I have a situation where an IRA owner is in payout status and dies. The account has 4 non-spouse Primary Beneficiaries. Two of the beneficiaries elect to take death distributions. The remaining two beneficiaries request that ONE Beneficiary IRA be open. (I do not know the reason why they and the advisor is insisting that One Beneficiary IRA be opened - They know that the RMD will be based on the Single Life Expectancy of the oldest beneficiary).

My question is:

1) Is this legal or does two separate Beneficiaries have to be opened?

2) Where in the Code and Regulations can I prove this?

Thank you in advance for your input.

Anthony Milano

An employee is married and elected single medical coverage. If the employee is transferred from one company of a controlled group to another company can the employee change his medical election from single to family coverage?

Thanks.

Is it permissable to amend a 12-31 401(k) plan to a plan year running from 01-01-2004 to 09-30-2004 and then terminate the plan and pay out all participants prior to 12-31-2004?

Does this create 2 two short plan years? Are you allowed to have consecutive short plan years? If the answer is no - could you process the distributions in early 2005?

Awhile back I posted a question regarding what "maintaining" a plan meant because a client of mine maintained a profit sharing plan (had not put contributions into the plan in a few years) but set up a SIMPLE IRA concurrently.

I got some feedback from this board, and wanted to come back to tell you what the IRS said.

They disqualified the SIMPLE IRA saying that "In order to establish a SIMPLE IRA, the employer cannot currently maintain another retirement plan". The fact that there has been no contributions to the plan does not mean, to this auditor at least, that the plan has not been "maintained". The IRS response letter suggests that if a deduction were to be taken for a contribution for a year, that it should have been put into the profit sharing plan if the profit sharing plan was still maintained, and if they wanted to open the SIMPLE they should have terminated the PSP first.

I thought you all might be interested in the response we got from the IRS.

My girlfriend is doing research on different IRA's and she was curious as to what are the qualifications to be eligible for a Roth

Income from certain fishing activities is not taxable to Native American tribal employees. How should this income be treated for purposes of the tribe's 401(k) profit sharing plan? My theory is that compensation for deferral and contribution purposes can be defined to include fishing income, but that for 415 purposes, only W-2 income (plus 401(k), cafeteria plan and transporatation plan deferrals) can be counted.

I haven't found any guidance on this, so my theory is based upon an analogy to the treatment of nontaxable parsonage income for clergy in qualified plans (as I understand it after a brief review).

Any thoughts?

DB plan receives a DRO in good order and the administrator determines it is qualified. The court orders the plan to distribute benefits to the alternate payee per the terms of the QDRO.

A mistake was made by the atty who drafted the DRO and the administrator did not catch the error.

Specifically, the order indicated that the alternate payee is awarded 50% of the participant's accrued benefit. It should have been 50% of the participant's accrued benefit earned from the time of marriage to the time of separation. The alternate payee was paid 50% of the participant's benefit through the date of separation and now wants more (i.e. 50% of the participant's benefit forever). Is there any such thing as an amended QDRO?

The participant and alternate payee have not finalized their divorce and have not fully divided joint assets yet. Perhaps I am wrong, but if joint assets are being split 50/50 couldnt the participant reduce other assets being given up by the same amount of excess plan benefits resulting from the mistaken language?

This occurred in California which is a community property state.

Thanks much for any responses.

I would appreciate any opinions as to whether a wrap plan (i.e., a plan that allows the plan sponsor to make one Form 5500 filing for all of its health plans) should be a separate plan document, or whether a company's cafeteria plan can serve as both a 125 plan and the wrap plan document.

Which approach do you generally take?

What are the pros and cons of each approach?

Thanks in advance.

In a 401(k), assume there is an April 1 Entry date.

What is the "official" interpretation of which payroll contributions must commence? Is it the first payment after the entry date, or the first payment for a pay period ended after the Entry Date? Consider three scenarios:

A) Payment on April 2 for the week ended March 26th.

B) Payment on April 9 for the week ended April 2nd.

C) Payment on April 16 for the week ended April 9th.

