Am I correct in assuming that a plan can still elect NOT to receive rollovers from another plan, either by a participant or directly from another plan? Or are the EGTRRA rules saying that a plan MUST receive rollovers?

I have a money purchase plan which requires that all forfeitures available be used to offset the required employer contribution.

This was not done, and the contribution has been funded fully for the previous year. The Plan does not contemplate this situation.

My gut tells me that we need to dispose of forfeitures annually, but I can't find that in writing...

Can anyone provide more info on this situation?

A recordkeeper provides distributions checks via us mail as part of its service. Typically if a plan sponsor wants something overnighted via FedEx or other providers, the plan sponsor provides its FedEx Acct #.

If a participant wants FedEx service they will typically provide a credit card number.

ISSUE/QUESTION: A participant wants his retirement account to be reduced by the overnight fee, but it seems illogical since the fee should be an after tax expense but by reducing the account for the fee amount this is creates a pre-tax expense.

Any thoughts on the legitimacy of charging a participant's account for the expense of overnighting a distribution check they want expedited.

Thanks for any insight.

andmik

One of our clients was audited by the Department of Labor recently. They asked the client to put procedures in place that would require 2 different plan sponsor signatures for approving a distribution. The DOL rep said it isn't a regulation but would like them to voluntarily comply.

Has anyone else run into this?

i've been on long-term disability for the past 6 years. i am in dire need of cash and was hoping to liquidate my ESOP which is worth about $65,000.00.

under the terms of the esop my employer will only distribute at early retirement, not long-term disability. do i have any recourse?

also, are there any companies that purchase esop's so i could get the money now and somehow assign it to them for payment at 55. i'm 44 now.

any advice would be greatly appreciated. thanks in advance.

I have a client who has a 401(k) that includes all employees. Document does not say to exclude members of a collective barganing agreement. A few years later, the company now has employees that are part of a cba and are enrolled in the plan. They contribute and receive a match.

Do I automatically test this group seperatly? Even though the document includes these employees. Free pass on the ACP test?

Anything else would be appreciated. What other admin. issues to worry about?

I have several questions regarding these plans:

1) The company's offering these plans claim they are not offering insurance. They are marketing to individuals without any company obligation. Is there any regulation for these plans?

2) Do they need to be sold by licensed agents?

3) As health insurance cost rise and more of these type of plans "pop up", will litigation and regulation increase?

4) What are the drawbacks of a plan that costs about $120/year but claims to save thousands in discounts on prescription, dental and vision?

5) As an employer, I am opening a liability to offer this to my employees if they pay the company directly?

A client's attorney has asserted that if rollovers from traditional IRAs (deductible only) are allowed, the Plan Sponsor/Trustee will need to issue Form 5498 annually. I agrue that such is not the case as once rolled over it ceases to be an IRA.

Thoughts?

Secondly, according to EGTRRA, beginning in 2003 employer sponsored plans may provide for deemed IRAs. Does anyone have any good soruces of information on this arrangement? What are advantages/disadvantages? Do the deductible limit rules based on AGI apply? Would a 5498 have to be issued for these?

An Employer with a 9/30 Fiscal Year End establishes a 401k plan on 1/1/02 with a short first plan year of 1/1 to 9/30. There was a SIMPLE plan in effect the prior calendar year.

For the initial 401k plan year, what pay period is used if the 401k plan specifies Fiscal Year Pay? Is it 1/1 to 9/30/02? Is it possible (or required) to use 10/1/01 to 9/30/02 pay?

Thanks for any input.

Executive and Employer entered into a 457(f) agreement years ago. Vesting date (and payout date) is 12/31/02.

Executive DOES NOT have a rolling risk of forfeiture right. However, Executive and Employer would like to amend the agreement to defer vesting (and payment) until 12/31/04, in exchange for Employer's commitment to credit Executive with a substantial amount of additional deferred compensation. Therefore, both the deferred compensation accrued as of 12/31/02 and the additional deferred compensation will be at risk for another two years.

I believe this works under 457(f). Any thoughts?

If a plan has used disaggregated numbers to help satisfy ADP/ACP testing in the previous plan year, can they use that percentage as the prior NHCE percentage in the next year?

My thinking is they cannot use the disaggregated figure when doing prior years testing in the following year, but would like someone to verify this.

Thanks.

I understand that the IRS is currently considering the elimination of lump-sum settlements to the beneficiaries of a retiree. Please bring me up to date? What types of plans will be affected?

