simple IRA if they must give specific benefits to certian EE's under Fed regs. Any help on this is greatly appreciated. Thanks

I have a plan where the employer would like to pay the asset management fee/contract charge. The plan is self-directed and wrapped in a group annuity package. Can the employer pay this expense and get a deduction?

Reg 1.404(a)-3(d) seems to indicate these are not deductible.