For which pay period must deferrals commence? If scenario B, would deferrals only be calculated for the service days after the entry date (i.e. April 1st & 2nd).

Any references to guidance would be appreciated.

ERISA requires the administrator to provide an annual SAR to each participant and to beneficiaries receiving benefits under the plan. ERISA section 3(7) defines participant as any employee or former employee of an employer ... who is or may become eligible to receive a benefit of any type from an employer benefit plan ...

So active participants and term deferred participants will receive the SAR. If a former participant is terminated and receiving a benefit paid from the plan's trust, does that individual get a SAR?

Thanks.

Can PBGC premiums be paid from plan assets?

If a couple was divorced and then remarried, can a QDRO established during the divorce be reversed if all the assets have remained in the company plan?

Interesting question came up. We have a client (actually former client - we cancelled our contract with them because they would never get us data on time) who is moving their administration to a bank.

According to them, the reason they are moving the admin and assets to the bank is that the employer is taking out a business loan, and the bank will give them a better loan rate if pension admin and assets are with the bank.

In case this ever comes up with a client we want to keep, I'd appreciate opinions on this. It certainly seems like a prohibited transaction to me, and I can't locate a PTE that seems to allow it. Any thoughts? (take this with a grain of salt anyway - this client is a bonehead, and may well be misunderstanding what the bank said or is doing.)

Thanks.

Is a 5310-A needed if a participant makes an elective transfer under either regulation Section 1.411(d)(4) Q and A 3, or Code Section 411(d)(6)(D)?

If a plan makes a plan to plan transfer of one account to another plan, are both plans required to file a form 5310-A?

I'm trying to research the prevalence of Pre-X clauses in Disability plans. Those of you who are consultants, can you shed any light on current trends? Any replies appreciated!

I'll be attending the conference for the first time and am curious as to what to expect. I found the feedback on the 2002 conference, but it was held at the Hyatt then. I believe this will be the second year for it being at the Hilton.

For those who attended last year, how were the facilities?

The internet cafe that's set up in the exhibit hall, is it difficult to get time at one of the stations? I considered bringing my laptop for email, etc., but am concerned about it being stolen from the room.

How are the session rooms set up? Is it set up classroom style?

The dress code is described as casual. Are khakis fairly prevalent? What about at the receptions?

Thanks in advance for any information provided.

Rhonda

Does anyone have experience integrating the Schwab Tools link into the new version of Relius? The have changed the entire architecture from ASP to ASP.NET and we are a little lost. Any suggestions or guidance would be appreciated.

For a 401(k) plan, I know that the term "participant" generally includes anyone who's eligible to make elective deferrals under the plan. An individual who chooses not to defer income and, therefore, may not have an account balance, is a nonetheless a participant.

Does this expansive definition also apply to the Sec. 404 limit? For example, Jack and Jill each have $100,000 compensation and are eligible for coverage under their employer's 401(k) plan. Jack makes elective deferrals, but Jill chooses not to do so and has no account balance. Is $50,000 (25% x $200,000) the Sec. 404 limit? Does an employer get some "wiggle room" on the Sec. 404 calculation when eligible employees decide not to participate in the 401(k) plan?

We have received a QMCSO. It follows the model notice provided for in the regulations under ERISA 609. My only question is as of what date do we enroll the dependent child? Just with the next payroll? Or do we do it retroactive to the date of the notice (is that even permissible?) I have looked and even under the model in the regulations, there is no space to specify when coverage is to begin, so I assume coverage begins as of the earliest time we can enroll the dependent, is this correct? Any guidance/help will be greatly appreciated!!

Thank you

We have received a QMCSO. It follows the model notice provided for in the regulations under ERISA 609. My only question is as of what date do we enroll the dependent child? Just with the next payroll? Or do we do it retroactive to the date of the notice (is that even permissible?) I have looked and even under the model in the regulations, there is no space to specify when coverage is to begin, so I assume coverage begins as of the earliest time we can enroll the dependent, is this correct? Any guidance/help will be greatly appreciated!!

Thank you