I work for a small company (three employees total as of now; up until last May there were four). The owner pays for the health insuance coverage of everyone except me; he deducts the full cost of my coverage from my paycheck. I am a full-time employee, and have worked here for almost five years. The only difference that I can tell between me and the covered employees is that I'm female and they're male.

I'm in the state of Michigan; anyone know if it's legal for an employer to pay for some employee's coverage, and not others? Does there have to be a specific criteria for excluding some employees (i.e. part-timers, clerical staff, etc)?

Thanks for any input.

An IRA holder is in payout status, and the primary beneficiary on the account is his wife, who is 10 years younger than him. His wife dies in 2002, and he names his daughter primary beneficiary. When calculating his 2002 IRA RMD, am I correct to use his daughters age when doing the calculation? By doing this, his RMD will be greater.

Or, am I required to leave the calculation based upon his deceased wife’s age? Thanks for any guidance on this. Sincerely, Anthony Milano

I have two controlled group members (A and b) who each have a plan, both subject to a 6-year graded vesting schedule. There are frequent transfers of employees between members. If an employee works for member A for three years, then transfers to member B, I would assume that employee is considered to have 3 years of service (for vesting and participation) upon commencement of service with member B. And, over the next three years, that employee would be 100% vested in member B’s plan. However, I would also assume that, since the employee became only 40% vested in member A’s plan as of the date of transfer, that employee would normally not continue to earn vested years of service with A’s plan and, therefore, would forfeit 60% of the employer’s contribution to A’s plan.

Am I correct in this assumption? Is there any way around this, other than having the employee transfer back to member A and earn the requisite years of service? What if member A’s plan covered both member A and B employees, but did not include member B compensation for purposes of benefits? In other words, after the transfer, the employee would be a participant in both the plan of A and B. However, contributions to the A plan would not be made on compensation earned as an employee of B, although vested years of service would continue to be earned. Would this work?

A TPA just told me that; "DATAIR prototypes AND volume submitter documents have until late next year to complete their GUST amendment and restatements!!"

This person also stated; "turns out the due date for the GUST amendment and restatements does not start being calculated until the Document Sponsor (DATAIR in this case) has received ALL their letters from the IRS. So, we have until 12 months after they get their last letter to get the GUSTs done.

I need confirmation/opinions on this. Is this true?

We have a pre-tax transportation program for commuting and parking costs. We use an outside vendor to reimburse employees by check when they submit a claim form. We pay an administrative fee to the vendor for each employee.

At one of our locations, the building offers parking to employees through the employer. The employer pays for the number of spots and then pays the building.

Rather than put these employees in our transit program through our vendor, can we just deduct the money pre-tax and pay the building directly for each employee's parking spot?

Question -

Plan purchased an investment in an LLC during the course of the plan year. As of the end of the plan year, the investment advisor said that this investment had not changed, same as what they bought in for?

What are the rules for reporting an investment that is not valued on the market? I.E., would I just check question 4g on the 5500 and then list the amount on question 3?

Thanks,

Keeping up with the board, I've seen a lot of discussion about whether Rollovers (Trad to Roth) affect AGI as AGI relates to Contribution eligibility. But what about AGI for Saver's Credit purposes?

Specifically, since a Trad to Roth conversion is taxable income, would the conversion amount be included in AGI for determination of Saver's Credit eligibility and Credit Rate? And if included, is the entire amount included, or just the Base, or just the Total-Base? Form 8606 (2001) puts (Total-Base) on 1040a line 15b.

Thanks!

An ESOP has, by its terms, satisfied the 401(a)(28)(B) diversification requirement by distributing the portion of the participant's account subject to the diversification election. The sponsor now proposes to amend the ESOP to satisfy the diversification requirement by allowing actual diversification under the ESOP through 3 or more investment options. Is there a 411(d)(6) problem with this change?

I have a client with a 403(B) plan. I really don't know much about 403(B) plans. The client has less than 100 employees. I was told that a Form 5500 was not required to be filed. While i don't know much, i see from other threads that Form 5500s are filed for these plans. Are there any circumstances where a Form 5500 would not be required for an active 403(B) plan?? Thanks.

Can an employee and his spouse (employed by another company) both take advantage of a DCFSA? Are there any tax implications? Thank you!

