I have an assignment to summarize the life insurance benefits available to employees of large companies. The analysis should compare face amounts, features, premium rates and conversion privileges. We want to try to offer coverage in the Servicemembers' Group Life Insurance program that is comparable to that provided to employees of large companies. The Department of Veterans Affairs is performing this analysis. I am an actuary employed by the VA at the VA Regional Office and Insurance Center in Philadelphia.

Does anyone know how the IRS is treating 403(b)plans set up by employers who mistakenly thought they were 501©(3)?

Case in point is a hospital.

We have a client who is a participant in a multi employer plan. He retired in February of 1997 under an early retirement provision at age 56. The plan allowed retirees to go back to work for contributing employers and still receive their monthly check. In October of 1997, the trustees amended the plan to disallow retirees to work unlimited hours and collect their checks. The amendment complies with ERISA and DOL rules and we are not arguing this. What our question and argument is, can they retroactively apply this amendment to someone who specifically made a retirement decision based on the previous rules of the plan? We are using the 1982 2nd Circuit Ct decision of Teamsters v Hoh as our argument that the trustees were arbitrary and capricous in their application of this upon retirees. What does anyone else think? Are there newer rulings or contrary ones that we need to review before and arbitration hearing?

Looking for anyone administering governmental plans on Quantech.

[This message has been edited by Jeannie Hagan (edited 09-01-98).]

We administer some plans that define a year of service as a plan year in which the employee works at least six months during the plan year. Quantech's elapsed time method requires that twelve months counted in order to receive a year of vested credit. This does not give credit for the first year of employment for those who worked six months or more. The only way to work around this is the manually enter in the years of vested credit each time eligibility is run, which is not very efficient. Any other thoughts or solutions with the elapsed time method. By the way, these are governmental plans.

Can someone summarize for me the amendment requirements for cafeteria plans? Will all cafeteria plans have to be restated by 12/31/98 for the "change in family status" regulations? What if the plan refers to "any other event as listed in the regulations" as a life event, then would amendment be necessary?

What other law changes have an effect on cafeteria plan documents - SBJPA, USSERA, TRA '97, GATT? Thanks.

[This message has been edited by Dawn Hafner (edited 09-04-98).]

If these contributions did not result in an ADP failure and were not excess annual additions under 415, were they excess deferrals that violated the $10,000 limit of 402(g)? If not, I don't think you can return them just because they violated the plan's non-statutory 15% contribution limit--I believe the Code and regs permit such refunds only if one of the statutory limits is violated.

Contributions in excess of plan limits would be qualification defect on account of a failure to follow the plan's terms and could be corrected through one of the IRS's correction programs. (But I'm not sure they'd let you pay the money back--they might require you to make additional contributions to the other employees.)

Need some advice..Have a disability claim in progress for LTD, which was denied due to preexisting condition clause. Was told that HIPAA does not cover Disability Insurance. My research seems to tell me defferently. Heres what my research shows: HIPAA definition of Group Health Plan (Also called employee welfare plan) follows:

"..(5) Group health plan: The term `group health plan' means any employee welfare benefit plan, governmental plan, or church

plan (as defined under paragraphs (1), (32) and (33) of section 3 of the Employee Retirement Income Security Act of 1974 (29

U.S.C. 1002(1), (32) and (33))) that maintains (or makes contributions to) a health plan." Sections of ERISA quoted above reads as follows:

" Sec. 1002. Definitions

For purposes of this subchapter:

(1) The terms ``employee welfare benefit plan'' and ``welfare plan'' mean any plan, fund, or program which was heretofore or is hereafter established or maintained by an employer or by an employee organization, or by both, to the extent that such plan, fund, or program was established or is maintained for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise, (A) medical, surgical, or hospital care or benefits, or benefits in the event of sickness, accident, disability, death or

unemployment, or vacation benefits, apprenticeship or other training

programs, or day care centers, scholarship funds, or prepaid legal services, or (B) any benefit described in section 186© of this title (other than pensions on retirement or death, and insurance to provide such pensions)." Did I miss something? What is wrong with my research? Why can't I apply my previous disability insurance to help cover the preexisting condition? Appreciate any responses. Thanks in Advance.. My insurance plan is an ERISA plan.

[This message has been edited by dhltn (edited 08-31-98).]

Does your company offer a vacation rollover policy. If so, how many days can you roll over, do you have a cash payout option? If you have a use it or lose it policy, how is it perceived? Let me know!

I need to amend a plan terminating in 1998 for GATT, USERRA, SBJPA and TRA. Does anyone have a copy of the sample language which the Cincinnati Key District has provided in cases where a DL has been requested? Alternatively, does anyone have a snap-on amendment for GUST?