Peace,

Joel L. Frank

Can a QNEC be used simply because the employer has money in a suspense account they would like to allocate if the document reads "The Employer may, in its discretion, make a Qualified Nonelective Employer Contribution for the Plan Year in any amount necessary to satisfy or help to satisfy the "ADP" test, described in Section **, and/or the "ACP" test, described in Section."

Though that would typically be for that reason for such a declaration it would appear they could use it as long as it complies with the allocation formula specified in the document.

I'm trying to ascertain if with respect to a non-ERISA 403(B) for a public school district if there are any outstanding issues. My understanding from earlier threads is the following:

1) 100% of compensation (grossed up to include 125 deferrals and MECs for purposes of funding State Retirement Pension Plans, 457(f) arrangements) up to the 402(g) limit -- assuming no age 50. In other words $11,000 for 2002. In order to reach the 415© maximum of $40,000, it would therefore require an employer contribution of $29,000. (403(B) or 401(a) Board paid annuity I assume.

2) If the individual is over age 50, the $11,000 goes to $12,000. If the individual defers less than $11,000 the $1,000 age 50 catch-up can still come into play, irrespective of any discrimination testing in a qualified plan (i.e., if you fail the ADP test, $1,000 could be "recharacterized" as an age 50 amount? Of course this assumes the plan is subject to ERISA, which public school districts are never subject to).

3) If the individual is over age 50, and has over 15 YOS, the maximum would be $11,000, plus $3,000 (15-year catch-up), plus $1,000 for a total of $15,000--for the 403(B). If the individual has taken advantage of catch-ups under pre-EGTRRA law, how does this apply? Does the $5,000/year average past deferrals come into play as to whether one can achieve this limit?

In addition, if the individual is also participating in a 457 plan, what is the maximum based on somebody under age 50 or over age 50?

4) Have we come to a conclusion that the tax year, mentioned in the regs. truly means individual participant's tax year (typically calencar) as opposed to plan sponsor plan year which could be off-calendar?

Is there anything else missing. Is there a "definitive" thread or explanation on this site or others that explains this in "simple" English??

Thanks for your comments in advance.

Do the normal cost and amortization bases need to be prorated for a short plan year of an ongoing plan similar to the provisions of Rev. Rul 79-237 for terminated plans? Would your answer change for a participant with compensation at the 401(a)(17) limit, whose compensation is already being prorated (in effect a double proration)?

Our pension plan requires an employer contribution of 11.11% on all taxable compensation. Employee contributions

are not allowed.

At the end of the year, the Company sets aside a dollar amount of company profits for a profit-sharing distribution,

which is distributed during the next calendar year. The amount set aside is distributed as 10% pension and the

remainder in taxes and cash.

Two questions:

1) Do we need to do anything in our internal bookkeeping to ensure this will considered an "employer contribution"

rather than an "employee contribution"?

2) We are considering giving employees the option of contributing profit-sharing amounts to the company 401(k)

instead. Some managers feel employees should get the same gross amount for a 401(k) contribution as if they took

cash and pension. Accounting is concerned that this methodology could indicate that the employee had control in

making the contribution, making it an employee contribution rather than company. Do you see that as being an

issue?

I have a client who wants to establish a self insured VEBA for post retirement medical and life insurance pursuant to a collective bargaining agreement. Plan has been unfunded for many years. My firm is the actuary for the plan. We need to find someone who can provide plan and trust documents. Please let me know if you know someone who can provide these services.

I realize this is probably a stupid question, but are plan sponsors still permitted to exclude Section 125 (etc.) deferrals from compensation? Thanks.

Participant in a PSP recently got separated from spouse. A separation agreement was signed and other spouse relinquished all rights,..., in participant's PSP benefits. Participant now wants to change the beneficiary designation. I looked at Reg 1.401(a)(20), Q & A 27, which states in part ..."if the spouse is legally separated or the participant has been abandoned (within the meaning of local law) and the participant has a court order to such effect, spousal consent is not required unless a QDRO provides otherwise." Does the "court order" language apply to the separation or to the abandonment, or both?? Also, I guess one would need to look at what "legally separated" means with respect to any one state's domestic law.....????

Has anyone ever had a client who couldn't qualify for a fidelity bond? Apparently due to their financial position they are not able to obtain the required bond coverage.

Is this a qualification issue?

If I check the box on the 5500 that they do not have coverage will that trigger an audit?

Any ideas?