Kirk Maldonado

That is a person that has to file reports under Section 16 of the Securities Exchange Act of 1934. Generally speaking, auditors are not experts in securities laws. Also, that act severely limits their ability to do non-audit-related work, such as advising on securities laws matters.

I would change the emphasis of Becky Miller's posting a little bit,. Specifically, I think that the emphasis should be on intended and not on primarily. A mandate that more than half of the plan assets be invested in employer stock raises too many fiduciary issues, and I don't think is the correct interpretation. I must confess that I had been working on ESOPs for many years before I got that epihany.

Scrivener's error is a good suggestion, but whether or not the doctrine will apply in a specific case if very fact-specific. My research on this point lead me to conclude that it isn't nearly as valuable as you might think at first. You should get competent ERISA counsel to advise you on this point.

This concept is not new. Exec-u-care has been selling these policies for quite a while. Whether they work or not depends on how the policy is written. As to the IRS position on this issue, see TAM 8251008, August 31, 1982.

I think that the plan needs its own ID number because otherwise the payments are attributed to the employer. That could cause problems with the employment tax withholdings, especially relating to the taxable wage base.

By admitting you do that, then that makes it easier for the DOL to find the employer and harass them on this issue. It makes perfect sense from the DOL's perspective; you get employers to voluntarily confess in writing that they have sinned. That's like the tax that they used to impose on the possession of illegal drugs. If you paid the tax, you automatically admitted that you possessed illegal drugs.

The Corbel document seems inconsistent with Section 8 of Revenue Procedure 2000-20.

Check out the websites for The ESOP Association and the National Center for Employee Ownership.

RButler: The DOL informally states that those fees are impermissible, but has not taken a formal position on this issue, despite the fact that (my understanding is that) an application for an Advisory Opinion was submitted on this point a while ago. I think that the DOL is wrong on this issue.

I don't think you can use a prototype document for a multiple employer plan.

While I think that the fee should be disclosed in the SPD, I'm not certain that is literally required by the precise wording of the regulation. Here is the relevant portion: Plans also shall include a summary of any provisions that may result in the imposition of a fee or charge on a participant or beneficiary, or on an individual account thereof, the payment of which is a condition to the receipt of benefits under the plan. I believe that this language is aimed at the sitaution where the plan charges the participant a distribution fee in connection with the payment of benefits. I don't believe that this language is so broad as to sweep into its coverage the payment of any plan administrative expense. Believe me, I know from personal experience that the DOL knows how to draft broad language about paying administrative expenses out of plan assets.

I don't know of a text either, but a lot of issues regarding PEOs have been addressed in the "Who's The Employer" column.

There was an extended discussion on this topic in the past few weeks or so. You should be able to find it using the search function. P.S. It triggered a lively debate.

I don't think that is permitted under the Section 411 regs.

I agree with ActuarySmith.

I seem to recall that there was a U.S. Supreme Court case, circa 1960, holding that deferred compensation plans don't work for partnerships.

Tom: I'm not sure that this is helpful (or even responsive), but here are some notes that I have stored on my computer that involve cafeteria plans and HIPAA: According to the final regulations issued March 23, 2000, "if, in accordance with the special enrollment rights provided by HIPAA, an employee, spouse, or new dependent is entitled to enroll in a group health plan, a cafeteria plan may permit the employee to elect to enroll pre-existing dependents in the underlying group health plan."

Johnny: Who is going to audit the IRS to determine if there is compliance with the non-discrimination rules?

jaemmons: Despite the fact that I have over 1,000 postings, I have never "scolded" another poster. What triggered my reaction was that I felt that you were not making innocent misinterpretations of the law. Your positions were so fundamentally inconsistent with the statute and stated in such a conclusory manner that I felt that you were opposed to the transaction from a policy perspective, and you were just using the argument that the transaction violated the statute as a ruse. In other words, I felt that you were not being forthright as to why you were really against the transaction. However, I will take you at your word that those were honest mistakes, and I apologize if I have offended you.

Here's a cite to an article on this general topic: http://www.fool.com/taxes/2002/taxes021004.htm

Christine: Would you have the same concerns if it was an individually directed plan? It would be hard for the participant to sue the plan for letting him do what he wanted to do with the assets in his account (assuming that the shares go into his personal account).

Darla K: Have you looked in IRS Publication 502? You probably won't find anything exactly on point, but you may find something that helps.

MRoberts: You are right in that the examples in the article I posted are of extremely little relevance to the facts involved with the original poster. My only excuse for posting it is that I thought that the article might be of some (limited) interest to our general readers.

jaemmons: My recommendation to you is to not state items as being absolute facts unless you know them to be. That may require that you reread the statutes before you post replies. Had I not intervened, your erroneous postings would have mislead a lot of readers. Given the fact that you have posted two erroneous replies in this thread alone, I would wish that you would take the time to do your homework before you state things as being absolute facts. If you aren't willing to do that, as a courtesy to the readers you should caveat your response with the statement that you haven't read the statute in a long time. Stating things as being facts when you have no idea what is the right answer is reprehensible.

Mbozek: Read 4975(d)(13).