Is it clear under the IRS guidance for Notice 96-67, that if an employer decides to 'eliminate' the 70 1/2 rule --- that the employer can force a participant to terminate and commence benefits, WITHOUT any choice to continue to work and receive benefits?

If you've encountered a problem with Quantech and have found a neat work-around, please share it in this topic. THANKS!

Any messages regarding Crystal Reports are welcome here. Also, did you know one can use a different report writer than Crystal Reports for Quantech Reports. For example, my firm uses Microsoft Access for some Quantech reporting.

[Note: This message was edited by JohnB10]

For anyone who is interested, I have compiled a list of Web sites for state retirement systems, which you can access by clicking here. Is your state's site missing? You can let me know about it by clicking here, and I will be happy to add it to the list.

A Sole Proprietor has a money purchase plan & profit sharing. When calculating ideal salary, must the same compensation be used for both plans? Or, since the money purchase is primary, can a higher comp be used in the MPP, and the comp for PS calc be reduced further? Any software available that can run both plans simultaneously if same comp needs to be used? (Profit Sharing plan is integrated, by the way.)

The State of Ohio offers the Ohio Public Employees Deferred Compensation program pursuant to Ohio Revised Code 145.71-.76. The program appears to be enrolled and serviced exclusively by a national firm, via their office in Columbus, Ohio (Copeland Companies). There are currently 118,000 employees enrolled in the program.

Query: The Ohio Revised Code allows a state government unit to offer up to 2 additionl deferred compensation plans to its officers and employees. An Ohio County Water Authority has expressed interest in having my firm establish and administer a 457 plan for them.

1. Do most states offer a large deferred comp program such as the Ohio Public Employees Deferred Compensation Program? If yes, is it common for single government units such as a county water authority to also offer a separate program? I am having a hard time seeing why an employee would choose a separate 457 plan established just for the water authority over the larger Ohio Public Employees Deferred Comp Program. Also, with limitations on the amount that any one employee can defer, would it make sense to establish a second plan?

2. Am I correct in assuming that the Ohio Public Employees Deferred Compensation Program is administered exclusively by one firm? If yes, is this exclusivity in plan administration common for governmental programs of this type?

3. If I am interested in getting into the 457 plan administration arena, can I help the water authority establish a 457 plan? In other words, does a county water authority qualify to have a 457 deferred comp plan?

4.More importantly, can any qualified plan administration firm administer a 457 plan or must the State choose the plan administrator?

5.Are prototype 457 plan documents available?

Thank you for your patience in answering these questions.

[This message has been edited by Lisa (edited 08-30-98).]

Four small businesses exist. Three have pension and profit sharing plans. Those three understand they are part of a controlled group. Over time, changes occur in the ownership of the fourth business. No one realizes that those changes bring that fourth business into the controlled group. The fourth business does not have a pension or profit sharing plan and cannot afford the same plan as the other three. It is now five years after the changes which made the fourth business a member of the controlled group. What can be done to cure the problem?

I'd like to get a discussion started concerning Sponsor and Participant Reaction to the recent market downdraft. Maybe the current downtrend will not continue, but I suspect (and then again what do I know) the volatility will continue.

We have the opportunity here to get responses from a variety of angles - sponsors, consultants, investment managers etc.

Question #1 - What are participants doing in response to the current drop in the market? Are they panicking? staying the course? complaining to plan sponsors (of nondaily plans) that they cannot get out of their equity funds?

There is an article in the New York Times today (8/30) in the business section which quotes Hewitt Associates as saying they have not seen a significant increase in fund switching in their plans. I assume these are jumbo daily plans.

Do you agree/disagree with Hewitt?

Question #2

Are Sponsors doing anything special, e.g. communications to participants concerning the merits of long term investing, not locking in losses etc.? Are they considering it?

Question #3

If there hasn't been much reaction yet (and I'm not sure of that), when will it kick in if the market downtrend continues? Will there come a panick point when participants start to bail out of the market?

I hope we get lots of input on this - specific information, opions or just comments.

Looking for history of cross-tested plans. i.e. TRA 86 to final 401(a)(4) regs., information relating to the IRS's desire to disallow them early on etc.

Thanks

My client is purchasing the stock of a company that is owned by a conglomerate. Under the purchase agreement, my client agrees to provide the employees with equivalent retirement benefits for the next year. My client is not assuming the plans that currently cover these employees. If it sets up a new plan that will cover just the employees in the acquired company, can the new plan rely on the 1 year transition rule of Code section 410(B)(6)©? It does not appear so, because the regulations under that section seem to require that the "plan" which is relying on the transitional rule be in existance before the transaction, which it is not. If anyone knows of guidance on this issue, please let me know, or has reached a different conclusion, please let me know.