I have a "situation" with a DB plan that only allows lump-sum payments if a participant's accrued benefit is less than $10,000. Recently, an IRA rollover was made for retiring participant with a $40,000+ benefit. Obviously, this is a failure to follow the terms of the plan and perhaps a violation of the exclusive benefit rule (at least according to the IRS).

I assume that this can be corrected under APRSC but my primary question is how best to accomplish this if the participant does not want to return the money. I dont think that the plan has any recourse against the participant (or any leverage- ie. the threat of taxes or penalties). If there are any potential pitfalls for the participant I think that the plan has a "duty" to point them out, so if anyone can think of some- please let me know.

Any thoughts would be appriciated!

This is a duplicate of a posting on the Small Business board.

As an alternative to a qualified plan some planners have recommended a "private pension plan" using life insurance products. I have several cases where nothing: integrated, age weighted, cross tested, ageless etc., "works" but the owners need and want to start setting money aside. An article touting the "private pension" in lieu of a qualified plan caught my eye.

The Business Journal of San Jose carried an article entitled "Plan wisely for retirement" "Small business may benefit from private pension plans" by David Burros, CPA, CFP. The URL is http://www.amcity.com/sanjose/stories/0427...98/smallb1.html

Life insurance policies in Texas enjoy the same creditor protection as a qualified plan and everywhere insurance enjoys income tax deferral. However the consumer press reported many sales presentations have been marginally within the law. In response Texas passed strict rules requiring clear labeling of illustrations as being life insurance policies.

I'd be interested in seeing what other planners think of the technique and what alternatives are available.

As an alternative to a qualified plan some planners have recommended a "private pension plan" using life insurance products. I have several cases where nothing: integrated, age weighted, cross tested, ageless etc., "works" but the owners need and want to start setting money aside. An article touting the "private pension" in lieu of a qualified plan caught my eye.

The Business Journal of San Jose carried an article entitled "Plan wisely for retirement" "Small business may benefit from private pension plans" by David Burros, CPA, CFP. The URL is http://www.amcity.com/sanjose/stories/0427...98/smallb1.html

Life insurance policies in Texas enjoy the same creditor protection as a qualified plan and everywhere insurance enjoys income tax deferral. However the consumer press reported many sales presentations have been marginally within the law. In response Texas passed strict rules requiring clear labeling of illustrations as being life insurance policies.

I'd be interested in seeing what other planners think of the technique and what alternatives are available.

Has anyone heard anything as to when the IRS will open up the submission of ongoing plans on restatement or when documents will be available for generation (i.e., Corbel?)

I am looking for some recomendations on administration software. I would prefer software written for windows vs dos software. If you wouldn't mind letting me know what you use,why you like it and how I can contact the company marketing it, please let me know. My email address is CDS@Willmar.com

Does anyone use language in the FMLA policy that states that the organization may designate a leave of absence as FMLA leave? Example: the employee is out on Worker's Comp and employer wants to run FMLA leave and WC concurrently. If you do, would you send a copy of your language to me at my email address?

Is anybody starting to market and/or comment in the national mass or industry media on the new (1/1/99) safe harbor 401(k)? I would appreciate any news, web page cites, and opinions. Thanks.

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]