GBurns

Isn't there an Agreement with the employee or a Plan Document that spells out what can and cannot be done?

Considering that the Administrator is usually paid a fee, whether by the employer or employee, I do not see why it should not be a duty of the Administrator to notify employees about their balances, It takes little more effort than "pushing a button" and mailing the notice. What does your SPD, PD and TPA Agreement say?

You did not state what type of job you hope to get in the "401k sales industry" (whatever that is), but in any case I must point out that large does not mean good. The biggest or largest might not pay you the best etc etc. You might want to consider redefining and reanalyzing whatever it is that you are thinking of.

Considering that most people do not and even cannot balance their own checkbook, why would you want to put the burden on the employee to reconcile the account? In addition, what happens if the employee gets Quarterly statements, he/she probably had not yet received the statement for reconciliation anyhow. In any case this is not a problem that can be blamed on the employee even without the mail box rule. Sue, You did not state what your function was and why the contribution was sent to you. I also wonder why this contribution was alone by itself. When amounts are deducted from employees on a payroll it is treated as an Accounts Payable item and there is a total for each category of deduction such as "401 (k) EE deductions Payable" "FICA Payable" etc. The total amount of the category has to be distributed (to the Trustee etc) usually as a single check accompanied by a list showing the amount for each individual. If there are distributions to multiple parties, the distributions must add back to that total. A simple balancing of the accounts. If an employee contribution is missing it should have shown up long ago and should have been questioned without the involvment of the employee. This does not look like an employee problem, this looks like a sloppy bookkeeping and alack of accounting controls by the recordkeepers.

I certainly hope that you do not expect every post to dot every "i" and cross every "t". It goes without saying that the plan must be compliant. If the plan satisfied 105(h) but was never adopted by the company it would not be valid and the deductions would be disallowed and the benefits would not be tax free.

I would say that although there has been nothing that I have seen FASB or otherwise, I would not follow 85-4 or anything elsse blindly considering that the treatment stated has not stood the challenge of the IRS our the Courts. There have been a number of rulings that have pointed out that most of the COLI plan designs are not acceptable. The ownership of the asset, the deductibility etc etc are all now subject to questioning. 85-4 etc were all based on what has now turned out to be fallacious thinking therefore each case should be evaluated separately and not under anything general.

Are you saying that on the weeks that the child does not attend the day care, the teacher mails or drives there and pays them the $225???

What would make a PEO an eligible sponsor of a 403(b) plan????

He should have a written plan with a Board resolution. The IRS and Courts have indicated that such benefits are not subject to retroactive adoption. Look on the IRS website for a Coordinated Issue paper on the subject and look at Revenue Ruling 61-146. If done under an adopted medical expense (or premium reimbursement) plan the payments are not taxable income to the employees or former employees, however, the employer has to get proof of payment of the insurance premiums.

When is this employee charged this money and when do they pay? If after missing the two weeks at Christmas, does the daycare bills the teacher $725 which must be paid before the child is taken back in? Isn't this the same as a registration or enrollment fee? Or isn't the $725 the day care charge for that week?? If this teacher was billed monthly or per semester etc, the questioned money would have been included and you would have reimbursed it and would not have questioned it. If it is reimburseable if paid monthly or quarterly etc why is it not reimburseable when paid weekly? This is not an elected option by the teacher for additional services, it is the charge imposed by the day care provider.

Are you sure that this employer credit is supposed to be included in the employee's wage? WHYY??

