I have stumbled on a potential client with a 403(B) plan and a 401(a) plan. The client claims that they only make employer matching contributions to the 401(a)plan based on employee contributions made to the 403(B)(of course I cannot get a copy of the 401(a) plan document). If you don't contribute to the 403(B) plan, you are not eligible to receive contributions to the 401(a). This arrangement allows the employer to maintain the 403(b)without complying with ERISA, avoid the ADP testing inherent in 401(k)and minimize administrative hassles by contributing matches as infrequently as annually.

However, I don't understand legally how you can base matching contributions to the 401(a) on employee deferral contributions made to a 403(B) plan. Can anyone think of a type of 401(a) plan and the provions required within it that would permit such an employer contribution formula without losing its qualified status???

Thanks

Situation: Plan document states the definition of compensation is W-2, then excludes overtime, bonuses, and commissions. There is a NOTE after the exlusion provisions that states "any exclusion of comp only applies to Employer Discretionary contributions and does not apply to any contribution which is qualified or subject to anti-discrimination testing". My question is - can you exclude these types of compensation in calculating the 3% Nonelective contribution under the safe harbor rules, or must you use full W-2?

I recently started a new job and intend to avail of health insurance using COBRA through my ex-employer. My wife is currently covered by her employer (her insurance does not cover me) and she intends to continue her coverage. Later this year, during summer, she plans to leave her job. At that point, I would like to include her, as a dependent, under my COBRA coverage. My ex-employer says that I must decide to get family coverage right now or forgo it altogether. i.e. I cannot take the single coverage for the next 6-8 months and then opt for family coverage when my wife leaves her job. Is this true? If not, can someone point me to the relevant text that I can refer to.

Thanks in advance,

Varghese K.

P.S. If it matters at all, my wife was covered under my health insurance policy (with my ex-employer).

When a LLP or LLC adopts a qualified plan, do all the partners need to sign the document or can the managing partner sign on behalf of the partnership.

Could anyone help settle a difference in interpreting 1.411(a)-7(d)(2)(iii). This reg reads: Computation of benefit. In the case of a defined contribution plan, the employer-derived accrued benefit required to be restored by this subparagraph shall not be less than the amount in the account balance of the employee which was forfeited, unadjusted by any subsequent gains or losses.

Here are the two interpretations:

(1) The forfeited amount, unadjusted by any subsequent gains or losses, is the minimum amount that must be restored. Therefore, a plan may restore more than the forfeited amount and may restore the forfeited amount plus interest (for the time the participant was away from the plan).

(2) The minimum restored amount is the forfeited amount and the restored amount shall not be adjusted by any interest.

Which is right?

A SEP participant was under-contributed 3 years ago (1996). Can anyone please explain how to correct the situation?

Thanks so much!

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Jorge Casasnovas

I will be teaching 2 C-2(DB) classes this semester--one a semester long class and the other a weekend review class.

Both will be held in Jacksonville Beach, Florida and are open to all students studying for the exam or who just want to learn about defined benefit plans.

The semester long class will be held on Saturdays March 13, April 10, April 17 and probably also May 29 from 9 am - 3 pm. Cost is $250 per student.

The weekend review class will be held on Saturday and Sunday May 15 and 16 from 8:30 am - 4:30 pm. Cost is $400 per student. (Hotel rooms are available at the Comfort Inn Oceanfront for $89/night.)

Please email me at lda@leading.net for more information.

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We have several clients who maintain both a self-insured medical plan and a cafeteria plan through which premiums for the self-insured medical plan are paid. According to my conversations with the IRS, the cost to the employer of a self insured plan includes the amount of claims paid for the plan year. Also, the IRS has informed me that premiums paid for a fully insured plan for levels of coverage in which an employee is not required to contribute (e.g. employee only) should not be included as part of the cafeteria plan(assuming the plan document does not include in the plan.) By analogy, claims paid in a self-insured plan for levels of coverage in which the employee does not contribute should not be included as part of the plan. This seems to be difficult information to obtain. How do you efficiently obtain a breakdown of claims paid for less than the full amount of coverage? Are other preparers even going to this extent? Furthermore, should the total cost of the plan equal only the participant's salary reductions if they are actually greater than the amount of claims paid for the year? Please provide some feedback of what other preparers are doing?

