Do most plans provide employees with a copy of a life or disability policy issued by the carrier or do they summarize the policy and include it in the SPD that describes the other coverages such as health, flexible spending? We are in disagreement as to whether the average employee can understand the carrier's language. We have had an issue in the past where the life and disability benefits were summarized as opposed to using the actual policy and an employee misinterpreted the summarization. We understand that DOL requires that the SPD be written in terms understandable by the average plan participant.

If plan documents and trust documents of an erisa governed decfined contribution fund are silent on the issue of amount of permissible company stock the plan can hold, is there a limit.

co worker tells me that they can hold up to 100% BUT ONLY if the trust agreement says they can, whereas my understanding was that if the plan/trust documents were silent, DCs can hold up to 100 (compared to DBs that can only hold up to 10%)

any guidance or relevant ERISA provisions would be greatly appreciated

as always - Many Thanks

i have a 401k plan with a 9/30/01 year end that failed the adp

test. excess contributions will be distributed in april 2002. how

should box 7 of form 1099r be coded? what is tax implication to

participants.

My company is considering offering a Long Term Disabilty Benefit.

We feel that this is a important benefit for employees to join so we want to offer a company paid Life Insurance Policy to all employees who join the LTD Benefit (at a 50% co-pay). Would this be considered discriminatory to employees who do not join the LTD Benefit?

I have a client that has missing participants that have left the US and moved to Mexico. Is it best to use the SSA or IRS? I am aware that participants can be located using the IRS and SSA. Can someone provide the address used and format required when inquiring through the SSA? Thanks!

Have several high-level questions regarding

single-employer db plan termination and PBGC

"takeover" versus normal reversion

(a) Have yet to see a case where a plan

was takenover by pbgc- and the plan sponsor

had not gone bankrupt or liquidated.

Is this generally the case... or can a plan sponsor simply let a funded plan become

unfunded (underfunded) to avoid steep reversion

on surplus.. and simply "cut and run" by letting

the pbgc cover it, assuming all of the pbgc premiums were paid up and in order?

(B) Separate and a part from premiums collected,

does the PBGC effectively play "robin hood",

from a collection of terminated plans ?

Example: a large plan(A) only slightly underfunded, with assets in place to cover most of its plan option pre-65 retirees and post 65 retirees is taken over.

Another large plan(B) with only post 65, demographic, is massively undefunded and is taken over.

Does the pbgc- in effect- with its pre-65 payout

reductions, cut the retirees from plan (a),

and use these gains to cover post 65 retirees

from plan (B)..?. although in the case described

Alot of the asset recovered from plan (a),

was in place to cover nearly all of the early

retirees from plan (a).

Does anybody know where I can find a website where it shows a chart that explains that putting $2000 in per year starting at age 18-25 will get you more money if you started to put $2000 in per year starting at age 26-65?

It looks something like this:

Age Example #1 Example #2

18 2000 0

19 2000 0

20 2000 0

21 2000 0

22 2000 0

23 2000 0

24 2000 0

25 2000 0

26 0 2000

27 0 2000

28 0 2000

..

..

..

65 0 2000

Total $1.5 Mill $1.4 Mill

If anyone could find this website, that would be greatly appretiated. Thanks, Ryan

How do you complete the Schedule T for a Plan that allows discretionary profit sharing contributions or matching contributions if no Employer contributions are actually made? Can you use the exception code that say's that no HCE are benefiting since no HCE received an Employer contribution? Alternatively, should you use the exception code that say's that all non-excludable NHCE are benefiting if they actually would have all benefited if an Employer contribution had been made?:confused:

How is the deductible limit calculated for a target plan or money purchase plan when the tax year and/or plan year is changed?

For example:

1) Tax Year is Calendar Year 2003.

Plan Year is Changed from 7/1/02-6/30/03 to calendar year, creating short plan year 7/1/03-12/31/03?

2) Tax Year is 10/1/02-9/30/03, and is changed to calendar year, creating a short tax year 10/1/03-12/31/03.

Plan Years are 11/1/02-10/31/03 and 11/1/03-10/31/04.

How is deductible limit calculated?

If a plan is amended to a Safe Harbor plan, and no other contributions are made to the plan after the effective date of the Safe Harbor provision other than the deferral and match under the safe harbor formula, would the plan still be exempt from 416 application even though it holds assets that were not under the terms of the Safe Harbor conditions (contributed prior to the inception date of the Safe Harbor amendment)? In addition, doesn't it seem odd that the exemption from 416 would eliminate non participants and those participating at less than a 3% level to be excluded from a minimum now? Seems sort of out of kilter to me though that is what the law reads. Thoughts anyone?

What's the general opinion on whether or not the IRS will require a signature amendment to IRA based employer plans?

Do you think a custodian will be required to provide IRA owners with a copy of the amended IRA plan document, whether or not the amendment requires a signature?

Finally, shouldn’t the amendment to the disclosure statement include changes to GUST?

