Is anyone familiar with the Momentum contracts provided by Equitable Life Assurance? I have read their prospectus dated May 1, 2001, and it says Momentum is a group deferred annunity contract used as a funding vehicle for employers who sponsor qualified retirement plans. I'm confused because the contract owner can fund the plan by selecting several investment options which are contained in a pooled separate account. Aren't group deferred annunity contracts allocated contracts and excluded from a plan's financial statements? Aren't PSAs unallocated contracts and included in a plan's financial statements? I have a client who invests solely in Equitable and I'm having trouble determining how to report this investment on their financials.

thanks for the comments.

In a NQDCP, is Spousal Consent required if the primary beneficiary is not the spouse? Is this the case in all states or just community property states?

We are thinking of giving an employee an interest free loan, for $12,000, to be repaid over a period of 3 -5 years (not sure yet). Does anyone know what the taxable consequences to this employee would be, i.e. as a fringe benefit, etc.?

I know that 2002 will bring lots of changes to 401k Plans...does anyone know where I can find a concise listing of what those changes are? Our Plan trustee hasn't sent us anything.....

Any help is MUCH appreciated.

I realize a distribution from a "funded" 457(B) governmental plan can be transferred to another "funded" 457(B) plan, or even more portable next year. However, can an "unfunded" 457(B) for a private tax-exempt be transferred to a "funded 457(B) governmental plan? And if so, does a separate account have to be set up like rollovers from other plan types next year?

My aunt, age 81, passed away and had left her traditional IRA

to four children under the age of 13 (her greatnephews, and

greatgradnephews), I am the trustee.

She was receiving distributions based on her life expectancy,

as she had inherited this IRA from her deceased husband.

Our tax accountant is checking on the way it would be most

tax effective to transfer to kids. I've been reading on this subject and there are so many rules and regulations it's confusing. Our

financial advisor is taking care of the paperwork to do the transfer, but I'm afraid he does not know all the ins and outs.

Can we establish IRA's for the children as Inherited IRA's?

If so, at the time of transfer is the amount taxable? or can

we elect to receive distributions based on each child's life

expectancy, and only be taxed for that amount?

The financial advisor indicated we could take the 5 year depletion rule, but it is my understanding that only applies to a surviving spouse. Is this correct?

Would appreciate help.

:confused:

When the Roth IRA first was available (in '98?) they had a option, if you rolled it over then, to spread your extra tax payments over a number of years. Was this four years or three years? I need to know if I'm done with paying the extra.

Thanks in advance!!!!!!

If a plan is disqualified back to its effective date, are the excise taxes for nondeductible contributions applicable? After disqualification, the contributions would not have been made to a qualified plan, so once the income tax consequences are dealt with, can the excise tax be avoided? Will the IRS/DOL impose the excise taxes in any event?

http://benefitslink.com/boards/index.php?showtopic=11052

The above thread discusses the due date for a top-heavy contribution. Do the same arguments apply to a required match contribution?

What is the due date of a required match contribution? What are the consequences for failing to make the matching contribution by the required due date?

I have a situation that I would like to seek advise on. I have a client who has four Hispanic participants who have gained U.S. employment using forged Social Security Cards and Green cards. The client just found out by the SSA that the documents are not valid. The client has given the participants a reasonable time frame to gain legal work papers and apply for a valid Social Security Card. If they cannot secure the proper documentation they will be terminated.

These participants have account balances, but are not vested. So upon termination their accounts are forfeited and reallocated.

Does this affect the qualified status of the Profit Sharing Plan?

I'm not sure if this is appropriate for this topic. I am thinking of opening a 529 plan for my son. I already have an Education IRA which I am making contributions. I know that you cannot make contributions to both in the same year. However, if I get someone else, i.e. his grandparents, to open the 529 plan would I be able to contribute to the Education IRA and they contribute to the Section 529 plan in the same year? or is it the beneficiary cannot have contributions to both plans in the same year?

Can anyone direct me to documentation regarding establishment and administration of group trusts for qualified retirement plans?

Nothing like doing things at the last minute!! I have self-employed doctor with leased employees. Plan is considered part of control group. All non excludable leased employees (all NHCE) benefit under another plan. The question is can I use exception D under question 3 or do we need to run through the numbers in part 4 even if the result is 100%? On Form 5500 questions 6 & 7 should we report just the self- employed doctor or include leased employees covered under the other plan?

