I have a tax-exempt employer setting up a qualified plan. Does the fact that they are a non-profit organization exempt them from the fidelity bond requirement?

We are merging Money Purchase Pension plans with the Profit Sharing plans during 2002 with proper resolutions and adoption agreements to stop accruing benefits. My question is on some the employer will have to make a small 2002 contribution on some since the 60 notice was not processed until early in this year. Since the contribution does not have to be deposited until 2003 can we consider the contribution as transferring with the other assets in 2002 since the MPP plan is closed and do a final 2002 return? Should we have them go on a deposit the funds in 2002 and then transfer? We are trying to avoid having to do returns for 2 years versus one. HELP!

The Scenario:

ER pays 100% of premiums for core benefits for EEs. Benefits are non-taxable medical, dental, vision benefits. Whatever is not used by an employee is put into an FSA for the employee (employees do not receive cash back).

However, each EE has the option of up-grading the core requirements with salary reduction dollars.

Question:

I know that this is not a Section 125 plan if an EE has no option of upgrading the coverage and the unused allocated portion is put into an FSA.

BUT, The question is whether it remains a non-Code Section 125 FSA if EEs can pay premiums to upgrade coverage.

Any assistance will be appreciated.

Does the GUST remedial amendment period extension in Rev. Proc. 2002-73 that was released today have any effect on the EGTRRA good faith and/or Required Minimum Distribution amendment due dates?

http://benefitslink.com/IRS/revproc2002-73.shtml

I just ran my first gateway testing on Relius. Can someone verify for me exactly what the results are telling me. My report says reflectsthe following

Highest HCe Ben 6.50%

1/3 of Highese HC Ben % 2.167

NHCE with Ben % < 2.167 Failed the NHCE Ben % - 0

Test Passed

NHCE Ben % Failing part pof Gateway Test

REquired Min NHCE Ben % - 5.00

NHCE with Ben % < 5.00 - 186

Test Failed

Must pass Min. Allocation Gateway Test or Safe Harbor Minimum Allocation Gateway Tst or both to pass Gateway Test.

Last Line says - PASSED Gateway Test Requirments.

Can someone tell me Did I or Did I Not Pass?

Thanks

One man plan, assets never >$100,000. Plan is terminating end of the year - does a final 5500EZ need to be filed even though a 5500EZ has never been filed?

An employee has medical coverage on herself and her husband.

The husband has just been approved for VA medical care. Would this be considered a qualifying event under Section 125 to allow the employee to drop her husband from current coverage, or must she wait until Open Enrollment (01/01/03)?

I'm preparing a new 457(B) plan for a tax-exempt entity (it qualifies for the top-hat exemption). Should I include the provisions in the new IRS model amendment for the 401(a)(9) regulations regarding minimum required distributions, or do you think it is ok to incorporate the rules by reference? The plan will have only one participant, but I'm thinking that I may need to specifically include the basic provisions of the model amendment (although I may include it as an appendix so it doesn't "junk" up the main plan document). Does anyone else simply incorporate the rules by reference?

Does anyone have any information or websites on "wasting trusts"?

Thanks.

I have a plan that is currently a 2/28 plan year-end.

They will be switching to a 12/31 year-end effective immediately.

What notification, if any, does the plan have to provide to the participants regarding this switch?

Time-frames involved?

Thank you in advance!

I understand that the new regs require the use of 415 compensation for determining the gateway test.

A Plan uses 3401(a) comp in its document, without any adjustments to the definition. Am I correct that that definition satisfies the new regs?

Also, are severance payments part of the definition?

Employees who are part of the Employer's control group but not employed by one of the Plan's participating employers were enrolled in the Plan in error. The employees should have been enrolled in their employer's plan held by a different recordkeeper.What is the best way to move these participant account balances out of the Plan and into the correct plan? This situation seems too far removed from the inclusion of ineligibles based on age and service requirements contemplated by EPCRS so I am wary of applying those principles to this situation.

Can a SEP allow participants to purchase life insurance with either seasoned monies and/or rollover assets?

