The ideas about science quoted here were taken from essays, exams, and classroom discussions. Most were from 5th and 6th graders.

(#32 is my favorite)

Q. What is one horsepower?

A. One horsepower is the amount of energy it takes to drag a horse 500 feet in one second.

2. You can listen to thunder after lightning and tell how close you came to getting hit. If you don’t hear it, you got hit, so never mind.

3 Talc is found on rocks and on babies

4 The law of gravity says no fair jumping up without coming back down

5 When they broke open molecules, they found they were only stuffed with atoms. But when they broke atoms, they found them stuffed with explosions

6 When people run around and around in circles we say they are crazy. When planets do it we say they are orbiting

7 Rainbows are just to look at, not to really understand

8 While the earth seems to be knowingly keeping its distance from the sun, it is really only centrificating

9 Someday we may discover how to make magnets that can point in any direction

10 Australia has cold summers and hot winters, but somehow they still manage.

11 Most books now say our sun is a star. But it still knows how to change back into a sun in the daytime

12 Water freezes at 32 degrees and boils at 212 degrees. There are 180 degrees between freezing and boiling because there are 180 degrees between north and south

13 A vibration is a motion that cannot make up its mind which way it wants to go

14 There are 26 vitamins in all, but some of the letters are yet to be discovered. Finding them all means living forever

15 There is a tremendous weight pushing down on the center of the earth because of so much population stomping around these days

16 Lime is a green-tasting rock

17 Many dead animals in the past changed to fossils while others preferred to be oil

18 Genetics explain why you look like your father and if you don’t why you should

19 Vacuums are nothings. We only mention them to let you know they are there

20 Some oxygen molecules help fires burn while others help make water, so sometimes its brother against brother

21 Some people can tell what time it is by looking at the sun. But I have never been able to make out the numbers

22 To most people solutions mean finding answers. But to chemists solutions are things that are still all mixed up

23 In looking at a drop of water under a microscope, we find there are twice as many H’s as O’s

24 Clouds are high flying fogs

25 I am not sure how clouds get formed. But the clouds know how to do it, and that is the important thing

26 Clouds just keep circling around the earth around and around. And around. There is not much else to do

27 Water vapor gets together in a cloud. When it is big enough to be called a drop, it does.

28 We keep track of the humidity in the air so we don’t drown when we breathe

29 Rain is often known as soft water, oppositely known as hail

30 Rain is saved up in cloud banks

31 In some rocks you can find fossil footprints of fish

32 Cyanide is so poisonous that one drop on a dogs tongue will kill the strongest man

33 A blizzard is when it snows sideways

34 A hurricane is a big breeze of a bigly size

35 A monsoon is a French gentleman

36 Thunder is a rich source of loudness

37 It is so hot in some places that the people there have to live in other places

38 The wind is like the air, only pushier

A client of ours has an employee that is currently on COBRA. Their COBRA will expire soon (18 month limit) and the employee wants to elect the employers Health Insurance when it does. The problem is this employee was eligible for coverage under the employers plan earlier in the year and declined it to stay on COBRA.

Did the employee miss their chance when they became eligible and declined or is the COBRA ending an ok event to allow the employee to elect coverage under the employer's insurance in this situation? I've checked the plan doc's and I'm not finding anything on this. It all pretains to either the termed employees rights or if employee can pre-tax their COBRA premiums.

Any and all advise would be greatly appreciated. Thanks in advance.

Employer/sponsor of PSP was caught in the middle of dealing with former e/ee and ex-spouse of former e/ee where former e/ee directed plan to distribute $x of his balance to the ex-spouse as part of their divorce settlement. Former e/ee as well as ex-spouse was adamant that no decree was needed and failed to see the tax benefits of obtaining a decree or incorporating the PSP balance within the decree. Plan had to obtain counsel to communicate to former e/ee and ex's counsel regarding the tax issues involved and re obtaining a QDRO, etc..... E/er/sponsor now wants former e/ee and e/ee's ex to split the fees and expenses involved. I saw prior recent post re DOL Opinion re QDRO expenses w/r/t def. cont. plans... Would it be matter of allocating a portion of the expenses to his account and sucking it out of his account balance? Also, how would the ex-spouse be handled? Bill her for her portion and hope you can collect? Also...., how do you allocated among the three involved -- plan, former e/ee, ex-spouse....? Thanks for any help on this.

