Kristina

The 25% limitation you reference is the 415 limit. It is an individual limitation. The family member scenario is family aggregation, which has been discontinued. The family attribution rules under Section 318 pertain to the determination of who is a key employee or a Highly Compensated Employee which is a different issue than the 25% of pay limitation.

Complete documentation of the market value on the date of transfer must be maintained in the corporate records as well as the plan records as verification of the amount of the contribution. I believe any plan can accept publicly traded stock as a contribution from the plan sponsor.

The SAR content changed to reflect the small plan/large plan filing. See Fed Reg 4/19/2000 and 6/5/2000. Date requirements are the same.

I assume you mean the 5500 form and all attached schedules. Yes, this is the information which he is entitled to obtain. A participant is not entitled to obtain information which would divulge directly another participant's interest or balance in the plan.

EREAD, I would agree that consideration would have to be given to what constitutes perfect attendance (Would FMLA time count,or vacations?) But I see so many problems if one just assumes that FMLA does not exist that I see problems with this whole premise. I can see employees being excited about having a similar structure outside of a qualified plan. A retirement plan is normally not as structured for short term reward with a long term payoff.

Could someone explain what the Family Medical Leave Act (FMLA) has to do with this question? I can see where the profit sharing allocation could be allowable, but I see many ramifications in deductibility and 415 limits, not to mention timing of the actual contributions. Am I alone in this?

Is the contribution to be made at the end of the year or on a monthly basis? I can see accounting for these amounts on a monthly basis, but not contributing the amounts until after the end of the year so you can determine who is still there. I am assuming that all of the employees considered would earn more than $33,600? How do you propose to verify 415 limits? What do you plan to do about deductibility?

The elections I used were irrevocable elections which ended upon the termination of the employee. There was one employee who chose not to defer receipt as he and his wife used the money for Christmas shopping each year. Are you considering allowing him to make a different election now? How can you change an irrevocable election?? With the tax ramifications so great on the required minimum distributions, I would be very concerned about missing an election if annual elections were used. 50% of any amount is a big nut for just about any tpa firm.

Wouldn't it be nice if the Employer's actions and intentions were actually covered in the plan document so that you could point out to him that last day/1000 hour language does not tie to periodic contributions and periodic contributions do not tie to an annual allocation formula.

What is the source of the forfeitures? Non-elective employer contribution perhaps? Were the participants who left the plan in the partial termination 100% vested, or were the forfeitures realized from their leaving the plan?

I agree with bzorc. When unlimited participant loans are allowed, the participants tend to look at the plan as a savings account and not a long term retirement account. The TPA will spend many, many additional hours determining the maximum amount that may be loaned in this quarter, not to mention the ever present "what if I borrow it over x period or y period" scenarios. Also, these participants tend to know when the employer contribution has been made to their plan and will time their loan requests to coincide with that. After my experiences with unlimited participant loans, my most liberal recommendation would be one new loan a plan year. One outstanding loan at a time would be more manageable.

All right, Dave! Remember, the pension field is our career, not the career of the participants.

Perhaps we do not have a dumbing down issue. Perhaps we have a "trying to cover too many issues in one sentence just in case we are sued" issue. The law is complex. Our communications job is to Keep It Simple. The declarative sentence could be a useful tool.

To R. Butler. We all need a laugh now and then.

Let's not be snippy. This topic was brought up, I believe, in an effort to point out that plan participants are not the only ones who can not follow instructions and, I believe, to encourage the benefits community to contemplate better methods of communication. Many of us tend to ridicule those participants who seem to be unable to complete forms as we clearly told them. Well, did we clearly tell them? I think not, if they still got it wrong.

Cook County Illinois has this same style of ballot, but without the arrows. It was easier on the presidential candidates as they were only one side of the ballot. My thought as I was voting for judges which were listed on each side of the column was that I wondered how many votes were disqualified because the names were directly across from each other and the two top holes were yes and the next two holes were no. I understand that the representatives got together to determine which would be first, but it is my understanding that each precinct designs their own ballots to fit the voting equipment they have. Why, oh why can't there be an immediate tabulation of the votes cast with paper backup. Oh, wait, I live in the "vote early and often" state.

