The preamble to the 457 regulations states that a participant may not elect to have the special 3-year 457 catch up election apply more than once..........unless the participant is covered by the plan of another employer (etc..)...

The first paragraph of Section©(3)(i) of the regulations states that the plan ceiling can be raised for one or more of the participant's last 3 taxable years.......

It is possible that I overlooked another cite in the regulations, but assuming a participant is otherwise eligible, how many times may the limit be increased?

Thanks.

I have certain common stocks in my self-directed IRA-SEP that are worth considerably less than I paid for them. I'm considering establishing a Roth IRA and transferring these stocks to it. If I die before the 5 year ban on distribution from the Roth IRA, how will the beneficiaries of my Roth IRA be affected?

:confused: I have plan 457 . I want to liquidate my assests i have a finanical hardship my employer gave me a form to write down all my personal information: rent payment utilities food and clothing medical expenses car payments other transportation charge account payments college expenses insurance premiums spouse salary my salary cash in savings and checking stocks and bonds life insurance cash value and other income. Am i required to give all that information to them to get my money. I feel thats being too personal. how can i work around that so i can get my money?

Where can I get the updated Roth IRA TAx code.

Thanks, Ken

This might be a stupid question, but here goes.

A QDRO says that the former spouse is to be treated as the surviving spouse for the participant in a 401(k) that is subject to the QJSA rules. The participant does not remarry. The participant then terminates employment. When he wants to take his money out of the plan, does he have to get spousal consent since his ex is till his spouse under the QDRO or is the ex only considered his spouse for purposes of getting the death benefit should the participant die?

Thanks

Carolyn:

a plan froze benefits at 12/31/82. the formula at that time was a ss offset.

they determine the ss ben based on the law in 1982.

the plan discounts at 5% per year and uses level pay after 1982 until age 65.

say person is age 50 at 12/31/82.

my question is should the PIA be multiplied (or increased) by the 7.4% COLA of june 1982?

my feeling is that a participant's PIA is not increased by COLAs until and after he reaches age 62 and not prior to that point in time. so in this case the COLA would not be applied.

We have a Cafeteria Plan with component self-funded plans of medical and dental, group term life, and flexible spending account for unreimbursed medical. We have determined that all employees are eligible with the exception of part-timers. The percentage of HCE and Key employees is less than 5% of total employees eligible. We have plenty of information regarding testing requirements from manuals but none on what the numeric values should be. How can we make this simple. Are there any sample worksheets available with the math functions?

Plan year is 11/1/01 to 10/31/02...

are the new EGTRRA limits regarding increased employer deduction to 25% effective for Plan Years beginning in 2002 or plan years ending in 2002.....?

Our actuaries are concerned that using the new mortality table required by Rev. Rul. 2001-62 will result in a lower value for annuity distributions and cash balance calculations in violation of 411(d)(6).

I am reading the language of the Rev. Rul. that states "... a defined benefit plan must provide that the present value of any accrued benefit and the amount of any distribution, including a lump sum, must not be less than the amount calculated using the applicable interest rate described in sec. 1.417(e)-1(d)(3) ... and the applicable mortality table described in sec. 1.417(e)-1(d)(2). The present value of any optional form of benefit cannot be less than the present value of the normal retirement benefit determined in accordance with the preceding sentence."

And, I am reading the language that states, "A plan amendment will not violate sec. 411(d)(6)(B) of the Code and the corresponding provision of ERISA solely because of a reduction in any annuity distribution with an annuity starting date on or after the later of the adoption date or the effective date of this amendment if the cause of such reduction is the substitution of the table in this revenue ruling for the table in Rev. Rul. 95-6."

I told them as long as the present value of the annuity is not less than the present value of the normal retirement benefit determined in accordance with Rev. Rul. 2001-62, there will not be a violation of IRC sec. 411(d)(6).

Does anyone else agree with this conclusion?

A non-integrated PSP became effective back in 1995.

The GUST adoption agreement, has a section where I must elect ...either Non-integration or Integration.

The highly paid owner participant would love to switch the plan to Integrated by use of the GUST adoption agreement ..... but it seems to good to me.

Can a non-integrated plan switch to integrated, simply by elceting to do so in the GUST adoption agreement ??

If yes, when is such an election effective? What about the fact that the contributions for years 1995 - 2001 were computed on a non-integration basis. Do any years now have to be retroactively amended ?

