Kirk Maldonado

I don't think that the PTE issue affects my concern about what entity actually pays the benefit. For the loan to work, the employer would have to loan the funds directly to the plan, with the plan using those funds to pay the participant.

One of my partners at a prior firm sat on a jury even though she was a litigator.

While not terribly responsive to your inquiry, I want to point out that COBRA imposes burdens on the employer; not the insurance company.

Yes. Many plans do that. They charge a flat fee each month for each participant. If the employer doesn't pick up the charge, it comes out of the employee's account. This discourages people from making small contributions to the plan (e.g., $100 per year).

I believe that there are major problems associated with the employer paying the amount. For example, it wouldn't be a payment from a plan. Therefore, it couldn't be rolled over, etc.

For what it is worth, here are some notes that I had stored on my computer: Employer was required to reimburse employee for medical expenses, even though employee was out of the service area of the HMO and the indemnity plan dissolved. Coble v. Bonita House, Inc., DC NCalif 3/25/92, 14 EBC 2824 .

I had our tech support guy point that out to me also. After several months of working with my notebook computer, I found that I vastly prefer it over a desktop computer, even though my desktop computer has a 17" color monitor. What made the difference, I came to realize, is that the LCD screen on the notebook does not have any flicker. I realize that personal preference plays a big factor in this, but people that still suffer from flicker (myself included), may benefit from switching to an LCD monitor. Be warned, though, that they ware much more expensive.

PAX: I agree with your comments if you assume that the plan's administration is run by the book. In my experience, the people that invest the plan's assets in very aggressive investments tend to be people that don't play by the rules. They tend to invest the plan's assets in the same way as their own personal investments. In fact, many of them don't even have a formalized investment policy (to ignore).

I agree with MBozek. Putting DB plan assets into aggressive investments doesn't make sense because the plan typically only assumes a modest rate of return in its actuarial assumptions. Remember that the goal of ERISA is to minimize the risk of large losses, not to maximize the rate of return.

There isn't an explicit reference in that Advisory Opinion, but it is a fair interpretation of it. I don't think that there is a need for an explicit rerference. How anybody could think that leaving plan assets uninvested is in the exclusive benefit of participants is beyond me. Anybody who thinks that shouldn't be a fiduciary. P.S. I think that Katherine is thinking along the right lines.

Fidu: I think you are missing the forest for the trees. Reread it and think about the bigger picture. It doesn't say expressly what you are looking for, but it is implicit in the DOL response.

Oscar: Thank you for your informative reply. Do you have a cite to that letter that you can share with us?

Look at DOL Advisory Opinion No. 93-24A and Associates in Adolescent Psychiatry, S.C. v. Home Life Ins. (7th Cir. 1991).

The ones where the benefits are paid directly from the VEBA to the employees are still around. There are no cases challenging them because they clearly work. I've set up many of them over the past twenty years.

If it isn't subject to ERISA, it could use any method of crediting service it wants. It could cross-refer to the regs or develop its own methodology.

RTK: I strongly suggest that you read section 645 of EGTRRA, which provides in relevant part: ‘‘(E) ELIMINATION OF FORM OF DISTRIBUTION. —Except to the extent provided in regulations, a defined contribution plan shall not be treated as failing to meet the requirements of this section merely because of the elimination of a form of distribution previously available thereunder. This subparagraph shall not apply to the elimination of a form of distribution with respect to any participant unless— ‘‘(i) a single sum payment is available to such participant at the same time or times as the form of distribution being eliminated, and ‘‘(ii) such single sum payment is based on the same or greater portion of the participant’s account as the form of distribution being eliminated.’’.

Unless the church elected to be subject to ERISA, then those regulations don't apply. If they do apply, though. All the rules have to be stated in the plan. On a historical note, I was the author of the final elapsed time regulations many years ago when I was at the IRS. However, I didn't do the drafting; that was done by the DOL, who handled the proposed regulations before that project was transferred to the IRS.

tyardley: You might get more responses if you indicated where you are located.

That's not how they work. The total premiums due under the plan are the amount of the benefits, increased by administrative fees. There's no way that the insurance company could lose money on them, at least the way the earlier contracts were drafted.

RTK: I don't recall seeing a 90 day notice requirement in EGTRRA.

ERISA Section 514 says no preemption of other federal laws, including securities laws.

You need to retain competent ERISA counsel.

A slap alongside the client's head?

Do we have the same client? I have the same issue with a client involving the same years. Is your client in southern California?

According to the definition of a "Qualified Beneficiary", domestic partners would not have COBRA rights. A QB must be a spouse or dependent child of a covered employee.