Christine Roberts

When the applicable plan provision (calling for offset of future distributions) fails to specify, how is the offset amount determined? For instance if a participant was entitled to a $400,000 pension paid over 20 years, but accidentally received (and spent) $1,000,000 in 10 years, is the $400,000 deemed to have been paid out within the 10 years or can the participant argue for a pro-rata treatment?

I am looking for information on setting up a top hat nonqualified deferred compensation plan for members of a limited liability company who receive self-earned income for services to the company. ------------------

Thanks for all the helpful comments. What appears to be your collective answer is as follows: 1. Provided that the annuity contract or custodial account has been amended, effective 1/1/98, to comply with SBJPA '96, specifically the provision in sec. 403(B)(1)(E), no plan document amendment is needed, per the IRS. 2. The DOL could possibly require plan document amendment but this is not likely. ------------------

Actually, I can't find anything in the prototype plan document stating the deadline for contributions, I was just assuming (always dangerous) that for deduction purposes 12/31 was the deadline. There is no year end requirement to receive a contribution, thus the question is raised, does the right to the contribution accrue on the first day of the plan year, or just as each installment payment is made? Employee expectations are an issue here. Also, the employer would probably just apply the existing installments toward the new, lower contribution amount.

For purposes of Code Sec. 411(d)(6), can the right to a discretionary employer contribution be said to have accrued before the contribution deadline (12/31 for this 403(b)plan), where the employer actually makes the contribution on a payroll to payroll basis? Employer has traditionally contributed 5% of contribution but wants to reduce this level retroactive to 1/1/99. ------------------

An employer maintains a top hat deferred comp. plan for key employees and wants to expand to include key employees of a business that is in "controlled group" relationship with the employer. Model documents seem to permit this - any special pitfalls to look out for? ------------------

By way of explanation, this plan is set up on a profit sharing prototype due to discretionary employer contributions. As examples of needed amendments, the definition of HCE, repeal of family aggregation, $5,000 cash out limit . . I am not familiar with an amendment exemption based on method of funding. What is the source? ------------------ [This message has been edited by Christine Roberts (edited 07-19-99).]

My understanding is that Rev. Proc. 99-23, 1999-16 I.R.B. 5, did not extend the SBJPA amendment deadline of 12-31-98 (or end of 1998 plan year, if later) applicable to 403(b)plans. Any comments on options for plans that did not meet the amendment deadlines? [Note: This message has been edited by CVCalhoun]

QMSCO requires employee's ex-husband to cover employee's son under his medical plan. Ex loses coverage due termination & apparently did not have access to COBRA. Employee elects to cover son under medical/flex plan. Ex-husband regains coverage with a new employer, and employee wants to make mid-year cafeteria plan change to drop son's coverage. Would this be permitted under the "catch-all" provision under existing proposed regs (1.125-2, Q&A-6©, or under new temporary regulations re: allowing changes consistent with QMCSOs and other family court orders Temp. Treas. Reg. Sec. 1.125-4T(d)? ------------------

What recourse under ERISA or otherwise would the sponsor or trustees of a defined benefit plan have against a plan participant to recover excessive distributions made to the participant over a period of several years? The plan has already stopped future benefit payments but is still considerably in arrears. Also, the participant initially notified the administrator that the payments were too large but the administrator ignored the advice and kept the payments coming. ------------------

This question relates to a cash balance plan but is asked also in relation to DB plans in general. Following default on a plan loan without a distributable event (hence a deemed distribution), must the plan continue to charge the same interest rate on the outstanding balance as applied prior to the default? It would be administratively preferable to reduce the interest rate, following the default, to a level equal to the amount that the plan is paying on the loan balance (e.g., from 8% down to 5%), otherwise the higher interest rate gradually erodes the account balance. It would seem that the interest rate reduction would not be tantamount to an actual distribution because the participant retains the right to repay the loan at any time. Any comments or conjecture on the Service's likely take on the issue would be appreciated. ------------------

When does Social Security Disability constitute Medicare entitlement, for purposes of a second qualifying event and/or COBRA cutoff? I have heard of a rule that a person receive SS disability payments for 24 months but cannot find this in writing. ------------------

Does anyone have the cite to a fairly recent article I recall seeing in a tax publication, comparing the pros & cons of having a corporate trustee, versus self-trusteed retirement plan? ------------------

If COBRA covers a self-insured medical expense reimbursement plan under Code Sec. 105(h), but is very unlikely to be invoked (due to fact that "premium" for COBRA coverage will cost 2% more than the reimbursements themselves)how best to handle COBRA notification requirements - without confusing employees as to what "benefit" they would receive from COBRA? ------------------

Seeking comments on the pros/cons of using a combined SPD/Plan document, for a self-funded arrangement that encompasses group health, dental and flex benefits. Also, any insights on how to document the employer's transition to combined document from current situation, in which plan document is maintained separately from SPD. ------------------

Two employees of the same employer who are unmarried and who both have health FSAs for unreimbursed medical expenses have had a child and would like to use the father's FSA for reimbursement of medical expenses associated with the delivery. However the mother is not the father's legal dependent. Although it would seem natural that the mother's health FSA be used for this purpose she will need to use all of her benefits to cover the cost of unrelated surgery following delivery. Is it possible to treat the delivery costs as pertaining to the dependent child so that the father's FSA can apply? I am concerned about possible charges of discrimination on the basis of marital status (unmarried), if this is not possible. ------------------

A dental plan that is part of a self-funded health/dental/flex arrangement excludes coverage for preparation of dental devices (crowns, dental appliances, etc.) in instances where the device was partially prepared (e.g. where impression for prosthetic device was made, or tooth prepared for a crown)before coverage under the self-funded plan began. Presuming that the prior work was covered by a group health plan and there has been no break in service for purposes of HIPAA, would the pre-ex. condition exclusions prevent application of these restrictions? ------------------

Can anyone confirm whether or not USERRA rights of reinstatement, benefit parity etc. are applicable to persons who voluntarily leave employment to join the military or to upgrade existing military skills? ------------------

My question should have been, will the bonus plan avoid ERISA coverage AND result in deferral of income on non-vested amounts?

Didn't recent regulations under HIPAA address whether requiring an employee to be "actively at work" in order to be eligible for health coverage would constitute a violation of HIPAA's discrimination provisions? I cannot find any discussion of this issue but have a clear recollection of it being addressed at some point. ------------------

Can a bonus plan that vests performance bonuses 20% per year for seven years avoid ERISA coverage? Intended recipients are in mid-30s and are not necessarily in "top hat" group. ------------------

Would a requirement that an employee not go to work for the employer's client constitute a substantial risk of forfeiture, for purposes of a nonqualified deferred compensation plan? This is not technically a non-compete requirement as discussed in section 1.83-3(B)(2) of the regs. ------------------

Is anyone familiar with the procedures and options when a plan's group annuity provider is reorganized and "demutualized," with a resulting distribution to the plan of shares of stock in the reorganized entity (or cash equivalent)? Standard Insurance Company is currently going through this process. ------------------

The answer to this question, per Harry Beker of the IRS (Sec. 125 maven), is that it is not an automatic plan disqualification issue but could result in plan disqualification on audit.

The answer to this question, per Harry Beker of the IRS (Sec. 125 maven), is that it is not an automatic plan disqualification issue but could result in plan disqualification on audit.