We have a client who provides a daycare facility there. All employees who utilize that Daycare per the client automatically has the money coming out of the employees check with taxable money. If that employee wants the Dependent Care Account on FSA how would it work?

Individual inherits an IRA from her father who passed away in 2000. The father reached age 70 1/2 a couple of years before his death. The beneficiary (daughter) took a distribution in 2000 based on 1/5 of the balance of the IRA. Does this constitue some kind of irrevocable election requiring her to complete the distribution over 5 years or can she take the 2001 distribution based on her life expectancy?

Can an IRA invest in real property located in a foreign country? I haven't found a prohibition of such an investment, and the ERISA prohibition on foreign investments doesn't apply.

I understand that an individual who converts to a Roth IRA prior to his required beginning date will never have to take distributions and that his children will be able to use their entire life expectancies if they are the beneficiaries at the participant's death. What happens if the spouse is the beneficiary and she rolls the Roth over as her own. Is she permitted to continue not taking minimum distributions or must she start taking MRD?

I appreciate anyone's thoughts.

What is the potential for successful personal liability claims against ENRON fiduciaries for breach of fiduciary duty under ERISA?

A. definitely liable under ERISA

B. definitely NOT liable under ERISA

C. will depend on facts not yet determined.

Dr. X is the sole owner of an LLC. Is Dr. X permitted to have salary reductions from his Section 125 Plan?

PSP Client uses Kemper document. Kemper is not allowing them to adopt GUST restated document because the funds for the plan are not held at Kemper. So, client wants to use Smith Barney Document as funds are held there. Smith Barney has not been issued a DOL opinion letter yet. So, client needs to have a letter of intent to adopt Smith Barney document when the opinion letter IS issued. Who drafts this letter of intent to adopt? (Plan is self trusteed). I understand it has to be signed by the employer as well as the document sponsor. Document sponsor says they have no idea what the intent letter is. Plan year end is 12/31.

thanks a lot

Someone on medical leave in our health plan pays a higher premium while on medical leave.

Would this violate the HIPPA health nodiscrimination regs?

Or could one use the current ee vs. former ee distinction under the similarly situated rules?

two plans, one for hourly ee's and one for salary ee's. both currently exclude hce's. company is debating letting hce's in 2002. can the plan use the average deferral % for the nhce's for 2001 to determine what the hce's can defer in 2002. no testing in the past because no hce's. thanks for any help on this one.

jimj

I'm with a TPA that does COBRA.

We have a new group coming on 12/1 and they have 3 people currently on COBRA. One of the 3 left of very bad terms and is very antagonistic.

The group wants to put in a new health benefit on 12/1, but needs all the health apps in to get a quote, amd Mr. Grumpy won't get in the app. If the price ends up being too high, they will stay with the old benefit. (I don't know if they have renewal rates for that group or not.)

The group sent Mr. Grumpy the application via certified mail. He held onto it past the deadline, but says he just mailed it back, and it's starting to go over the "typical" mailing time from his location.

The group wants to kick him off for being un cooperative, which I don't think they can do.

My bigger concern is the rates before the plan year/determination period, which they won't be able to get a quote before 12/1. Any ways around this?

Mara

The below questions all relate to 2002.

1. Will a participant who elects to roll over 100% of his assets have to be given the OPTION of either rolling over everything or rolling over everything except her after-tax basis?

2. Can a participant elect to have his assets distributed to him (with appropriate withholding) and then roll over the entire amount, INCLUDING after-tax basis, to an IRA or another Qualified Plan within 60 days? If rolled over to another QP, will the new administrator take the participant's word as to how much is after-tax basis, or is some documentation necessary? I assume the new administrator will also have to track the after-tax basis?

3. If assets that include after-tax basis are rolled over from a QP to an IRA, can any of it be rolled over again to another QP at a later date?

An employer with a 401(k) plan wants to terminate the plan's loan policy. Is a resolution to terminate the policy all that is needed?

