OK, I know that there is no maximum age in the SIMPLE IRA, because the IRA Answer Book has this question and answer: SIMPLE contributions are not subject to a maximum age requirement. The IRA Answer Book even references the IRS Code sections 219(d)(1) and 408(B)(4). However, these Code references do not seem to support the answer. Am I missing something?

IRC 219(d)(1)

IRC 408

I have a client with a DB plan that contains the 100% owner, his wife and a common law employee. The plan year end is 7/31/02. The minimimum required contribution would otherwise be in $150,000 range and the client is strapped for money. I realize the timing is not good, but is there anything i can do to reduce the owner's benefit. He has also almost fully accrued his benefit. Any suggestions would be appreciated. Thanks.

This question was posted on the American Society of CLU bulletin board.

This is certainly the first I have heard of anything like this and believe it to be, well, just wrong. I though others might find this interesting.

*************************************************

Recently I received a call from an accountant wanting to know if I had ever heard of a 5 year moratorium on contributions being imposed on the top heavy group. Unfortunately I don't have all the details but it's a family owned business with 3 generations still involved. Apparently the plan is top heavy and all members of the group must amend their W-2's for 2002 and cannot contribute for 5 years including the 25 year old 3rd generation grandson. Does anybody have any idea why this moratorium would be imposed or can reference regulations that might provide insight?

*************************************************

The adoption agreement offers two choices:

1) The Rule of Parity

2) One-year holdout rule

There's probably a default in the plan document (which I don't have).

I'm leaning toward the one-year holdout rule, but I wanted to get some input from some break in service experts.

Hello -

I asked this on the db thread and then realized that there was a thread for 5500's.

Here's a wild one -

If a company sells the assets of a subsidiary, where the subsidiary is the plan sponsor of a db pension plan, and where the buyer of the subsidiary's assets assumes the subs plan, who is responsible for the annual reporting requirements (Form 5500)? Specifically, the sub was sold AFTER the end of the plan year BUT BEFORE the Form 5500 was due. We are now in a situation where we don't know who was (or should be) responsible for the Form 5500 filing. I'm afraid that the asset sale agreement did not mention this reponsibility. Any ideas/suggestions?

Here's a wild one -

If a company sells the assets of a subsidiary, where the subsidiary is the plan sponsor of a db pension plan, and where the buyer of the subsidiary's assets assumes the subs plan, who is responsible for the annual reporting requirements (Form 5500)? Specifically, the sub was sold AFTER the end of the plan year BUT BEFORE the Form 5500 was due. We are now in a situation where we don't know who was (or should be) responsible for the Form 5500 filing. I'm afraid that the asset sale agreement did not mention this reponsibility. Any ideas/suggestions?

We use Relius 8.0. We have a top heavy 401(k) Plan. Document amended to use Match to meet top heavy. We are allocating an additional profit sharing contribution. Document provides satisfy top heavy first. We have about 20 participants. All but 2 get sufficient match to meet top heavy. When I run the profit sharing allocation the 2 first get the amount needed to meet top heavy requirements. My problem is that the Relius is factoring the top heavy contribution for those 2 into the minimum permitted disparity allocation (i.e. the top heavy contrib. to those 2 employees is 2%; base contrib. to all employees is 2%, Relius is saying maximum permitted disparity is 4%, not the 2%)

Is Relius doing that correctly? I know permitted disparity canot exceed the base. Since only the two are receiving the top heavy, I just assume that it would not be counted as part of the base

If the top heavy shouldn't factor into the permitted disparity, how do I make it quit?

Thanks for any guidance.

http://www.pcmag.com/article2/0,4149,912123,00.asp is the "Top 100 Web Sites (You didn't know you couldn't live without)," from the March 2003 issue.

Related story:

http://www.pcmag.com/article2/0,4149,912429,00.asp is the "Top 100 Classics - These classics are the well established and typically well-known Web sites that you know you can't live without and that you're glad that you don't have to."

I have seen plans on the interenet whereby employers are providing a "Premium Reimbursement Account" as part of their cafeteria plan. Pursuant to one employer, "This allows you to use tax-free dollars to pay for certain tax qualified individual insurance plans that are not offered by the District. This could include expenses for individual medical plans, Medicare Part B, etc." I am confused, I thought that if the insurance was not employer-provided, the participant could not be reimbursed for those premiums? Can anybody help clarify this issue for me?

A large group (400+) excludes a class of FT employees from core benefits (medical, dental, life and DI) but offers the excluded class a mini-med plan, plus other voluntary benefits and offers all on the 125 POP plus full flex. The employer contributes to the core plans but does not contribute anything toward the voluntary plans, including the mini-med. The core employees (management and office) have a 90 day wait for benefits, the excluded class must be employed 6 months before voluntary benefits and flex plan are offered (due to high turnover in this class). Is this type of carve out plan considered discriminatory under the Section 125 rules? If so, what recourse does the employer have if they want to continue the 125 plan, which they do. They cannot afford to pay for benefits to the currently excluded class, and in the past when they did offer to pay a portion, they could not get participation from this class and it jeopardized the whole medical plan.

