I have been asked to file for a determination letter for the pension plan of a local government. The problem is that there is no "stand alone" document, rather the government has a compilation of local ordinances that make up the terms of the plan.

My question is this - If the local government will pass an ordinance saying that this plan intends to comply with 401(a) and address all portions of 401(a) that apply to governmental plans, could this compilation of ordinances be submitted to the IRS in lieu of a plan document?

Does anyone have experience with something like this?

Thanks

I work with a bunch of guys who swear buy this plan…. They on a weekly basis buy and sell into our company share offering though our 401K. Our stock, lets say XYZ, has an almost predictable, cyclical pattern where-by it will oscillate from $50 to $70 a share through out the year. They buy low and sell high for example 3 in the afternoon on Monday they will see its at $50, buy the end of the week or month it may be at $60 and they will sell.

Is there anything wrong with doing this through their 401K?? Won’t they have crazy capital gains tax to pay when they retire from all the buying and selling??? Am I better off sticking with regular 401K investments to my company stock, XYZ, or should I ‘day trade’ like my coworkers.

thanks

Is 204(h) notice automatically required when converting or amending a money purchase plan to a 401(k) profit sharing plan (as opposed to a merger of MP into PS)? A recent case issued by the 3rd Circuit (Brothers v. Miller Oral Surgery Inc. Retirement Plan, 25 EBC (3rd Cir. August 31, 2000)) suggests that this might be the case. However, my understanding of the regulations to Section 411 of the Code and from conversations with representatives from the PWBA is that this determination is very factually intensive. This begs the question: what result in the scenario where the plan participants are all HCEs and all contribute the maximum to the MP and will continue to contribute the max to the PS? I am of the belief that this is not a "substantial reduction" of benefits. What if one of eight participants is able to contribute $25,000 instead of $26,000? I would think this would not change the result. Obviously, if the plans are small and it is unlikely that a participant would file suit for lack of notice, I would anticipate that the risk of not giving participants 204(h) notice is minimal or none. Any thoughts?

I have a Cafeteria Plan that offers health insurance as a combo. insured/unfunded benefit, and then they keep the employees' health FSA contributions in a trust. The beginning of year participant count on the health insurance went over 100 for 2001. I realize that I normally wouldn't have to have an audit due to the funding on the insurance...but I've got that trust piece in there as well...Does it need an audit just because of that trust feature, or do I consider the under 100 count on the trust as the determining factor?

Client wants to put a cap on the HCE deferrals (9%)in the plan document. I guess this doesn't cause a problem--does this smell funny to anyone?

Currently I have a Trad IRA with equities valued at 16,000 and a 401k saving. I would like to invest in a Roth IRA and would like some information such as

What is a ROTH IRA and how is it different from a Traditional IRA?

How can I benefit from investing in a Roth IRA?

What kinds of investments should I have in a Roth IRA?

What does it mean to covert and unconvert?

Thanks!

For states that have adopted the EGTRRA provsions, the 403(B)(2) part of the old MEA calculation goes away completely effective Jan. 1, 2002. What about in states that have not passed legislation to comply with the EGRTTA limits particularly California? I am of the opinion the MEA/MAC limit has to be calculated the"old" way? (i.e using 403(B)(2) Is there agreement for this opinion or does anyone think otherwise?

Question: Does a spousal consent is required if the participant is divorced, her former spouse is the beneficiary, there is no DRO or QDRO, he is not naming any other beneficiary and he wants to rollover the money? Thanks in advance for any comments.

Where in the updated code can I see where owner-employees are now allowed to take loans under EGTRRA?

I'm in the process of preparing restated prototype document. Existing Money Purchase adoption agreement allows employer to elect a special timing rule for distributions on disability after separation from service. Plan allows for distribution of account exceeding $5k in the first plan year after separation for service. Special rule: distribution as soon as administratively possible after separation from service on account of disability.

New prototype Adoption agreement eliminated special disability distribution timing employer election. Plan language states that disability distribution is same as regular separation from service distribution. Is there an anticutback issue by eliminating the "as soon as administratively possible" exception?

