The DOL appears to be making pre-field audit inquiries into whether health plan sponsors properly allocated proceeds of the Principal's demutualization. The inquiry is only relevant if plan participants were required to pay all or part of health plan premiums for themselves or their dependents. The inquiries are not triggered by Form 5500 filings. I am seeking comments from other practitioners who have had to deal with such inquiries. Thanks.

Client had a money purchase plan for 5 years. During the 6th year, the client amended the money purchase plan to a profit sharing plan formula (in the middle of the year). What do you put on the form 5500? And do you attach a schedule R for the half of the year that the plan was a money purchase plan?

Ohio S-Corp. doing business in Ohio.

Has a section 125 provided by his payroll company.

Does not have a group health plan or offer any other employee benefits.

Employees are allowed to have the cost of the premiums for individual health insurance policies to be withheld pre tax. Then on behalf of the employee the client then remits the premium payment to whichever insurance company the employee has purchased the policy from.

This seems inappropriate to me. Can someone shed some light on this for me.

Thanks,

Michael J. McCormick, CPA

Cincinnati, Ohio

I have a client who would like to move money from a SIPP in the UK to a US based profit sharing plan. The client is a US citizen living in the US. I don't think the UK/US tax treaty would allow such a transfer but I'm not clear on this. Has anyone brought foreign retirement money into a US 401(a) plan or possibly an IRA.

Draper

IF a sponsor wants to have a defined benefit plan and a SEP, must they adopt a individually designed SEP; are there any model/prototype SEPs which can accomodate this configuration?

Draper

Hi -

I was hoping somebody to help me out with a life insurance (CSV) value question.

An individual has a collateral assignment split dollar life insurance arrangement with their employer. The policies premiums are paid in full. Taking advantage of the Final Reg. provided safe harbor, the policyholder decides to convert the arrangement to a loan arrangement and pay imputed interest on the amount of ER paid premiums.

My question is: If the executive decides to cash in the policy (say three years after making the election) does he/she pay tax on the cash surrender value?

Thanks for the help!

Mazzu

Just a reminder, advertising is for the Yellow Pages, this forum is for questions and

answers and general information. Questions about software, recommendations ect are fine,

direct advertising of specific products is not.

The plan distributes lump sums if the value is $5,000 or less. An error was made in the lump sum calculation- wrong benefit formula- and now people who received lump sums of $5,000 or less are due an additional benefit.

If the value of the new corrected benefit is over $5,000, but the additional value is less than $5,000, could the plan administrator distribute the additional value in the form of a lump sum? Does the answer depend on whether the discovery occurred in a subsequent tax year? For example, for MRD purposes, a participant that was subjected to the mandatory cash out rules in the 1st MRD year, would be entitled to additional accruals (lump sums) in subsequent years while still accruing.

I would think that if the underpayment error is discovered in a subsequent tax year, that the additional lump sum (say $1,000) could be distributed as a lump sum, but since the total value was in fact over $5,000, that it would be prudent for the plan administrator to obtain spousal/employee consent. If the error was discovered in the same tax year, the plan administrator should request the employee to return the dollars and process as an annuity. Looking for comments.

Thanks

Can a board of trustees of a health fund compromise a member's lien when the member's recovery will be little or nothing after the lien is repaid. (Even after the 1/3 is deducted for attorney's fees)?

Can anyone point me towards some authority for either position?

Thanks!!!!

We have a client who is in the process of offering supplemental insurance. Some of their employees has expressed interest in the insurance as long as their premiums for the year (or remaining balance of premiums) can be deducted from their bonus expected to be received a month after the beginning of the plan year. Can such an election be made? How about such an election for medical and dependent care flexible spending accounts?

I need to know what most of you are seeing regarding current trends of contributions by Employers. Due to the rising cost of health care and an unstable economy we are seeing Employers backing off of a stated match formula and going with a discretionary amount. Some are even discontinuing their match citing cash flow problems throughout the year..

Does anyone have any numbers or stats as to what new 401k plans are doing and what is happening to ongoing plans?

