A 401(k) plan states that the elective deferral limit is 15% . We have a few participants that went over the 15%. The plan offers no guidance. What is the best method for correction? APRSC?, follow the 402(g) regulations? Please provide any articles or legislation that may help. Thanks!

Somebody in our office asked me whether §129 plans were excluded from filing a Form

5500 and whether they were subject to ERISA. I'm not familiar with the operation of these types of plans and hope that someone could help me find the answers to these questions.

This is what I know so far. The instructions for Form 5500 aren't of any help. The 5500 Preparer's Manual doesn't indicate there is a need to file. But IRC §6039(d) lists §129 as a "specified fringe benefit plan" subject to reporting. I'm a little confused (more so than normal).

[This message has been edited by Mel Fuentes (edited 09-11-98).]

Has anyone had any experience with a QSERP "qualified supplemental executive retirement plan" marketed by Price Waterhouse? It appears they are using the cross-tesing to create a "passing margin" within the plan. Any feedback would be appreciated

Help!!! I need good basic info on ERISA requirements. I have read the DOL Regs and now need some human input!! What is the best way to comply? Are Summary Plan Descriptions a requirement?

Clarification: This is a 401(k) elected "salary reduction" of 15% by the self-employed. Not an employer "non elective" contribution!

Self employed elects 15% for 1998(this amount will be less then $10,000). Net income will not be determined until 4/15/99. When is the contribution required to be remitted to the trustee? Do you have a cite for your answer?

[This message has been edited by Gary Tencer (edited 09-11-98).]

I had a self-employed elect 100% of net income, which might be less than $6,000. Net income for 1998, will not be determined until 4/15/99. When is the correct time for the contribution to be remitted to the trustee? Do you have any cites to support your answer?

What plan documents are you using for these Plans? I have looked at 2 and am not completely satisfied with either one. One requires extra language inserted, and the Model Plan requires percentages for each rate group. Thanks for any input.

This message from Dolores Upton was moved from old board, since the discussion was still in progress when the board moved:

Let me start by saying that I am not well versed in IRC section 457 plans so any help you can give me will be appreciated. I am confused as to the change made by the SBJPA to provide for "an additional deferral election" as described in IRS Notice 98-8. In reviewing IRS Notice 98-8 and other materials, I am confused as to the meaning of "additional". Does the word "additional" have plural meaning - (1) an election in addition to an election made prior to the first permissible payout date and (2) the deferral date is beyond (or in addition to) the deferral date originally elected? In other words can I elect to defer to 62 prior to the first permissible payout date and then make a subsequent post-permissible payout date election to instead defer to 60? The model amendment leads me to believe that my second election would need to be an election to defer beyond age 62.

Thanks!

If plan assets are invested in a mutual fund and no individual transactions exceed 5% of plan assets, do the total of all transactions for the plan year also have to be less than 5% not to require disclosure in form 5500 27(d)?

This message from "saltyfish" was moved from the old board, since it was still under discussion when the board moved:

Need some help with the Mental health parity act as it pertains to a Michigan-based municipality. Do they have to comply? Since they're exempt from ERISA, can't they waive this and/or voluntarily modify benefits? Are they eligible for the 1 percent exemption otherwise?

Thanks for your help!

[Note: This message was edited by CVCalhoun]

We have a client with a calendar year end plan profit sharing plan. He would like to restate the plan using a "new comp" type allocation formula for period ending 12/31/98. He is taking the position his profit sharing plan is discretionary and therefore he should be able to change formulas at this late date. I am concerned about all the employees already working 1000+ hours. I think it is too late for a change for the '98 year. Am I right or wrong?

Thanks for any insight.

SIMPLE 401(k): It appears that this type of plan is not required to file a 5500c/r (per 1997 instructions). However, the proposed 1999 Form 5500 instructions does not exclude them from filing. Is this a mistake on the instructions? Will these plans have to start filing even though they may not have filed for 1997 and 1998? What if a filing was done in the past?

This message was moved from the old board, since the discussion was still in progress when the board moved:

Welcome to the board--glad you dropped by!

I seem to recall looking at this issue a long time ago, and finding that it was indeed possible to treat volunteer fire fighters as "employees" for plan purposes. However, their lack of compensation obviously creates some problems with the 403(B) exclusion allowance and section 415 limitations. And I haven't looked at this one in a long time, so I'm not sure what the current status is.

[Note: This message was edited by CVCalhoun]

Some 403(B) vendors purport (apparently) to have a "prototype" 403(B) plan document that they will make available at no charge (or nominal charge) to employers. My understanding, however, is that there is no such thing as a "prototype" plan in the sense that the plan document has been approved by the IRS and has an IRS letter that adopting employers can rely on, similar to a qualified 401(a)-type plan. Am I missing something here?? Are these "prototype" 403(B) documents really nothing more than sample documents that employers can use in writing their own plan? Thanks for your help.

What are employers doing to communicate the new Medicare+Choice options to retirees or prospective retirees?

It seems with all the new possibilites and combinations of company health plans and Medicare options, specific communications for the upcoming changes are necessary.

What is the policy guidelines your company uses to dispense loans to active participants? Any dollar limits, limits on how many, etc?

Looking for feedback from administrators that are using (or planning to use) negative enrollment. Does it seem to create a positive response from participants?

There are a lot of assumptions in your example. The big one is that there is a valid employer/employee relationship between the leasing organization and its employees. Another one is that 100% of the employees of A, B and C are now the "employees" of the leasing organization.

Given your presumptions, what you say is correct. The former employees of A, B and C are treated as employees of the leasing company, for the purpose of determining whether the plan of the leasing company passes coverage and nondiscrimination. This would be true even if, for some reason, the benefits of some of those employees were taken into account in determining whether a plan of A, B or C met the nondiscrimination requirements.

Is there a way for a DB plan to merge assets to a DC plan that has adopted the Retirement Equity Act Safe Harbor (meaning, the participant cannot elect payments in the form of a life annuity)? Or is the only way to process this correctly is by the DB plan terminating and participants elect to roll their account to the new DC plan.

We have 401(k) Plan that allows us to establish and administer a loan program within the plan. Currently the Company pays loan anitiation fees and annual loan maintenance fees. Even though the Company has always paid these fees, they have always been slient in the bargaining agreement.

If the Comapny decides to start requiring union employees to pay for futuer loan anitiation and annula fees, is this change in policy a nogotiable item, or can the Company just make the change?

Any labor specialists out there, or someone who has experienced something similar? Any suggestions will be appreciated.