The document for a particular plan defines compensation as w-2 earnings minus bonuses. A participant terminated and received severance pay. Should the severance pay be included in comp for the purpose of determining the 3% Safe Harbor contribution?

Thank You!

I have a plan with age 21 and 6 months of service eligibility requirement. The sponsor/purchaser is buying another company with a 3 month and no age eligibility requirements. The purchaser will give past service credit for service with the purchased company. So far no problem.

Since there are participants in the purchased company plan that will not meet the eligibility requirements of the purchasor's plan (all NHCE's), the purchaser wants to allow those participants in the sellers plan to be immediately eligible while not bringing all of seller's employees in through an open enrollment on 2/02/02, the closing date.

I've considered using partial open enrollment language such as "the eligibilty requirements are waived for any Eligible Employee who was employed on Febuary 1, 2002 and a participant in the Seller's Company's Plan." Is this permissible? Since the Purchaser is bringing in NHCE's that it could legitimately exclude, I don't see a problem. Can this be done with a protype? Should it be submitted?

One of my clients has an employee who was hired on 6/30/97. He met the 1 year eligibility period and entered the plan 7/1/98. He terminated 9/4/98 and took a distribution of his vested balance. I just found out that he was rehired in August 2001 and informed her that he should have been let back in the plan immediately. She doesn't want to let him back in until he has met his "year of service" again. Any way she can get away with this without risking the qualification of her plan?

Client's profit sharing plan has invested all of the plan assets into an investment variable annuity contract. the annuity contract is on a seven year schedule and provides for participants to withdraw a certain % of their account balance per year without penalty. If withdrawal is greater than that % certain penalties apply. Also, upon death, a participant's beneficiaries are entitled to market value of the account or the original investment value of the account plus a guaranteed % per year. Isn't there a diversification issue with respect to the sole trustee's potential liability???

Client's profit sharing plan has invested all of the plan assets into an investment variable annuity contract. the annuity contract is on a seven year schedule and provides for participants to withdraw a certain % of their account balance per year without penalty. If withdrawal is greater than that % certain penalties apply. Also, upon death, a participant's beneficiaries are entitled to market value of the account or the original investment value of the account plus a guaranteed % per year. Isn't there a diversification issue with respect to the sole trustee's potential liability???

Protection of Plan Receiving Assets from Other Plan in Merger or Spin-off

Assume that Company A, a Fortune 500 Company, is in the process of making a number of acquisitions. Company A maintains Plan X, a 401 (k) plan. What are people doing in each of the following situations to protect the qualification of Plan X: (a) Company A buys Company B and merges its Plan Y into Plan X; (B) Company A buys the assets of a trade or business of Company C, another Fortune 500 Company, where the trade or business employs 75 employees; © Company A transfers 30 employees of Company A's subsidiary, A-1, and wants to transfer their account balances under Company A-1's plan, Plan Z, into Plan X. Company A-1 has taken a number of aggressive positions on a number of issues involving Plan Z; and (d) assume the same facts as in example ©, except that Company A-1's CEO is transferred to Company A and only her account balance under Plan Z is spun off into Plan X.

Protection of Plan Receiving Assets from Other Plan in Merger or Spin-off

Assume that Company A, a Fortune 500 Company, is in the process of making a number of acquisitions. Company A maintains Plan X, a 401 (k) plan. What are people doing in each of the following situations to protect the qualification of Plan X: (a) Company A buys Company B and merges its Plan Y into Plan X; (B) Company A buys the assets of a trade or business of Company C, another Fortune 500 Company, where the trade or business employs 75 employees; © Company A transfers 30 employees of Company A's subsidiary, A-1, and wants to transfer their account balances under Company A-1's plan, Plan Z, into Plan X. Company A-1 has taken a number of aggressive positions on a number of issues involving Plan Z; and (d) assume the same facts as in example ©, except that Company A-1's CEO is transferred to Company A and only her account balance under Plan Z is spun off into Plan X.

Can an ESOP eliminate the 10 year participation requirement and require that a participant only attain age 55 prior to being given the diversification election right. The "rights, benefits or features" regulations specifiy that the diversification election is exempt from testing only for "qualified participants", so I am concerned about messing with such definition but I can't see how being more liberal would be discriminatory.

Can a Roth IRA accept rollover from a 401(k) Plan that includes after tax contributions?

Mkelly

One of our companies has a 7 year vesting schedule and with the new changes, it will have to go to a 6 year schedule. If someone terminates (for example) in January 2002 and the plan has not been officially restated yet, are they subject to the 7 year vesting or do they get to benefit from the new 6 year? Any help would be appreciated!

Due to EGTRRA employers have a choice between a 3 yr. cliff or 6 year graded schedule. If the employer chooses to go from a 5 yr. cliff to a 6 graded schedule, employees with more than 3 years of service will need to decide wich one they want, right? Any comments will be greatly appreciated!

Participant's last day of work is in 12/2001; however he is receiving severence pay until 4/2002. Would his termination date then be 4/2002 or the last day he worked?

Can health insurance be offered to an employee who's work hours change from 40 to 24 hrs? If so, how long? If not, do they need to go through waiting period again when they reach 40 hrs?

i need information on super-integrated plans. maybe an example formula or something. i don't understand them or how the allocation works. from what i do understand of them i think they might work well on some of the plans i administer. either super-integrated or new-comp. but cross tested plans are my weak point. also, if anyone has info on seminars/web-casts/resources that are given on plan design please let me know. i can't find any. Thanks!

Our Cafeteria Plan Provider filed a 5500 for us, as did our 401K provider. It has just come to my attention that our medical/dental/ancillary provider does not file on our behalf. I am certain that I've missed the deadline. At this point can I file an amendment and include this other info on one of the 5500s that have already been filed? Should I bother? I am new at this and have no experience with completing this form. Our Cafeteria plan provider is different from our health provider, does this make a difference in amending the 5500? What do you suggest? We have one medical carrier and one dental/ancillary carrier, our plan has over 100 participants, employees do not contribute. Thanks

When a Participant went on a short two week leave, his contributions were improperly stopped. Of course, he just noticed it now. We would like to make him whole, since we made the mistake. Is there anything we can do outside of paying him outside of the Plan???? Our Plan does not allow after-tax contributions.

Ms. XEC receives $1,000 per year in consulting fees and has an IRA with $3 million in assets. In 2002, Ms. XEC establishes Plan M, a profit sharing plan. Ms. XEC then rolls over $2 million from the IRA into Plan M and makes a contribution of $180 to Plan M. She then wants to purchase life insurance on her life.

Under the incidental benefit rule applicable to life insurance under a qualifeid plan, is Ms. XEC able to pay premiums of (a) $500,000 + or (B) $45?

Employer X is privately held and sponsors ESOP M. If Employer X purchases COLI to fund its repurchase liability, (a) is the inside buildup on the COLI and/or (B) any death benefits on the COLI, subject to the alternative minimum tax?

Dear Moderator, What is the maximum contribution that a well paid department head at a county can contribute in his county 457b plan in addition to his employers match contribution ?

Say our state was in federal compliance, and he being over 50 years of age wished to max out, but the employer was also going to contribute-- then is the max only $ 11000 + $ 1000 (-minus the

employers contribution) ? Or could it be higher than the plan the plan limit of $ 11000 + $ 1000 + ER contribution, for the year 2002.

Thank You

3 months ago mom turned 70 and wants to know does she have to start withdrawing money from her Roth IRA? Can she also continue to make monthly contributions?