We have been asked to advise on this matter and I need some backup facts.

Thanks!

Client is a sole proprietor with no employees maintaining a profit sharing plan. One of the assets is a rental property that is owned as follws:

participant personal ownership 4/6

profit sharing plan 1/6

nephew of participant 1/6

Client would like profit sharing plan to buy out remaining 1/6 from newphew.

Does anyone see any issues with either the existing ownership structure of this property or proposed in relation to the ps plan.

Thanks

A 73 year old IRA holder withdraws funds for whatever reason. May they return the funds within 60 days to the IRA to avoid taxation in 2003? Obviously anybody under age 70 1/2 may do this, but does the law allow an over age 70 1/2 person to do so? The IRA holder will keep out funds necessary to cover the 2003 MRD.

Thanks for any responses.

Good day all, here are the specifics to my question:

1) 1998--used the 4 year conversion method to the ROTH IRA. Paid all appropriate taxes(over the 4 year period).

2) Roth IRA has been reduced due to recent economic conditions.

My question is if I need to, can I take all of my ROTH money out without any penalty or tax considerations?(value is less than when I started the account).

I have added new Roth money to my IRA's in parallel with the conversion.

I realize that my money is after tax money and normally the investment income would only be taxed? But, since i had a loss... I assume I could touch all of the money if it becomes necessary(assumption is not penalized for losses as I already paid taxes over the four years on essentially money that is no longer there).

Hope this makes sense. Appreciate your time.

I'm trying to confirm if the same Two-year rollover rule that applies to SIMPLE IRAs is applicable to SARSEPS. Does a participant have to wait 2 years before rolling over a SARSEP, tax free, to a qualified plan?

I have been in the business a short time so forgive me.

While reviewing a plan document, I noticed the plan is non-trusteed. What determines whether a plan can operate as non-trusteed vs. needing a trustee?

This particular plan is a profit sharing plan with only post-tax employee contributions.

Thanks

I'm always curious to see other actuarys' CL assumptions. Most of my plans have stayed at the max end of the range for both RPA and OBRA. I recently came across the following two year set of assumptions which made me wonder whether I am missing some rule about CL rate selection. Calendar year plan:

2001 RPA=6.21, OBRA=6.21

2002 RPA=6.85, OBRA=6.00

My question is why the OBRA rate would not go to the upper range 6.28. 6.00 happens to be 105% of the 4-year ave. on 1/1/02, which was the old RPA upper range max before the JCWAA change. Is there some rule that says the OBRA rate needs to be the same % of the 4-year ave. from year to year? I thought we had complete latitude within the range from one year to the next.

Prehaps OBRA FFL was not a factor for this plan and the actuary felt it was easier to justify staying at 105% if he/she was ever asked about it.

I have seen other changes over two years which have also made me wonder. All of which led me to this post. Thanks.

A participant who satisfys diversification criteria in an ESOP wants to know if they can transfer funds into the PS plan for diversification purposes.

I am not at all familiar with ESOPs so I ask for your point of view.

Thanks in advance for your thoughts.

I am preparing an allocation for an age-weighted profit sharing plan. The plan has two participants that terminated in the plan year who earned 1000+ hours. In an age-weighted plan, should these terminated participants who are not excludible under 401(a)(4) receive an allocation? The plan document requires employment on the last day of the plan year, however, in order for all the participants the have the same EBAR, should these two receive an allocation?

I have a plan that requires spousal consent for distributions. Is it required for MRD's though?

If so, can someone give me a cogent reason why? I understand why it is needed for regular distributions (eg: termination, in-service), but not for MRD's. To me, it is akin to an excess--not eligible for rollover--and not subject to S.C.

And on another topic: MRD's and hangers on

What recourse does a Plan Administrator have if a participant is not taking his/her MRD? Is there a force-out rule similar to the $5000 rule? And what if the MRD is over $5000? I hate to think that a participant's (or spouse's) recalcitrance or reluctance could jeopardize a plan's qualification.

Any thoughts would be appreciated.