How is the return of excess deferrals for a plan year ending 6/30/2002 reported on the participant's Form 1040?? According to the 401k answer book they should be reported on the 2001 1040. does that mean that if the form has been filed the participant needs to amend the form or can the return be reported on the 2002 Form 1040??

I had someone suggest to me that a non-amender could amend and restate currently and be OK as long as the 3 year statute of limitations goes by without the IRS auditing or picking up on it..... I know the filing of the Scedule P of the 5500 starts the statute running with respect to the trust arrangement of the plan, but does that apply to the qualified status of the underlying plan document as well? Didn't necessarily sit quite right...... Any comments on this?

We loaded 7.3 on Monday and came across a problem with insurance. If you post an insurance transaction and tell it to pay premiums, it messes up the reportwriter reports. You only get a few of the participants on the reports. Standard reports are fine. They are aware of the problem and hopefully will have it resolved soon. But the bottom line is, if you have alot of plans that have insurance, you may want to hold off loading 7.3 until it is fixed.

Tim

Can I transfer my 403b (the institution is a church) vested money to a 403b account at a "outside" mutual fund family, a family that is not one of the 4 provided in the 403b plan? If so, what steps do I need to take?

Eric

In the case of an individual about to retire AND turn 70 1/2, and who has both an employer sponsored DB plan and an IRA, must RMDs be taken seperately from each plan, or can the DB and IRA be aggregated together and have RMDs come out of one plan (say the DB) only ?

After being retired for 10 years and receiving a pension from a public employee retirement system the pensioner is informed that he owes $25,000 to the PERS. Accordingly, the PERS is reducing his pension over the next 96 months in order to collect the overpayment. Is there no statute of limitations?

How does one allocate assets from a MP/PS combination plan, which is a prototype plan with Schwab, to separate MP & PS accounts to comply with required GUST restatement? Schwab wants Plan Administrators to submit a letter of instruction indicating how to allocate the assets of the plan between the two new, restated plans. There have never been any employees and maximum dollar contributions have been made every year according to the formula 15% PS & 10% MP. Would one simply allocate assets 40% to PS & 60% to MP?

We have a situation where a large health plan went from a fully funded plan with a VEBA to a fully insured plan midway through the year. As a fully insured plan, we have no audit requirement for that portion of the year. But the trust stayed open and paying benefits until very late in the year and then reverted monies back to the employer. I believe that this is not allowed. Should the trust have used the remaining funds to pay premiums to the new insurance company or does it matter if they revert to the employer then pay the premiums?

Second question: Does the audit requirement extend until the trust is liquidated, or does it then end immediateley upon the plan becoming fully insured?

Any help would be greatly appreciated.

We have a client who is terminating a money purchase pension plan (prototype) that has one remaining participant with an account balance in excess of $5,000. The client knows that they will have difficulty getting the sole participant to return the benefit distribution form (they would also like to discourage him from electing what could be a pretty expensive annuity given the small participant population)and are wondering if they can state in their cover letter and/or 204(h) notice that (1) an annuity will be purchased for him if he does not respond with an election by the deadline and (2) any expenses associated with the purchase of the annuity will be assessed against his account. Can a plan even be amended for this and, if so, what fiduciary issues arise? The basic plan document is pretty general with its plan expense language...

Are the accrued safe harbor nonelective contributions counted in the top heavy testing? I have a case where it makes a difference and would appreciate any references. My "vote" is yes since it is a commitment prior to 12/31.

I need opions on whether the following situation constitutes an affiliated service group and what possible solutions might be;

Company A is an employee benefits firm consisting of Owner A (49%) owner B (49%) and owner c (2%). They have 4 employess that make 20K, 30K,30K, and 85K respectfully. Owner a and B recieve only 1099 income paid to their individual seperate corporations. Owner a and b want to set up a simple plan for the 4 employees of Company A and also be able to fully fund individual SEP accounts for themselves through their individual companys. there income is derived from brokerage commisions and fees generated from the sale of group insurance and the 1099 income is approx. 200k to each owner A and owner B paid trough owner a's corp (owner a is 100% owner) and owner b's corp (owner b is 100% owner). Can this be done? I know that this is not a controll group, but do we have an affiliated service group? If so what are some possible solutions? thanks for your help.

