i have a client who currently pays the investment fees (annuity wrap) for all participants in his plan. now, he wants to pay only for current employees, not former ones. i thought i saw some kind of write-up recently that addressed this, but i can't come up with it.

any thoughts?

Has the DOL taken any action to finalize the

COBRA regs it issued last Spring? The last

I heard the implementation date was

postponed past January, 2004.

If a participant is overpaid by $145, can we collect only $45?

Revenue Procedure 2003-44, Section 6(5)© states that generally for submissions under VCP, the plan sponsor is not required to seek the return of an overpayment of $100 or less but must notify the participant or beneficiary that it's not eligible for favorable tax treatment (rollover).

Although we aren't under the VCP, in practice we don't collect overpayments of $100 or less but do inform the participant re the fact that it's not eligible for favorable tax treatment.

So can we collect only the amount over $100? I don't think it's clear so I wondered what everyone else thinks?

A participant (HCE) took a loan in 02. Loan was OK by plan terms. He defaulted in 03. In addition to his regular participant account balance he had a rollover account from a prior plan. The plan permits dstribution from the r/o at any time. There are no other in-service distribution provisions in the plan.The loan papers do not specify which account secures the loan. Rather than considering the defaulted loan as a deemed distribution, can I consider it an offset against the r/o? Is the defaulted loan a PT? If so, does the offset cure the PT?

at death is it possible for beneficiary (not spouse) to rollover over the participants'

plan without having to take a full distribution?

thanks,

mark

A client terminated his DB plan when he reached NRA and rolled the money into a new PS plan. I realize that the J&S feature still applies to the rollover. The PS plan allows for in-svc. distributions (the DB allowed in-svc. distr. at NRA) and my client would like to take advantage of that. If he wanted to take monthly or bi-monthly distributions that were less than $5,000 each, would spousal consent be required?? I think it is, but would like confirmation. Thanks.

I funded my Roth IRA in 1998 with normal contributions when I was 57 and rolled over (Converted) a traditional IRA to this same Roth IRA in 2003 when I was 62.

After reading Publication 409, tax topics 428 and 558 from the IRS web site, and documents from several other web sites (including this one), I am of the belief that once I have passed age 59 1/2 and have satisfied the five year rule, the conversion in 2003 and all subsequent conversions are not bound by the early distribution 10% penalty (see TTCA-98 Brings Order To Roth IRA Distributions).

Please let me know if I am understanding this correctly.

Thanks

William

Any opinions on how to handle a situation where a plan sponsor assumed their Canadian employees could participate in both a DB plan and a 401(k) plan? My opinion is that they have no 415 comp so they may not have any benefits under either plan. Therefore, they can not receive any benefits under the DB plan and the plan sponsor should look to see how this effects their funding since they have been funding these employees. Also, the match should be forfeited in the 401(k) plan and the plan sponsor should decide how to handle the deferrals but they will not be distributed on a 1099R. Am I being too conservative?

The health & welfare plan requires an individual to work 375 hours per quarter to be eligible for coverage the next quarter. Any excess hours are put into an hour bank. If a participant retires with 600 hrs in his hour bank, the participant will be covered for one quarter only. The remaining 225 (600 - 375) hours will be lost to the participant in that it falls below the minimum of requirement of 375 hours. Can the plan eliminate a retiree's hours in an hour bank that fall below the threshold limit of 375?

If a retiree returns to work, can the fund require the retiree to fulfill the initial eligibility requirements of the plan?

If a participant's membership in the fund has terminated and the participant elects and pays for COBRA for a full 18 months, at the end of that 18 months, can the fund set the participant's hour bank to zero and require the participant to fulfill the initial eligibility requirements of the plan?

Thanks in advance for your help.

We have a couple of new client that came over to us, some in the beginning of last year, some in the middle last year and some towards the end. Before they came over to us the trustees were individuals. When they signed on with us they chose to have a Corporate Trustee. Who signs the schedule P for the 2003 5500 if the trustee changed during the year? The individual trustee or the corporate trustee?

Please help!

Thanks

EGTRRA added 411(d)(6)(E) that allows eliminating optional forms of distribution "except to the extent provided in the regulations." The IRS issued proposed regs on July 8, 2003. My 2004 code says they are still proposed. Does anyone know the status of finalizing the regs?

