katieinny

The ER currently offers discounts to employees who don't smoke, are within normal weight ranges and have good cholesterol and blood pressure readings. The same discounts are also offered to those employees who are not in such good shape, but are or were in programs or under a doctor's care to help them achieve success in these areas. Can the ER say that the discount will only be available AFTER success has been achieved? If not, can the ER say that the discount will only be available for as long as the employee remains in a program or under a doctor's care? Or can the ER insist on a certain number of documented attempts to achieve success?

A plan was amended in 1995 to say that distributions could not occur for terminated participants until NRA. Am I correct in telling the ER that the pre-95 money must always be available to a terminated participant?

A client has a 403(b) plan governed by ERISA because there are both Employer and Employee contributions going into the plan. I seem to recall that 403(b) plans do not have to be updated during a remedial amendment period like DB or DC plans. Also, I believe that there are no prototype documents available for them, only individually designed documents. Can someone confirm that these are true statements -- or correct me if I am wrong? If I'm right, is it because 403(b)s really aren't qualified plans?

I guess you're saying that there is no relief from the audit requirement for terminated plans.

A plan goes over the limit for the first time in 2001 and does the audit as required. Then the plan terminates in 2002 and all assets are out by 12/31/02. We're doing the final 5500 and hate to force a financially strapped client to pay for an audit for a terminated plan. Is there any relief from this requirement for terminated plans? If we file the final 5500 without an audit, does the client risk a penalty? If so, how much?

I know that the instructions for the Model SEP say that you cannot use the 5305 SEP if you maintain any other qualified plan. But if you are terminating a qualified plan and then establish the SEP, is there a problem using the model, or must the client go to a prototype instead?

"without the need to restrict the funds as plan assets" is the key I'm looking for. I just want to be sure that the "deemed IRA" rules that say those assets are governed by the IRA rules, not the QP rules does NOT apply to rollovers from IRAs.

I agree that if the rollover is coming from a conduit IRA where the assets were originally QP money, the rollover is not governed by the IRA rules once it is rolled to the QP. But, in light of the proposed regulations on "deemed IRAs," I'm not so sure we can assume a rollover from a regular, traditional or Roth IRA loses it's IRA status after being rolled into a QP. Does anyone know if anything definitive has been issued on this?

Of course that makes sense. I've been doing some substantial reading on withdrawal liability today. The amounts can be pretty stiff, so I wanted to get some input from others. Thank you all for your help.

I was just reminded that one of the issues for this client is that the term of the participation agreement expired -- and that's when the business shut down. Does the expiration of the contract have any affect on the withdrawal liability? What if it were another type of business, such as trucking, that was working under a specific contract that expired -- which resulted in the company going out of business?

That's exactly what I needed to know. Thank you for the input.

This was a construction business. So, when you say "does not face withdrawal liability," you mean that he will not have to contribute to the plan to cover the unfunded liability? He can simply walk away and be done with it?

Is it a withdrawal event if a business that was participating in a multiemployer plan ceases to exist. Are there funding liabilities?

Thank you for your information. I have printed off some information on the VFCP. Hopefully, the fact that the EE contributions are a couple of years late instead of a couple of weeks late won't change anything. So, in this case, the IRS doesn't need to be brought into this at all?

An ER recently discovered that a couple of pay periods worth of elective deferrals were not deposited to the plan for the 2001 Plan Year. Of course, he's willing to make the contributions and must calculate earnings (or losses) on those contributions. He'll need to come up with the earnings out-of-pocket. Is it possible that this could be dealt with via self-correction, or is it definately a VCP issue?

A small ER (husband and wife only) did not realize that they needed to file 5500s. What address is used for the letter they are preparing to request an abatement of the penalties? I'm quite sure it's not the usual address for filing a 5500 form.

I have several questions regarding QSLOBs, but I need to start somewhere. We have a controlled group that includes several companies. The owner of these businesses is a European company. I believe that most of the US companies can be treated as QSLOBs. Each of the companies has its own 401(k), and one also has a DB plan. A couple of the companies have just a handful of employees. They don't seem to overlap with each other or the any of the other companies. They don't meet the 50 employee rule for QSLOBs. What do I do with them? If they are covering all eligible employees in their plans, can they continue to maintain their own plans? A couple of the companies do similar businesses, and share a few employees. If each company can pass coverage and minimum participation on its own, and I allocate those few employees to one company or the other, can they still be QSLOBs -- or must each line of business be totally unrelated to each other? Some of the reading I've done implies that it's not worth it to go through the hassel of trying to meet the QSLOB rules. It seems that it's just as easy to test all the businesses together. Can anyone comment?

This doesn't happen to be a NY client. He's in a southern state, and the employer with the disability plan is also in that state. We're trying to determine if he can make a claim through ERISA.

Steve72 mentioned "recently effective regulations." I would like to look at that stuff. Can you point me in the right direction?

So, I would think that in the plan's handbook (or whatever was given to employees) there MUST be a description of how to make a claim under ERISA (after all other avenues have been exhausted). If that language is not there, the employer is in violation of ERISA. How am I doing so far?

An employee is told that his disability does not qualify under the employer's disability plan, and therefore his claim is denied. Does ERISA come into play here? Could he make a claim under ERISA?

Thanks for sending me to the right place. It doesn't look like we should recommend permitting a hardship in this case.

I know the safe harbor reasons for taking hardship distributions from a plan. Can I get some opinions on stretching the meaning of "the purchase of a principal residence" to "buying land for the principal residence" instead?

Found it. Thanks for your reply.

We have submitted a plan under the VCO program due to profit sharing contributions made for 2 employees who are in an ineligible class of employees. We will be transferring the contributions to an unallocated account and the ER will allocate the dollars to the remaining participants next year. The agent would like us to address how earnings will be calculated. These individuals were eligible employees for several years, then entered an ineligible class a few years ago. Is there a generally accepted method for calculating earnings for the years the employees were not eligible. It seems impossible since the employees were diversified amoung several funds offered under the plan and had the ability to change investments periodically.