KJohnson

If you change anything that is required to be in the SPD it is a material modification--so the answer is yes.

You may want to look at this discussion: http://benefitslink.com/boards/index.php?showtopic=462 and this http://www.benefitslink.com/links/20010724-012097.shtml

Yes, while you generally get a pass for purposes of coverage--410(B)--discrimination under a profit sharing or money purchase contributionk--401(a)(4)--and 401(m) --the ACP test-- you do not get a pass under 401(K)--the ADP test. Collectively bargained plans (whether multi or single employer) must run ADP.

Given the expanded rollover rules in EGTRRA, can an individual who turned 70 1/2 in 2001, is still employed, and is not a 5% owner roll amounts from his traditional (non-conduit) IRA into his employer plan to avoid any future MRDs (other than the one for 2001) until he actually retires. This assumes that the plan in question will adopt a good faith EGTRRA amendment to accept transfers from non-conduit IRAs.

If you are adjusting the profit sharing contribution by the match instead of the match by the profit sharing contribution then do you have a problem under 401(k)(4)(A). The profit sharing is dependent upon the match, the match is dependent upon the deferral and therefore you have the proft sharing dependent upon the deferral--a 401(k)(4)(A) violation?

Assuming you could pass ACP, I would do it the other way around. I would reduce the match by the profit sharing contribuiton. That way you know your profit sharing formula would pass a 401(a)(4) safe harbor. Passing ACP may be an issue. I guess under your scenario you would have a 5% profit sharing contribution and a match based on any amounts deferred over 5%. Who knows, it may actually work for ACP because someone who was making $200,000 would not be able to defer much over 5% because of the 402(g) limit. Look at the following link (where I believe that both you and MWedell weighed in, : http://www.benefitslink.com/mbmirror/4744.html

mbozek--Has the Service spoken on the issue of the timing of a catch-up amendment? Can't you just make it effectively available now and do the amendment at the end of the year?

Check out the "deemer" language on retroactive amendments in 412©(8) which gives mulits two years after the close of the plan year rather than 2 1/2 months after the close of the plan year for single employer plans.

I haven't researched it, but it sounds like you are seeking money damages and not equitable relief. Look at the Great West case that came out of the Supreme Court earlier this year--no money damages under 502(a)(3). However, if you are only trying to get the info, rather than the penalty then I would think this would work. Again, this seems most analagous to a liquidated damages claim when all contributions have actually been paid. Although I haven't done all that much multi work lately, my recollection is that a number of courts have shot down 515 on this and only allowed a 301 action. You might want to look at these cases to see if anyone ever tried 502(a)(3) as an alternative to 515. Also, depending on the language of your agreement, could you actually treat this as an additional contibuiton obligation under 515? A bit of a strech, but who knows. Unless you are worried about venue/jurisdicitonal issues on the 301 claim, why not just plead everything in the alternative?

This is from the old 125 Plan Q&A column Question 6: When can a company owner (whose spouse is also an employee) make use of pre-tax dollars in a Section 125 Plan? The owner holds 100% of the company ownership. Assume that discrimination is not an issue. Answer: Code §125(d)(1)(a) states that all participants in a cafeteria plan must be employees. The proposed regulations at §1.125-1 Q&A-4 define what is meant by "employee." The term "employees" includes present and former employees of the employer. All employees who are treated as employed by a single employer under subsections (B), ©, or (m) of section 414 are treated as employed by a single employer for purposes of section 125. The term "employees" does not, however, include self-employed individuals described in section 401© of the Code. Further, it appears that persons who own more than 2 percent of the shares of an S corporation are not considered "employees." (An S corporation is a corporation that has elected to be treated as an "S" corporation for income tax purposes, pursuant to subchapter S of the normal income tax provisions in the Code.) See Code section 1372, which states that for purposes of the "fringe benefits" portions of the Code an S corporation is treated as a partnership and a more than 2 percent shareholder of the S corporaiton is treated as a partner of such partnership. Remember to apply the "attribution" rules of Code section 318. The spouse of a 100% owner of an S corporation, LLC (Limited Liability Corp.) or a sole proprietorship would be considered to be the 100% owner as well. In this question, therefore, neither the company owner nor the owner's spouse could participate in the cafeteria plan. If the corporation is a C corporation for federal income tax purposes, nothing prevents the 100% owner of the corporation's shares from participating. He or she could be an employee and therefore eligible for participation. The spouse of the 100% owner also would be eligible for participation even though attribution would apply to a C corporation owner's spouse. Here's the interesting tidbit. A sole proprietor who employs his or her spouse (as a bona fide employee!) may not participate in a Section 125 plan, but the spouse may participate! This is because there are no shares to attribute in a sole proprietorship. Incidentally, this method also applies to family health insurance coverage. The non-owning spouse could elect family coverage (covering, as a dependent, the spouse with 100% ownership of the company.) The health insurance premium would be completely deductible

Chip's point is a good one. If you have in-service distributions you are really going to have to keep separate accounts even if you apply the joint and survivor provisions prospectively to the entire plan You cannot have in-service of the money purchas amount and you cannot eliminate the in-service because of 411(d)(6) issues.

I agree. However, given the different rules about death benefits/QPSA and QJSA all of your distribution forms and your beneficiary designation forms will need a good look-over.

