I have a client who recently merged his money purchase pension plan into his 401(k) profit sharing plan. The effective date of the merger was 12/31/01. The problem is that the funds technically didn't move out of the related trust until January 2002. The question being does the money purchase plan need to meet minimum funding requirements for the year 2002? How will this affect the 2002 5500 reporting?

When ERISA was passed into law in 1974, my company indicated in a letter that I was given three year credit for service prior to age 30 ( plan required you to be 30 years old to join), I also was given $1 monthly annuity credit for each year of prior service. I was also told that I was fully vested at age 37, and did not have to wait until age 40 and if I terminated service at age 37, I would be entitled to 50% of my annuity accumulation at age 55. The company's payout start at 50% for less than twenty years service and goes up in increments until 25 years of service is obtain with a payout of 63%

Question: Does the three years prior service credit (age 27,28,29) count toward total years of participating service, although years actually under the plan is 21 years. Am I entitled to benefit based upon 21 years or 24 years?

Nice utility from Microsoft that speeds up the Windows XP boot-up process:

http://www.microsoft.com/whdc/hwdev/platfo...ot/BootVis.mspx

Start it up, then use the Trace -> Optimize System command. Worked well for me!

Does the Privacy Rule (or some other law) permit a health plan to send correspondence (e.g. EOBs) directly to the primary insured, even if such correspondence concerns a dependent? It is my understanding that many plans are continuing to send EOBs to the primary insured even if the document concerns a dependent. I gather that if a dependent wanted to receive communications from the health plan directly to them, they could request the plan to do so (request for confidential communications). Since I could not find a specific HIPAA regulation approving or disapproving of the action, I figured I would pose the question to the experts!

Thanks.

I am trying to fill out a Form 5500, and I cannot discern what the following information, contained within the insurance company's Schedule A information, means:

Average Enrollment =

100 Subscibers

200 Members

For purposes of filling out the 5500, are both subscribers and members "participants" for purposes of 5500, line 7?

Thanks!

Have client who withheld SIMPLE IRA deferrals from ees pay since 2001 but never remitted ee deferrals (or er match) until yesterday.

As I review the DOL's timing rule on remitting ee contributions to SIMPLE IRAs (29 CFR 2510.3-102), it is unclear to me on whether the er owes lost interest or earnings on the funds.

The paragraphs referring to the employer's obligation to make up lost earnings or interest seem to apply to pension plans only - not to SIMPLE IRAs. Has anyone come across a different interpretation? Does this er owe interest?

I noticed that the EPCRS program now includes SIMPLE IRAs - does anyone know if the IRS recommended method of correcting this type of violation includes procedures for making up lost earnings/interest on the funds?

jlg

A new plan is set up for an employer who has several participants who are 5% owners and who are over age 70 and 1/2. Some are well into their 80s and are close to 90 -really!!. (We should all be so healthy!!!) I am assuming that a contribution can be made on behalf of these senior-senior citizens, but how does MRDs work for them. Are they given the grace period to the following 4/1 for purposes of receiving their first MRD and then double up in such year or must they take their first MRD by 12/31/03, the second by 12/31/04, etc....

Merger of two corporations (stock for stock), with possible cash earnout payments over the next few years. Some of the earnout, if earned, will be paid to shareholders' 401(k) accounts (or possibly conduit IRAs if 401(k) accounts are rolled to IRAs) based on company stock held within their accounts. Is the earnout paid to the 401(k)/IRA accounts simply considered earnings and, thus, creates no immediate tax consequence within the 401(k)/IRA? Is the answer the same if the participants sold their stock held within the 401(k)/IRA prior to the time the earnout is paid? Any thoughts are appreciated.

Does anyone know of any pension funds suing their investment manager because they invested in Worldcom stock? (Not suing Worldcom or its investment managers.) In general, does anyone know of any suits filed by pension funds because of bad investments by their investment managers?

I have several questions regarding QSLOBs, but I need to start somewhere. We have a controlled group that includes several companies. The owner of these businesses is a European company. I believe that most of the US companies can be treated as QSLOBs. Each of the companies has its own 401(k), and one also has a DB plan.

A couple of the companies have just a handful of employees. They don't seem to overlap with each other or the any of the other companies. They don't meet the 50 employee rule for QSLOBs. What do I do with them? If they are covering all eligible employees in their plans, can they continue to maintain their own plans?

A couple of the companies do similar businesses, and share a few employees. If each company can pass coverage and minimum participation on its own, and I allocate those few employees to one company or the other, can they still be QSLOBs -- or must each line of business be totally unrelated to each other?

Some of the reading I've done implies that it's not worth it to go through the hassel of trying to meet the QSLOB rules. It seems that it's just as easy to test all the businesses together. Can anyone comment?

