KJohnson

The permissible methods of calculaiton are dictated by the statute (4211) and it should be fairly easy to find out which method the Plan uses. However, the actual calculation will be dependent on things such as your own employer's contribution history and the unfunded vested benefits of the plan which, in turn will be geared to mortality and interest assumptions. That is why I agree with Kirk that you should contact the Plan. In addition to their statutory obligations to provide estimates and information, I think they tend to be more than willing to walk you through any calculation that was made and the assumptions underlying the calculation.

My experience has been that multis are pretty good at explaining what goes into the calculation. If this is a potential withdrawal, look at 4221(e) of ERISA that obligates the multi to give you general information for free regarding the calculation and the multi is obligated to give you an employer-specific estimate if you are willing to pay the reasonable cost of providing such an estimate. Finally the BNA Tax Management Portfolio on multiemployer plans has a pretty good explanation of what goes into a calculation.

Carolyny--I think they are right that it is their fiduciary duty to take reasonable efforts to collect overpayments. However, those reasonable efforts should consider both the cost of recouping and the potential equitable defenses that a participant would have (in addition to a participant's assertion that the remedy sought is money damages and not equitable relief). I believe there are DOL Opinions that say as much--I think 77-08 was the first one that says you have to weigh these types of factors in collecting from participants (I think this also mentions going after the TPA who made the overpayment to recoup). Thus, I don't believe that a Plan fiduciary has a duty to go after every participant for every dollar of overpayments. Also you have an operational defect. However, I believe that the IRS's position is that you only have to ask the participant and as long as someone (i.e TPA, Trustee, Sponsor) puts in the missing money you should be able to self-correct. You might want to look at Question 130 on the Correcting Plan Defects Q&A's that are on Benefits Link.

I am not sure I understand how this would arise without a 125 Plan. Would there be any way for an employee to put pre-tax dollars into any type of 105 Plan without a 125 Plan in the first instance? Also I thought that 1.125-2 Q&A7 which prohibits such an offset applied to all 105 Plans irrespective of whether they are funded through a 125 Plan (although I have always wondered why they put this it in the 125 proposed regs rather than the 105 regs).

GBurns--I don't know if I would send him to the Tax Management Portfolio. In their "Communication Material" look at Worksheet 13 Question 15 which states that these amounts can be withheld. 15. What happens if I leave the ABC Corp.? If you leave the ABC Corp., no money will be put into your Medical Expense Spending Account after your final paycheck. Any claims paid to you from your Medical Expense Spending Account in excess of the amount you have contributed to the plan during the year may be deducted from your final ABC Corp. paycheck. If you leave the ABC Corp., you may still continue to draw money out of your Medical Expense Spending Account for unreimbursed medical expenses incurred during the plan year until your account reaches a zero balance. This is not in their sample plan, however.

You might want to look at this post. http://www.benefitslink.com/boards/index.p...t=ST&f=1&t=1472 The Supreme Court's decision a few weeks back in Great West might make it even more difficult for a Plan to recoup payments

I agree that no notice is required other than an SMM. No 204(h) implications for money purchase or db plans because this is really an elimination of an optional form of benefit rather than a reduction in accrued benefits.

This was specifically allowed in revisions to the 411(d)(6) regulations. See 1.411(d)(4) Q&A 10(B). Any such amendment is effective as of the later of December 31, 1998 or the date the amendment is actually adopted. The amendment also must be adopted prior to the end of the GUST remedial amendment period. Thus, if your Plan has not been updated for GUST, it is probable that the "in-service" distribution is still in place. If however, your Plan has been updated, you should check the language to see if the in-service distirbuiton option prior to actual retirement/separation from service has been eliminated.

I think that the "typical" result of disqualification is for the plan to be treated as a non-qualified plan funded by a secular trust--generally not a good thing. What I think this means is that all contributions during the disqualified period would be taxable to the participant and the trust itself would be taxed at trust rates on earnings. I also believe that under Code §402(B)(4) a highly compensated participant in such a plan will be taxed on the earnings in a secular trust (in addition to the trust being taxed) if one of the reasons that the plan is not qualified is its failure to meet the minimum coverage requirements of Code §410(B) [or §401(a)(26).]

I think the majority of the courts that have looked at this have stated that it is the status of the plan at the time of attempted rollover (i.e. if it is disqualified you can't roll over) that governs. However, when the IRS disqualifies a plan it usually does so for only specified years for either operational defects or because the plan is a non-amender. (e.g. a non TRA '86 amender would not neccessarily be disqualified prior to that date). I believe that there are a few court decisions that "pro-rated" the distribution between amounts attributable to disqualified years and amounts attributable to years that the plan was not disqualified. My recollection is that there is a discussion of these cases in the BNA portfolio on Plan disqualificaiton.