Thanks

Hi Everyone,

IRS Announcement 2002-49 released this morning extends the dealine for using Revised IRA Model Documents for establishing new IRA's as of June 1, 2002 as originally prescribed in IRS Rev. Proc. 2002-10. The Text of the annoucement follows:

"Extended Period for Use of Certain Forms

IRS Announcement 2002-49

In Rev. Proc. 2002-10, 2002-4 I.R.B. 401, the Service provided that existing model IRAs, SEPs and SIMPLE IRA plans may not be used after June 1, 2002, to establish new IRAs, SEPs or SIMPLE IRA plans. In response to comments, the Service is extending the June 1 deadline to October 1, 2002. Thus, a financial institution may use an existing model IRA to establish a new IRA for a customer through October 1, 2002. Similarly, an employer may use an existing model SEP or SIMPLE IRA plan to establish such a plan through October 1, 2002. The deadlines by which revised model forms must be adopted under Rev. Proc. 2002-10 are unchanged."

Cordially

David Hammond

Company A buys out Company B, both companies have 401k plans, but the decision is made that Company B assets will not be rolled into Company A plan, nor is Company B plan terminated to allow participants to roll into IRAs, but rather it is "frozen" participants can only take distribution at normal retirement age or if terminated from new company A.

What possible reasons could this decision have been made?

Assume a Cafeteria Plan with the following components plans: premium conversion for group health insurance (GHP), health flexible spending arrangement (Health FSA), and dependent care assistance program (DCAP). The employer is large and all plans have well in excess of 100 employees participating at the beginning of the plan year.

The 5500 for the Cafeteria Plan and the DCAP component are no longer required. But the GHP and Health FSA still require a filing. The employer used to file a "consolidated" 5500 for the Cafeteria Plan and all underlying component welfare plans (i.e., GHP and Health FSA).

Now that the Cafeteria Plan filing requirement has been removed, must the employer file 2 separate Form 5500s (one for the GHP and another for the Health FSA)?

Thanks for your thoughts!

Could someone please let me know when is the last day of the year to make Roth IRA contributions?

Does using a plan loan to keep a foreclosure from happening on your principal residence qualify a participant to amortize longer than five years?

When employees take leave or are temporarily laid off, an employer advances them the health premium and permits them to make "catch-up" deductions under the employer's POP.

Pre-tax deductions are made on an per-hour basis. If the employees do not work enough hours during the remainder of the the plan year to re-pay the advanced premiums through pre-tax deductions, may the employer require the employees to repay the balance due on an after-tax basis after the plan year closes?

The FMLA regulation states that catch-up contributions may also be made on an after-tax basis. See 1.125-3 Q&A 3 (3)(iv). Is this an all-or-nothing rule or can a portion of the catch-up be made pre-tax, and another portion be made after-tax?:confused:

Thanks in advance for the any advice. Here's the situation:

In October 2000, I opened and fully funded ROTH IRAs for both my wife and me. Come 2000 tax filing time in April of 2001, we found that due to our income and ROTH phase out rules we could not fully contribute to ROTHs. So we recharacterized a portion of each roth to traditional IRAs.

So we filed taxes for 2000 each having a ROTH and a TRADITIONAL.

We then filed taxes for 2001 and we had each fully funded our ROTHs for 2001 (which we were allowed to due this time)

Now we are in 2002 and my question is this: can I make the traditional IRAs amounts (which we were "forced" to create because of our one-time high income level in 2000) into ROTH IRAs this year.

Or is there some rule that since they went from ROTH to TRADITIONAL that they cant go back to ROTH?

Or I have I simply passed out from exhaustion?

thanks again.

Thanks in advance for the any advice. Here's the situation:

In October 2000, I opened and fully funded ROTH IRAs for both my wife and me. Come 2000 tax filing time in April of 2001, we found that due to our income and ROTH phase out rules we could not fully contribute to ROTHs. So we recharacterized a portion of each roth to traditional IRAs.

So we filed taxes for 2000 each having a ROTH and a TRADITIONAL.

We then filed taxes for 2001 and we had each fully funded our ROTHs for 2001 (which we were allowed to due this time)

Now we are in 2002 and my question is this: can I make the traditional IRAs amounts (which we were "forced" to create because of our one-time high income level in 2000) into ROTH IRAs this year.

Or is there some rule that since they went from ROTH to TRADITIONAL that they cant go back to ROTH?

Or I have I simply passed out from exhaustion?

thanks again.

Can a 457(B) plan provide for removing excess contributions from a 457(B) plan for a np before end of tax year? Eg. at end of 2002 total ee and er contributions exceed the $11,000 limit. Reg. 1.457-2(e) states that the plan must provide that the amount of the deferral must not exceed the 457(B) limit. Existing regs fro correcting plans under 1.457-2(l) do not discuss failure of NP plan to comply with regs because they were written before np became subject to 457. Could the excess amt be returned to the employee by end of taxable year since it is not deferred? I am assuming that 457 plans like 403(B) plans are not required to be administered in accordance with their terms- they must only comply with the law, eg. amounts held under the plan cannot exceed 457(B) maximum. Therefore (1) are all deferrals under the plan taxed because the plan becomes an ineligible 457(f) plan if the deferral amount is exceeded, (2) is the excess treated as an after tax contribution subject to taxation in year of contribution but can only be distributed as provided in 457(B) or (3) can excess be refunded to employeebefore end of year of contribution since it is taxed as wages and not deferred?