I am curious as to how other practitioners are interpreting Code Section 414(k)(4) which was added by EGTRRA. This section provides

‘‘(4) SPECIAL RULES FOR SECTIONS 403(B) AND 408.— For purposes of this section, any annuity contract described in section 403(B) for the benefit of a participant shall be treated as a defined contribution plan maintained by each employer with respect to which the participant has the control required under subsection (B) or © of section 414 (as modified by subsection (h)). For purposes of this section, any contribution by an employer to a simplified employee pension plan for an individual for a taxable year shall be treated as an employer contribution to a defined contribution plan for such individual for such year.’

It is effective for limitation years beginning after December 31, 1999. It seems to retroactively require employers to aggregate contributions between employer 401(a) plans and 403(B) contracts that might not have any employer money, but I am not quite sure due to the refernce to 414(h) which deals with pick-ups. If I am reading it correctly, then some clients need to review 2000 and 2001 401(a) and 403(B) contributions for any excees contributions.

What commentary that I have seen about this provision just repeats the law.

Hi-

If a plan fails ADP and money needs to be returned to the (one and only) HCE but there are also matching contributions - do I have to refund the related match as well? THX

Is it permissable for an IRA to invest in an S Corporation?

I heard that you can establish a plan document that requires an employee to continue to make contributions to their Health FSA when they terminate and their claims have exceeded their contributions to the plan, even if it requires withholding the amount from their last paycheck. Is this true??

Is there a limit on the amount an employer can contribute to a self-funded welfare benefit plan (health insurance) in one tax year? The Plan is an IRS approved 501 © (9) VEBA trust. The employer is a tax-exempt organization. An extremely negative year in terms of claims paid has resulted in the trust reserve balance falling to uncomfortable levels. Can a lump-sum payment be made to bring the reserve up to acceptable amounts? And can that level of reserves be established by the Plan trustee based on claims history or some criteria other than an actuarial calculation?

An employee is rolling over his terminated money purchase plan account balance to a conduit IRA

Since former retirement plan monies, is this protected against creditors should a personal bankrupty occur?

The employee also has the option to rollover the balance to employer's 401(k) plan

Would this be a safer route to go?

If a custodian instructs an investment manager to liquidate a substantial portfolio, and the investment manager follows those instructions, which of the parties do you feel is at fault if the custodian had no authority under the controlling documents (i.e., the custodial agreement) to give those instructions and the investment manager had no authority under the controlling documents (i.e., the investment management agreement) to follow those instructions? The custodian? The investment manager? Both of them (what percentage)?

Do you believe it is industry practice for these types of instructions to be funneled to the investment manager through the custodian, or do such instructions typically come directly from the person/group that has authority to issue those instructions (e.g., from the trustee)?

If you believe it is the industry practice for the custodian to act as a conduit to deliver instructions from the trustee to the investment manager, does that industry practice absolve or at least lessen the investment manager's responsibity for acting at the direction of an unauthorized individual (if you feel the investment manager has any responsibility at all)?

Thanks in advance for your input.

I'm not sure why, but a company has adopted 2 profit sharing plans. For good measure, the eligibility requirements are different for each plan. This results in plan 1 covering 9 ees (including the 2 HCEs) while Plan 2 allows 8 of these 9 ees (including the HCEs) to participate plus an additional ee not eligible for plan 1. At least the plans are not top heavy and their limitation years coincide.

If the er contributes 7.5% of pay to each plan would there be a discrimination issue for that one NHCE in each plan who receives 7.5% from that one plan while the other 8 participants get 15% total from the two plans?

Also, since total eligible compensation is different in each plan, how would the 15% of pay maximum between the two plans be calculated?

Is anyone aware of a new lawsuit involving nationwide for allegedly making too much money on certain mutual funds. the details i have are very scetchy but it could have something to do with sub-ta or subsidies the are paying record keepers.

I'm in need of some assistance regarding FICA alternative plans. The question has been asked of me by a client who currently maintains a 401(a) FICA alternative plan, if there is a way to allow participants to defer a part of their wages under an additional plan 457? perhaps? without messing up the current plan as it stands? The gov. entity currently makes a 10% contribution to the money purchase. I do not deal with these types of plans very often, so I would appreciate any help anyone can give .