Is it possible for COBRA premiums for a qualifed beneficiary to be paid for through the premium coversion portion of the cafeteria plan. For example: Employee is paying the COBRA premiums for is ex-wife or employee paying COBRA premiums for aged out dependent.

I thought I had read that this would be allowable under a new regulation beginning next year????

I have had an inquiry from a colleague in Japan who is a member of the equivalent of our FASB. He is eager to learn about the accounting methods and disclosures for "cash balance" plans. It is unclear to me whether they should be accounted for as defined contribution or defined benefit plans. Any advice would be appreciated.

I have been given a new assignment and I need some help on where to start. The company I work for has never done benefit planning and they want me to develop a project schedule that will lay out the planning process to take place over the next few months. Has anyone out there gone through this process, and if so, what key areas are best to concentrate on and what should be avoided. Would greatly appreciate any help anyone can give.

A qualified retirement plan is allowed to pay certain legal and/or administrative fees out of Plan assets. Other types of fees probably should not be paid out of the trust.

Is anyone aware of a good article that discusses how to determine when to pay a fee from the Plan and when not to?

As an example, if an employer hires a consultant to create a benefit formula in an existing qualified plan to maximize benefits to the HCE's (to the detriment of the NHCE's)and then hires an attorney to amend the plan for the new benefit formula, I generally believe that the employer, not the Plan, should pay such fees because they were beyond "normal" administrative practice.

Conversely, when the consultant charges the plan to prepare the annual 5500, it is probably appropriate for the Plan to pay the consultant's fees as the 5500 filing is necessary to the administration of the plan.

Work at at computer software firm of about 120 people. Interested to know what other companies provide in their tuition reimbursment programs to employees. How and how much do you cover?

I am currently a Human Resources Coordinator for a computer consulting firm with about 120 employees and almost 3 years old. We are coming up on the completion of our 1 year with a 401k plan and do not match. I am looking for info about other companies and what they do in terms of matching (percentages and such), and what your plans provide. Any information would be much appreciated. We are hoping to start matching at the first of the year.

Thanks.

401(k) Plan has employee deferrals and match contributed. In calculating the maximum employer contribution for the 15% limit, I am using taxable wages of eligible participants excluding 401(k) deferrals and cafeteria plan deferrals; also excluding any participant's wages if not employed on the last day of the year; also excluding any participants wages above the $160,000 limit. I multiply this figure by 15%, then subtract the elective deferrals and employer match which then gives me the net profit sharing contribution allowable for the employer's fiscal year.

Is this correct?

Need help determining the treatment of 402(g) violations not returned by April 15th.

My office has been struggling with what health benefits,if any, we are legally required to offer to our part-time employees (we have one 20 hr./wk. employee and one 30 hr./wk. employee). We pay the full health insurance premium for our full-time employees (40 hr./wk.) but have not offered any health insurance to our part-time employees. I have searched ERISA, the IRS Code,etc. and cannot seem to find guidance with regard to this issue. I would appreciate any input you might have.

It seems that there is very little technical information out there on SEPs. Does anyone know of a comprehensive text or resource that can be used for SEP research? I've seen the BNA Portfolio on SEPs, IRS publication, limited exam guidelines, but nothing that gets very detailed.

Company A is considering purchasing substantially all of the assets of Company B. Company B is currently involved in liquidation proceedings under the bankruptcy laws. Following the asset purchase, Company A will terminate 10% of the employees formerly employed by Company B. Does Company A have any successor liability with respect to providing these individuals with COBRA coverage. Any thoughts? Thanks. Ed

Clearly, a plan that wishes to satisfy a safe harbor must amend the plan to include a plan provison setting forth the safe harbor the plan intends to use. Does anyone read section 401(k)(12) or Notice 98-52 to require a plan provision stating that participants will be given written notice of their rights and obligations within a reasonable period before the beginning of the plan year?

IRC 457(g) requires that governmental plans will not be treated as eligible deferred compensation plans unless all ""assets and income" of the plan ... are held in trust for the exclusive benefit of participants and their beneficiaries." Ms. Calhoun has written an excellent article on this topic that I recommend reading.

