George Taylor, former president of ASPA, Tuesday August 12, 2003, 8 am - 12 noon, at the Lodge at Woodcliff, Pittsford. Who should attend? Administrators, attorneys, and CPAs (CPE avail.) $35 includes breakfast and 4 hours of CPE credit. For more info or to register, email cathy @ pswny.com . Cosponsored by Northeast Benefit Services and Pension Services of Western New York.

100% Owner Rule is 100% invalid

In 1998, Local 282 IBT Benefit Funds adopted a resolution, the "100% owner rule", requiring owners, and their children, parents, and siblings, to report no less than 40 hours per week for any week worked, and to pay benefit fund contributions thereon. Last month, the Second Circuit rejected that rule. The Court said nothing in ERISA or the trust agreement authorized the trustees to modify the pay-per-hours worked as set out in the collective bargaining agreements.

The IRS is reminding businesses using "off the shelf" retirement plan documents that they must formally adopt updating amendments by September 30, 2003 to maintain the tax qualification status of the plan. "Off the shelf" refers to pre-approved Master & Prototype and Volume Submitter Plans. Employers who make changes to a pre-approved plan beyond the choices allowed in the adoption agreement should do more than just adopt the updates: they should file for a new determination letter.

Flurry of New Regs.

401(k) and (m) guidance was consolidated; new guidance affects targeted contributions, bottom-up QNECs, ADP and ACP testing, and pre-funding elective and matching contributions. Final regs. address deduction rules for 10 or more welfare plans. Final regs. address retroactive annuity starting dates. Proposed regs allow elimination of some optional forms of benefits, and remove the 90 day notice to participants. Links to new regulations can be found in the July edition of IRS Employee Plan News, available on .

Universal Availability means, if an employer allows catch-up contributions ("CUC’s") for any plan, it must allow them for all it’s plans. That would be a problem for any employer participating in collectively bargained plans, because the employer generally can not change the union plan and, if one union plan permitted CUC’s, in theory all the unions representing that employer’s employees would have to offer CUC’s. Problem solved: the IRS has decided that collectively bargained plans are not included in the universal availability rule.

Correction Programs

The IRS has published a CD-ROM providing information about retirement plans correction programs; to order a free copy, call 1-800-829-3676, and request Publication 4050.

I have 25 years experience with ERISA audits. I teach ERISA courses. I wrote CPE’s textbook, "Preparing Form 5500".