First, is pre-school fees still reimburseable under Dependent Care Reimbursement Plan?

Second, are fees paid to a school for "kindercare", which is when a child attends kindergarten 1/2 days and then "kindercare" for the other 1/2, reimburseable under Dependent Care Reimbursement Plan?

Thanks.:confused:

My online broker said I could transfer my shares to a non-retirement account. Is this true? If so, can I deduct the loss if I sell the shares from the non - ret acct. Thanks.

I'm concerned. An employee in my company applied for a hardship withdrawal due to eviction reasons and the HR Manager approved it without getting any paperwork from him that proved this hardship. (HRM says the paperwork is "coming" in a few days.)

Aren't we required to have the proof up front before allowing the withdrawal? Can anyone tell me where to find this info?

say an individual is an S corp. no other employees.

if on the individual's 1040 he shows S corp income of say 50,000 and no other compensation.

can the 1120S make a ret plan contribution for that individual (to either a DC plan or a DB plan) and can the individual make a 401-k salary deferral?

thanks ,

gary

say an individual is an S corp.

if on the individual's 1040 he shows S corp income of say 50,000 and no other compensation.

can the 1120S make a ret plan contribution for that individual and can the individual make a 401-k salary deferral?

thanks ,

gary

My employer, the University of South Alabama, participates in the Alabama State Teacher's Retirement System (TRS) DB plan. We have a medical school and a medical faculty practice plan (FPP). The FPP is a separately incorporated 501©(3) corporation through which the medical doctor professors carry on their clinical practice, and from which the doctors receive a salary. The FPP does not sponsor a qualified retirement plan. So the medical doctors receive two salary checks - one from the university for their teaching duties and on which the doctors will receive a retirement annuity from the TRS, and one from the FPP for their clinical practice on which no retirement is provided.

Discussions are beginning about folding the FPP into the university for business reasons unrelated to retirement plan considerations. The doctors will continue their clinical practice, only through the university instead of the FPP.

We have discussed the fact that the day after the FPP is dissolved, the TRS DB plan will have a significant unfunded liability with respect to the doctors. In other words, due to the salary formerly paid through the FPP but now paid through the university, the doctors' state paychecks will approximately double overnight, with the same years of service, which will make the TRS annuity approximately double what had been assumed in all previous actuarial projections. Obviously, the TRS will look to the university and the doctors to make up the difference.

The university, like most state institutions, is in no financial position to make up any part of the difference, so the likely outcome is that the doctors themselves will have to fully fund the unfunded liability.

Now, finally to the question. Assuming the doctors do not want to use existing 403(B) or 457 funds to pay the liability. Is there any possible way for the doctors to fund this liability with pre-tax dollars? For example, it seems to me that if Alabama law either currently allows, or could be changed to allow, this buy-in to be "picked up" by the university, pre-tax treatment should be allowed.

I was able to find a couple of letter rulings that were somewhat on point. The first, PLR 20002051, allowed 414(h)(2) treatment for the purchase of service credits for prior employment as a private school teacher and for any employment which the plan's board of trustees deem to enhance the participant's ability to teach in the public school system. The second, PLR 200229051, actually ruled on a retired employee issue, but also described a plan under which existing employees made an irrevocable election to purchase, in exchange for an increased mandatory contribution, an enhanced retirement benefit equal to 2% for each year of creditable service, up to 80% of three-year average salary. The taxpayer didn't request a ruling on the 414(h)(2) impact on existing employees, so if anyone has any insights on such impact I would appreciate hearing them.

Thanks in advance for any thoughts.

Ken Davis

Univ. of South Alabama

Four months into the plan year, my client stopped the matching contributions to their plan. They notified the participants, but failed to contact us so no amendment was drafted or executed. I notified the client that they would still have to make the contribution (matching formula in document). What is concerning me is that after the client notified the participants that there would not be a match, several participants stopped their deferral contributions. Notwithstanding the employee relations nightmare, what possible issues/problems can arise?

Thanx!