Kirk Maldonado

I did some research on the topic of hours banks a few years ago, and I couldn't find anything.

mbozek: As I stated in my earlier post: Check out Revenue Ruling 90-29, 1990-1 CB 11.

Christine: I think you might have been looking at the wrong portion of Publication 15-A. Read the text on page 11 under the heading "Leave Sharing Plans."

MRoberts: What is the source of your 31-day rule? My recollection is that the IRS said in the preamble to one of the set of Section 125 plan regulations that it was not imposing any such deadline.

My recollection is that some courts have taken into account voluntary terminations as well. The rationale is, if the person realizes that they are going to get laid off in the next week, they shouldn't be penalized for quitting one week before they were going to be discharged anyway. However, that unfortunately could bring into the equation normal turnover.

Why would the person want to contribute to the plan under these circumstances?

R. Butler: The answer to your question is contained in your posting. The regulation says that the list is illustrative, not exclusive. In other words, it is just one way that there could be a problem, not the only way.

MBozek: You are reading that example excessively narrowly. Paragraph (e) of that regulation is much more broad, specifically stating: Thus, a fiduciary may not use the authority, control, or responsibility which makes such person a fiduciary to cause a plan to pay an additional fee to such fiduciary (or to a person in which such fiduciary has an interest which may affect the exercise of such fiduciary's best judgment as a fiduciary) to provide a service. I think that a brother-in-law would law within that prohibition.

Mbozek: I think you would reconsider your answer if you read the DOL reg.

I agree with JPOD. Example 6 of DOL Reg. Section 2550.408b-2(f) says that using your son is a prohibited transaction.

efrueh: Or have you retained the services of such individuals?

DOL and IRS audits should not necessarily deter corporations from entering into ESOP transactions. However, it does emphasize the need to obtain the assistance of competent legal counsel and other advisers who are familiar with the nuances of ESOPs.

You might want to review the infamous information letter that the DOL issued to me on the payment of plan expenses. That was one of the specific questions that I posed to the DOL.

There is an organization based in Orange County California that is called the Self-Insurance Institute of America, or something like that. You should try contacting them for basic information.

I agree with Sandra Pearce.

The ex-spouse might want to ask her divorce attorney as to why this issue didn't come up.

Thanks.

You can get the form and the instructions off the SEC's website.

That information is available throughy the EDGAR. But you will need to use some third party service to search for the filings. Unless you are lucky, it will probably take you quite a while to find one.

AndyH: Do you have a cite for that article you mentioned? There is a dearth of articles on Davis-Bacon plans.

Yes. There was an SEC no-action letter issued to the American Bar Association about two years ago that spells out how to do it. P.S. You need to get competent securities counsel involved on this matter.

How do you deal with the situation where the employee has to pay his or her portion of the premiums for health insurance?

Check out: http://www.americanbenefitscouncil.org/doc...pdate061002.pdf

I agree with Mary C.

It sounds like the plan divided the total administrative costs equally among all participants. In every other case I've seen, the plan divided the cost among the participants in proportion to the proportionate size of their account balances. You should check this out.