A sole proprietor(SP) has net se earnings(net of 1/2 SE tax and plan contributions) in excess of $160,000. Also has other common-law employees. He has a profit sharing plan integrated with SS at 100% of TWB. If we calculate the max contribution under code sec. 404 and allocate in integrated manner, SP receives $25,546.99 of the total allowable contribution of $34,105.04. Is this correct or is the SP's allocation limited to 15% of $160,000 ($24,000) because he is a SP.

Could someone tell me the difference between Non-Registered Seperate Accounts and Collective Trusts? and with which plans they would be used(401k, 403b)? Also, are Non-Registered Seperate Accounts..... insurance products ?

By now, most benefits managers running flexible benefits programs and/or offering multiple health benefit options have had a chance to summarize their firms' fall enrollment season results.

In my experience, those results make great 'tea leaves' for emerging industrywide benefits trends.

If you're close to the benefits elections data at your firm, how about sharing your results with us? No need to name names, or even provide numbers - just your take on what the patterns foretell.

Company A acquired a division of Company C, an unrelated entity. Some of the employees of the division who were eligible for retirement under Company C's plans retired from Company C prior to closing, so that they could begin receiving their pension benefits and begin coverage under Company C's retiree health plan. After the acquisition, some of those "retired" employees went to work for Company A. Company A reimburses those employees for a portion (but not all) of the premiums they must pay to Company C for their retiree health coverage.

Question: Has Company A established a "welfare benefit plan" under ERISA? In other words, is the mere reimbursement by an employer of a portion of the premiums paid by employees for health insurance which is not provided by the employer a welfare plan?

Any thoughts would be much appreciated.

This may be more of a compensation question, but I'm interested in any ways partnerships have found to compete with corporations that can offer stock options to employees as well as having stock in their DC plans or stock purchase plans. What have they done to create a sense of ownership among non-partners and how have they replaced this in the total rewards (total compensation) equation?

The IRS today issued final Roth IRA regulations.

Here's a link to their full text, in hypertext format, provided by BenefitsLink:

http://www.benefitslink.com/taxregs/1.408A-final.shtml (click)

This topic is "locked," which means you can't post a message in this topic. This message is only intended to serve as an anchor to the full text of the final regs. To post a message about the final regs or any other Roth IRA topic, just click on "Start a New Topic" below.

[This message has been edited by Dave Baker (edited 02-04-99).]

What guidance is there regarding charging a nominal fee for the processing of a QDRO? Can we do this? Is there a max we can charge? Any information will be appreciated.

------------------

A privately held corporation will be setting up a profit sharing plan. Somewhere between 10% and 50% of the Plan assets will be invested in the stock of the corporation.

Can the Plan meet nondiscrimination rules using cross testing? For example, can the Plan use an age-weighted allocation in its allocation formula?

We are currently filing one Form 5500 for our Cafeteria Plan. Our plan includes the following: Dependent Care Reimbursement, Medical Reimbursement, Health Insurance Premiums, and Group Life and Disability Premiums. We have over 100 employees, and some of these plans have over 100 participants. Do we need to file separate 5500's for these plans?

We have some employers whose plans were started some years ago who have the Joint Survivor Annuity built into it. Is it possible to remove this with an amendment if that is what the employer or trustee wants?

To compare our plan benefits, defined benefit plus retiree health, I am conducting a survey that compares our benefits to other public systems. This is on both pension and retiree health. I'm looking for sources of information where this data might be found. I am also interested in contrasting the provisions and benefits of defined benefit plans in the public sector to private sector defined benefit plans, specifically in the areas of post retirement adjustments, COLA's, and ad hoc payments based on investment earnings in excess of acturial assumptions. I'd like to know why the public sector offers these enhancements while the private sector may not. I have a thesis on why differences in benefit formulas and post retirement benefits exist but would like to author a paper that would prove my thesis.

Anyone out there have any thoughts on these subjects, or where the data might be available?

Thanks

------------------

Question regarding preparing ADP/ACP testing and utilizing the current and prior year alternatives. I had been preparing ADP/ACP tests using the prior year and current year elections mixed for the ADP/ACP test. For example, I may use 1998 %'s for ADP and 1997 %'s for ACP. At a recent seminar, it was noted that the above procedures were not recommended. The individuals attending didn't have notes on certain citations or reasons to indicate there were issues with preparing tests in the first example.

Can anyone help to cofirm the statements that testing the ADP/ACP with different years is not appropriate. Thanks!!!!!

Are there any problem areas involved in changing custodians?