There seems to be a conflict as to the meaning of the term "assets and income". One of my colleagues has indicated that several commentators have indicated that the term assets only applies to amounts actually deferred from employees salary (similar to 402(g) deferrals) and to employer contributions that have previously been placed in a trust, a custodial account, or in an annuity policy. The contention is that employer sponsored 457 plans with no employee salary deferrals and only a promise to pay on the part of the employer are not subject to the trust requirement.Further, the contention is that the legislation adding 457(g) to the Code was never intended to require the funding of plans that previously had no "assets" and that the funding requirement for these plans was not changed by 457(g).

Unfortunately, I cannot find support for this position in either the statute, the Committee Reports or in Notice 98-8. However, Paragraph 19 of Notice 98-8 does refer to "amounts deferred" when discussing the trust requirement.

To what plans does the trust requirment apply? Does the trust requirement apply only to employee salary deferrals as "amounts deferred" or does it apply to all "book accounts" under 457 plans? If it only applies to salary deferrals , is there a pass through trust requirement when an individual is to receive a distribution because assets have been identified to pay the distribution?

I would appreciate any clarification which anyone could provide. References and citations would be fantastic.

Thank you for your assistance.

JDC

[Note: This message was edited by CVCalhoun]

Is there anyway for an employer to offer health insurance to early retirees (55 - 65 years old)? The emp would be responsible for the premium. Also the company does not want the liabilty for these emps (FASB). The group is self-funded and does not want to put these emps on the current SF plan.

Question:

A deceased's account in a money-purchase pension plan is transferred to the IRA of the surviving spouse. Is there any special creditor protection afforded these assets that may be an exception from the lack of creditor protection generally afforded IRA's?

Is there any difference if the only assets in the spouse's IRA are those incident to this transfer?

Thanks for any help!!

After TRA '97 employers are now permitted to pay parking benefits in lieu of compensation to employees. I have heard that the IRS prefers that the employee make an election at the beginning of the year based on how much he expects the month to month parking expenses to be. May the employee avoid making an election without violating any constructive receipt rules?

What if it is not feasible to make the election? One company has employees who park all over the city. The easiest way to administer under the new rules to have the employee first incur the expense, then have the EE turn in the receipt for a pretax deduction in the following month.

EX:

Jan. $100 expense incurred for parking.

Feb. EE turns in receipt for $100 to ER who then takes a pretax deduction for that amount from the EE's paycheck, and also a $100 reimbursement to net pay (since the EE has already paid his own money to pay for the parking).

ER cannot set up monthly parking with the garages for all of its EEs since there are so many EEs and so few large blocks of parking available within walking distance of the ER.

Also, the expenses for monthly parking may easily change from month to month. Can we cross over months to take the pretax deduction? We most likely cannot cross over years.

Any problems with this type of administration of the new "in lieu of" parking benefits?

I would appreciate any advice that someone could offer on my situation. I had to be hospitalized last November and required on going medical care thereafter. My employer had a partially self-funded health plan and discontinued it July 1, 1998. Now they have a plan where they just pay premiums, they are no longer self-funded. Due to the nature of my position at this company I had knowledge that their financial status is precarious. They are not paying my health claims and the third party provider won't even talk with the insureds any longer. They are referring us to the Treasurer of the Board of Directors. He has told me that paying the claims is not a priority. Some of my bills date back to February, 1998. The third party provider cut the checks, but the company has not funded the check runs. I have contacted the Dept. of Labor. They recommended that I speak with an attorney. She won't take my case on a contingency basis. I am on disability and cannot afford to run up a lot of legal bills. I pay my COBRA every month, but I wonder what good it is really doing me. Now the providers are starting to threaten me with collections. Please offer me any advice you might have. Thanks!

Does anyone have experience with a "phased retirement" design in a DB plan (i.e., retiring with a partial benefit while continuing to work on a reduced hours basis)?

I would agree with LCARUSI - it's not entirely the employer's fault.

You are correct with the issue of taxable income. Unless it's done with income from this year it can't count. As for the deferrals, your option is limited by the Document language. Don't simply allow that participant to increase at any point. You'll need to adhear to the language or you may create other problems.

Good luck....

Two C Corps (A&B) are in the same controlled group under 414. Each maintains a separate health care spending account with different maximum contribution elections defined by the respective plan terms. Per 125(g)(4) ees of A and B are treated as under a single employer. What happens if an ee in B elects $2000 contributions to health care, and then moves to A which only has a maximum $1500 election? EE can still seek reimbursement for expenses incurred while at B, but what if ee wants to continue to use the $2000 maximum from previous employment? Any other issues or problems?