Ernst and Young publishes a monthly letter now called "upshot." This month (http://199.50.26.12:80/upshot/sneakpeek.asp) they speak to the issue of plan fees and employer's potential liability to their employees.

E&Y said "finally, the Labor Department recently issued a warning to plan participants about excessive 401(k) plan fees and expenses. Burdening plan participants with above-average fees could leave an employer facing not only employee displeasure, but also legal action."

My non-profit employer will shortly terminate most of its employees due to loss of funding and a number of employees have 403(B) savings. Can you indicate what are the advantages or disadvantages in those employees rolling over their 403(B) savings into an IRA. Most of the 403(B) savings are now maintained at various mutual fund companies. Is there any difference between such an IRA and simply letting the 403b accounts continue other than the wider selection of investment vehicles (e.g., stocks)?

Thanks!

Does anyone know if a Sect. 125 plan document can have a "wraparound" provision referencing a self insured health plan (reference to an SPD). By having this statement in the 125 plan, I have heard you can avoid having a plan document for the self insured medical plan.

Thoughts?

[This message has been edited by Peg H (edited 08-25-98).]

A US citizen on US payroll is working at one of our overseas locations. He is covered under US benefits. We decide to make him an employee of our local subsidiary and on the local payroll. The local subsidiary does not offer medical or dental. Do we owe him a COBRA notice? My impression is that no termination of employment or reduction in hours has occurred, since he is still employed by a member of the controlled group, therefore, no qualifying event. It would seem like transfering an employee to a US location or subsidiary which does not offer benefits. Does anyone have similar situations that you've had to handle?

I recently read an article regarding LTD Insurance policies in qualified plan. The article made the point that the premium would taxable to the participant.

I have not been able to locate any IRS reg or publication on this issue. I assumed the author is making an interpretation from how PS58 cost for Life Insurance is handled. However their is a table to calculate the taxable portion of the Life Insurance premium.

If anyone has any knowledge of an IRS publication on the taxability of the LTD Premium, I would appreciate any help.

If a $1000 plan loan is taken out from a 401 (k) account by a participant with a $2000 vested balance and the account is used as collateral, can the same participant with a legitimate hardship of $2000 request the loan collateral of $1000 still in the plan be paid to him under the hardship rules?????

EMPLOYERS WITH EXISTING PLANS WHO JOIN OTHER EMPLOYERS UNDER ONE PLAN ( NOT A MULTIPLE EMPLOYER PLAN)USUALLY MERGE OR CONSOLIDATE THEIR EXISTING PLANS UNDER THE TRANSFER OF ASSETS AND LIABILITIES RULES. BUT WHAT IF THEY INSTEAD AMEND THEIR PLANS TO SUBSTITUTE THE ONE PLAN FOR THEIR OWN. WOULD THERE BE ANY RELIEF FROM FILING AND WOULD THEY HAVE TO TERMINATE THE OLD PLAN?????

CAN YOU SET UP A 403b (7) CUSTODIAL PLAN FOR THE PURCHASE OF MUTUAL FUNDS. THE PLAN WOULD REQUIRE THAT EXISTING EMPLOYEES IN A NON PROFIT HOSPITAL WITH TSA'S CONVERT THE ANNUITIES TO CASH AND TRANSFER THE FUNDS TO THE NEW PLAN????? I UNDERSTAND FROM IRS RULING 90-24 AND PLR'S THAT THIS CAN BE DONE.

ALSO, AS A SIDE NOTE INDIAN TRIBES CAN TRANSFER FROM 403 (B)S TO 401 (K)S

Congress is considering legislation to allow trade associations to sponsor health plans and grant them exemptions from state mandated benefits.

One of two plans may be self insured, as long as one is fully insured. DOL and many state regulators "frown" on MEWAs...Any opinions?

Our HMO and PPO carrier is Trigon/Blue Cross-Blue Shield in Virginia. Today, I receive a questionnaire with the request to sent the latest Payroll Tax Return to them, marking employees in their plan, full time, part time and temp employees, as well as those employees not in the plan, are they Champus, are they on their spouses' policy, Medicaid, Medicare, etc. I don't think it is any of their business. Trigon is not Government (Fed or State) run, how can they request a payroll tax return, we don't even ask our employees if they are married, how

can they ?

Would appreciate some insights ....

Thank you,

Anna

I am seeking info on 401k matching practices for companies with less than 500 employees.

Thanks.

Can anyone email me a list of deductible items for a flexible spending account?

beacun@yahoo.com

If plan sponsor of $100,000,000 ESOP sells a subsidiary for $50,000,000, can plan sponsor contribute entire amount as a dividend and release approximately 50% of stock in suspense account without Code Section 415 concerns? Or would amounts need to be paid out over several years in light of Code Section 415 limitations? Any thoughts? Thanks.

I am seeking info on 401k matching practices for employers of less than 500.

Due to massive growth, my company will be relocating its hq for the 2nd time in 4 years. This new location is 7 miles from our current site and 20 miles from the original site, but we fear a potential loss of employees if we do not offer benefits to having them stay & travel the extra miles. I am, therefore, looking for suggested percs or benefits which we may offer to make the additional drive or ride time worth the effort.

We have a 403b1 Tax Deferred Annuity Plan. The plan is totally funded by employee contributions.

My understanding is that we are exempt from ERISA is this true ?

Inc magazine in the August 1998 has an article detailing the difficulty of selecting and installing the "best" plan for the business, the shareholder employees and the other workers.

http://www.inc.com/incmagazine/archives/08981051.html

First, the focus of the test is "key employees," not HCEs. That distiction helps one reach the conclusion that if you have only key employees, you cannot have a cafeteria plan. This has been our conclusion for a one person P.C., we have not encountered a large group with only key employees. The plan is available to non-key employees even if they are HCEs, so pay close attention to the definition.

A recent case in the 5th circuit (RADFORD v. GENERAL DYNAMICS) has held that for purposes of bringing a fiduciary claim the sectoin 413 statute of limitations is not tolled by filing a claim under the plan's claims procedure AND filing under the claims procedure was required prior to bringing the actions. This is a trap for the unwary. It also may be incorrect. The case will soon be out on the commercial sites. It is obtainable now at www.ca5.uscourts.gov Docket no 97-10689 (8-18-98). Are there similar view in other circuits or is this first impression?

We have established a 401(k) for a new client. The client phoned and said they have a frozen 457 plan. They would like to know if the participants can transfer the funds to the 401(k) plan? Any other options for the client?