The "multiple use" test was repealed by EGTRRA for the 2002 plan year. In your opinion, does a "moldel amendment" explicitly repealing the "multiple use" test need to be adopted by the end of the 2002? Or perhaps this is one of he "non-optional" provisions that does not need to be explicitly reflected in the plan document until the "2005 plan year,", the EGTRRA remedial amendment period?

If a plan has life insurance in it as a plan asset for 3 participants does the beneficiary on the life insurance policies have to be the plan or can it be an individual beneficiary? If it has to be the plan how is the benefit handled once the participant passes away?

I have a frozen defined benefit plan. Benefit service and participation was frozen in 1996. The plan is not top-heavy. Benefits are increased each year based on revised average salaries for the participants. Average salary is based on the 5 highest years of service. There are 5 HCEs and 45 NCHEs. Only 15 of the NHCEs have benefits in the plan. All 5 HCEs have benefits.

The prior actuary indicated that no HCE benefited in the plan for 410(B). Is this correct given that the protected benefits are increasing each year as the average salaries increase?

:confused:

We have a plan that's been distributing deferrals to participants while employed but under age 59-1/2. This has happened infrequently enough that we would like to correct the operational failure under SCP. As part of the correction process, we would attempt to recover the distributions from the affected employees. In the very likely event that these employees will refuse to return the distributions, would SCP still be an appropriate correction? Would we be better off going through VCO or VCP?

Normally a benefit increase created by reallocating excess assets requires a demonstration that the increase is non-discriminatory, per Rev. Rul. 80-229.Benefit increases due to adoption of the higher retroactive comp limits of EGTRRA are not subject to non-discrimination testing. Does the EGTRRA pass trump 80-229?

I think the answer to this is no, but thought I would ask anyway.

Group's 125 plan year is June 1 to May 31. Insurance renewal is Nov. 1. There is a significant change in rates effective Nov. 1. Could an employee who is presently not participating in the 125 plan, but is covered on the medical plan, enroll in the 125 plan effective Nov. 1?

The only reason he was not enrolled in the first place was concern about reducing his future soc. sec. benefits.

12/31/2002 is approaching fast, which is our GUST deadline based on our prototype sponsor, and our firm is running into potential issues that we would like to head off.

1. All of our clients received material at the beginning of the year regarding GUST, along with an invoice and authorization form for us to begin the process. Naturally, we have a handful whom have not responded to our letters or reminders. Any suggestions for "scare" language other than "failure to amend can result in plan disqualification" - this quote does not affect them. We would like to avoid resignation as well.

2. Just like everyone else, we'll receive new business/takeover plans up until the last week of December. Some will be amended for GUST, others will not. For those that are not amended for GUST and because of the 12/31/2002 deadline, is it possible to provide the plan a Resolution for the Trustee to sign until we are able to provide the client with a GUST document? What are other TPAs doing in this situation? Can a document be sent in 2003 but back date the signature for 2002?

3. Number 2 assumes that the client we take over was using a provider that has reliance from the IRS and is posted on the IRS website. What if the client's prior TPA's document or document sponsor is NOT on the list and has not receive reliance? Is a correction program the only option?

The MPPP document defines "compensation" (for computing employer contribution) ... as "W-2 wages subject to federal withholding".

The calendar year MPPP decides to terminmate by 12/31 of the current year. In August , the employer notifies participants that ... "all benefit accruals will cease on 09/30 and that the plan will terminate sometime thereafter (but no later than 12/31)".

Salary is paid monthly, which means that the salary earned by participants in month of Sept .... will not be paid to them uintil Oct.

MY QUESTION:

Must the "Salary earned by participants in Sept, be included in eligible COMPENSATION" for determining this short-year MPPP required contribution ?

Company has a full cafeteria plan (125) with a plan year of 1/1 thru 12/31, all insurance contracts, but for one, renew on 1/1. Company also has a fully insured health insurance policy with a renewal date of 7/1. Insurance Company only permits election changes (absent a QE) at the time of renewal.

Employee does not elect heath insurance when first eligible, and has no qualifying events. If the employee wishes to elect health insurance for the following plan year, must the employee elect coverage prior to the start of the 125 plan year (to satisfy the 125 regs) and then wait until 7/1 for the coverage to become effective (to satisfy the health insurance contract)?

Treasury Reg 1.125 - 2 Question 6 seems to cover premium increases without issue, but what about new enrollees and/or participants changing beneficiary coverage without a QE?