Service providers provide services to the plan only. Not the services to the participants.

Just an FYI. In talking with a DOL person regarding the edit checks on the 5500's (The edit checks which were not shared with any software developer.) I was told that there were 30 edit checks on the Schedule H which tie to the audit report itself. It is very important that the Sch H and the Audit Report must match exactly, or that there is a footnote pertaining to any discrepancy in the Audit Report.

The PWBA (Pension Welfare Benefits Administration) is a division of the DOL. The helpful person at the DOL could have given you a telephone number for the PWBA. The number is available on the PWBA or the DOL website. The number I have is 202/219-8770, but I'm not sure it will be any more helpful than what you will find on the website. As a Third Party Administrator, I will say that it was not unusual to have four months go by before the valuation of the plan is completed and distributions made. Know that the Plan Administrator is required by law to make the appropriate distribution to you at the appropriate time. Also, you must be aware that the plan document could require that you incur a one-year break in service (a plan year in which you worked less than 500 hours) before a distribution can be made. If so, you will not receive a distribution until next year, based on your termination date and the assumption that you worked full-time. By law the plan document may provide that no distribution be made to you until you have attained Normal Retirement Age. Whatever the plan document provision is, a distribution can not be made until the document allows it. Getting upset and assuming the plan administrator and the third party administrator are conspiring against you only leads you to making less than pleasant phone calls, which just adds stress to some poor Shmoo doing the work and trying to make it through the day. You are within your rights to review the full plan document. Call your former employer (or the Plan Administrator listed in your summary plan description) and set up a time to go to their office and read the document. If the document says immediately, then you have grounds to be upset and can discuss it in a civil manner while you are there. If the document says as soon as administratively feasible, then you need to get a definition of that term. If the document says after a one-year break in service (which I doubt as you have already signed the paperwork) then you will have to wait until next year. Also, your summary plan description has a section as to what steps you must take to make a request or appeal.

Mary Kay. Because we are filing 5500's with the DOL and the IRS issues the EINs, I do not recommend that the ss-4 be sent with an incomplete 5500-EZ. I'm sure you will get a letter. Get the EIN before filing the 5500 or 5500-EZ.

I believe the instructions for the 1999 5500 series require that a EIN be obtained before filing. The SS-4 can be faxed and a number issued by the next day.

A common collective trust is when unrelated plans invest in the trust. I believe your issue is whether you have a master trust situation, but since the financial reporting for a Master Trust requires reporting the plan's share of the underlying assets, there would be no additional reporting. A better question is, Does (or Do) the plan(s) Trust Agreement(s) provide for the comingling of assets with another plan? Who will be the Trustees of the Plans, a common Trustee or different for each Plan? Since you already have a Group Annuity contract, having a plan split off as a separate plan adopting the same contract raises no difficulties in filing except for keeping track how much of the assets, income, expenses, etc belong to each plan. It is unlikely the insurance company will do that for you. You will still have the Sch D and financial statements to complete for each plan.

The Federal Register of 4/19/00 (65 FR 21068) contains most of the changes required to the SAR. You will need a copy of the old SAR format as this format either deletes or adds changes based on whether you are filing for a large plan or a small plan. The 6/5/2000 Federal Register contains changes to the first paragraph by deleting reference to the IRS and adding the reference to the PWBA. It also updated the address for the PWBA in the "Your rights to additional information" paragraph.

If my client does not have documentation that all of the parameters of 404© have been met in his files, I will not indicate on the 5500 that the plan is 404©, but that it is either partially participant or totally participant directed. I fear that coding the characteristic of 404© on the 5500 will just wave a very big red flag for bored DOL auditors, so I would want to verify that the documentation exists on the date the 5500 is filed.

Because the merged plan no longer exists, you will have to file a final 5500 series and indicate on the Sch H or I that the plan was merged with another plan and give the particulars about the recipient plan.