Is there any good reason for a MEWA to adopt a trust if all underlying benefits are fully insured and all premiums are employer- and/or employee-paid? I posted the same question on the Health Care Coalition board.

Is there any good reason for a MEWA to adopt a trust if all underlying benefits are fully insured and all premiums are employer- and/or employee-paid?

we want to buy a home in another state for our retirement home and was told it had to be our primary residence we do not own the home were in now it will be our first home why cant we purchase it with a esop loan?

For years beginning after 12-31-01 a taxable loan taken at retirement is now an eligible rollover distribution subject to mandatory 20% withholding if not directly rolled over to an IRA or other qualified plan. What body authorized this new rule? Please cite the authority. Are any plans exempt from this new rule?

Peace,

Joel L. Frank

For years beginning after 12-31-01 a taxable loan taken at retirement is now an eligible rollover distribution subject to mandatory 20% withholding if not directly rolled over to an IRA or other qualified plan. What body authorized this new rule? Please cite the authority. Are any plans exempt from this new rule?

Peace,

Joel L. Frank

We have a Money Purchase Plan, only two participants are the owner and his wife.

We have amended for GUST and EGTRRA. We are now terminating before the end of the year (as we no longer need a paired plan to reach the 25% limit).

Do we need to wait for the determination letter from the IRS regarding the termination before the assets can be distributed, or in this case rolled to IRAs?

Would the 10% penalty apply to distributions for the purchase of a first home? I'm presume the participant would not qualify for hardship withdrawal for the home purchase.

I'd be interested in knowing if any larger companies outside of the auto industry are eliminating or cutting back on 401K matches. Here in Michigan, we hear lots about the autos doing it, but not much more. We cannot find any good trend or market data , your help would be greatly appreciated.

A single employee fills out life ins. beneficiary form naming parents. Later he marries, but never changes the beneficiary to his wife. The form he signed contained the clause:

"If I am married at the time of my death, my spouse will be the sole beneficiary unless spouse signs the waiver below."

Since no new form was filled out, the spouse obviously never signed the waiver. After the employees death, the ins. co. paid the employee's parents, even though they were informed he was married. The other plans (401(k) and pension) were paid 100% to surviving spouse, by the company.

Egelhoff gets mentioned a lot lately, but this doesn't seem to apply. Nothing in the SCOTUS ruling overturned section 1055 of ERISA (joint survivor annuity) so shouldn't this be a no brainer?

Spouse bene of the Decedent's traditional IRA. Can the spouse rollover and convert the decedent's IRA directly to HER Roth IRA without first rolling decedent's IRA into HER traditional IRA?

Custodian says it's OK. Can't find it in Pub. 590. My concern is that if one needed to recharacterize where would it go?

Thanks,

Reg Jones

Yes, I know that today is Christmas, but I still have end of year deadlines. My question concerns the requirements for a safe harbor nonelective contribution. There are several threads on this subject, but I am still confused.

Employer wants to have a safe harbor 401(k) with a 3% non-elective contribution. Employer wants a 1,000 hour requirement with a last day of year requirement for receiving the 3% non-elective safe harbor contribution. My undertanding from 2000-3 is that is allowable, (the result was different is 98-52) but what about the participants who made deferrals during the year and quit before the end of the year or have less than 1,000 hours. Do their deferrals have to be tested under ADP??

I could be reading 2000-3 incorrectly. Any help is appreciated.

Thanks.

I have long taken the view that the triggering events enumerated in sections 403(B)(7)(A)ii and 403(b)11 have NO application to rollover treatment but rather list the earliest date upon which a participant may make a TAXABLE distribution. Apparently I am not alone. In fact, I am in very sound company! Following is an exact quote from "Tax Focus/September 16, 1992". This is a publication of "Standard Federal Tax Reports" published and researched by "CCH" the topical law publishers. Here is the quotation:

..."NEW ROLLOVER RULES:

By eliminating the key requirements that currently exist as a condition for rollover treatment, Congress has taken significant steps to make it easier for individuals to keep their retirement assets in a retirement vehicle. Specifically, the Unemployment Compensation Amendments (UCA) of 1992 eliminated the distinctions between total and partial distributions, the mandatory triggering events, and the one-year distribution requirement for total distributions.

After December 31, 1992, any portion or all of a distribution from a qualified plan or tax sheltered annuity plan (other than a minimum distribution, generally required to begin after age 70.5,) can be rolled over tax-free to another qualified plan, tax sheltered annuity, or IRA with only the following conditions:

(1) it must be rolled over in 60 days, and

(2) it cannot be one of a series of substantially equal periodic payments (not less frequently than annually) made (i) over the life or joint life expectancies of the participant and his beneficiary or (ii) over a specified period of ten years or more.

In short, with the exception of required distributions, nonannuity distributions generally may be rolled over, regardless of the amount or reason for the distribution."