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GAshley

Company A is bought by Company B in an asset deal and 401(k) accounts are transferred to a similar plan established by Company B. In determining the HCEs for the Company B plan, for former Company A employees, do you have to consider the compensation received from Company A during the look-back year for purposes of the $80K threshold? Basically, is Company A considered also to be the "employer"? Any thoughts are deeply appreciated.

how would one arrive at an annual rate of interest that is equivalent to the average of a 1 year treasury and a 30 yr US gov't bond yield for the period of 10/ - 9/30 prior to the subsequent calendar year? I don't know where to find the 1 yr rates and i believe i would need to take the avg of 12 mos of 30 yr US gov bond yields. Look forward to any comments.

does anyone know how to obtain or how to derive a 83 Group Annuity Mortallity table projected with Scale H to 1988? And can anyone explain what this table means?

I am in the process of establishing a benefits communication team at my company. I have had a hard time finding adequate job descriptions & salary info for this type of position. These folks would be traveling @ 75% of the time conducting enrollment meetings, re-education meetings, etc. in 10 different states.

Does anyone have something like this in place? If so, can you give me some pointers on where to look for job classification informationlike this? Thanks!

Are there any hurdles to jump through before a trust may be designated as a beneficiary of a Roth IRA? Is it easier to name the trust beneficiaries directly as the Roth beneficiaries?

We are a small organization with a very lean budget. Some of our employees are interested in receiving extra vacation days instead of a merit increase. Has anyone offered this before and, if so, how did you administer it?

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Can a loan from a 401(k) Plan be repaid under a balloon type repayment?

Participant pays interest monthly, then at the end of the loan term they pay off the principle.

Do most people include the amortization schedule with their loan documents?

We would like to eliminate and include just the truth-in-lending statement (includes interest rate, interest $ collected, financed $, total amount paid, # of pmt, amount of pmt, pmt frequency), promissory note, and spousal consent form. Can't find where the amortization schedule is required.

A calendar year plan is established in 1998. The employee deferral and match are made every payroll and are programmed where the percentages are entered by a user.

In October a key employee reaches his $10k limit and the user sets his deferral % to 0. However, the user failed to stop the match and an additional $4000 was contributed to the employees account. The error was discovered in 1999 and the $4000 was returned to the employer as an administrative error.

The question is, should the money have been returned because the error was discovered in 1999? If it was not returned as an administrative error, the ACP and top heavy would have failed. ACP would have required a 1.5% QNEC and top heavy would have been 2.75%.

It is the opinion of the administrator that this was a mistake of fact, and was handled correctly because it was returned prior to the March 15 deadline.

Any thoughts?

I understand that the maximum time to deposit contributions is 15 bz day of month following month $ withheld. But I also understand that client can receive a 10 day extension if certain criteria is meant.

What is the criteria for a 10 day extension????

We have a client who recently acquired another firm, both corporations. They are trying to determine the best way to deal with the two 401(k) plans- terminate the acquired plan and distribute the assets to the participants or trasfer the assets from one plan to the other- anyone have a checklist we can use to guide them through this process? Principal is the administrator for the main plan. Thanks.

Employer wants a nqdc plan which mirrors the investment options of its 401k plan. The 401k plan is daily val'd and participants call the mutual fund company to change investment elections. (footnote: The employer understands that the earnings of the rabbi trust are taxable and does not want to fund the nqdc plan with coli because the 401k investment options are not available under any variable life product.)

Can anyone provide me with legal authority (or source from which I can find such authority other than the federal register in general) that permits such an arrangement? I'm worried that giving participants that much control would turn the rabbi trust into a "funding vehicle" for purposes of Title I.

I suppose the 457 regs could be used to argue by analogy, but such an analogy ignores the public policy of 457 to provide government and tax-exempts with a defined contribution plan they otherwise would not have.

If the plan is drafted to merely permit the participant to suggest investments and keep investment responsibility with a plan fiduciary, would a daily val'd feature work? If a participant uses the 800 number, how does the investment fiduciary get to review and possibly overrule a participant's suggestion? Does anyone have document language that is designed to give participants investment election?

Thanks in advance.