E as in ERISA

The definition for welfare plans is different than that for 401(k) plans, etc. I don't have it in front of me -- but I think that the general conclusion is that it only applies to those who have enrolled in benefits.

Since all employers in a controlled group are considered a single employer, the plan would not be a multiple employer plan. But if related employers don't meet the 80% test and are not technically a controlled group, then the plan would be a multiple employer plan.

I don't have a link to a sample -- just something to consider in drafting. The purpose of the wrap is generally to just merge several benefit arrangements into one plan in order to save costs on audit and reporting requirements (e.g., one audit and 5500 instead of ten). So it could be a relatively simple document. However, most of the time the underlying plans don't have documents that are fully ERISA compliant. So in many cases it may be necessary to prepare a more comprehensive document that provides the additional terms. You might want to confirm whether the scope of the project is the former or the latter.

What is the employer's tax year?

File as much as you can on 10/15. Respond to any notices from the DOL ASAP with as much info as you have. You typically won't get a penalty notice for at least a few months. This is not guaranteed, but it is typically how it is handled. Your other choice is to file under the delinquent filer program and pay a fee.

Your description is pretty good -- multiemployer is usually collectively bargained and multiple employer is not. However, I would not say that multiple employer are not related in any way. Multiple employer is typically used when the parties are partly related -- but not the 80% that is needed for a controlled group. For most testing purposes, each employer is tested separately. However, if there is a failure of one employer it can potentially taint the whole plan and trust. That is why it is usually used in a situation where the employers are partly related.

You do limited reporting.

If it has employer contributions, then it is an ERISA plan subject to filing, etc. Coverage, discrimination testing, etc. generally apply to the employer contributions.

A merger is a continuation of the plan, but in combined form with another plan. So you only need to have merger documents, not termination documents. (Note that your merger documents need to cover both the merger of both the plan AND the trust.) If you're just picking an arbitrary date for the merger, you should consider 12/31 as a possible date. That will resolve many of reporting issues. Plan A assets may not physically transfer at that date. But you would generally report them as owned by Plan B at that date if both the plan and trust documents have been properly drafted to legally transfer them at that date.

If it's a 403(b), how was it "terminated"?

If you're looking for "cites", you could look at the rulings on automatic enrollment. In those cases, an employer can clearly require a person to fill out a form in order to get zero taken out.

But does that deal with the use of classifications? It is legal for an employer to provide different benefits to different classifications of employees -- e.g., part time v. full time -- and employees work just enough hours to be considered full time so that they can get health benefits. So where do you draw the line?

Okay. I see. Slightly different issue. It is a matter of negotiation at the time of employment? A person hired into category A dollars gets compensation of X + Y and zero benefits, while a person hired into category B gets compensation of X and benefits of Y? My vague recollection is that was okay. But I can't recall the source and I'm not 100% certain.

There are still requirements to meet...but they are different.

As mbozek said, the universal availability rule is satisfied even if you exclude employees covered by a CODA. See 403(b)(12). But as he also noted, if you are having trouble passing ADP with the 401(k), you could also just consider using the 403(b) for all employees because there is no discrimination testing for the 403(b).

More than the cost of an audit: $50,000

Are you sure that they set up a 401(k) and not a 403(b)? The latter would look very similar to a 401(k), but it could be set up as a non-ERISA plan (all the employer does is take the payroll deductions and pass them on).

Is the problem just that your provisions use the "prior year" testing method and you need to use the "current year" method if you are going to be switching to and from safe harbor? I'm not aware that there is anything in the IRS check sheets (http://www.irs.gov/retirement/article/0,,id=97188,00.html) that require elimination of ADP/ACP from the document.

If the $81.00 402(g) excess didn't occur until after 6/30/03, then why would it be taken into consideration for the 6/30/03 ADP testing? I realize that you may be performing the testing after the 402(g) excess has occurred. But you are testing as of 6/30/03. Any catch-ups used at that point would be taken into consideration for purposes of determining the 402(g) excesses occurring after that.

What type of entity is it and what type of compensation was Dr. A taking? Is there is any basis for claiming that there was no income from which a deferral could be made? E.g., if this was a partnership, maybe there is a position for saying that Dr. A's extra "expenditures" reduced his income to zero under the terms of the partnership arrangement. And he can't make deferrals on zero income. Just a thought. I agree with the others that counsel should be consulted.

There is not enough info there to determine. It depends on the details of when the contributions were made and which limits were exceeded.

No. But here is an html version that you might be able to cut and paste in a dozen steps or so.

Yes. $400. If you do payroll matching, then no true-up is required. See Notice 2000-3, Question 2.

I don't believe that very many would be "deemed 125" plans -- that would generally only be a medical plan that requires employees to participate in the plan under certain circumstances (e.g., under the facts of Rev. Rul. 2002-27 the employer required participation if the employees didn't certify outside coverage).

The plan's definition of compensation should tell you whether it is compensation for the plan year or compensation from the date of participation (usually the former, unless it specifies the latter). But the date of participation is the date on which the employee becomes eligible -- not when they start deferring. See Notice 98-52, Pt IV, Sec B.