For FMLA purposes a child means biological, adopted, or foster child, a stepchild, a legal ward, or a child of a person standing in loco parentis, who is either under age 18, or age 18 or older and "incapable of self-care because of a mental or physical disability."

Does that mean that a child that is over 18, must meet the definition of having a disability on the day before the FMLA event? Or can it mean an adult child who, as a result of the FMLA event is, for instance hospitalized and needs assistance.

I need to know if the child had to have already been considered disabled by the above definition prior to the FMLA or is the FMLA event enough to cause the child to meet the definition?

I am the agent of record for a plan that has recently sold off greater than 50% of the business. Plan assets dropped from 1.5 mil to less than 500K and participant count is down to less than 40. For this size of plan what is the average asset charge, or where can I find this type of statistic?

I have an issue where the IRA holder named a trust as the beneficiary of the IRA. Form my understanding of the final RMD regs, specifically treas 1.408-8 Q&A 5, this designation cannot be passed on to the underlying beneficiaries of the trust. This means that all post death distributions must be reported under the name and tax ID number of the trust beneficiary. The trustee may then pay the funds to the underlying beneficiaries of the trust.

However, I am being challenged. I am being told by the trustee of the trust that the effect that the underlying beneficiaries of the trust can be treated as the direct beneficiary of the IRA, and not just for purposes of calculating RMDs as provided in the regs, but that we should ignore the trust altogether and treat the underlying beneficiaries of the trust as if they were the direct designated beneficiaries ( i.e. , instead of naming the trust, the IRA Holder named the individuals as the beneficiaries)

What is the right approach or permissible allowances.

Thanks for your help.

I have an issue where the IRA holder named a trust as the beneficiary of the IRA. Form my understanding of the final RMD regs, specifically treas 1.408-8 Q&A 5, this designation cannot be passed on to the underlying beneficiaries of the trust. This means that all post death distributions must be reported under the name and tax ID number of the trust beneficiary. The trustee may then pay the funds to the underlying beneficiaries of the trust.

However, I am being challenged. I am being told by the trustee of the trust that the effect that the underlying beneficiaries of the trust can be treated as the direct beneficiary of the IRA, and not just for purposes of calculating RMDs as provided in the regs, but that we should ignore the trust altogether and treat the underlying beneficiaries of the trust as if they were the direct designated beneficiaries ( i.e. , instead of naming the trust, the IRA Holder named the individuals as the beneficiaries)

What is the right approach or permissible allowances.

Thanks for your help.

Can a participant (age 61) of a Sec 403(B) plan with substantial accumulated sick pay, make sick pay contributions to the plan in the form of elective deferrals? I believe he can based on the 401(k) definition of elective deferrals as being amounts not currently available to the employee.

Also, in the post-EGTRRA environment, the maximum this participant can receive in annual additions for 2003 are $12,000 elective deferrals, $2000 regular catch-up, $3000 special catch-up for 403(b) plans, $28000 employer totaling $45000. Is my analysis corrrect?

Is anyone aware of a time limit for the filing of a QDRO in PA? I have been researching this issue and have not be able to come up with an answer.

Here's the scenario:

An employee is looking to retire and start drawing on his pension. He was divorced twelve years ago and his ex never sought entry of a QDRO. I believe the settlement agreement addresses division of his pension, however, I am not certain because a copy of the settlement agreement cannot be located. Any thoughts on what course of action he should take or not take?

Thank you in advance for your input.

I believe under 404(a), the maximum a company can deduct is 25% of covered compensation. What would happen if everyone who was eligible was putting away 30% of their comp? (far-fetched I know, but stuff like this keeps me up at nite)

I am also under the assumption that non-deductable contribs (ie over 25% of covered comp)are not allowed.

I'm probably wrong somewhere, I'm just wondering where.

Does the company just deduct the 25% and ignotre the additional 5%?

We have a client that had continued to sponsor a SARSEP through 2002. Late in 2002, they decided to install a 401(k) Profit Sharing Plan, with the Profit Sharing Plan effective in 2002 and the 401(k) effective in 2003. So, they no longer sponsor the SARSEP, but some of the employees contributed to the SARSEP in 2002. The company made a profit sharing contribution for 2002 in lieu of the SEP contribution. The profit sharing structure is "new comparability" with different group contributions. The question is, would you count the 2002 SARSEP salary deferrals in the average benefits percentage test along with the profit sharing contributions?

I have a plan that failed to do ADP refunds for the 2001 plan year by the statutory due date of 12/31/2002. They have corrected this by using the one-to-one correction method. Should the refunds and the QNEC be shown on the 2003 5500 or should they be reported on an amended 2001 5500?