Lisa From what you posted, Are we to understand that it is your position that if the day care charges $250 per week and if the child is sick 1 day and does not attend and on that same day the mother stays home from work to attend to the child (Dr visit etc), you would advise that that 1 day is not eligible for reimbursement??

pax A physician could write a prescription for an otc medication just to make it eligible and to certify the medical necessity. Take a look at some of the Rev Rulings and other guidance issued in the last 2 years regarding weight-loss, cayenne pepper, Christian Scientist practitioners, wheel chair accessible vehicles, stop-smoking treatment etc. to see what the IRS position is. As the IRS points out it is not the fact that it is prescription or OTC but whether or not it is for the treatment etc etc of a eligible condition.

mbozek Thanks. This is what I was seeking and also what I think that billfgrady was looking for in the original post. However, Rev Rul 80-351 does not state whether or not there is an actual section of the IRC or Treas Regs that directly addresses the waiver, although it most likely that it is not necessary to have such a section. Do you know of any such a section? If the employee waives participation (coverage requirements etc not being the issue raised) then there would be no non-elective contribution possible for this employee regardless of the method or formula used for allocating the employer PS contributions. This would serve the purpose that billfgrady seems to need to satisfy.

Mike, What does disqualification have to do with the question that I asked of how you determine how to allocate your PS contributions? The question of disqualification only arises if one chooses to do something that is not allowed and which is a disqualifiable offense. The question is just a question not an action taken or a recommendation. Unless your answer would raise other issues or contradict something else that you have said.

1.401(k)-1(e)(6) which deals with "Other benefits not contingent upon elective contributions", did not seem to have much relevance except to point to matching contibutions as defined by 1.401(m). I did not say that anything could be labeled as something else, my post stated "A "match" is specifically a match" etc. The question that I asked you still remains unanswered " Mike How is allocation usually determined with your PS contributions? A % of deferral, a % of salary etc ?"

What is a KEYSOP? Right after I posted the question I realized that I could probably find the answer in a previous thread... and I did.. http://benefitslink.com/boards/index.php?showtopic=1577 A Google search also provided a lot of info. After reading I thought "Here we go again". As far as I know there is nothing new EXCEPT intensive IRS action against illegal and abusive tax shelters and coming action against promoters and users. This includes COLI, BOLI, Reverse Split Dollar, Split Dollar etc etc and many items promoted by the Big 5 and investment bankers. You might also want to search "tax shelters" "illegal tax shelters" "abusive tax shelters" etc. Then decide what category you think this falls into. I suggest that you seek specific tax code and Treas Regs references rather than interpretations by a promoter. I would also wonder why there is not even 1 PLR on any aspect of the plan after all this time. I would also question whomever wrote the opinion letter (if there is even one) that is used as support to make sure that they are still standing behind whatever they wrote. But most of all I would advise anyone to get their own opinion Letter from their own selected lawyer and then consider their own PLR.

Re:" If it is a percentage of deferral it is a match, no?" No!! All apples are fruits but not all fruits are apples. The employer PS contribution can be based on a variety of formulas. 1 formula could be based on compensation, another could be based on participation (elective deferral). A formula that uses participation (elective deferral) would look like a match but would not be a match. Using the participation (elective deferral) does not make an employer PS contribution a match. A "match" is specifically a match. Calling an orange an apple because it is a fruit does not make it an apple regardless of any similarities one might find.

You posted that it was "purchased by his dentist". Assuming that you really meant "from his dentist", I wonder what was the reason for the purchase? Was it part of a specific treatment program for a specified disease? Was it part of a general maintenance program? I think that the difference between this case and an OTC purchase needs to be clarified.

Although 401(k) plans are "classified" by the IRS as Profit sharing plans, they really have nothing to do with whether or not the employer actually makes a profit or not. The decision to allocate a contribution by the employer is controlled by other issues not the posting of a profit in a particular year.

Are you using the term "multiemployer health and welfare fund" as if it meant "multiemployer health and welfare plan"? The fund is not the plan.

Mike How is allocation usually determined with your PS contributions? A % of deferral, a % of salary etc ?

Fidu2 Where did you ever manage to find or where do you think that you can find these "institutional investment managers with skill and experience choose to buysell futures" ? Have you checked the actual track record of anyone claiming such "expertise" or were you just being hypothetical?

In a 401(k) isn't the "profit sharing contribution" usually if not always an employer "match" based on the employee's elective deferral? If there is no employee deferral then any matching % X $0 = $0

Is it allowable or possible to, instead of waiving participation, just elect to have no further contributions? Would that not have the same effect from the participant's position without affecting the plan as far as testing etc goes?