I agree, check with an attorney. However, for general information here is a survey done based on the status of state laws in 1999 regarding IRA protection:http://www.ici.org/issues/99_state_ira_bnkrptcy.html

This was in 2001-1 .04 A restated plan is required to be submitted if four or more amendments (excluding amendments making only non-substantive changes) have been made since the last restated plan was submitted. In addition, the Service may require restatement of a plan or submission of a working copy of the plan in a restated format when considered necessary. For example, restatement may be required when there have been major changes in law. A restated plan or a working copy of the plan in a restated format generally must be submitted for a plan that has not previously received a determination letter that takes into account all requirements of GUST. However, see section 3.04 of Rev. Proc. 2000-27 for exceptions to this requirement.

If you are talking about seeking a determination letter, I believe in the Rev. Proc. that is issued at the beginning of each year states that if a Plan has four or more substantive amendments a restatement is required. I haven't checked this provision recently, but that is my understanding.

I think the courts have had some diverse views on this. For example, compare 125 F.3d 715 and 137 F.3d 12 with 16 F.3d 907.

For what it is worth, you might want to look at 403(a)(1) of ERISA which says that a trustee shall have exclusive authority and control to direct the managagement of a plan's assets except to the extent that the plan provides that the trustee "is subject to the direction of a named fiduciary who is not a trustee, in which case the trustees shall be subject to proper directions of such fiduciary which are made in accordance with the terms of the plan and which are not contrary to this Act"

If I understand your question, as long as the participant is not in "constructive receipt" of the amounts from which he or she is deferring then it shold be o.k. Roughly speaking under the Code, as long as you have a salary reduciton agreement in hand before "pay day" then he or she should be able to defer from that check. Of course just because it is allowed under the Code doesn't mean your plan document allows it. You should check your Plan language on this issue.

On the other hand, the following is from the regs: Q-5: Can an employer or employee organization withhold money or other benefits owed to a qualified beneficiary until the qualified beneficiary either waives COBRA continuation coverage, elects and pays for such coverage, or allows the election period to expire? A-5: No. An employer, and an employee organization, must not withhold anything to which a qualified beneficiary is otherwise entitled (by operation of law or other agreement) in order to compel payment for COBRA continuation coverage or to coerce the qualified beneficiary to give up rights to COBRA continuation coverage (including the right to use the full election period to decide whether to elect such coverage). Such a withholding constitutes a failure to comply with the COBRA continuation coverage requirements. Furthermore, any purported waiver obtained by means of such a withholding is invalid

Aren't there three things involved--participation under 410, the definition of accrued benefit under 411(a)(7) and the number of years required to be taken into account for vesting under 411(a)(5)-(6). My understanding is that only the definition of accrued benefit (i.e. the restoration of forfeitures) can require repayment.

I obviously don't have the document in front of me, but if the condition for allocation is either termination when you have over 500 Hours of Service or being employed on the last day fo the Plan Year regardless of the number of Hours of Service then it would seem that you would be o.k. if you terminated prior to anyone accruing 500 hours because nobody has "earned" the allocation for the year.

EREAD, I think that restoring the previously forfeited balance and resuming participation are two different things. One can require repayment the other cannot.

In a defined contribution pension plan/group annuity context, generally everything that went into the policy is a "plan asset" and nothing can revert to the employer. However, in broad strokes, your understanding is correct with regard to welfare plans. Most of the insurance companies that have demutualized put out detailed guides that dealt with both reitrement plans and welfare plans.

You can "wrap" all of your welfare plans (including the cafeteria plan which is not really an ERISA plan at all) into one document with one plan number and file only one 5500. However, many employer plans are not written this way. I have always thought that each plan number needs a separate 5500. I believe the delinquent filer program for DOL is still open. Were 5500s filed in past years?

1974-3 appears to be just the Senate and House Commitee Reports on ERISA. I have it if you can tell me exactly what you are looking for (its fairly long) I know some employee benefit research services contain fairly good documentation on legislative history.

I agree with all of the above, but the decision to "go to cash" to faciltiate the change in providers is a fiduciary decision governed under the general "prudence" fiducary standards of Section 404 of ERISA. Of course, this prudence standard is guaged with reference to all participants in the Plan and not one particpant's desire to direct his or her own account. Thus, absent some unusual circumstances or some form of "self-dealing" on the part of the employer, it would seem that you would have a very "tough row to hoe" in any type of fiduciary litigation.

IFOREZ is correct, it all depends how your Plan was updated for GUST. Many have indeed eliminated the "in-service" distribution option at age 70 1/2. This was specifically allowed in revisions to the 411(d)(6) regulations. See 1.411(d)(4) Q&A 10(B). Any such amendment is effective as of the later of December 31, 1998 or the date the amendment is actually adopted. The amendment also must be adopted prior to the end of the GUST remedial amendment period. Thus, if your Plan has not been updated for GUST, it is probable that the "in-service" distribution is still in place. If however, your Plan has been updated, you should check the language to see if the in-service distirbuiton option prior to actual retirement/separation from service has been eliminated.