Have a signed QDRO, March of 2004. Determination Date is 10/1/2001. The Assigned Benefit is for a specific Dollar amount of the Participants Balance, assigned to AP, "without adjustment for losses".

Should I calculate the earnings from 10/1/2001 until the last valuation (3/31/04) but not include losses? This does not make sense to me. Any help is appreciated

Are there any regulations (SEC / ERISA) that prohibit a bank to act as trustee for DC & DB plans of a publicly traded company that the majority owner is also majority owner of the privately held bank?

I am unsure of this but are 401(k) assets, protected from lawsuits against the participants or account holder? Specifically, I'm wondering if 401(k) assets are protected like O.J. Simpson's pension was (I think it was protected...) from civil lawsuits (not necessarily for killing somebody but maybe from somebody falling on your home's steps, etc...). Would IRA assets also be protected?

Thanks

A company maintains a master welfare benefit plan that provides various types of benefits, including retiree medical and life insurance for union and non-union employees. The company has 3 separate VEBAs to fund this plan. Each VEBA contains a short statement in the preamble that sets forth the VEBA's "fundamental purpose." The fundamental purpose of one is to provide retiree medical benefits under the plan to non-bargaining participants. The fundamental purpose of another is to provide retiree medical benefits under the plan to bargaining participants. The fundamental purpose of the third is to provide retiree life benefits under the plan to participants regardless of their bargaining status. Other than these statements, the VEBAs are identical and do not have any language that specifically says that assets can be used only to pay certain types of benefits under the plan. To date, the company has used each VEBA to pay only the types of benefits described in the fundamental purpose.

The VEBA for non-bargaining retiree medical has a liquidity problem, and the company would like to use assets in the other 2 VEBAs to pay retiree medical benefits for non-bargaining participants.

Can the company transfer assets from the other 2 VEBAs into the non-bargaining VEBA?

If not, could the company accomplish the result by amending the other 2 VEBAs to revise their "fundamental purpose"?

Can the company just disregard the "fundamental purpose" and pay non-bargaining retiree medical benefits out of the other 2 VEBAs?

Any help would be appreciated.

Let's suppose a client determines that a participant wasn't eligible to receive a profit sharing contribution after all.

The deposit had been made, the deduction had been taken from the employer's tax return, and the tax return had been filed.

Is it appropriate for that money to be returned to the employer, or should it be deposited in a forfeiture account and be considered a plan asset?

I'm using an FIL method and my UAL is negative and I'm not in Full Funding. Sec. 4.01(2) of RP 2000-40 grants automatic approval if I want to re-establish my UAL.

Q1: If I do this, it looks like the re-established base should be amortized over 10 years. Do you all agree?

Q2: If the Plan was amended this year to increase benefits, any reason why I can't re-establish my UAL recognizing the amendment or should I create two bases. One, my re-established base and two, my recent amendment. I guess the two base approach would give me a lower min since the amendment is 30 years and the re-established base is 10 (I think).

I inherited a plan that has a 10-year certain and life as the normal form. The QJSA for a married participant is 50% J&S and the QJSA for an unmarried participant is a "10 year certain and life". There is no life annuity available under the plan.

It is my understanding that a QJSA for an unmarried participant must be a single life annuity (Treasury reg. 1.401(a)-20 Q&A 20). Am I correct that the plan must offer a single life annuity for unmarried participants as the QJSA? The 10-year certain an life can be an optional form of benefit offered under the plan.

Thanks.

We have a client (he is a CPA) that refuses to give us his Schedule C so we can calculate plan compensation for him, thus calculating the appropriate contributions for the plan. He says that his comp is "well over the limit" and that he will not give us his Sch. C. He says that it is not our job to determine his compensation and we should accept the "well over the limit" answer and proceed with his contribution calculation. Has anyone else run into clients such as this and how should we proceed. I believe part of our job IS to determine plan compensation, which is not always "well over the limit". Help!!

Normally if a client doesn't get their failed ADP refunds done withing 12 months after the close of the plan year we calculate the corrective QNEC for them using either a bottom up formula, straight percent formula, flat dollar formula or using the one to one correction method. For the 2002 plan year, what effect, if any, would recharacterizing part of the refunds as catch up have on the end result of the QNEC?

For example, 2002 ADP test was just completed and refunds needed to be done by 12/31/2003. It is determined that some of the HC's refunds would have been recharacterized as age 50 catch up had the refunds been done timely.

Thanks!