I am thinking of opening a Roth Ira acct for my retirement. I have an IRA already and also a profit sharing plan but can't touch those till age 59 1/2. I need to know if at age 55 can I start to withdraw money from my Roth if I retire with my wife and have no other income. My wife will have a steady retirement check at age 55.

Part-timer worked 16 hours per week in a normal 40 hour work week, every year, for at least 5 years. At the end of his employment, Plan administrator first told Part-timer that he was vested, and then more than a year later said he was not vested.

A DB plan's vesting service provides:

For vesting purposes under this Plan, which includes eligibility for deferred vested benefits, an Employee shall be credited with one year of Vesting Service for each Plan Year in which the Employee is credited with at least one thousand (1,000) Hours of Service, or, if less, 50% of regular scheduled Hours of Service in the case of a part-time Employee.

How would you interpret, "or, if less, 50% of regular scheduled Hours of Service in the case of a part-time Employee?"

I say it's 50% of 16 -- which is 8. Therefore, if he worked at least 8 hours per week, every week in each of the five years required for vesting, then he should be vested. Certainly make it past summary judgment?

By the way, there's a so-called "misprint" in the SPD which supports my interpretation above. Plan administrator argues plan document rules. The SPD v. Plan document conflict aside, the plan doc says the following:

Plan defines Hours of Services as [slightly edited]:

The sum of (a) (B) © and (d), subject to (e).

(a) Each hour for which an Employee is paid, or entitled to

payment for the performance of duties for the Employer during the applicable computation period.

(b)Each hour for which an Employee is paid, or entitled to

payment, by the Employer on account of a period of time during which no duties are performed (irrespective of whether the employment relationship has terminated) due to vacation, holiday, illness, disability, layoff, jury duty, or leave of absence, subject to the following restrictions:

(1) No more than 501 hours...

(2) No credit hours for worker's comp, or unemployent comp

(3) No credit for reimbursed medical expenses

© Subject to military duty restrictions

(d) Back pay, as long as not already credited in (a)(B)© above

(e) Sections (a)©(d)shall be determined from employer records, and (B) determined from Labor Regs. 29 CFR 2530.200b-2.

Hours of Service credited to appropriate computation period in accordance with Lab. Regs. 2530.200b-2©.

I still say Part-Timer is vested even under this interpretation. What do you think?

I know that we don't need to take withholding on (rollover eligible) distributions of less than $200. And I know that for administrative reasons, I don't want to take withhlding on those distributions.

But my recordkeeper is saying that their system is set up to take withholding on all (rollover eligible) distributions, and they do it for all their clients.

So I'm trying to get a sense of the market-who is taking withholding on those small forceouts, and who is not?

RCK

If I withdraw Roth IRA contributions for a first home purchase, can I later repay the withdrawn contributions back into my Roth IRA or are they gone forever?

General tested Floor Offset arrangement provides that Class A participants (almost all HCEs) get a 4.50% x Years of Participation DB accrual and rank and file get .50% x Years of Participation.

DB benefits are offset by a large (around 9%) DC contribution.

The maximum pension offset is .50% of pay, which in effect means that Class A people get 4%, others 0%.

DB plan also provides for a minimum accrual of $40 per year (not per month) x years of participation, maximum 10 years, so a very small pension is paid to all participants.

Will this pass 401(a)(26) if Class A is less than 40% of the population, and not more than 50 people?

If a pregnant employee has doctors appointments for routine well -pregnancy care and may have occassional morning sickness and calls out of work, does this qualify as FMLA, or would it only count if the doctor puts a patient on bedrest etc, followed by the birth.

Thanks.

I have yet to attend a seminar or fully learn the ins and outs of HIPAA. Can anyone fill me in on a source for learning that is an easily understood.

I am a generalist and handle any and all HR functions. What do you see is the biggest obstacle for me? I have learned we cannot get involved with claim issues, and the like. What are the biggest pointers I need to learn about. This will help me choose a better seminar as well. Thank you all.

Hello--

This is my first posting. I've been asking around and can't get a straight opinion. I'm due to submit my 2003 contribution for Roth IRA and am wondering if I should wait a year.

I'm tired of seeing my TIAA-CREF and personal investment accounts dwindling as I contribute faithly a significant portion of my salary monthly.

What's the rule of thumb here? If I don't submit now, then at least I can watch my $3000 gain it's simple 2% interest in the bank. Investing it andwatching it go down all year long will just continue making me mad.

What should I do? What is everyone else doing?

Thanks so much,

Wanda

1) Are APR's published somewhere? I am pretty sure they are, just not sure where to look. Internet site, etc.

2) Do they change from year to year?

I need some help with what should be a basic controlled group question. My question is based on the following facts:

Husband and wife each own 50% of Corporation A. Husband owns 50% of Corporation B. The remaining portion of Corporation B is owned by an unrelated third-party. Wife is an employee of both Corporation A and Corporation B. Husband and wife are happily married. Both corporations sponsor 401(k) plans and the employees of each corporation are only permitted to participate in the 401(k) plan sponsored by their respective employer.

My question is whether Corporations A and B constitute a controlled group of corporations for compliance testing purposes?

Thanks for your responses.