waid10

It is a large company, but some of the small changes should be able to be made by the VP of HR.

We recently adopted a Wrap Plan encompassing health, dental, long term disability, short term disability, and other benefit programs. The SPDs for the individual benefit programs are attachments to the Wrap Document and more fully explain the benefits. Are the individual booklets for the benefit programs considered part of the Plan Document because they are attachments to the Wrap Document? Or are they considered SPDs? The reason I ask is because the Wrap Document established one plan number for our welfare programs. However, the booklets for the individual programs still each had its old plan number (different for each program). Obviously, we want to update them so they all show the Wrap plan number. We are not sure if this is an amendment to the plan document or merely a small change to the SPD. Any thoughts? Thanks.

My company currently has several retirement and health plans. Whenever a change to a plan needs to be made, a board resolution must go to the Board of Directors. It is very difficult to get on the docket for the Board meetings. And the Board members often don't think they need to deal with certain ministerial plan changes. Most of our plans currently state that amendments to the plan are to be made by the employer. We have interpreted that to mean the Board of Directors. So all plan changes, major and minor, have been going to the Board for approval. So I have been assigned to work on putting together a document that lists all types of plan changes and who has the authority to make them. Then we will try to get the Board to formally delegate authority to subcommittees or individuals (Finance Committee or VP of HR) to make those changes. Knowing our Board, my document and the types of changes permitted to be made by someone other than the Board will need to be finely defined. Has anyone tried to put anything like this together? Any recommendations on sources or websites? I know that if I say that "minor plan amendments" can be made by the VP of HR or Finance Committee, the Board will ask what "minor" means. So I will likely need to come up with a list of all types of plan changes. Has anyone seen this type of list? Please help. Thanks.

My company currently has several retirement and health plans. Whenever a change to a plan needs to be made, a board resolution must go to the Board of Directors. It is very difficult to get on the docket for the Board meetings. And the Board members often don't think they need to deal with certain ministerial plan changes. Most of our plans currently state that amendments to the plan are to be made by the employer. We have interpreted that to mean the Board of Directors. So all plan changes, major and minor, have been going to the Board for approval. So I have been assigned to work on putting together a document that lists all types of plan changes and who has the authority to make them. Then we will try to get the Board to formally delegate authority to subcommittees or individuals (Finance Committee or VP of HR) to make those changes. Knowing our Board, my document and the types of changes permitted to be made by someone other than the Board will need to be finely defined. Has anyone tried to put anything like this together? Any recommendations on sources or websites? I know that if I say that "minor plan amendments" can be made by the VP of HR or Finance Committee, the Board will ask what "minor" means. So I will likely need to come up with a list of all types of plan changes. Has anyone seen this type of list? Please help. Thanks.

We have an employee named Jim that had family health coverage. He terminated employment and elected COBRA for his family in July 2004. He was on active military duty Oct 2004 through February 2005. During the time of active duty, the health insurer took Jim off of the plan and placed the coverage in Jim's wife's name, who continue family coverage. Jim has returned from Iraq and is no longer on active duty. He wants to be included on the family coverage. The health insurer has asked if they should just put him back on the Plan and the 18 month period continues to run (from July 2004)? OR Is Jim entitled to additional months of COBRA coverage for the time he was on active duty? Thanks.

My employer has changed computer systems and will now receive premium payments from health plan participants after the month for which the coverage applies (e.g., participant makes payment on March 1 for insurance coverage received in February). Consequently, if a participant terminates employment in the middle of a month, the employer must bill the employee for the premiums for the weeks of coverage he/she received during that month (e.g., employee terminates employment May 18; employer must bill the terminated employee for premiums owed for May). So, the employer may have trouble getting paid. My employer is worried about losing a lot of money after employees leave. The employer realizes that they cut checks for accrued but unused vacation to employees when they terminate. To ensure payment of the the health plan premiums, the employer wants to withhold the vacation payout checks until the terminated employee pays the premiums owed. Or the employer wants to deduct the the premiums owed from the vacation payout check before the check is mailed to the terminated employee. Withholding checks for this reason may violate state law. Reducing vacation payouts by the premiums owed just seems sticky to me. These appear to be separate things and shouldn't be combined. Does anyone know if the Fair Labor Standards Act addresses anything like this? Or the DOL? Can reducing the amount of the vacation payout checks really be permitted? Anyone have any thoughts? Thanks for your help.

Sorry, yes it is a 457(b) plan. It is a non-governmental 501©(3) hospital. The trust is a grantor trust (not a group trust), I believe just as a means to set aside money to provide the hospital with a source of assets to assist in meeting its liabilities under the Plan. Even if the assets are in trust, aren't the assets (by nature of a 457(b) plan) subject to the hospital's creditors should the hospital become insolvent?

Hi all, If a hospital maintains a 457 plan, does that hospital have access to participant funds in the event the hospital becomes insolvent? I thought that was the whole risk with a 457 plan. However, someone told me that once the assets are in a trust, they are basically untouchable. Please help. Thanks.

