As a new subscriber to BenefitsLink, I am interested in knowing if there are any working or ad hoc groups of HR/Benefit professionals that have an interest in and regularly discuss issues relating to Integrated Disability and Absence Management. In paticular, are any members migrating to the full integration of WC, STD and LTD benefits and what "best practices" and benchmark standards have you set for your organization. Lastly, what other internet based resources might you recommend that I explore. Thank you.

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Robert J. Ayers

Regional Director

Integrated Disability and Absence Management

GatesMcDonald

800-423-1846, ext. 3581

Is anyone familiar with the current IRS position regarding plans with no sponsor, sometimes referred to as orphan plans?

In order to be a participant in the plan, an employee does not have to contribute to the Plan, UNLESS his/her job classification is covered by a collective bargaining agreement between the Plan Sponsor and one of the unions that represents some of the participants.

The reason I ask is that our client wants to offer an early retirement window benefit, but Treas. Reg. 1.401(a)(4)-3(B)(2)(iv) states "no employee contributions. The plan must not be a contributory DB plan." Does the fact that some of the participants "contribute" to the plan due to a collective bargaining agreement cause the plan to be a contributory defined benefit plan? I have tried to find a definition of contributory defined benefit plan, but have been unsuccessful.

I would appreciate anyone's guidence.

If I gift stock to my church can I purchase the same amount back & receive a step up in my basis, or do I have to wait 31 days (wash rules) to purchase it ? Thanks !

If I remember correctly, there are ERISA rules surrounding how many days an employer has to respond to a participant's request for a benefit calculation, an SPD, or a plan document.

Can anyone point me to where I could find the details on these timing requirements?

Q&A-6 states that in an asset sale, "the sale" is the qualifying event. What if the employee doesn't actually terminate employment until later? The buyer is buying the operating assets and hiring the employees at these locations. Some headquarters employees will continue to be employed by the seller for several months to wind things up. The seller has terminated its health plan, and the HQ employees are claiming that buyer must offer COBRA to them as of the date of the sale, even though they have not terminated employment yet. The statute says that "termination" is the qualifying events. Are the regs just sloppy language? Any thoughts?

Is it true that religious non-profits can "noncomply" with IRS regs on for example, a defined benefit plan, with impunity. Or, can they be brought to the DOL like any other for-profit for noncompliance??

Participant X died w/ $1,000 plan loan outstanding. X's account ($10,000 including the $1,000 loan) distributes equally to two beneficiaries. Should the 1099R to each bene be (A) for $5,000 or (B) for $4,500 w/ a third 1099 for $1,000 going to deceased taxpayer/estate?? Thanks

I know that the Simple 401(k) plans do not have to worry about the ADP/ACP testing, however what tests DO they need to worry about? I know that the Section 415 limits apply and I think that the 410(B) test applies ... any others?

Can I "borrow" my original investment amount from my Roth IRA? If so, do I have to replace it within a certain time frame?

Can anyone tell me where to fine the results of the 1997 and 1998 US Chamber of Commerce benefits survey? This survey shows each benefits item as a percentage of payroll. Thanks for any assistance anyone can provide.

After considerable analysis, my wife and I decided that conversion of a sizable portion of our IRA holdings to a Roth IRA made sense -- the thought of tax free distributions seemed to dance through our heads. Around the time of our conversion, however, I started doing some reading, and having conversations with others, about the various alternative "income tax" systems (e.g., flat tax, national sales tax, VAT, etc.) being considered as a replacement to our current mess.

Without getting into all of the pros and cons of each alternative, let me say that the National Sales Tax (NST)intrigued me because as a tax on consumption, instead of income, it should go a long way toward capturing the current lost taxes on unreported legal, and illegal, activity. I believe that this unreported activity is easily 25% - 33% of what is reported today, and therefore if "collected" would lower the tax burden for the rest of us who pay taxes on everything we earn (assuming overall tax revenues collected remain the same).

The problem with this NST is that my dollars being distributed from a "tax free" Roth IRA look and spend just like any other dollars, and as such will be taxed via the NST when I go out to buy a car, or a shirt, or a Coke. I have not heard or read of anyone to date raising the issue that I have raised here, and I would like comments or ideas as to how you might see this being handled (perhaps someone is aware of something in the Roth legislation that covers this possibility). I'm not trying to be cynical here, and I don't give a very high probability to a NST replacing the current income tax, but I certainly don't want to find myself contributing to the "tax bag" with my Roth distributions.

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If the employer wants to be able to vary the contribution percentage why not just put in a profit sharing plan?

Can someone give a simple example of the advantages of funding employee (current, not terminated employee) life insurance through a 419A(f)(6) plan than through any other method?

How often must a 401(k) participant be allowed to change the amount of (or discontinue) their deferrals? If a plan is only valued once a year and has only one entry date (first day of plan year nearest completion of requirements), can the plan only allow participants to change their elections or discontinue deferring as of the first day of the plan year?

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Michael Spaid

Called in to review a case where a plan is filing a Standard Termination with the PBGC. There exists one individual who retired over 10 years ago and who elected 10 Year C&C Annuity (this is a small plan that offered lump sum option - uncommon for someone to elect an annuity form to say the least). Retired participant has been receiving monthly payments since then.

Another firm is doing the plan termination. In the course of termination, they sent distribution packages out to all participants, including the retired participant, showing a lump sum optional form of payment.

My thoughts are that the participant has already made her election of form of payment and that Plan must purchase an annuity contract providing monthly payment for life (10cc guaranty has long expired). I don't see why lump sum option would be available to a retiree at termination (already turned it down at retirement). In addition, if I recall past readings, that if she somehow was able to elect a lump sum, that the lump sum would be ineligible for rollover as she has been receiving periodic distributions, so that amount would be currently taxable.

Any comments would be appreciated (this is a rank and file employee by the way, not the owner's mother or any such nonsense).

Who are some vendors of IVR enrollment

for smaller businesses?

Just seeing who's out there...

Who are good vendors of IVR for enrollment of participants for smaller businesses?

Just trying to see who's out there...

Hello! Here's a question that I need some help on. Facts: husband recently died at age 49 after 30 years of service. The company has a DB pension plan with early retirement age at 55 plus 10 years service or age 65. The plan includes a formula to calculate both the benefit and the "early retirement" benefit.

On the first day of what would be the month of his death, he notified the company that he wanted to retire as of that same day. He died on the 15th day of that month. The wife filed w/ the company to receive her surviving spouse annuity under the DB plan. The company granted this to her, but reduced the amount because the company claimed that because the husband had 4 weeks of vacation left at the time he purported to retire, the company still treated him as an "active employee" and said he could not retire until the first of the next month. As such, he (and in turn she) was entitled to a lesser amount. [i don't get this part.]

However, the company is treating the husband as having "retired" when it comes to determining his eligibility etc. for other benefits! In other words, they are being very inconsistent from what I can tell.

My questions are (1) can the company claim he was not "retired" because of his accrued vacation time? I understand under state wage laws they have to pay him that same time, but I cannot imagine the need to pretend he was actually working another 4 weeks. Are there any ERISA provisions regarding when someone "retires"? (2) what other ERISA provisions govern this dilemma? I have read the provisions regarding QPSA'a but have not been able to really find something that addresses the issue.

Any thoughts/comments are really appreciated.

The HCE rules under Section 318 provide for attribution between parents, children and legally adopted children. What about step children?

H owns 100% of Company A. Second wife has two children. Are the 2 children included in HCE group? Thanks.