GBurns

The issue seems to be not that " the IRS has been known to disagree with a plan's past ADP/ACP testing and required fixes which disrupted anticipated participant distributions" but more whether the distributions can be suspended or delayed especially for an unspecified time. Disrupted versus suspended. Note that the old plan has NOT been terminated. It is not clear whether it even will be. That being the case I do not see how delays based on plan termination could be used as an excuse.

Why was the provider unsuccessful? Couldn't it be that they were unsuccessful because of a status issue?

vebaguru Your link is to ISTA. As far as I have ever known ISTA provides administration services and acts as an insurance agency, much in the same way that FBMA does for Miami-Dade PS and many other large PS Districts and States. It does not sponsor, maintain and operate the cafeteria plans and can lose its ability to administer. Here is a link to the Indianapolis Public School District. IPS is the largest employer using ISTA services. It is IPS who sponsors, adopts, maintains and operates their section 125 Cafeteria Plan that ISTA administers and sells products under. http://www.benefits.ips.k12.in.us/Summary_...ts/default.aspx

To whom is the PHSA applicable? What is the definition of "association" under PHSA? How would a VEBA be used ?

Thanks for the response. I found it quite an eye opener.

vebaguru In addition to examples of Taft-Hartley plans can you also cite a few of these teachers associations that sponsor, maintain and operate flex plans ?

This is a very important issue. Just ask the next three adult females, that you see, about the importance of doing eyebrows. And if you really want a revelation, if you are male, ask your female significant other to NOT do anything to their eyebrows for three days and see their reaction. Then if they really do nothing you will better understand the reason for amusement. I might make fun and find some comical and even ironic, but I realize that the issue has become an important one for them, even though self inflicted and often purpose defeating.

I know nothing about SEPs. I wondered about the employee status. Can you really have an employee with total income for 52 weeks of $350? How many hours could they have worked? How do they remain an employee if not at work for the vast majority of the year? As you pointed out "it is only employed with no pay limit, so it is the "employed" part that I wonder about firsst, then the "limit". Is there a minimum?

How do you maintain employee status with $350 per year? I understand that if you start a new employee in the last few weeks of the year, at a low enough hourly rate, that it is possible to only earn $350-$400 for that part of the year, but this employee apparently is not a new late in the year hire but has been there in 3 different calendar years. $350 for the calendar year at $6 per hour would mean that for the entire 52 weeks this employee only worked 60 total hours (OT not included). Even at Part time status, I do not understand employee status. This to me is casual labor. Wouldn't exclusion of PT, or by hours, be easier than using compensation?

Re 2: Why would reimbursement of substantiated medical expenses be taxable income? Re 3: What does the deduction of business expenses by an employer, a section 162 action, have to do with payroll taxes?

Or they could be looking surprised that others did not shave but plucked instead? Of course, there will be those who think that the look of surprise was because they found out that it might not have been such a good idea. Does it improve the looks of most? I find it comical looking in many.

None of the competing bidders filed any objection to the RFP , the bidding process or to the award. That suggests that there either was nothing to contest or they were not interested in providing services under the conditions. But looking at the vendor's Q&A neither conditions nor required services seem to have been a problem. Of course that does not say that the RFP was not designed with the end award in mind. I think that the NJ procurement code requires a minimum of 2 accepted bids at the final stages and a minimum of 3 at the bid opening, since this was not sole sourced. Since the RFP was very public and not restricted to any particular in-house list, if other providers were interested they could have easily submitted a bid. So while we don't know who or how many did submit responses, we do know that there were a few and that there was no filed objections to it being awarded to Prudential. The union action was against the change not against the award. ************* Joel: While it might beg the question, it supports my point that the employees have no interest.

And in those 25 years they have had numerous opportunities to change it. Maybe they do not care. 25 years of participation and now no mass objections, makes it seem like they accepted what was there and now will accept the change. Or they just do not care. Why should it matter to anyone else if it does not matter to them? They do not have to participate, they have alternatives.

What makes this "better" and How much less does it cost? How does it get around the ERISA, COBRA and FMLA etc issues that were raised?

I have never run across anyone who sells leads to anyone other than their own agents. Check your Broker Dealer or investment funds provider for a BD or sales agency that develops such leads. Since companies do not usually advertise that they are looking to change providers etc, such leads usually have to be developed through surveys or data analysis. The basic information used comes from services such as www.freeerisa.com (Judy Diamond and Associates). They have a service that will give you the names of the PS and plan data, from which you can use your own criteria to select targets for offering your services. Of course, a lot depends on which segment of the 401(k) market you are going after. I am curious. Why would you go into the 401(k) business without knowing where your prospects would be coming from? How do you select your service providers without marketing and sales support being a major item in the equation?

