Can a participant in a governmental 457(b) 3yr. catch-up plan also participate in the $2,000 catch-up in a 401(k) or 403(b) in the same year?

Did you hear that Saddam Hussein was injured? He lost a leg.

Just think how pissed off all the doubles are now!

Can a floor/offset arrangement have an age-weighted defined contribution plan offsetting a defined benefit floor plan. I know a New Comparability PSP can be used as an offset, but I find no definitive information for an age-weighted PSP as such. Thanks very much for any help you can provide.

We are revising the forms we give our customers who elect to Recharacterize their IRA contributions.

As part of the customer's notification requirements to the financial institution, they are required to list each contribution they want recharacterized (within the same IRA) and the date it was contributed.

Some of our customers elect automatic monthly (or quarterly) deduction.

We're considering adding a line to our Recharacterization form which states: please list each contribution amount you want recharacterized, and the date of contribution. If this box is left blank, we will process the recharacterization according to LIFO (last in first out).

In your opinion, is this option allowable under the regs?

Has anyone else ran into this type of situation? How do you handle?

Under the IRS Final & Proposed Required Minimum Distribution Rules, April 2002, if an IRA participant died after his her required beginning date and the beneficiary is a non-spouse beneficiary, in order to set up single life expectancy non-recalculated payments, the non-spouse beneficiary must contact the financial institution by December 31 of the year following the death of the participant. If the non-spouse beneficiary does not contact the institution, what payment method is available for that non-spouse beneficiary? Can the beneficiary set up a SLE payment schedule and take catch-up payments subject to the 50% penalty (for the missed payments)?

I have a 401K plan that failed the ADP test for 2002. I have amended the plan

for GUST prior to 12-31-02 and did not include the option to have only the top 20% of HCE's to be included in ADP test. Is it possible to make a retoactive amendment to elect the top 20% rule since this will result in significantly better result for the test. Also, does the amount being returned to HCE's due to plan failing ADP test have to include losses if the HCE's accounts lost money during the plan year.

We are examining allowing the elective transfer of account balances from a local gov't agency's 401(a) Money Purchase Plan to the State Retirement System; the State approached the local gov't agency to participate in the State Retirement System (DB Plan).

The local agency is contemplating mandating that all new employees (as of a future date) participate soley in the State Retirement System and current employees elect either to continue to participate solely in the Money Purchase Plan or transfer their account balances (and future participation) to the State Retirement System (to purchase service credits), or maintain their current account balances in the Money Purchase Plan and participate soley in the Kentucky State Retirement System (and as an inactive participant in the MPPP).

We note that the Money Purchase Plan is on a standard ERISA-type prototype which adds a few issues to the matter (e.g. taking on obligations from which it would otherwise be exempt).

It appears that prohibitions against elective transfers under 411(d)(6) do not apply here, so the elective transfers are feasible at a federal level. We have not yet examined whether current employees opting out of the Money Purchase Plan (and no longer receiving an accrual under that Plan) would constitue an impermissible modification under applicable state and local law of the employee's future pension accrual rights.

Another issue is whether the employees would impermissibly forfeit certain rights under the MPPP if they transfer their account balances to the State Retirement System under applicable state and local law.

Finally, can the ERISA-type plan be amended to delete the nongovernmental plan provisions without running afoul of local or state contract law?

Are we on the right track? Any other issues we have not contemplated?

A note to Carol - your Governmental Plans Answer Book is an excellent resource and it is greatly assisting us in this matter

Thanks

a plan provides for int credits of 4%, but through annual amendments for many years keeps providing an annual credit of 8% or close to it.

s/ this be considered a permanent plan amendment and be required when projecting a terminating ee's account balance to 65 for accd ben purposes?

they also use one rate for active ees such as the 8% after each amendment, but a lower rate of 3.5% for inactives. this seems like a forfeiture in violation of section 411 and possibly a 411(b) backloading violation all in accord w/ 96-8.

any thoughts out there?

We have a floor offset plan where the accruals were frozen two years ago. The ER is still making contributions to the PS plan, so the DB benefits for the many of the active participants are completely offset. The number of participants in the plan before the offset is applied is over 100. However, the number of participants with benefits after the offset is applied is less than 100. I am confident the ER doesn't have to pay PBGC premiums for these folks but what about counting them as participants on the Form 5500?