According to its report posted at http://www.icmarc.org/retirementreform/cal457.html, ICMA Corp. is of the opinion that employers should wait until California tax law is updated before implementing EGTRRA's higher ($11k/$12k vs. $8.5k) 457 limits, "taxable when received" provisions, and 457-to-qualified plan rollovers.

According to ICMA, California law could consider any 2002 457 deferrals over the 2001 $8,500 limit (adjusted for inflation) to be excess contributions for California state income tax purposes.

According to ICMA, under state law, EGTRRA rollovers from a 457 plan to a non-457 plan could be a taxable distribution, and under state law participants may not be able to change their benefit payment schedules. (It seems California law still applies the pre-EGTRRA "constructive receipt"/"taxable when made available" concept instead of EGTRRA's "taxable when received" recognition model.)

According to ICMA, current California law does not prohibit a state and local governmental 457 plan from implementing EGTRRA, but doing so could have a negative impact on its participants' California state income tax liability.

ICMA says it is likely that in early 2002 the California legislature will modify state tax law to conform to EGTRRA, retroactive to 1/1/2002. ICMA encourages employers to urge our elected state representatives and the Governor to resolve this matter as swiftly as possible.

I am researching the possibility of moving our 401(k) plan to safe harbor and would like to know the percentage of plans that are already safe harbor. We have about 6500 employees. Any info on data resources would be appreciated.

recently i read that an employer can do a notice 30 days before the first day of the plan year saying that they might make the safe harbor nonelective contribution and then 30 days before the end of the next plan year they must decide whether they will or wont be making the contribution. I call this the wait and see nonelective safe harbor. Is this accurate or are their other restrictions?

Here is an interesting question:

A 50+ employer group currently has a Pre-tax Premium Account including group health, group dental, and group vision. However, several employees have spouses whose group health deductions (with other employers) are not on a pre-tax basis.

Question: Can this employer add to their current plan an Outside Insurance Premium Account which will allow an employee to run his/her spouse’s outside group insurance premiums through this employer’s plan on a pre-tax basis?

I don’t think it can be done, but the employer tells me he has heard of other groups doing it.

I appreciate any help you can give me.

We have encountered the very popular ineligible deferral problem discussed at length on this site. It appears that most persons uniformly suggest reporting a corrective distribution of ineligible deferrals using Form 1099R. However, what code would you use in box 7 on Form 1099R to report such distribution? It isn't really a code "8" is it? It isn't a return of excess deferral or contribution. And if you use code "8," what if you really do fail the ADP/ACP test and have to make refunds - then you'd have code "8" distributions that really are code "8" distributions and some code "8" distributions that really are not code "8" distributions. Problem is that there is no other code to reflect a refund of ineligible deferrals on Form 1099R. Isn't this a problem?

I am doing a projected 2001 calendar year adp test. On the census, an employee shows up with a date of hire of 7/1/2000. The Plan's eligiblity is no age, 3 months of service, and you enter on the first day of the month following. So, she enters the plan on 10/1/2000.

But for adp testing purposes, can I treat her as "otherwise excludable" up until 1/1/2002? Or do I have to test her along with the rest of the "non-excludables", effective 7/1/2001.

Thanks

I am doing a projected 2001 calendar year adp test. On the census, an employee shows up with a date of hire of 7/1/2000. The Plan's eligiblity is no age, 3 months of service, and you enter on the first day of the month following. So, she enters the plan on 10/1/2000.

But for adp testing purposes, can I treat her as "otherwise excludable" up until 1/1/2002? Or do I have to test her along with the rest of the "non-excludables", effective 7/1/2001.

Thanks

A company was purchased, their 401k plan was frozen, and EEs began to participate in the new company's plan. No plan merger occurred. A 5% owner had received a Min. Distrib. under the old Plan. He is not a 5% owner under the new company. Does he have to continue to take MRDs from either or both plans? I can find nothing in my resource data, so I really appreciate any help.