The owner/only employee of a sole proprietor business died with $200,000 in his Profit Sharing plan. His son is the sole beneficiary of the account. The plan document allows nonspouse beneficiaries to spread the payments over the life of the beneficiary. However, since the owner/plan sponsor is deceased does the plan have to now be terminated and the assets from the Profit Sharing account paid out to the son immediately?

Did anyone see a recent article in Money magazine stating that long term care insurance, was not only tax deductible but reimbursable under a medical FSA? Did I miss something in the OTC translation??

I tend to take a fairly paternalistic approach to DROs that do not specify whether or not the alternate payee is designated as the surviving spouse with regard to a plan's QPSA provisions. Although I do not use it as a criteron to qualify the DRO, I usually point out that a failure to designate the alternate payee as the surviving spouse may leave the alternate payee without a benefit if the participant dies before benefit commencement. What is everyone else doing out there?

Background: I'm over age 59.5, my AGI is less than 100K, married filing jointly.

I want to roll over a portion of my regular IRA to a Roth IRA. I need to pay taxes from funds in the IRA. If I withdraw funds from the regular IRA to pay the taxes (or have taxes withheld from the conversion) I will exceed the AGI limit and will not be eligible to convert to a Roth.

My solution is to withdraw the funds to pay taxes from the Roth right after the conversion. Since I am over 59.5, there should be no penalty on withdrawing. Does anyone see any problem with this strategy? It somehow seems too simple.

Dick

Is it in option to show receivables on form 5500 if the plan is daily val?

Client amended 401(k) plan to eliminate installment payments and annuities effective for distributions after 12/31/2001 and did not provide a summary of the amendment to participants. EGTRRA added §411(d)(6)(E) for years beginning after 12/31/2001 to provide for the elimination of optional forms of distribution without any notice requirements...but includes the language "Except to the extent provided in regulations..." Since final regulations eliminating the notice requirement have not yet been published (that I'm aware of), I'm of the opinion that the client messed up. Any thoughts? The only correction that I can think of is to go back to distributees and offer all of the optional forms previously eliminated, adopt another prospective amendment eliminating the optionals forms, and follow the notice requirements. SCP? VCP?

Client has a cash balance plan that provides for immediate distribution upon termination provided the terminated participant makes the distribution election within 6 months of termination. If election is not timely made, participant must wait until earnly retirement date. Any thoughts about significant detriment issues?

Participant (age 65) would like to change installment amount from $300 to $600 monthly. current balance is $14,000. Can the payments be considered installment payments (0% tax withheld) after the change in $ amount, or are they now taxable as "eligble for rollover" (20% mandatory withholding). I think I found in my reading that the new payment amount must qualify as an installment (life of participant or 10 years) ignoring all previous payments. In this case, the payments would not extend 10 years, and the participant is only age 65. Or, is there something I am missing because the participant is over the age of 59 1/2?

Thanks!!

I understand that MSAs are available to small employers (fewer than 50 employees) and self-employed persons (including partners in a partnership) if they participate in a high-deductible plan. It is also my understanding that a larger partnership, with several hundred partners and even more common law employees, could make a high deductible health plan available to all partners and common law employees as a group plan. Then the individual partners could go out and set up an MSA - even though they are in a "Group" health plan and that plan covers more than 50 employees because each partner is considered a separate self-employed individual.

Can anyone confirm or deny my understanding? Is anyone familiar with any vendors and/or large partnerships that may be doing this? Thanks.

Plan was restated for GUST in 2003.

2002 the plan did prior year testing.

If we switch to current for 2003 is that a switch that locks the plan into current for 5 years or was that the last of the "free" switches that would allow the plan to use prior in 2004?

Thanks.

Not plan related but anybody have a link on the web to a formula for computing the risk premium for a self-cancelling installment note, i.e., premium based on probability of seller not surviving the note term and thus collecting all payments, etc....? Thanks in advance.

The DOL's instructions to send in loan payments timely notwithstanding, we are having a split decision here on how a loan should be set up on the recordkeeping system. Should the loans be set up bi-weekly--as the money is taken out of the pay check? Or monthly, how it's remitted?

I am looking for info regarding integrated allocations. Samples of how the actual allocation would change????

Any help would be great!

Is there a threshold on how high a minimum loan amount can be? I thought it was $1000, but we have a plan that has $2500. So how high can a plan go for its minimum?

Medical plan provides for 100% waiver of premium (all coverage levels) if an EE is on LTD. Question is, if the LTD EE is covering a Domestic Partner, what happens to the imputed income, if anything? Does the EE still have to pay the imputed income portion?

Thanks!

DB Plan will terminate and employer intends to make the necessary distributions following termination. Can participants who are currently employedreceive a distribution without violating the prohibition on in-service distributions. Ibelieve the answer is yes, but cannot locate any specific authority. Diane Bennett cites an undated 1993 letter from John Riddle which acknowledged a distribution pursuant to a "plan termination", but a wanted something that I can actually stick in the file. Any thoughts?

Thanks.

Need to clarify my understanding:

Under Section 4.02 of Rev Proc. 2002-40, the only approved change is the change to the Unit Credit method.

This means, under the Procedue, a change in assets valuation method and/or Val date to BOY cannot made for a frozen plan!?

Can an eligible 457 plan, i.e., governmental plan, choose which employees are eligible? For example, can the plan provide coverage for a select number/class of employees?

Is there a rule that says you cannot use a distribution form older than 60-90 days? I have to pay residual balances (year end Emoployer contributions) to participants who received a distribution of their then vested funds back in March.

If there is a rule, please let me know the code section and where to view this online.

Thanks!

I have a client that has a 401k and Profit Sharing Plan. We are amending the 401k to make it a safe harbor effective 1/1/04, using the safe harbor match. The intention is to not make any additional contributions to the profit sharing plan. The only contributions going into the plan will be employee deferrals and Safe Harbor match. Notices to participants will be provided before 12/1/03. My understanding is that as long as we have only deferrals and safe harbor match going into the plan, we'll pass ADP/ACP and top heavy. I have told the administrator that if additional discretionary contributions are made, we would have to test the plan.

In terms of general safe harbor rules, is there anything else that I'm missing or need to be aware of? Sorry, I haven't done many safe harbors and I want to make sure I'm covering everything.

Thanks for your help!