Reg. 1.401-6 deals with the termination of a qualified plan. Para. (B) defines a termination and states a plan is not considered terminated merely because an employer consolidates or replaces that plan with a comparable plan. 1.381©(11) describes what constitutes a comparable plan.

Seems like terminating a MPP to start a Profit Sharing plan (k) would be O.K since they wouldn't be "comparable."

But what about an employer who currently has a Profit Sharing Plan ('ER $ only) and wants to terminate it, distribute assets to employees and then start a 401(k? Put the logic of this aside.

The 401(k) would seem to be a comparable plan. Would the employer be making an impermissible distribution of those PS $ because the plan wouldn't be considered terminated? Is there any length of time they would have to wait before starting the 401(k), similar to the 401(k) rule for distributing deferrals and starting a successor plan?

This is probably a stupid question, but it has me stumped, and I would certainly appreciate your guidance.

Specifically, my question relates to Rev. Rul. 98-1 Q&A-8 and the conversion of a lump sum benefit to a "straight life annuity" for purposes of applying 415(B) to a DB plan.

In the example in Q&A-8, the participant has an option to take the benefit in the form of a lump sum, which on the facts works out to be $950,000. In converting that to a "straight life annuity" as required by 415(B)(2)(B), the Answer says "Thus, the equivalent annual benefit must be the greater of the equivalent annual benefit computed using the plan rate and plan mortality table (or plan tabular factor) and the equivalent annual benefit computed using the applicable interest rate and the applicable mortality table."

The example there says the plan rate is 6% and the plan mortality table is UP-1984 and that the "applicable interest rate" is 8%. The example goes on the calculate the "straight life annuity" equivalent of the $950,000 lump sum by (1) converting the $950,000 to an annuity using 6% and UP-1984 (which turns out to be $89,656), and (2) converting the $950,000 to an annuity using 8% and GAM-1983 (which turns out to be $94,078), and (3) then selecting the higher of the two.

That doesn’t seem consistent with 415(B)(2)(E)(i) and (iv), which I read to say that you determine the actuarial equivalent "straight life annuity" of the benefit in question by converting it to a straight life annuity using:

(1) The higher of the plan rate and the "applicable interest rate" AND

(2) The “applicable mortality table”...

and that's the end of it. The plan mortality table is not used in this step at all.

I understand that the plan mortality table would definitely come into play in calculating the $950,000 lump sum. But once that's done, I read 415(B) to say you're through with the plan morality table. More specifically, by my reading 415(B)(2) simply says you (1) pick the higher rate between the plan rate and the applicable interest rate (which here would give you 8%) and (2) you apply the "applicable mortality table" (i.e., GAM 83) and the result is the "straight life annuity" amount that you test. I don't see anything in 415(B)(2) that says you do this calculation using the plan mortality table and the plan rate and compare that to the result using the applicable interest rate and the applicable mortality table.

Consider: what if the applicable interest rate were 4% and the plan interest rate (as in the example) were 6%. According to the ruling, it seems you'd compute two annuity amounts, one using 6% (the plan interest rate) and the plan mortality table (UP-1984), the other using 4% and the applicable mortality table (GAM-83), and you'd select the larger. However, 415(B) seems to say you'd just use 6% and the applicable mortality table... which will definitely give you a different result.

What am I missing?

I'm new to 403(B) plans. This is my first (and only) one.

Is the ACP on matching contributions done exactly like for a 401(k) plan? Prior or current year; statutory exclusions; etc.

Are the 180% and 140% safe harbors still in effect?

Is there any reason why an employer could not make a zero interest loan to its ESOP?

I want to emphasize that I'm only asking whether there is any prohibition on no interest loans; not whether it is a prudent decision .

Is it OK for a participant to set up an Irrevocable Trust as beneficiary of his 401(k) Plan?

If a plan treats plan loans as participant directed, but all other investments are pooled, is the plan a "partial participant-directed account plan"?

We have not been adding code 2H if the only participant direction is for plan loans. I believe this is correct, but, would like to be sure.

Plan defines average annual compensation as the average over 5 consecutive plan years..... The plan year was changed - now we have a short plan year. Do we annualize the compensation for that period/ignore the short plan year/use overlapping years (like vesting)???