Wil

An Employee has changed status from full-time to part-time. They are no longer allowed to participate in the insurance nor the cafeteria plan. How does this effect the annual election? Is the participant only entitled to what they have put in the plan as of the new part-time date? exa: annual election was for $3000 as of the change to part-time they have only contributed $1,000. What is the participant entitled to? Thanks for the help!

Can anybody point me to a stand-alone, reasonably priced (or free) retirement benefit calculation program, which would determine the accrued benefit and also do lump sum calculations as well as monthly options?.

We're looking to standardize this process internally to lower the level at which this work can be done, by developing something, but first I thought I'd ask if such an animal already exists. Basically I'm looking for a user-friendly program that a clerk can run with some modest training, that could be adaptable to numerous plan designs. Maybe this is wishful thinking?

Does anyone have a good location to obtain step-by-step procedures for filing under VCP, including the fees involved?

Thanks,

Ronnie Wasel

When implementing a new cafeteria plan at a state agency, does anyone know how to apply the nondiscrimination rules given the grey lines that exist between different state agencies (most of of which use the same statewide federal tax employer ID number). This particular plan is an employer and employee funded optional dental plan offered to a wide range of employees in certain, but not all state agencies. Not all employees choose to participate.

Thanks in advance for any advice. -- Johnny

Client names spouse and 2 children as beneficiaries of his IRA. Upon death, can the spouse roll her share of the IRA to her name or does she lose that option because the IRA designates non-spousal beneficiaries? In other words, does she have to be the "sole" beneficiary of the IRA in order to roll the IRA to her name? Do seperate accounts solve the issue? Thanks.

A professional actuary has recently allocated a proposed $10,000 contribution among a plan's 3 participants (A, B, and C)under both an age based plan and a new comparability plan.

Under the age based: The $10,000 will be allocated ... A=60%, B=15%, and C=25%. [6000+1500+2500 = $10,000].

Under the new comparability: The $10,000 will be allocated ... A=70%, B=10%, and C=20%. [7000+1000+2000 = $10,000].

MY QUESTION:

Suppose that the employer NOW decides to contribute an amount OTHER THAN $10,000. And that the employer does not want to pay the actuary to compute a new allocation.

Can the employer use the same "allocation PERCENTAGES" that the actuary earlier determined when it was thought that the contribution would be $ 10,000 ?

A 401(k) has a plan year that runs 7/1 through 6/30. During calendar year 2002, a HCE contributes up to the 402(g) limit of $11,000 and thus can make a $1,000 catch-up contribution to get to $12,000. Starting 1/1/2003, the HCE decides not to contribute anymore to the 401(k) so for the Plan Year Ending 6/30/2003, his total deferrals are below any sort of Plan or ADP Testing limit.

My question is how is the $1,000 that was a catch-up contribution in 2002 treated for the 6/30/2003 PYE? Is it still considered a catch-up contribution for testing purposes? Or is it not a catch-up because the participant has not exceeded any Plan or ADP limit for the Plan Year?

Thanks!

BTH

Just wondering what techniques DB practitioners are using to estimate the funding impact of introducing a cash option to a plan?

Needed estimates would be (1) cash only at retirement (2) cash at retirement & termination and (3) cash at term but only if it's below a certain amount , e.g. $15,000.

What type of form long or short is applicable under the following circumstances?

At the beginning of the plan year the plan did not have any participants. It was not until the fourth quarter that the number of participants exceeded 120.

The form's instructions as well as the regulations refer to the participant count at the beginning of the year.

The plan sponsor does not want to file a long form just as a precaution.