I would like to have the plan be considered a small plan (under 100 participants) but I think that those folks with $0 benefits in the DB after the offset are still "retaining credited service" to the extent they were participants before the freeze date. So, they would still be considered participants for 5500 purposes.

Does anyone have any thoughts, input, experience with this, etc.?

Thanks!

The 50% owner of the corporation that sponsors a 401(k) plan takes an in-service distribution of 401(k) source dollars without any sort of forms and contrary to the terms of the document. He is about 45 years old. Obviously, this is a no-no for many reasons, so does anyone know if there is some specific guidance regarding correcting this problem? Self-correction would be preferred. I tried reviewing Rev Proc. 2002-47, but didn't locate anything.

If no specific guidance is available, I am taking opinions on how to correct this.

Does anyone know if it's ok to use the new EBSA (Employee Benefits Security Administration) name on client's tax form filings? I know the 2002 instructions still show the PWBA, but I wanted to change my filing instructions and cover letters this year so I don't have to do it next year. I know it's not a big issue as the address is still the same...........

E/er's MPPP contribution formula was amended to 0% of compensation, i.e., plan frozen in 2001. E/er also maintains a PSP. In reviewing plan doc's for GUST restatement the PSP document requires that a top heavy contribution be made to the e/er's MPPP if the e/er maintains one and the MPPP document mirrors that language. Was considering amending that language to the efffect that "... any such top heavy minimum contribution shall be made to e/er's PSP in any year that e/er's MPPP is frozen..." Reg. §1.416-1 T-5 wouldn't appear to help in this situation if the plan doc's actually mandate where the top heavy contribution goes. Any suggestions re proposed amendment? Thanks.

Can an employer offer health, dental, vision, STD, LTD, health FSA, dependent FSA, term life and AD&Da and transportation benefits under a single welfare plan? It would seem to me they cannot, but I can't find any guidance on this.

Are there any different administrative issues to consider for a K-12 school 457 plan? I believe that for 457 purposes, a K-12 school is considered a governmental entity and therefore can be administered the same as a state or local government plan. Is this correct?

Has anyone heard that there has been a recent change and contribution receivables are no longer considered "non qualified" for bonding purposes?

We have a self-employed defined contribution money purchase pension plan with the ER as the only participant. The document states that the annual contribution shall be 23% of comp. However, the doctor/ER exceeds the annual compensation limit.

My question is this: If the doctor fully funds the pension, he exceeds the maximum annual addition of $40,000. But, if he only contributes $40,000, the pension account is not technically fully funded. Has anyone else faced this situation, and if so, how did you resolve it?

Our plan includes a significant number of working spouses who waive coverage available through their employer so they become primary under our plan. The reason is simple--our plan is extremely rich with many first dollar benefits and the required employee contribution is VERY low. We would like to "steer" more spouses toward electing coverage under their employer so we could become secondary. Does anyone have any suggestions?

I'm trying to determine whether or not work comp. payments would be included as compensation when determining avg. comp. I know that some plans specifically enumerate whether these payments are included (usually excluded), but in this instance I'm working with a bad definition:

"Compensation" means the sum of payments made to an employee for performance of personal services, as certified on a written payroll of an employing department....

It would be easier if the def. included only taxable wages, because in that instance, work comp. payments are generally not taxable under sec. 104.

My hunch is that work comp would be excluded because it is generally considered payment for injuries and not payment for personal services, but I could be wrong...I just haven't found any good guidance or cases setting forth as much...

Any ideas?...thanks,,,

Anyone have experience with voluntary and revocable assignment of pension benefits under Code section 401(a)(13)(a) and Reg. 1.401(a)-13(d)(1) or the payment of benefits to third party under Reg. 1.401(a)-13(e)?

Does the Plan document have to explicitly allow for such assignments or payments? And if the Plan does allow it, how are people establishing that the assignment or payment arrangement is voluntary and revocable ? With a form signed by the participant and assignee?

Thanks.

Could someone please explain to me the difference between rolling and trailing returns?