When would a participant in the following situation be required to start receiving Required Minimum Distriubtions?

Plan doucment defines Required Beginning Date as April 1 following age 70 1/2 for all participants.

Plan document will be amended by the end of the GUST remedial amendment period to leave the Required Beginning Date the same, but to state that participants reaching age 70 1/2 between 1/1/97 and 12/31/01 (or possibly 12/31/02) will be given the option to defer their distributions until termination of employment (in accordance with IRS guidance).

If a participant that turned age 70 1/2 in 2000 elected to defer distributions until termination of employment, and the participant terminates employment in 2004, would the participant be required to start distribution prior to 2004?

Under the 2001 proposed regulations, a plan document can specify that the Required Beginning Date is Age 70 1/2 for all employees. Under SBJPA, the Required Beginning Date had to be defined as the later of age 70 1/2 or termination of employment for non-5% owners. However, plans that were not amended for SPJBA could give participants the option to defer distributions.

So which takes precedence, the employee's option to defer under SBJPA, or the 2001 proposed regulations? Would a participant who had made the election to defer be required to start distributions as soon as the 2001 proposed regulations become effective (in 2002 unless the model amendment is adopted)?

Does anyone know where I can find a sample WHCRA notice for an spd?

Has anyone filed amendments to their ESOP plans to account for the changes made as a result of the EGTRRA? I am attempting to file these in-house versus using legal counsel to save on cost. Any suggestions would be greatly appreciated.

A couple of years ago my organization laid-off several employees (not enough for WARN), these employees were offered severance pay that was substanitaly more than our severance pay policy.

This year, we are again laying-off several employees, but want to only offer the terms that are stated in our severance policy.

Can we do this without being held liable? By the way our organization is in Texas.

can you put life insurance in a db plan with only a sole prop. or a one life corp?

What kind of document can you put a governmental plan on? We don't deal with 457/government plans and the agent keeps referring to 401(a) plans, which all of our k plans are as well. I have found some conflicting information that a gov't plan could have a 401(a) plan on a prototype and that they can't. Can one be placed on a volume submitter?

Any insight would be greatly appreciated.

Non-calendar year MPPP and PSP plans are terminating 12/31/01 which which will create a short plan year for each. Must the 415 limit for the final limitation year be pro-rated. I know that it must be prorated when a limitation year is changed and a short one is created, but I thought that the full 415 limit can be used in the final year.

Thanks.

Has it been confirmed that the IRS will allow sponsors to amend their plans for the new RMD regulations by the end of their remedial amendment period for GUST?

can a sole prop. or a one-life corp. have

life insurance in a defined benefit plan?

I would like to have a discussion about the pros and cons of life insurance in a plan. It seems most TPA's hate it why? What are the administrative hassles if any. Do you charge higher fees for plans with life insurance?

Are there good financial planning reasons to offer life insurance in a plan? What are they? Is there some reference book I can refer to?

Employee bumps another employee to prevent being laid off. As a result of the bump he loses $5 per hour. He has two out standing 401(k) loans, and now wants to stop having payroll deductions taken out to repay these loans. I know a loan will be deemed to be a distribution if not paid.

My questions are:

1. Can we allow him to stop making his payroll deductions to pay off these loans?

2. If we can and before the loan is defaulted, let’s say in 3 weeks he decides he wants to continue to make payments do we allow it? If we do does he have to make the back payments to catch up?

I say No, but who knows for sure.

I think this may have been discussed in the past, but I’m not sure.

Can segregated accounts exist within and be part of a ps/401(k) plan?

In considering a design for an ESOP provision, given the new regulations under EGTRRA, how are pass-through dividends handled for non-vested (less than 100%) employees? Is the entire dividend paid out, regardless of vested percent? Or is the vested amount paid out and the non-vested amount re-invested?

Anybody know much about these? I know what they are, and the theory, but I'm having trouble justifying some of what is going on with regard to qualified plans, and maybe the IRS has provided guidance I don't know about!

We had a client who is a PEO. Member companies would sign a contract with the PEO, and essentially "terminate" their employees, and hire them back from the PEO. The PEO has no right to hire and fire them, cannot direct their work, hours, etc... essentially they are a payroll service. They wanted a 401(k) for the PEO, and then individual companies would have a cross-tested plan covering only the keys, while the non-keys would participate in the 401(k).

We told them to go find another TPA. But I'm curious as to what other folks out there think of this type of arrangement, and whether you are aware of any IRS guidance regarding PEO's and their sponsorship of qualified plans. Thanks in advance.

Is the retroactive application of the $200,000 comp limit subject to non-discrimination testing? Or is it still a matter of plan design- a safe harbor plan is still a safe harbor, a general test plnis still ageneral test plan?

would it be a problem if a plan sponsor amended its plan which previously provided for a discreitionary match so as to add a last day rule for HCE's prior to the end of the plan year? Thus effectively adding an additional allocation condition during the plan year for HCE's but not NHCE's.

Elective deferrals are added to w-2 compensation for purposes of 415. Does this include elective deferrals under a 457(B) non-qualified deferred compensation plan?

I am wondering if I need to adjust an owner and his wife's compensation before calcualting their contribution. Here's the situation: 100% owner and wife both work for company. Owner's compensation is $200,000 and wife's compensation is $230,000. I know that they are both considered owners because of attribution rule. Do I need to aggregate them because they are husband and wife, and therefore adjust both of their compensation amounts down so that the sum of both does not exceed $170,000 for purposes of allocation the profit sharing contribution? Or do I not aggregate their compensation amounts, and simply allocate each contribution using $170,000 for each person. Please help...:confused:

Trying to figure out the best design for a business owner who makes $200,000, no employees other than spouse who takes $25,000. Would like to avoid establishing a K feature. Anyone remember the old 40% MPP's we used to set up to get around family aggregation rules? With that in mind, could we establish a simple standardized PSP...deductible limit would be 25% x $225,000 or $56,250. Business owner would receive $40,000 and spouse would receive $16,250. Am I missing something here? If this is do-able, is this the BEST design for this scenario?

Must a plan document specify the percentage allocation for each rate group, or a maximum which the allocation does not exceed, in order to satisfy the "definitely determinable" benefit formula rule?

Is the answer to this question changed in any way by the introduction of the gateway testing rules?