We have land in a custodial IRA account, and are considering switching to different custodians (banks).

Has anyone ever done one of these transactions?

Thanks!

Is there any way to "fix" a defect in a 457 plan? Specifically, the 457 plan participant made a deferral election, but the employer failed to follow the election. Now the year has closed, the error has been discovered, and the employee would like the deferral election to have been followed. Could the employer make the contribution on behalf of the employee and issue a corrected W-2? In such a case, the employee would reimburse the employer for the contribution.

A company has a frozen PS and MP. Plans are terminated and distributions are processed to all participants. The month following the distributions, the company starts a 401(k) SIMPLE.

I believe the company should have transferred the balances to the 401(k) SIMPLE as this is a successor plan. Is this correct? What actions can the company take to try and correct any plan violations?

We have a plan that has a provision that states" Any other Employee shall be eligible to become a Participant at the beginning of the first month following completion of a Year of Service; provided, however, no such Employee shall become a Participant who had attained the age of Sixty (60) years when his service commenced."

Is this provision legal? If it is not, and the plan has not been amended to removed it, how is it applicable?

The long-proposed COBRA regulations have gone final. IRS issued

them today. Hypertext version is online at

http://www.benefitslink.com/taxregs/54.4980B-final.shtml (click)

An overview, from the preamble to the new final regs:

The regulations are intended to provide clear, administrable

rules regarding COBRA continuation coverage. The regulations

give comprehensive guidance on many questions under COBRA,

with a view to enhancing the certainty and reliance available

to all parties -- including employees, qualified

beneficiaries, employers, employee organizations, and group

health plans -- in determining their COBRA rights and

obligations. The guidance is designed to further the

protective purposes of COBRA without undue administrative

burdens or costs on employers, employee organizations, or

group health plans.

For example, the regulations:

* Prevent group health plans from terminating COBRA

continuation coverage on the basis of other coverage that a

qualified beneficiary had prior to electing COBRA

continuation coverage, in accordance with the Supreme Court's

decision in Geissal v. Moore Medical Corp.

* Give employers and employee organizations significant

flexibility in determining, for purposes of COBRA, the number

of group health plans they maintain. This will reduce burdens

on employers and employee organizations by permitting them to

structure their group health plans in an efficient and cost-

effective manner and to satisfy their COBRA obligations based

upon that structure.

* Provide baseline rules for determining the COBRA

liabilities of buyers and sellers of corporate stock and

corporate assets and permit buyers and sellers to reallocate

and carry out those liabilities by agreement. This will

significantly enhance employers' ability to negotiate and to

plan appropriately for the treatment of qualified

beneficiaries in connection with mergers and acquisitions,

while protecting the rights of qualified beneficiaries

affected by the transactions.

* Limit the application of COBRA for most health flexible

spending arrangements. This will ensure that COBRA

continuation coverage under health flexible spending

arrangements is available in appropriate cases without

requiring continuation coverage where that would not serve

the statutory purposes.

* Eliminate the requirement that group health plans offer

qualified beneficiaries the option to elect only core

(health) coverage under a group health plan that otherwise

provides both core and noncore (vision and dental) coverage.

* Give employers, in determining whether the small-employer

plan exception applies, the option of counting by pay period

rather than by every business day, and provide, for that

exception, for the consistent treatment of part-time

employees through the use of full-time equivalents.

This topic is "closed," which means that messages cannot be added to it, because it is only intended to provide an anchor to the full text of the final regulations; to post a message about the final regulations please click on "Start a new topic" below.

[This message has been edited by Dave Baker (edited 02-03-99).]

How do you terminate a SIMPLE IRA? Are you required to continue the SIMPLE IRA for the entire year, or can it be terminated by giving a 60-day notice? This question has arisen in an acquisition context where the acquiror would like to bring the acquired company's participants into its plan, but the participants are presently (for 1999) covered by a SIMPLE IRA. Certain provisions of Section 408(p) seem to indicate that it would have to be continued for all of 1999.

401k_question: It seems that employers are more concerned about their liability upon implementing a 401(k) plan than ever before. The vendors say offer employee education, a diversified and quality monitored fund selection, get a bond and that's it. However, as one employer put it, "Today I have no liability because I do not have a 401(k) I want to offer them this benefit, but they are "street smart" now and I want to know exactly what the risks are." A co-trustee can help but isn't it the employer's ultimate liability? Is there anyway he can cover himself completely from lawsuits, such as insurance specific to a 401(k) lawsuits? I can't find anything. This account has one officer and one CEO (the same). Any thoughts?