I am new at this, can I use dependent day care expenses for an elderly parent if I am claming him as a dependant, he is living with us and care is required?

If you discover a loan should have been deemed in a previous tax year, do you have to issue the 1099 for the year the loan went into default, or the year in which you actually deem the loan? For example, a participant takes a loan in Jan 2003, and does not make any payments. Loan should have been deemed by June 2003, but was just discovered in 2004. Can we issue a 2004 1099? What if it crossed many years?

Thanks!!

Help! I have a cash balance plan with an accumulated funding deficiency and an owner who is retiring. I have a sneaking suspicion that when an HCE takes a distribution from an underfunded plan a bond needs to be posted. Am I right? If so does anyone have the cite for this requirement? Thanks for your assistence in advance.

An employer is planning on terminating his DC plan prior to the sale of his business to another company. He's concerned that many of the participants have outstanding plan loans that they would not be able to repay on short notice.

The purchasing company offers a similar type of DC plan. If the purchaser's plan permits, can the employees roll their loans over to the purchaser's plan to avoid having taxable distributions?

Plan A would like to change there vesting schedule for all employer contributions from a 6 year to 100% immediate vesting. The problem is they would like to do it with an effective date, stating everyone that is still employed with company A on the effective date will have the 100% vesting. Everyone that has terminated from the company before the effective date will be still on the 6 year.

Can they do this?

I thought that when the amendment takes place it will change for everyone that still has money in the plan, terminated or not.

Please help.

Jesse

Can an employer if he has 2 stores that are under one plan document and one store wants to offer ONLY premium components and one wants to offer premium AND medical reimbursement. Can you do this under one plan document?

Would you have to do 2 plan documents? Or would they all have to be offered the same components under 1 plan document??

Thanks

Stacey L. Pederson, CRPS

JCCS Employee Benefits Division

Does anyone know if filed Forms 5500 are available anywhere on line? DOL/EBSA website?

A 50% owner of LLC A with a DB plan is also a 33.333% owner of LLC B. LLC B is not related to or an adopting employer. Can income from LLC B be used for benefit purposes of LLC A's DB plan without including the the two other owners of LLC B in LLC A's DB plan?? Thanks.

A school employee is allowed to purchase up to five years of retirement benefits on a pre-tax basis. The school also has a 403(b) plan, of which this employee is a participant. Is the pre-tax purchase of the retirement benefits included in the overall annual 402(g) limit ($13,000 + $3,000 catch-up for 2004)?

I'm looking at a proposal for a 412i plan, providing a benefit at the 415 limit (surprise) for the sole participant. Assume for the moment that the illustrated insurance is incidental. Doesn't the projected retirement benefit need to be provided by an annuity contract currently owned by the plan?

The proposal is assuming that a side-fund is maintained and the annuity contract not actually purchased until ARA. The annuity is projected to cost $X at ARA. The insurance has a guaranteed cash value of $Y at ARA. The current contribution to the side fund is equal to ($X - $Y) divided by a temporary annuity factor between now & ARA. Presumably this calculation is adjusted each year to take into account changes in the $Y value due to the actual current insurance cash value.

Now, I haven't seen a lot of these (can you tell?), but I would have guessed that an actual annuity contract would have to be purchased at the onset. Premiums for this annuity contract would be discounted to take into account the projected (guaranteed) cash value of the insurance (because otherwise there would be $ left over after the maximum 415 benefit was paid at ARA).

Comments?

I am not too familiar with the the actual restatement process (dates, etc.) but feel the following is a problem. When working on the year end testing, etc. I requested a restated (prototype) adoption agreement for a plan and was told it was not updated yet. Didn't these have to be updated sometime last year?

Any input would be appreciated. Thanks in advance.

Does anybody know of, and have experience with, a computer "translator" program that they would trust to translate a SPD from English to Spanish? If so, how much is it? I fiddled with various free programs from the internet, and while they work well for simple sentences, they aren't very good for long or complex documents. My inclination is to refer the client to an attorney who prepares them in Spanish, but thought I'd check with you folks first to see if you have any great ideas. Thanks.

We have a client who currently has a Profit Sharing plan with Post tax ee contributions only. The plan runs on a calendar year basis. The sponsor wants to add the 401(k) feature with safe harbor matching. The question I have is, when changing a plan like this are there any loops holes that would allow them to circumvent the advance notice to employees? Will they have to wait until next year to benefit from the safe harbor status?

Any help would be appreciated.

A DB plan has been started for a husband and wife. They are 50/50 owners in 3 businesses and each business adopted the plan. One business is an S-Corp and they take a wage of $80,000 each, another is an LLC with income of $375,000 and the third is a partnership with income of $70,000.

I have never had this type of situation and I'm looking for some help/input here. My initial thought was to combine the incomes from the three businesses to use in determining the DB contribution and then the CPA can determine how to divide the deduction between the businesses. Any responses are greatly appreciated (including what questions I should be asking that I have not even considered).

Facts: Employee turns 65 in January (2003) and enrolls in Medicare A & B. Employee is actively working in January, with a single health policy in force under an experienced rated plan. Employee terminates from the employer in June (2003). Employer has published rates from the insurance carrier for active employees (single & family) and rates for individuals not working, over 65 (single over 65, 2-person medicare primary, 1 on medicare/1 off medicare and family medicare). The insurance company, by contract, is charging the over 65 rate (which is significantly higher than the active employee rate), which the former employee disputes. Does similarly situated mean that if that person satisfies the criteria for a particular rate (i.e., over 65 and not working) that it can be charged? Also, can the qualifying event be considered the fact that medicare is now primary? We are trying to justify the premium we should charge (the active single rate, which is lower or the higher medicare primary rate)?

Does anyone know if 403(b) plans subject to ERISA are subject to the 15% prohibited transaction excise tax reported on Form 5330? I appreciate any help.

Is a grant of stock subject to repurchase at cost if a certain employment period is not completed a sufficient forfeiture condition to qualify as restricted stock? The stock is nontransferable until the employment period is complete.

My client is an S-corp. It would like to establish a medical reimbursement plan for only 2% shareholders (all employees are 2% shareholders). What are its options, if any?

Is it possible for the S-corp. to establish a medical reimbursement plan that is not part of a Sec. 125 plan and not an HRA or health FSA, that can provide medical reimbursement benefits to the employees?

Thanks in advance for your comments.

What proof is required before a claim for a baby sitter is processed. It is my understanding you need a federal ID numberand a paid reciept for a Day Care. I am not clear the rules for a baby sitter

Insurance products have surrender penalties and mutual funds have redemption charges.

Mutual funds' account statements don't show redemption charges, if any, (at least, I don't remember seeing them) but insurance products' statements generally do.

Generally (from what I have seen) , current market value of ins products = Cash surrender value. Yet, the value of mutual fund's units are not reduced by redemption charges (I have not, yet, seen it done).

Any thoughts on this.

Reason for the question:

I am looking at a statement of variable annuity which is invested in mutual funds. The statement shows a current surrender penality, which is about 5% of the mutual funds' value. The variable annuity is the plan's only asset.

What is plan's assets market value for funding - surrender value or the accumulated value?