The CPA doing the small plan audits for us (for the 2002 year) is saying we need to prepare the H versus the I. We get errors preparing the H from the software package because there are less than 100 participants. (These are audits due to the % of nonqualified assets held.) Is the CPA correct?

a quarterly valued 401k/profit sharing plan allows for participant directed investments. a quarterly deposit made on behalf of one of the doctors was made to the money market fund in the last quarter of 2002 and was reported as paid to the money market fund for the 12/31/02 participant statement. Subsequent deposits were paid and shown on statements prepared 3/31/03 and 6/30/03 as being paid to the money market.

After 3 timely statements had been provided to the participant (and a good return on the equity fund account that was where the money was supposed to have been paid all along) the participant calls and says that his $ was being paid to the wrong account!! What is the plan's obligation to reimburse for gains to the account? I believe that the only adjustments due would be for the 1st quarter that deposits were shown as made incorrectly; the plan/trustee/(tpa) is under no obligation to correct to-date as statements have been provided. Any comments, cites? thanks

Are employers limited to the 10 approved medicare supplemental insurance policies if they want to a supplemental policy available to their employees?

Am I correct in assuming that if employees are excluded from participation by class, they get neither the top heavy minimum nor the gateway? Also, if there is no exclusion by class, it is OK to give non-key HCEs just the top heavy minimum, not the gateway? Thanks.

Has anyone implemented a wellness program due to the overwhelming increases in health plan costs? We have a self-funded plan and are looking for ways to control costs (as everyone is) and were wondering if wellness/disease management plans work. If you have implemented, how long have they been in place and have you seen significant savings?

A 401(k) Plan allows for hardship withdrawal due to

1. Medical expenses

2. Purchase of Principal Residence

3. Tuition

4. Costs Preventing Eviction or Foreclosure from a Primary

Residence.

5. Such other costs or expenses deemed to be immediate heavy financial needs in accordance with Treasury Regulation Section 1.401(k)-1(d)(2)(iii)(A) and (B)

A participant is out of work due to injury at work and is waiting for his court hearing for workmans comp. He has used all of his personal income outside of the plan to keep up on his bills. He has no other source of income at this time and will be past due on his mortgage, but he has not yet received any notice of eviction or foreclosure. He does have other bills he has due utilities and I'm sure credit card dept. He is not receiving any income from the company at this time. Would he qualify under Item 5 above in any way??????

Please let me know as soon as possible....

I have a plan where the husband and wife work at the same company. The husband passed away with a loan balance.

The wife wants to rollover the money into her account. She doesn't want to get a 1099r for the outstanding loan.

She has the money to payoff the loan. (The company is going to help her out) Pretty nice! Once the money gets into her account she will take a new loan to pay the company back.

Can the company and most importantly the 401(k) do this? Is there any rules or regulations about this? Let me know your thought. Thanks.

I'd really appreciate anyone's thoughts on the following scenario:

1. A subsidiary is being spun-off from the parent corporation. The parent sponsors a 401(k) plan that covers the sub's employees.

2. The 401(k) plan accounts of the current and former employees of the subsidiary are going to be transferred in a plan-to-plan transfer to a newly established 401(k) plan of the subsidiary upon the spin-off.

3. Certain current and former employees of the subsidiary were previously participants in plans that were merged into the parent plan and various different forms of benefits were grandfathered with respect to those employees.

4. The subidiary would like to offer only lump sum distributions under the new 401(k) plan if it's possible to eliminate the other forms of benefits.

I read 411(d)(6) and the regulations at 1.411(d)(4) to provide the following:

a. The grandfathered forms of benefit could not be eliminated in the course of the plan-to-plan transfer because the requirements of 411(d)(6)(D) are not met because the direct transfer is not being made pursuant to a voluntary election by the participant whose account is being transferred.

b. A defined contribution plan may eliminate all alternative forms of benefit except for a lump-sum on otherwise identical terms to the forms of benefit eliminated. 411(d)(6)(E) and 1.411-d(4), Q&A 2.