Thanks. As a shareholder in a business, I am looking at ways to fund a cross-purchase agreement. I think I will take out insurance on the life of my business partner to fund the purchase of his company shares if he dies. He will do the exact same on my life. We looked at term policies. However, our insurance provider is touting Split Dollar insurance. Our company would pay the annual premium and we are told that the cash surrender value can immediately be loaned back to the company. If my business partner dies in year 1, the company would receive the remainder of the premium as a death benefit. So the company would always be insured to receive its entire cash outlay. Over time, the death benefit to the company will exceed the premium cash outlay. Also, we are told that the company borrowing back the cash surrender value does not preclude the company from receiving its full death benefit, net of any amounts borrowed. I would have income imputed to me every year at an ever-increasing amount. Is that the biggest disadvantage? The numbers that have been provided to me show that over the first 10 years, the term policy will cost nearly double in premiums as the split dollar policy (if you only look at the difference between the premium payments and the cash value available to be borrowed back). This just seems too good to be true. That is why I wanted to read why experts are down on split dollar plans. Anyone have any good sources? Thanks.

I checked the firms you mention and there are no complete articles that lay out the benefits and drawbacks of Split Dollar Insurance. I have tried searching on the internet, and there are a ton of hits. However, none of the articles I have found say much about disadvantages to Split Dollar. Can anyone help? Thanks.

Can anyone recommend a good article laying out Split Dollar Insurance? Specifically the advantages and disadvantages? I have read a few articles and they all seem to paint a picture that Split Dollar is a great device. However, people I speak with are absolutely against Split Dollar. I need some good articles by experts that will help explain to me the downside. Thanks.

Thanks for all of your responses. The severance agreement was signed at the end of June 2004 and provides that the employee will resign effective 12/31/04. He will receive an additional 6 months compensation (through 6/30/05) provided that the employee works a six months resignation notice (7/1/04 - 12/31/04) and meet certain performance objectives. Does this effect your previous responses on whether he can participate in the 403(b) and receive the match?

We have an employee that will be leaving our company on 12/31/04. As part of his severance package, he will be paid for the first 6 months of 2005. Since the individual will be paid for half of next year, can he contribute to the 403(b)? Is he eligible for the match? Our match does not require employment on the last day of the plan year. However, it seems that he would not satisfy the service requirement of 1000 hours (even though he is being paid like a current employee) to qualify for the match. Any thoughts? Thanks.

A colleague just realized that a mistake was made when an individual was enrolled in the 403(b) plan. The employee was enrolled in the "over age 50" catch up rather than the basic plan. For some reason, Information Systems had taken the cap limit off. So this employee has had money go into this for the last couple of years without regard to any annual limit. I have 2 problems to cure: The employee has not received a match because his deferral was going into the wrong area. With the cap limit turned off, his deferral has been over the annual limit. How do we handle this?

A colleague just realized that a mistake was made when an individual was enrolled in the 403(b) plan. The employee was enrolled in the "over age 50" catch up rather than the basic plan. For some reason, Information Systems had taken the cap limit off. So this employee has had money go into this for the last couple of years without regard to any annual limit. I have 2 problems to cure: The employee has not received a match because his deferral was going into the wrong area. With the cap limit turned off, his deferral has been over the annual limit. How do we handle this?

Yes, I think the plan was initially set up for employees, so I believe participation by non-employee directors is impermissible. The client wants to find a way to offer health insurance under its group plan (or some other method) to these directors. Does anyone have any thoughts? I spoke with several insurers about a separate plan just for non-employee directors, and all of them said they could not (or would not) design/sell a plan like that.

I have a nonprofit client that permits non-compensated directors on its Board to purchase up to $50K of life insurance through its group plan. Is this permissible? I thought that only "employees" could do this. Does anyone know what statute applies to benefits for non-compensated directors on the board? Are there are good articles on benefits for non-profit directors? Thanks for any help you can provide.

I have a nonprofit client that permits non-compensated directors on its Board to purchase up to $50K of life insurance through its group plan. Is this permissible? I thought that only "employees" could do this. Does anyone know what statute applies to benefits for non-compensated directors on the board? Are there are good articles on benefits for non-profit directors? Thanks for any help you can provide.

If a nonqualified plan offers several distribution options, how far in advance of a distributable event is the participant required to make the election as to distribution option? And where can I find guidance on this? Thanks.

Kirk, Your article is the one I referred to in my original post. I couldn't locate an electronic database that went back to 1987 for that journal anyway.

Can anyone recommend a good source for drafting a Wrap Plan? I am working on drafting one for the first time and need a good resource. I know that another person had a post from four years ago that he had written an article about drafting wrap plans in the late 1980s. I couldn't track that article down. Plus, I worry since it is not very current. Thanks.

Can anyone recommend a good source for drafting a Wrap Plan? I am working on drafting one for the first time and need a good resource. I know that another person had a post from four years ago that he had written an article about drafting wrap plans in the late 1980s. I couldn't track that article down. Plus, I worry since it is not very current. Thanks.

Does anyone know whether an SPD for a self-funded plan is required to have HIPAA language?

Does anyone know where the basic requirements are located for the establishment of a type of benevolence or hardship fund? Employees want to set up a fund that employees could contribute to. If an employee suffers some sort of hardship (i.e. death of spouse, house burns down, etc.), a committee would evaluate and provide funding assistance to that individual. It seems to me that this type of fund would be a welfare benefit plan under ERISA.

The sole shareholder of an S corp wants to set up a SEP to cover himself and his one employee. However, the S corp has already filed its tax return for the year. If he has the S corp make an employer contribution to the SEP, is there any way that the S corp can still take a deduction for the year? Could the sole shareholder take the deduction on his personal return? Seems to be that this wouldn't be permitted.