waid10

I have a new client whose money purchase pension plan and profit sharing plan are under audit. Apparently, neither plan had been amended to comply with regulatory changes starting in 1981. The IRS is instructing me that to bring the plans into compliance and not lose qualification, all required amendments must be drafted and adopted, starting with TEFRA/DEFRA/REA, and going forward to present day. It seems quite silly to execute these amendments when GUST and EGTRAA supercede them. Notwithstanding the fact that I was 8 years old when TEFRA came out, can anyone point me in the direction of a good resource or model amendment for TEFRA/DEFRA/REA? I am not sure where to start in drafting such an amendment.

Part of continuing eligibility within the Plan is to complete the health survey (from a third party vendor). None of the survey results will be shared with the employer. However, refusal to complete the survey will result in the employee being dropped from coverage. Even though the loss of coverage is not for a COBRA qualifying event, can the employer voluntarily offer COBRA?

Can an employer voluntarily offer COBRA even if it is not required (i.e., there has been no qualifying event)? My employer is making a health survey a requirement for eligibility. If I refuse to complete the survey, I will not have fulfilled the eligibility conditions, and then cannot enroll in the plan. If I am dropped from coverage due to not fulfilling the eligibility requirements, it is not a COBRA qualifying event, but can my employer voluntarily offer me COBRA?

We currently handle pension distributions in house. We have encouraged participants to permit us to do direct deposit of their monthly pension checks, so that we don't have to mail them. We have now engaged a vendor that will handle the pension distributions. The vendor will need employee data to continue the distributions. This would include the direct deposit and other info (bank, bank acct number, name, address, social security number, etc.). I am hesitant to just transfer this data. Is it enough to notify participants this data will be transferred to the vendor? Or do we need to have the participants complete new direct deposit forms sent by the vendor/administrator? Please help!

I don't know the answer but I am guessing that COBRA coverage is more expensive than coverage under his wife's (and our Company's) plan.

We have an employee who is on the Company's medical plan. Her husband works for another employer and will be going on long-term disability effective Oct. 1. Can her husband enroll in our Company's plan or is this not considered a qualifying event? I’m assuming his coverage will terminate since he will be going on LTD. Thanks for any insight.

What do you mean you "noted a merger"? Did you file a 5500 for the wrap plan and somehow indicate it is a merger of the individual plans?

Hi. We wrapped our welfare benefit programs into one plan mid year. Does anyone know the proper way to file 5500(s) for this year. Do we need to file separate final 5500s for all of the individual programs, or can we file one 5500 for the wrap plan? I don't know which is the proper way since we wrapped our programs into one plan in the middle of the year. Thanks.

Hi. We wrapped our welfare benefit programs into one plan mid year. Does anyone know the proper way to file 5500(s) for this year. Do we need to file separate final 5500s for all of the individual programs, or can we file one 5500 for the wrap plan? I don't know which is the proper way since we wrapped our programs into one plan in the middle of the year. Thanks.

Hi. We wrapped our welfare benefit programs into one plan mid year. Does anyone know the proper way to file 5500(s) for this year. Do we need to file separate final 5500s for all of the individual programs, or can we file one 5500 for the wrap plan? I don't know which is the proper way since we wrapped our programs into one plan in the middle of the year. Thanks.

Becky - I understand your concern. Unfortunately, I am not making policy at my employer. I am merely following instructions. So, does anyone have any ideas how to make something like this work?

My employer would like to begin offering some sort of phased retirement package, and have asked me for ideas on how to do so. They would like to allow executives that are in their early 60s, the option of cutting back hours to 20-30 hours per week. The difficulty is that these executives will have their categorization changed from full-time to part-time employees. This fact will eliminate the individual from eligibility for certain benefits (i.e., disability) and increase cost for other benefits (i.e., health insurance). One option we are talking about is creating some sort of separate welfare wrap plan for these individuals. That way, they would not lose welfare benefits when they cut back. However, these are all high paid executives, so we could possibly run afoul of discrimination issues. Another thought is to gross up the salaries of the individuals cutting back their hours. That way, they could go out and purchase certain welfare benefits on their own, but not suffer financially. The big issue here is that we are talking about employees in their early 60s. If they have to go purchase their own life insurance for a benefit of 2.5 times salary, it will cost a small fortune. Does anyone have any other thoughts on an approach to this? What have other companies done? Thanks.

Is there any type of Notice that must be given to participants prior to transferring the funds? I had been deferring my compensation over a period of several months. I retired, so I vested in the plan. I thought my old employer had to provide a 45-day Notice if they moved the funds to a different administrator. Any thoughts?

We have an employee that went on active duty in 1986 and returned to employment in 1990, both before USERRA was enacted. He has only now brought it to our attention that he wants credit for his time on leave. The individual that he gave his notice of leave to is now deceased. The documentation we have makes it appear as though he resigned from his job and then enlisted in the military a month later. When he finished his tour of duty, documentation indicates that he was re-hired a month after he returned. What is the proper way to treat military leave situations prior to when USERRA was in force?