My question is this: Could the spun-off subsidiary transfer the accounts to the newly established 401(k) plan on Day 1 complete with all of the various grandfathered forms of benefit and then, on Day 2, amend the 401(k) Plan to eliminate all but the lump sum?

I've not found anything in the Code and regs that would preclude this course of events, but it seems like a real end-run around the rules about retaining forms of benefit in a spin-off.

All thoughts would be very much appreciated.

Julie

Does anyone have a sample force out package (or letter) available? I have a client who wants to clean up their plan (PSP) by eliminating all terminated participants. We all know we can't force out anyone with a $5K balance or higher (without rollover) but we have been asked to draft a letter to ALL terminated employees to try and encourage withdrawal. I am struggling with this and thought I would solicit input.

Any ideas?

Does anyone know if the ASPA QKA designation is considered a "lesser" designation than the QPA? I got the QKA instead of the QPA becasue I dont work with DB plans at all. However, coworkers consider it a lesser designation.

I thought they were the same, only focused in different directions....

One employer may merge into a larger one. The large company has a DB plan and a 401(k) with a 3% match. The smaller firm has a PS/DC plan with a 3.5% discretionary employer contribution (which has routinely been made) and a dollar for dollar match up to 6% of salary for participants.

Obviously, employees at the smaller company are loathe to lose their 401(k) with an effective 9.5% of salary contribution from the employer.

The formula for the new employer's DB plan has a rule of 80 for vesting (age plus years of service = 80) and an accrual rate of 1.65% x years of service x highest salary.

I am wondering if it is possible, outside of hiring a consultant or actuary, to value and compare the new DB plan with the existing smaller company's PS/401(k) plan.

Any thoughts would be greatly appreciated.

If participant qualifies under the plan to do an in-service distribution, can he request that it be done as a direct rollover to his IRA? This would avoid the 20% (plus state tax) withholding on the distribution since he wants to put the money into an IRA anyway. He is under age 70 1/2.

Thanks.

I have heard there is a possibilty that the IRS may extend the RAP one more time. anyone hear anything about this?

A 401k PS plan, which permits self-directed investments, purchased (40% interest) and co-owns commercial real property with the employer (the plan's trustee) (60% interest).

Is this transaction a Prohibited Act under ERISA §406 and §4975?

The language of ERISA §406 covers the Sale, exchange, or lease of any property between the plan and a party in interest...not the initial purchase.

I can see possible problems when minimum distributions are required.

This co-ownership seems to have the appearance of impropriety. Without the plan's 40% contribution of purchase price. the ER would not be enjoying the benefits the real estate investment.

Thanks for helping me out.

One employer may merge into a larger one. The large company has a DB plan and a 401(k) with a 3% match. The smaller firm has a PS/DC plan with a 3.5% discretionary employer contribution (which has routinely been made) and a dollar for dollar match up to 6% of salary for participants.

Obviously, employees at the smaller company are loathe to lose their 401(k) with an effective 9.5% of salary contribution from the employer.

The formula for the new employer's DB plan is not particularly generous. It has a rule of 80 for vesting and a 1.65% x years of service x highest salary.

Is it possible to maintain the smaller employer's 401(k) only for current participants? Could employees of the smaller firm participate in both DC plans?

I'd appreciate any thoughts on how this generous plan can be maintained.

Also, any thoughts on how to value and compare the new DB plan and the existing smaller company PS/401(k) plan.

Thank you very much.

If a non-profit entity sponsors a qualified plan, is deductibility of the contributions really an issue?

It would seem to me that if the entity does not pay any taxes that the whole issue of a tax deduction would be moot.

How do the provisions of IRC sections 404(a)(1)(A) and 404(A)(7) - limitation for DB and DC plan - apply to plans sponsored by a non-profit entity?

This $ is already in a rollover IRA, angry woman wants to pull $ out for non-first-time-R/E purchase or refinancing... and use it for 30 days and then put it back into the IRA. Can I please tell her she is making up rules, or is there something I don't know.

Thanks