I have a plan which an employee was an owner in the year 2000. He sold his ownership in year 2000 and also terminated in that year as well. He also has a wife that still works with the company, but did not make over 85K in the year 2000. I am trying to complete testing for the 1/1/01 - 12/31/01 period. My questions are:

1. Is he still considered a Key EE, since he still has a balance in the plan?

2. Should his wife still be considered a HCE due to her relationship to an owner, or what was a former owner?

I have a client that fits the split DB/DC criteria. Young and Old Owners, and a similar mix of employees. They currently have a 401k plan. Can the DB participants continue to defer in the 401k (without getting a PS contribution) without the plans being subject to the combined plan 404 limits?? Thanks.

We've got a takeover Plan that uses one vesting schedule for employees hired before 01/01/00 (6 year grade) and another vesting schedule for employees hired after 01/01/00 (4 year grade). Is this permissable? I've never seen something like that before.

Hi there,

I am 28 yrs old and i wanted to start a ira roth. I am not sure who i should do this through or how i go about doing it can someone please help me?

Co A sponsors a 401k plan- all employees participate. The plan provides an employer match also.

That company wants to give a discretionary PS contribution to only HCEs and

interns, using new comparability to pass. If they did this within the

Plan,

would it require the min contribution (under th new comparability rules)

to

be given to all NHCEs, not just interns. In other words, are all the NHCEs considered "benefitting" under the final new comp regs since they are able to defer and get a match.

If they set up a separate plan just for the PS contribution, could they

just

give the minimum to interns? The rest of the NHCEs would get a 0% allocation.

Is a non-5% owner employee who retired at NRA (65) & took a 100% lump sum distribution at that time entitled to continue to receive employer QNEC contributions annually? The employee was re-hired within a month of the retirement and is now age 70.

The plan is a 401k profit sharing plan. The employer has never used the 401k feature, and since plan inception has only made 10% of comp QNEC contributions annually. The plan's eligibility requirements are: 6 mos of svc & no age requirement. What are the ramifications under 401(a)(9), if any?

A traditional 401(k) PSP of a publically traded company has 15 investment options for self-direction. One of those options is "company stock." The company would like to amend the plan to take advantage of the Section 404(k) dividend deduction provision that was amended by EGTRRA.

The company is NOT going to make an employer contribution that is set aside in a newly created ESOP account. Instead, they want to take the position that the Company Stock Account in the self direction investment menu is the ESOP portion of the plan.

Apparantly, the recordkeeper has seen this done on several occasions, and has even shown me an amendment.

I don't see how you can take the position that an investment option is a plan designed to invest primarily in employer securities, even if you throw in all kinds of 409 and 4975(e)(7) that applies to that investment option. We are talking about 401(k) deferrals and matching money that one day might be in a bond fund and the next day in company stock. How is that a plan or provision designed to invest primarily in employer securities.

A traditional 401(k) PSP of a publically traded company has 15 investment options for self-direction. One of those options is "company stock." The company would like to amend the plan to take advantage of the Section 404(k) dividend deduction provision that was amended by EGTRRA.

The company is NOT going to make an employer contribution that is set aside in a newly created ESOP account. Instead, they want to take the position that the Company Stock Account in the self direction investment menu is the ESOP portion of the plan. The only money going into the plan represents deferrals and matching contributions.

Apparantly, the recordkeeper has seen this done on several occasions, and has even shown me such an amendment.

I don't see how you can take the position that an investment option is a plan or even a component of a plan designed to invest primarily in employer securities, even if you throw in all kinds of 409 and 4975(e)(7) language that applies to that investment option. We are talking about 401(k) deferrals and matching money that one day might be invested in a bond fund and the next day in company stock. How is that a plan or provision designed to invest primarily in employer securities?

If you've done this, have you gotten a determination letter on it yet?

Sole practitioner has retired so little or no income on Sched C.

DB plan is underfunded just before termination, so $80,000 is required to fund but is not deductible under 404(a)(8) because of little income. Is the non-deductible amount carried forward, or does it become a basis in the assets in the trust, or is it lost forever?

Question - A client would like to count past service for purposes of his 401(K) plan eligibility for "non-compensated" service rendered by his wif, while getting the business started. Essentially she was working but not on the payroll. Can this be accomplished ?