Any one heard anything about changes being made at the fund? To either the fund itself or the folks entrusted with the care and feeding?

We have a 401(k) plan with certain components of the plan being designated as an ESOP and certain components being designated as a non-ESOP. Because of the complexity of separately testing the ESOP and non-ESOP components of the plan, we are contemplating converting the entire plan to an ESOP. Except for certain plan assets derived from a DB reversion, participants are free to direct plan investments to a number of different investment funds including an employer stock fund. Right now, 90+% of total plan assets are invested in employer stock and we do not expect this to change. The plan assets that are required to remain invested in employer stock due to the DB reversion amount to about 39% of the total assets. If we convert the entire plan to an ESOP, do we have an issue as to whether the plan is "designed to invest primarily" in employer stock since participants, in theory, could redirect up to 61% of plan assets into non-employer stock investment funds. Bear in mind, we do not anticipate this happening - only that it can happen. Thoughts are appreciated. Thanks.

I am confused (obviously) about terminating my Roth IRA. I have had the money in, successively, a CD, a DRIP, and a mutual fund starting in 1999. The first made a little interest and the last two lost big, meaning my total current holdings are far less than contributions. I am not 59 1/2 yet.

Am I right in thinking I can cash out with no tax penalty? Some people I've asked say it has to be in 5 full years regardless.

Sorry if this is an elementary question. Thanks for your help

A client who was operating a SEP, amounts calculated by my firm (CPA), was approached by Fidelity to have their assets invested there. Well during the typical Fidelity glossy sales talk the salesman told my client that the SEP could only be run for so many years and they should convert the plan to a SIMPLE plan. The clients did as they were advised and contributed the maximum amount to the SIMPLE. Now, it's tax time and we are just hearing about this.

Has anyone ever heard of this happening before?

What is their recourse? As they have always contributed the maximum 15% before and would have done again this year. They are now shorted? Can we pull all the assets out of the SIMPLE as administrative error and contribute to the SEP instead?

HELP!!!!

How are participant loans handled in a 401(k) Plan Master Trust? Specifically, are they:

(a) pooled together and considered one MTIA with the individual plan's interest in such MTIA being the aggregate of that plan's participant loans, or

(B) can they be pooled in with other participant-directed assets as one MTIA, as allowed under the special exception for participant-directed assets in a 401(k) Plan?

We are currently restating a small defined benefit plan for GUST and EGTRRA. The effective date of the restatement will be 1/1/1997 although the client will not actually execute the restated document until next month.

Our understaning is that we need to use the 1/1/1997 effective date because the changes brought about by GUST started for the plan year beginning in 1997.

Suppose the prior TRA-86 document was amended in 1998 and 1999 for benefit increases. Are we required to indicate the prior benefit formulas in our restated document?

Thanks

DK

If the only provision in the Section 125 Plan is pre-tax payment of health and dental insurance premiums are the premiums calculated the same as Medical Reimbursement Accounts and Dependent Care Reimbursement Accounts where you will have 24 or 26 or 52 pays in each plan year or just expensed each pay period. With a Medical Reimbursement Account and Dependent Care Reimbursement Account the plan year would start on, say, January 1st, and allow expenses incurred on or after January 1st, but the first pay of January might happen to include hours worked in the last plan year. With the insurance premium the premium is actually due starting the 1st of January even though the first pay of January might happen to include hours worked in the last plan year. The basis of the question is that we implemented a new dental plan as of January 1, 2003. The first pay on January 2, 2003 was for the last two weeks of 2002. Are we required by Section 125 deduct dental premium from the January 2nd pay or to begin deductions in the following pay using January 1st as the first day premiums are due?

Do the rules of converting a regular 401(k) to a safe harbor 401(k) regarding when you can convert apply to SARSEPs?

I have a participant that converted from full time to part time. They no longer work 1000 hours in a given plan year. The plan is top heavy. The participant only works when needed and did not work on the last day of the plan year. Would you consider this participant eligible for the top heavy minimum or not? I believe the participant is eligible but I would like to hear some other opinions.

let's provide some feedback on his retirement plan proposals.

president@whitehouse.gov

If a sponsor of an ERISA 403b plan has an employer discretionary contribution which is class based, since it is subject to the nondiscrimination rules under IRC 401(a)(4), as referenced in IRC 403(B)(12), is it subject to the minimum gateway allocations also?

IMO I would say yes, but I wanted to know if anyone has a contradictory opinion.

thanks

Executive director and 1 employee. Director will have medical and dental, EE will have dental (medical provided by spouse's coverage).

We have a client who is wanting to cancel her Daycare election because she feels she cannot be without the money right now.

We have paid her the remaining balance on her account for the receipts that she has turned in for reimbursement up to her amount that has been deducted from her paycheck. So she has no at risk amount.

Can she stop her enrollment since there is not a "change in family status"? Is financial hardship considered a reason for her to change her election to $0.00?

Which code do you use on the 1099-R when an employee separates from service at age 58? The 1009-R instructions seem to say you use code "1", although based on Sec. 72(t) (2)(A)(v) it seems you should use code "7".

With the passing of EGTRRA, is it possible to restate a governmental 457 plan as a 401(K) psp?

An ERISA based health plan paid out over $56,000 in medical expenses for a member who was injured as the result of an accident. The member had signed an agreement for reimbursement. The member has since recovered a signifcant sum, well over the amount expended by the fund for his injuries, from the tortfeasor. The Health Fund has exercised it's right of subrogation/lien. The amount owed is being held in escrow by the member's attorneys, however, the member has refused to pay the monies owed. A lawsuit has been initiated in Federal Court seeking equitable relief.

Is it a breach of fiduciary duty to compromise the amount owed to settle this or is it legal to accept less in order to resolve this matter?

Any help would be greatly appreciated. Thank you.

We currently are running Relius 6.0 on several stand alone workstations--we are considering changing to running Relius on a network. Any input as to anyone's experience, problems, challenges, etc. would be greatly appreciated.

Can someone let me know if catch up contributions are included in the adp/acp test.

the question is: cross tested 401k plan with qnecs to pass the adp test. are the qnecs in the general test? sal's book says no(from how i read it) but relius support says that qnecs are in it, and the reports include them. In prior versions thye did not, and the old FDP software did not. did the regs change?

please cite the applicable regs.

thanks

Is a nonqualified welfare benefit trust (a non-VEBA welfare benefit fund) required to file an income tax return separate from the employer's return?