QDROphile

The plan provisions describe a post-death run-out period for submitting claims for pre-death expenses. They do not extend the period of coverage for expenses of dependents. I agree with J Simmons that there is a "duh" factor here and it is the fault of the drafter that possble impressions to the contrary are created.

What determines when the amounts become FICA wages? It sounds like someone may be acting as an administrative agent of the [now dissolved?] employer that is paying the FICA wages, but I am not clear about what is going on.

You are correct. Lump sum "payment" for health benefits over a number of years won't work under a cafeteria plan. It will violate the rule against deferral of income.

Maybe the important question revolves around the choice at termination of employment between severanc in a lump sum or in five years of installments. The cafeteria plan comes in later and offers a choice between the cash severance payments or the health benefits. So (1) is the severance payment over five years deferred compensation, and (2) is the election to defer (choose the installments) timely?

That is one of the primary concerns, but other circumstances could play a part even if the 25% ownership mark is exceeded. Also, the LLC could maintain ownership documents (e.g. deeds) in the U.S., but a few questions would go along with those circumstances.

What is the plan asset? Is it the LLC interest or is it the Costa Rica real estate? It may be tough to answer that question without getting into legal advice.

My suggestion is that if you are not experienced with secton 403(b) and government plans, you should not undertake any responsibility for plan documentation, especially in light of the new regulations that place an emphasis on plan documentation. I hesitate to send you rope with which you will hang yourself, but you may wish to look at the IRS model 403(b) plan document. It does not address the specific issues that you mention (the contract compensation is addressed indirectly, depending on circumstances), which suggests that some special knowledge is required to perform adequately.

If you look at the regulations, you will see two essential conditions. One is an appropriate reason, the other is lack of other resources. I think you can address each condition separately, as do the regulations.

Just to keep the arguments straight, my understanding of the question relates only to the safe harbor and six month suspension of deferrals. Sob stories are not an element and the standards for determination of other resources are manageable. Determination of appropriate reason for distribution is another matter entirely and expansion on the list in the regulations opens an undesirable can of worms.

You have to proceed under the premise that the plan failed to comply with its terms in failing to calculate the match based on compensation for the year. Correct accordingly under EPCRS.

Very much against safe harbor. Very little protection gained by it, except you can't administer in your sleep. Nonsensical. Why should you be prevented from saving for six months simply because you tapped into the 401(k) for college tuition? At that point, it is just punitive. Not that it should ever happen, but the provision messes up elective nonqualified deferred compensation as well, and can have an effect beyond six months because of the less flexible timing rules for deferrals. I can't remember if it interferes with employee stock purchase plans, but check it out. However, a lot of the big administration systems require it because of the belief that it allows the process to be automated.

The new regulations have not changed anything with respect to group term life insurance, see section 1.125-1(a)(3)(A).

403(b) money can be rolled over to a 401(k) plan. A distribution is required for a rollover. I am not suggesting that such a rollover is the appropriate way to deal with a lost participant. Nor am I suggesting that it is wrong.

Consider EPCRS, Rev. Proc. 2006-27

When brokers call, the answer is negative. That is a top ten rule.

If you think an unrestricted window is a designated option then you must have to conclude that it is an inappropriate option, with only a handfull of exceptions in the universe of particpant directed plans. Surely you cannot conclude that it is appropriate in up markets and inappropriate in down markets. No reasonable fiduciary could make such calls. So your position is that a fiducairy must resrtict the window. That is a rather daunting task unless the restriction is so severe that the fiduciary personally picks each option. Or do you think there is a middle ground? Except for limitation to domestic publicly traded securities how can a fiduciary limit the options to categories of investments? Some elements in each category are likely to be inappropriate. Perhaps the best arrangement is a reasonable menu of investment options, for which the fiduciary is responsible. If, in addition, an open window is available for the multitude of investment experts out there (who have been trained by Money magazine and golfing partners and believe they have a constutional right to direct investments), the participants are on ther own, withoust recourse to the uninvolved fiduciary when they get unlucky. But we don't have solid legal support for that proposition. The wiser course for most plans is not to allow participant direction at all.

Within the 404© playing field, I understand the statement that a fiduciary is responsible for monitoring the investment options that the fiduciary selects, and is responsible for the choice of particular investments that are "offered" by a plan. The fiduciary is also responsible for making a reasonable number of reasonable investment options available. Mort Klevan of the DOL once commented that he could not see how offering an unrestricted window could comply with 404© regulations. Are you saying that an unrestricted window is an option selected by the fiduciary in the same way that a fiduciary might construct a menu of mutual find investment options? Or are you saying that the window is outside of the 404© protections (or merely outside of the 404© regulations -- if that makes a difference)? If the window is outside of 404©, do the 404© protections still apply within the menu? Or is the the window not an investment that is designated by the fiduciary (see, e.g. references to "designated alternatives" in regulation section 404©-1(b)(2)(B)(1)(ii)), so different standards apply? Where the lines are drawn is interesting and important. It would help to be more precise about what is meant by statements about liabiity and how the responsibilities relate to the more traditional framework of a limited menu of options designated by a fiduciary, and more important, to provide reference to authority that speaks to fiduciary responsibilities outside of that framework.

If the distribution is not rolled over directly, 20% withholding is required and assets must be liquidated to the extent necessary to cover withholding subject to some exceptions not applicable to gold. An interesting question is whether or not the particpant can use outside funds to cover the withholding. If the participant did not elect a direct rollover of a cash distribution, the participant could use outside funds in that amount of the 20% withholding to achieve a 100% indirect rollover. So if the same principal applies ... ?

Oral surgery and new crown should be eligible for payment by the HSA. The terms of the FSA will determine what is eligible for payment by the FSA. FSAs may be limited in unlimited ways.

What plan terms provide for not allocating for a year the contribution made for that year?

What do mean by "coverage received to date"?

No blanket proscription, but you have to look at what is being proposed. A plan cannot write uncovered call options, for example, because the potential obligation could exceed the balance of the account. I don't see any problem with publicly traded options because the maximum exposure is the amount invested -- the option could expire unexercised. My personal opinion is that these sort of investments are inappropriate for retirement plans unless they are part of a sophisticated professional hedging strategy. Not stuff for individual participants. But those who want to do such things can seldom be advised. How much is the broker going to make on the trading? Rhetorical question.

All three. The easiest to address are plan document and then administrative rules and procedures. If the option trades are not disallowed by the plan design and administrative limits, you have to go to various legal standards. Hint: covered call options are OK.

The beneficiary account has different rights and features that must be tracked, however you may accomplish that.

Separate coverage and ADP tests, assuming only one unit.