We have an employee that went on active duty in 1986 and returned to employment in 1990, both before USERRA was enacted. He has only now brought it to our attention that he wants credit for his time on leave. The individual that he gave his notice of leave to is now deceased. The documentation we have makes it appear as though he resigned from his job and then enlisted in the military a month later. When he finished his tour of duty, documentation indicates that he was re-hired a month after he returned. What is the proper way to treat military leave situations prior to when USERRA was in force?

We have an employee that went on active duty in 1986 and returned to employment in 1990, both before USERRA was enacted. He has only now brought it to our attention that he wants credit for his time on leave. The individual that he gave his notice of leave to is now deceased. The documentation we have makes it appear as though he resigned from his job and then enlisted in the military a month later. When he finished his tour of duty, documentation indicates that he was re-hired a month after he returned. What is the proper way to treat military leave situations prior to when USERRA was in force?

The Plan does permit participant-directed investments. However, the Plan document does state that the investments selected must be acceptable to the Employer. Also, the Plan document states that the Employer intends to invest contributions according to the participant's direction, but that the Employer reserves the right to invest the contributions without regard to such directions. So it appears that the Employer can put the funds wherever it chooses. I would think that since I am retired and have vested (on termination) in the funds, I now have the power to keep the funds where I want them. Am I off base here?

Is your answer different if I tell you that the 457(b) Plan allows deferrals of participant compensation? Is your answer different if I also tell you that I am retired?

My employer is a non-governmental tax-exempt with a 457(b) Plan. The employer recently terminated their 457(b) Plan administration contract with Administrator A. They have engaged Administrator B to handle the 457(b) Plan. The employer moved all of the participant accounts and investments to B without consent of employees/participants. Was this permissible? What if I had wanted to keep my money with A? Can anyone direct me to the rules on this? Thanks.

The new vendor is calling it an amendment and restatement of the plan (and not a termination and adoption of a new plan). How do you really tell the difference? I suppose whichever characterization you choose is what drives whether their is a distributable event or not. Any thoughts? Please help.

So even though the new vendor is putting in a new plan, it is not treated as terminating the old plan? I thought that would be a distributable event and permit the rollover of 403(b) funds to whomever the participant chose.

Hi, two questions: 1. We have a 403(b) Plan. We have decided to change vendors. Our new vendor is putting in place a new plan document, which we will execute. Our HR department is getting calls from financial planners saying that their clients (a few of our employees) have the right to immediately roll over their account balance. The financial planners claim that by executing a new plan with a new vendor, we are basically terminating the old 403(b) plan. I am not aware of a permissible rollover unless a participant terminates. Does anyone know? 2. So when we adopt the new plan, participant account balances are still sitting with the old vendor. The old vendor told us they have a new product coming out. However, for employees to take advantage of it, they have to roll over their account balances. It is strange to me that a participant, with money with that vendor, would have to roll money over. Any thoughts? Any clue on these questions is appreciated.

Hi, two questions: 1. We have a 403(b) Plan. We have decided to change vendors. Our new vendor is putting in place a new plan document, which we will execute. Our HR department is getting calls from financial planners saying that their clients (a few of our employees) have the right to immediately roll over their account balance. The financial planners claim that by executing a new plan with a new vendor, we are basically terminating the old 403(b) plan. I am not aware of a permissible rollover unless a participant terminates. Does anyone know? 2. So when we adopt the new plan, participant account balances are still sitting with the old vendor. The old vendor told us they have a new product coming out. However, for employees to take advantage of it, they have to roll over their account balances. It is strange to me that a participant, with money with that vendor, would have to roll money over. Any thoughts? Any clue on these questions is appreciated.

My company has wrapped many of its welfare benefits. The basic plan document is the wrap shell, with the individual benefit programs SPDs as attachments to the plan document. Now the company needs to amend some of the individual benefit programs (i.e., we need to change the elimination period for long-term disability). How, logistically do you create such an amendment? The wrap shell doesn't go into elimination periods, but the attached LTD SPD does describe the elimination period. So, would my amendment be to the overall Wrap Plan, but just reference the portions of the LTD SPD that are being changed? Please help.

My company has wrapped many of its welfare benefits. The basic plan document is the wrap shell, with the individual benefit programs SPDs as attachments to the plan document. Now the company needs to amend some of the individual benefit programs (i.e., we need to change the elimination period for long-term disability). How, logistically do you create such an amendment? The wrap shell doesn't go into elimination periods, but the attached LTD SPD does describe the elimination period. So, would my amendment be to the overall Wrap Plan, but just reference the portions of the LTD SPD that are being changed? Please help.