A plan provides a pension of 1.5% of avg pay per year and offsets it by 2/3 of the age soc sec benefit (with no pro-rate or unit accrual on the offset). As a result the accd benefit is less than zero for short service employees. The offset is computed based only on compensation with the employer.

Does anyone have knowledge or thoughts as to if the Plan can meet 411(B)(1) by doing the test just based on the gross benefit or must the offset be included in the test?. That is as a gross benefit only, it clearly passes 411(B), but tested based on the benefit including the offset, it would fail.

One case (allegedly) supporting the concept of ignoring the offset in the testing is rev ruling 76-259. This ruling, however, refers to offsets of benefits from profit sharing plans.

Look forward to any comments.

Just wondering if anyone has, or is considering, setting up new DB plans with a Jan 2 - Jan 1 Plan Year in order to take advantage of the EGTRRA $ limit increases.

I had an HR director tell me she had read that there was a proposal to allow employers to contribute unused PTO (paid time off) and/or sick leave to a 401k. I think it's a great idea but I have read nothing of this and can see some compliance issues. Just wanted to make sure I hadn't missed something.

I have a question about the ceilings the various states impose on deferred compensation. Is there a resource available to look up all the states' limits in one place?

I have a question about the ceilings the various states impose on deferred compensation. Is there a resource available to look up all the states' limits in one place?

Here is my list of distributions that will NOT legally be rollable into a qualified plan after 2001. Distributions from:

1- a non qualified plan;

2- a qualified plan that has lost its qualification (whether its sponsor knows it or not);

3- an employee's after-tax contributions in a traditional IRA;

4- a qualified plan in the form of periodic payments that are expected to last for the participant's lifetime, or for the participant's lifetime and that of his or her beneficiary, or for a period of 10 years or more;

5- a qualified plan that was a death benefit from other than the participant's spouse;

6- a qualified plan that was to an alternate payee other than from the participant's spouse or ex-spouse's plan as part of a divorce;

7- a qualified plan so that it satisfies the minimum distribution requirements of §401(a)(9);

8- a qualified plan that was a loan deemed to be a distribution under §72(p);

9- a qualified plan that is payment of dividends on employer securities under §404(k);

10- a qualified plan that is a corrective distribution under §402(g), §401(k), §401(m) or §415;

11- a non-governmental §457 plan; and

12- a Roth IRA.

Please let us know of any additions or subtractions that need to be made to this list.

Many school districts are hiring third party firms to come in and audit the 403b programs. Has anyone heard of any teachers' groups that have opposed the self-audits? And if so, what the outcome was, or is likely to be?

Can anyone help me get my hands on a copy of revenue ruling 76-259?

Thank you.

A plan provides a lump sum distribution based on gatt assumptions. However, if lump sum is less than 3,500, it provides a lump sum based on 6% and 71GAM for females, if it results in a larger lump sum.

If plan provides for this, would it not be required to provide lump sums over 3,500 on this basis as well?

Isn't this a 1.417(e)-1(d) requirement?

We have developed our own volume submitter document and have received our opinion letter. We want to develop a searchable data base to automate its production. Does anyone have any suggestions on the best way to go about doing this? We know that there are folks out there with documents and data bases already to go, but we don't want to scrap our document to buy theirs, at least not without checking out the alternatives.

Thanks for any help!

My client has discovered that a member of its controlled group of companies has started and contributed to a SEP. When you look at the controlled group (which the broker did not) the group is ineligible to set up a SEP. An employer contribution has been deposited. How do you correct for an ineligible SEP? Is there any known guidance from the IRS on this?

Do the Section 318 attribution rules still apply when determining Key Employees under EGTTRA? I sit pondering the revised top heavy language for plan years after 12/31/2001, but it's just not clear to me.

Anyone else think they know?

thanks.

Grant

Does an employer have the responsibility to adhere a court order for dependent child health coverage if the employee has not satisfied the new hire waiting period? I say the employee has to be eligible for health benefits before the court order can take effect and the employer has to comply.

When determining if a series of transactions of the same issue is >5%, do I combine buys and sells for the plan year, or keep separate. For instance, say 5% is 100,000. Purchases of the same issue total 60,000 and sales of the same issue total 40,000. Do I consider that this series of transactions is reportable because it exceeds $100,000 (60,000+40,000)?

Are the $40,000 and $60,000 compared to the $100,000 separately?

I have a client who is set-up as a partnership. There are two equity partners and one income partner. Is the income partner prohibited from participating in a 125 Plan.

Thanks,

Joe

Plans with after-tax employee contributions determine pre-'86 and post '87 amounts in the event a participant receives a distribution of after-tax prior to termination of employment for calculating taxable distributions and what portion of the distribution of after-tax needs to be considered a withdrawal of interest.

Now that after-tax contributions can be rolled over to another plan, is there still the need to ascertain the pre-'87 and post '86 after-tax contributions? Or, given the fact that the after-tax is a "rollover," the accepting plan doesn't have to worry about it? Essentially treat the rollover of after-tax as being made Post-'86 and determine whatever needs to be considered interest under Sec. 72?

I understand that under the new proposed regulations, if one member of a controlled group offers catch up contributions, all other employer plans in the controlled group that provide for elective deferrals also must offer catch up contributions. The regulations, however, are not clear on whether the exception for qualified separate lines of business applies. Does anyone have any insight on whether or not the universal availability rule would require all plans of a controlled group, even if they are maintained by separate lines of business, to offer catch up contributions?

Thanks.

Is propecia (medication used to slow hair loss) considered a cosmetic expense under a 125 plan? I think it is not covered, but I cannot find proper support. Please help. Thanks.

An employer's plan has one or two "quirks" that don't fit into a prototype, but they go ahead and, with the permission and approvoal of the prototye sponsor, adopt the prototype document with an addendum for the few "quirky" provisions and the addendum also contains a statement that the plan is an individually designed plan. Are they entitled to an extended remedial amendment period based on the following language from 2000-20?

.06 Certain Employer Amendments Disregarded for Purposes of This Section - An employer that has adopted an M&P plan or a volume submitter specimen plan may have modified the plan in a such a way that the plan, as adopted by the employer, would not be considered an M&P plan or a volume submitter plan. Nevertheless, for purposes of this section, such a plan will be treated as an M&P or volume submitter plan and will be eligible for the remedial amendment period extension provided by this section. For example, an employer may have adopted an individually designed GUST-related amendment to an M&P plan that would have caused the plan to be considered an individually designed plan under section 5.02 of Rev. Proc. 89-9. Despite the individually designed amendment, the plan will be treated as an M&P plan for purposes of this section.

When an employer restores forfeitures for a rehired participant, is the forfeiture restoration counted as an employer contribution for any or all purposes?

Should it be reported as an employer contribution on Form 5500, and if the plan terminated, on Form 5310?

Should it be counted against the deductible limit?

Is it counted as an annual addition?

Any other areas where it is or is not considered an employer contribution?