COMMENTARY:

The eliminated mandatory triggering events referred to in the first paragraph can be found under section 403(B)8 prior to January 1, 1993. CCH recognized, along with other practitioners, that effective January 1, 1993 these mandatory triggering events for rollover purposes was repealed. Thus, it is wrong to apply the triggering events under 403(B)(7)(A)ii and 403(b)11 to eligibility for rollover treatment.

Peace,

Joel L. Frank

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Subject: 403(B) rollover rules (not a 90-24 transfer)

Author: Joel L. Frank

Date: 12/24/2001 5:35 pm PST

I have long taken the view that the triggering events enumerated in sections 403(B)(7)(A)ii and 403(b)11 have NO application to rollover treatment but rather list the earliest date upon which a participant may make a TAXABLE distribution. Apparently I am not alone. In fact, I am in very sound company! Following is an exact quote from "Tax Focus/September 16, 1992". This is a publication of "Standard Federal Tax Reports" published and researched by "CCH" the topical law publishers. Here is the quotation:

..."NEW ROLLOVER RULES:

By eliminating the key requirements that currently exist as a condition for rollover treatment, Congress has taken significant steps to make it easier for individuals to keep their retirement assets in a retirement vehicle. Specifically, the Unemployment Compensation Amendments (UCA) of 1992 eliminated the distinctions between total and partial distributions, the mandatory triggering events, and the one-year distribution requirement for total distributions.

After December 31, 1992, any portion or all of a distribution from a qualified plan or tax sheltered annuity plan (other than a minimum distribution, generally required to begin after age 70.5,) can be rolled over tax-free to another qualified plan, tax sheltered annuity, or IRA with only the following conditions:

(1) it must be rolled over in 60 days, and

(2) it cannot be one of a series of substantially equal periodic payments (not less frequently than annually) made (i) over the life or joint life expectancies of the participant and his beneficiary or (ii) over a specified period of ten years or more.

In short, with the exception of required distributions, nonannuity distributions generally may be rolled over, regardless of the amount or reason for the distribution."

COMMENTARY:

The eliminated mandatory triggering events referred to in the first paragraph can be found under section 403(B)8 prior to January 1, 1993. CCH recognized, along with other practitioners, that effective January 1, 1993 these mandatory triggering events for rollover purposes was repealed. Thus, it is wrong to apply the triggering events under 403(B)(7)(A)ii and 403(b)11 to eligibility for rollover treatment.

Peace,

Joel L. Frank

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403(B) rollover rules (not a Rev. Ruling 90-24 transfer)

Joel L. Frank 12/24/2001 5:35 pm PST

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Can anyone clarify the difference btw prudent man and prudent expert rule as they apply to ERISA fiduciaries.

Are there ERISA or other code provisions or adsvisory opinions that deal w/ this at all?

thanks for all responses!

happy and healthy holidays to all

I've decided to convert my traditional IRA to a Roth. Can I deposit a new $2000 as well? (I meet the income rules). Thanks!

Hey, im 17 and a senior at my high school. I want to get started in investing. Any information you all might be able to provide would be greatly appreciated. Thanks

I am currently trying to locate an organization that offers detailed training on 457(B) Plans. Does anyone know of any in the Southern California area?

:confused: I have a COBRA question. Here is the situation. An employer has received notice that his HMO plan is going out of business. So the employer cannot and is not going to renew with wth current HMO, obviously. He is going to move to a new HMO on the plan renewal date. Prior to changing plans and under his current HMO he offers part time employees working less than 30 hours per week HMO coverage. At renewal he is going to change the eligibility for enrollment into the the new HMO to 32 hour a week. Therefore, all part time employees who were previously eligilble are no longer eligible for coverage. None of the part time employees has seen a reduction or increase in their hours. None of the part time employees has terminated employment. They are pretty much staying status quo after the plan change at renewal. Now, here is my question. The only thing that has changed are the hours needed for eligibility. Does the raising of hours for eligibility which makes coverage not possible to part time employees at the renewal create a qualifying event? In other words, since there is no reduction or increase in part time employee hours and none of them have terminated after the new HMO is put into place does this create a qualifying event for them under COBRA? Both the former HMO and the new HMO say it does not cause a qualifying event. I tend to agree. What do you think?

Thanks, Ashley Nevins

Calendar year employer is swiiching his 401(k) from 6-30 to 12-31. using a short plan year 7-1-01 to 12-31-01. He will be near 15% for short year and 6-30-01 year. He makes near $170,000. In calculating what he can deduct for 2001 can I use his $170,000 for 6-30-01 PYE + $85,000 for 12-31-01 PYE?

For plan year beginning 01/01/2002 seperate testing will be used for 401(B) and 401(a)(4) for those not meeting a YOS.

The disaggregated group is comprised of only NHCEs and therefore passes 410(B) and 401(a)(4). The non-disaggregated group consists of only HCEs and therefore passes.

Is the disaggregated group subject to the Gateway? Is the Gateway applied before or after disaggregation?

The employer would like to give the NHCEs only 3% TH minimum for the 2002 plan year.