You have to keep separate accounts which, as you accurately represent is a headache. I think that the other option is simply to prospectively draft your Plan to apply the QJSA/QPSA rules to the whole kit and kaboodle. I have heard Wickersham at the IRS say that adding a QJSA requrement will not be viewed as eliminating an optional form of benefit (although in theory "forcing" an annuity distribution absent spousal consent when a participant could previoly lump sum out without spousal consent would appear to be a problem). If you take this route I would think that you should get all new beneficiary designations. What do other people think?

Charles are you referring to a DB Plan or merging your money purchase pension into your profit sharing?

I think that the consensus is you only look to earnings. The employer essentially has use of plan assets (a prohibited "loan") and then you simply follow the explicit instructions in the 5330 on how you deal with a loan that is a prohibited transaciton.

You may want to look at this link. http://www.benefitslink.com/mbmirror/12136.html I believe you get the extended remedial amendment period because you were previously on a prototype even if you amended out of the prototype--assuming the prototype sponsor got its document in by 12/31/00. Thus you get the extended RAP. As a safety measure, if you "fit" under the GUST restated prototype (and again assuming the prototype was submitted by 12/31/00) then you could sign a certification that you will use the prototype by 2/28/02 to make "extra sure" that you have the extended RAP.

I know some collectively bargained plans have radically different contribution rates for apprentices and journeymen. Technically collectively bargained plans get a 401(a)(4) pass so that you could have any benefit structure you wanted and not have to do any testing. It would appear that you could give all highly compensated collectively bargained employees 100% of compensation up to $40,000 and give NHCE collectively bargained employees 1% and still pass. However, you had better make sure that you have a legitimate collective bargaining agreement and that all of the employees are "collectively bargained".

Kirk, I guess I am not really sure of the distinction. Suppose that you had supsension rules that were not as severe as those in the DOL regs where you only suspended if someone had over 110 hours in a month when they came back. (In other words you don't want to suspend for people who come back part-time.) Could you then amend the supsension rules in your plan and suspend when someone is back for 40 hours in a month as allowed by the DOL reg? Would this be any less an elimination of an optional form of benefit than having no suspension rules to begin with and then imposing them? Again, I haven't gone back and reread Spacek but my recolleciton is that the Plan changed the rules regarding suspension on someone who was already retired--but changed them in a manner permitted by the DOL reg. The Fifth Circuit said it was o.k. I think, per Carol Gold's comments, the IRS does not concede that the 5th Circuit got it right.

I believe that Carol Gold once informally took the position that institution of suspension rules, even if they complied with DOL regs would be a cutback (or proably more properly an elimination of an optional form of benefit). I think the rationale was that the DOL suspension rules pre-date REA and 411(d)(6). My recolleciton is that there is a case out of the 5th Circuit called Spacek that might deal with this issue and say that there is no cutback as long as your suspension provisions are consistent with the DOL regs.

If the owner wants them to continue to participate, I think to be on the safe side you would want evidence that the contineued participation was a subject of bargaining to avoid the top heavy allocation. I guess another quesiton is, even if they don't participate, whether you could permissibly aggregate with the collectivley bargained plan to avoid becoming top heavy in the first instance.

I think Bill is right that if you want this to be enforceable, you have to get it back to the collective bargaining agreement in some manner. Thus, if the rule is in the Plan and the Plan is incorporated by reference in the CBA it would be enforceable. If the CBA incorporates the Plan, the Plan gives the Trustees the right to make "rules" which are then binding on everyone who deals with the Plan, you may have problems, but at least the Plan would have an argument that is enforceable. I don't think that you would be going in under ERISA to enforce these provisions, it would be more of a 301 Taft-Hartley action for breach of a collective bargaining agreement. The most analagous thing I can think of is a liquidated damages claim in late contributions where the principle amount has already been paid. A number Courts have said that there is no ERISA action because ERISA only gives you liquidated damages on "delinquent contributions" and there are no delinquent contributions. However, they have allowed actions to go forward for breach of a CBA under Section 301 as long as the liquidated damages are not "penalties" (i.e. reasonable estimate of the damages to the Plan by the delinquent contributions).

I think E Read has the right analysis--is it neccessary for the administration of the plan. However, I know of many multiemployer plans that pay for seminars and continuing education for Plan employees. Also, many multiemployer plan Trustees go to educational conferences once a year and have their expenses paid from the Plan. I think that at the annual International Foundation of Employee Benefits Conference the itemization of expenses and reasonable expense rules is one of the first things that is emphasized to trustees and other plan employees who attend on the "plan's dime".

I agree its a pt, but wasn't there a case out of the First Circuit called Kwatcher in about 1989 or 1990 that got the notion of who is an employee under ERISA so terribly wrong. Admittedly it was not a p.t. decision, but I think it might actually support such an argument. I remember the opinion was fairly "witty" but I don't think they had any idea of what the were doing. I think the Supremes in Darden put this to rest, but I don't recall anything that specifically overruled Kwatcher. (Of course this is from recollection and I haven't gone back and read this case or Darden for that matter in a number of years).

You may want to look at the following DOL Opinions-- 89-28A, 86-20A and 86-21A. The notes that I have indicate that they deal with some type of performance based fee although I have not gone back and reread these recently.

I don't think they can refuse based on the Section of ERISA cited in my previous post. I would be interested in their response if you provide them with this cite. Under Taft-Hartley the Plan must be jointly trusted with union and management trustees. If the Plan won't give you an estimate even after you provide them with the statutory cite, you might want to try contacting one of the management trustees. I think you need to contact the Plan. My guess is that the union, understandably, won't give you much help if you are planning to withdraw and I don't believe that they have any statutory obligation to do so.