new rule changes effective has clear advantages for school employees(elimination of coordination rules etc.). New York state requires govermental 457 plans to create a deferred comp board and pass assets through a trust agreement. Are schools considered governmental for this purpose? Would a trust be required or would a group annuity arrangement be acceptable? Thanks for the input

Our client is a governmental entity (a city) who has recently extended an employment contract to a new city manager. In the contract they offer a "deferred compensation program annual contribution, payable in monthly installmets by the city, to a 401 or 457 type plan sponsored by an appropriate agency".

Would these contributions by the city be considered wages and subject to FICA, Medicare and not Withholding? Thanks for any guidance!

Our client is a governmental entity (a city) who has recently extended an employment contract to a new city manager. In the contract they offer a "deferred compensation program annual contribution, payable in monthly installmets by the city, to a 401 or 457 type plan sponsored by an appropriate agency".

Would these contributions by the city be considered wages and subject to FICA, Medicare and not Withholding? Thanks for any guidance!

This plan fails multiple use. There are two HCEs who don't have the necessary hours or last-day employment status necessary for receiving a match. Therefore, only one of the original three HCEs is actually in my ACP denominator. And because of that, her 2% match provides me with a 2.00/1 HCE = 2.00 ACP, and that's slightly too high.

Question is: Is it possible to treat even a dollar of a terminated HCE's deferrals as match? This has the effect of "forcing" him into the ACP test, doesn't it? Then my ACP is 2.00 + 0.01 = 2.01, divided now by 2 HCEs giving me a nice 1.01 ACP, and a plan that now passes multiple use.

The specific regulation 1.401(m)-1(B)5

says that any of the deferrals treated may be treated as matching contributions....if they are deferrals of employees eligible under the plan being tested. Now, this guy was previously ineligible for the 401(m) component....but it doesn't REALLY say component plan, it says plan. And this guy was eligible for the 401(k) arrangement. So I *think* I'm on to something here.

Anyone want to say yes or no to that?

Thanks

bri

Brain is not working....

M&P GUST opinion letter is issued 11/15/01.

What is the last date that clients may adopt the GUST document? 12/31/02 or 02/28/03

A brand new start-up company, formed July 1, 2001, desires to have a qualified plan to benefit the new owner. Plan is drafted with the following eligiblity requirements:

If employed on July 1, 2001, employee is immediately eligible for the plan. After that, eligibility is the attainment of age 21, with semi-annual entry dates.

The company adopts the plan with a July 1, 2001 effective date and then hires a series of new employees after July 1 and before December 31, 2001. The company now wishes to amend the eligibility requirements to require 1 year of service instead of only the attainment of age 21.

Effective January 1, 2002, can we amend the plan to reflect eligibility of age 21 and one year of service (1000 hours) so new employees hired after July 1, 2001 will not enter the plan until January 1, 2003 (i.e., after completing one year of service)?

Thanks for any answers and comments.

I'm trying to find a copy of the 1974-3 Cumulative Bulletin. The research service we use does not have it. Any suggestions?

Does an employer who adopted a SIMPLE plan last year have to provide their employees with any of the New EGTRRA tax law changes? Or does the Financial Institution in which the plan was established have to provide to the employees this information? When I say information I mean an Updated Summary Plan Description, Salary reduction notice etc...... Please advise?????

I know that the purchase of LAND does not qualify under the safe harbor rules for a hardship withdrawal, but what about the construction of a home? And, if it qualifies, what would be the definition of the hardship amount? Down payment on materials?

Has anyone ever needed to adjust an employee's W2 based upon the eligible expenses under the Section 125 plan for dependent care? What are the IRS issues for this? THANKS!

a self employed person learned after the completion of 2001 that he is in a good position to implement a db plan for 2001.

I am not sure if one needs to have a signed plan document by 12/31/2001 or a summary of the primary plan provisions in place. I have heard of some situation where having the basic plan provisions in place was sufficient. I don't know if this is that situation.

Any comments or suggestions?

Hey!,

This here is a pretty straight forward question that I can't seem to find a straight forward answer to:

If an employee gets married in September, are claims for the newly aquired spouse, from the months previous to the marriage(within that plan year), payable through the cafeteria plan?

Thanks in advance.

1. Is a Simple-401(k) plan a qualified plan?

(I thought that a qualified plan had to be either a defined benefit plan or a defined contribution plan. A Simple-401(k) plan is neither ...right ??)

2. Do the Simple-401(k) plan assets have to be held in a trust ?

3. Does a Simple-401(k) have to have a plan document, adoption agreement, and determination letter ?

4. It's my understanding that a Simple-401(k) that has participants other than the employer/owner must file a Form 5500.

5. Can a Form 5304-Simple or Form 5305-Simple be used to set up a Simple-401(k) plan ?

6. Do participants have to be given a Summary Plan Description?

7. In order to terminate a Simple-401(k) plan, must all the regular termination steps involved in terminating a qualified plan be followed .... or can the employer simply tell the participants that the plan has terminated and then disburse all the account balances ?

Oh my, that was a lot of questions. I'm tired.

My employer wishes to change the 401K plan provider/trustee.

However, I understand that my non-employer stock in my current plan will have to be liquidated, in order to, facilitate the transfer of assets to the new plan provider. The new plan does not have a provision for individual securities, but only mutual funds.

My personal broker tells me there is a rule that does not force a participant to sell securities at an inopportune time.

What is the law in this matter?

Client has discovered operational defects in 401(k) plan with respect to the last three or four years. Client wants to fix the defects. It appears that client amended and restated its plan by adopting a volume submitter document sponsored by a pension administration firm in 1998. That firm has since gone out of business. Client can only find its adoption agreement and no copy of the actual plan document or the accompanying IRS letter. Can client amend and restate by adopting a new volume submitter document and then submit the plan for correction of the operational defects under the new letter??? Contacts with the attorney handling the dissolution of the pension administration firm with respect to plan doc/ letter/ etc.. have been unsuccessful.

Has anyone attempted to take the position that employer-sponsored domestic partner coverage funded through an insurance arrangement is not subject to ERISA (and, accordingly, that the claims procedure regulations do not apply to claims by domestic partners) ?

Presumably, however, if I succeed in this argument, state insurance law is no longer pre-empted.

Okay - worst case scenario - you are a financial institution, not a TPA, you have a client who opened an account with you in 1997 by signing at that point a document that "certified" the trustee powers, and indicated that their plan was established in 1988.

Now - the client has changed CPA firms, and the new CPA would like to perform the annual calculations, but needs the document to follow the formula - YOU DON'T HAVE A COPY, the client seems to have lost their's if they ever had one, and the prior custodians seem to think that the docs are the responsability of the new custodian (you).... now what?

Has anyone ever had a situation where you cannot find the plan documents as originally drafted? Client is a sole-prop and files 5500 EZ each year.

Idea's? Suggestions? In the event we need to go to the IRS or DOL - who would be named in the filings as the original preparer if we are not absolutly sure ourselves?

Thank.

I am new to working with IRA products. Is it possible to convert a profit sharing plan to a SIMPLE IRA or SIMPLE 401k plan? If so, what all is involved in converting the plan?

Any suggestions on websites where to find information on company's benefit plans (both qualified and nonqualified plans)?

May a self-funded health plan impose different waiting periods for eligibility between salary and hourly employees? I would appreciate a cite to back up any opinions. I thought that as long as you treated similarly situated individuals the same it was OK. However, an earlier post to this board (2or 3 years back) indicated that the IRS had issued a determination letter saying this was discriminatory in a self-funded plan.