Sudden change in policy? They deliberated for a long time on deciding to have Mercer review the Plan. Then they spent time deliberating the Mercer findings and recommendations. Then they deliberated on doing the RFP. Then they planned the wording etc of the RFP, then released it in November 2004 with bid submission around January 2005. Then they took time evaluating and choosing a vendor in November 2005 with the change effective January 2006. That means from some time in 2002 until 2006. You call that "sudden"? Any how, as time goes by, things change or need to be changed. Maybe the State could no longer afford to use the same building and computer equipment. Maybe the current staff and equipment could not handled new services, such as online accounts. So rather than incurring the new costs they took the opportunity to expand the offerings, services and whatever else by getting a new co-TPA. I really do not know and it would take too much time to look for the whys and why nots. Since the particpants did not raise a stink, Why should anyone else? It is their plan, participation is voluntary and they do have alternatives.

I hope that you will let us know the final outcome. Aside from my curiousity, The issue might come up again for someone else.

Not knowing exactly what the members of any of the many unions would object to it is hard to be specific as to what steps could or should have been taken. There are more than 13 BUs involved in representing participating state employees. The Procurement Dept (or whatever it is called) did not just get up one morning with the bright idea to change the DC program. They had to get instructions to prepare the RFP etc. The Pensions & Benefits Dept also did not just get up one day and tell the Procurement people to prepare and send out the RFP either. Which means that there were planning meetings etc long before the RFP was put out in December of 2003. During the info gathering and planning there is usually an opportunity to have some input from the employees and their Bargaining Units. This is even more so if the DC program is part of the employment agreement or subject to the CBA. If it is then the BUs would have to sign off on at least a MOU before the change could be made. If not there are other hurdles that could be introduced. To wait for more than a whole year, to start objecting and then to wait until after the bid is awarded to challenge in this manner indicates to me either a lack of attention or a lack of interest. I notice that I have not been able to find any mention of an objection to the bid being awarded from any of the vendors who had responded to the RFP. That suggests that there was nothing to object to or a lack of interest in getting the business. Lack of such interest suggests that the competitors do not wish to match the fees etc that PRU is willing to provide the services for. Nothing to object to usually means that everything material was done in an acceptable manner.

Yes, the Arbitrator's decision applies to all participants, but that is irrelevant and not the point. Why only 1 union? What actions did any other Bargaining Unit take, assuming that their members asked them to take any action? If employees objected (assuming that they knew) their objections would and should be voiced long before the contract was entered into and therefore long before it got to an Arbitrator. Going to an Arbitrator is a last ditch type of stand. Where and when were the first steps in objecting taken? Maybe there were no objections because Locust is right, it might not be such a bad deal considering possible alternatives.

I hope that you do not think that there is only 1 union that represents all the employees who participate in that NJSEDCP ?

What does the SRA and employer agreement etc say? What does your state law say about such salary reductions?

Which judge, jury or authority decided that whatever was allegedy done, constitutes fraud? I suggest that you use a lawyer to determine what could or should be done, it is very dependent on not only the actual facts and circumstances but also on applicable law/laws of which ERISA and HIPAA should not be the only ones.

This sort of issue always makes me ask the same questions. Do the employees know about this? Do the employees even care? It seems that employees, especially public sector, really do not pay much attention to these things and even when they do they accept it even if to their detrement.

While there might not be ".. anything in the facts that indicates this is a contributory plan." by that same token, there is nothing that indicates that it is not, is there?. So there is no reason why taking any side is better or more correct than any other side. But is that even relevant? ********************** merlin Will you clear up some issues? It seems that the Plan itself is not the issue, so it should not matter whether there is anything that says that it was a contributary plan or not. The issue is the distributions, is it not? These distributions were done through the purchase of this annuity. I read this to mean that only the distributions are related to this annuity. Is that correct? Is this a group annuity contract or not? Who is the annuity contract issued to and what did the participants get, cash or coverage certificate? In other words, what is the nature of the distributions? Who is entitled to the settlement according to the settlement agreement? The contract owner or the covered insureds? It might be held that the certificate holders were the parties affected by the payment of undisclosed commissions since payment of commissions would have reduced their distributions. As such, any refund might really belong to those certificate holders.

The reason why OC declared bankruptcy is irrelevant. The fact is that governmental entities do declare bankruptcy. OC is neither the only municipality or governmental entity to have declared bankruptcy, anyhow. I cannot imagine that the Congress etc would have gone to all the trouble of creating Chapter 9 of the Bankruptcy Code for Municipalities etc, if there were not going to be governmental entities who would find it necessary to declare bakruptcy. And so far some have done so.