A privately held corporation has a SIMPLE. One of the employees of the privately held corporation also participates in a 401(k) plan at another employer. Is there a coordination issue on the amount the employee can contribute? What are the limits to consider?

Who generally files (or is repsonsible for filing) the Form 5500 required for a Master Trust Investment Account (MTIA) as a Direct Filing Entity (DFE)? Is this filing generally done by the regulated financial institution that serves as trustee or custodian? Is this filing generally done by TPAs? Does anyone have experience with Form 5500s filed by MTIAs?

I would appreciate any information on this subject that is not directly out of the Form 5500 instructions. Thanks.

If a plan has a 2-year wait to enter, are the employees with greater than 1 YOS but less than 2 excludable from 410(B) coverage?

EGTRRA changed the rules for determining when a plan is top-heavy. According to 2001-56, the new rules (definition of key employee, distributions, etc.) are analyzed on December 31, 2001 for a 2002 calendar year plan - the last day of the prior plan year. A new plan was adopted for 2001. Therefore, the determination date for the current plan year is also December 31, 2001 - the last day of the current plan year. It seems to me that you must apply 2 definitions and analyses to December 31, 2001 - one for the current year using the old rules and one for 2002, using the new rules. Has anyone heard anything to the contrary?

Has anyone heard of using an IRA to make a loan for a mortgage on a single family house. Loan would come from the IRA and the interest and principal payments deposited back in the IRA. Can you do this? If so, what are the pro and cons aside from investment/credit risk?

thanks

Our company started a 401K plan in May 2000. I have stopped making contributions to the plan, and my employer has discontinued making matching contributions because of a decline in business. For a number of reasons, no one has been particularly happy with the plan, and many of us would like to move our money.

I have both Roth and regular IRA accounts with another broker, and would like to know if I can rollover the funds of the 401 to either IRA account. I'd guess that since the 401 contributions were pre-tax, any rollover would be to the regular IRA. The fact that Congress may increase the maximum IRA contributions to $5000 makes this move, if possible, even more compelling.

So, can I close out the 401 and roll it over to either IRA account?

Carl C.

we were advised that the repeal of 415e would allow the following:

1. receive the maximum 415 limit in a 401k plan (i.e. 35k for 2001)

2. the maximum benefit allowable in a db plan ($135000)

is this correct? i was under the impression that the repeal was re: the 1.0 calc only but you still had the issue of either the 25% of comp limit or the full db limit, depending on which plan you fund.

we are interested in setting up a 401k plan in addition to our db since it is our understanding the deferrals will not count towards the deductible limit, thus, deferrals will be okay, as long as we don't fund the er portion (since we intend to fully fund the db)

were we advised correctly on the max 35k due to the repeal of 415e?

bb

Our prototype under TRA'86 was written assuming that the match was made at year-end (i.e., it did not contain a provision or option to calculate it on a payroll period basis). We therefore generally only permitted employers to change the matching formula from plan year to plan year...

Just when or how frequently can the matching formula be amended (or amended from fixed to "discretionary")? Our new prototype for GUST contains an option to specify that the match is based on "each payroll period". Does that provision (versus match based on "entire plan year") have a bearing on the timing or frequency of when the matching formula can be amended?

I recall that IRS Notice 2000-3 (regarding safe harbor) specified that safe harbor matching contributions can be ceased mid-plan year with 30 days advance written notice to the employees. Does this same approach hold true for any amendments to a plan's matching formula - i.e., it can be made at any time during the plan year provided that a written employee notice is provided 30 days before the effective date of the change?

And is this 30 day notice similar to the 204(h) notice, or where in the regulations is it discussed?

Thanks for your help...

Will the new benefits i.e. roll-over options, contribution limits, catch-up plans, non-refundable tax credits, for 401(k) employees effective 1/1/2002 also be applicable to public sector 401(a) money purchase pension plans? If so will these benefits be an option of the plan administrator or required to be included in the plan?

Does a 3% safe harbor contribution also satisfy the minimum top heavy contribution for a top heavy plan?

When a Plan amends its definition of compensation, and/or adds a compensation exclusion (i.e., bonuses, overtime, or compensation earned before a participant's "entry date")...

Can these types of changes be made mid-plan year? Or, if the effect of these amendments is a reduction in the compensation that will be considered for that year, is that a reduction of an IRS protected benefit? Say this is for a 401(k) plan with a discretionary match and discretionary profit sharing made at year-end.

If any of the contributions were mandatory, would that have any bearing on the ability to amend the definition mid-plan year?

Does the presence of an "employed on the last day" requirement have any bearing on the ability to do this mid-plan year? (The impact of the definition of Compensation, however, extends beyond those provisions that can have a "last day" requirement...)

Thanks for your input...

Just wondering what others know regarding the Nov. 15th extension for 5500's normally due with extension on 10/15.

Are all plans automatically eligible for this extension regardless of where they are located? I spoke with a representative at the PWBA and she said "it applies to all plans and, considering the circumstances, proof won't be required so long as the return is filed by 11/15.... however, every effort should be made to file as soon as possible..."

The response wasn't exactly definite, has anyone else inquired with the PWBA directly and received a different response?

Concerned about the accruals and funding requirements under the MPP.

Employer with a Standardized MPP wants to amend to a 401(k) effective 1-1-02. The MPP plan year is 5-1 to 4-30. The MPP calls for an ER contribution of 5% of plan year compensation.

It seems the employer could amend the MPP plan to change the plan year so that it ends 12-31-01 and fund the MPP contributions to that date and then continue as a 401(k) with the new 1-1 plan year.

But the employer would like to keep the 401(k) plan year as 5-1 (coindcide with FY). Could they amend the MPP with a rate of 0% as of 1-1-02 and change to the 401(k) as of that date?

The employer could establish a 401(k)effective 1-1-02 with a 5-1 plan year and amend the MPP effective 12-31-01 changing the plan year to 1-1 and with a 0% going forward and then merge the MPP

into the 401(k), but they would prefer not to. But is this the best way to do it?

Suggestions?

Couple of questions concerning 401k loans and terminated employees.

1. Can a plan administrator allow a former employee to continue paying on his/her loan after termination?

2. If the answer to question 1 is no, is there an amount of time the employer must give the terminated employee to pay the loan back? Is the Plan administrator required to notify the terminated employee that the loan is going to be "deamed' a distribution?

Thannks.

my company match my contributions to the 401k with company stock from an ESOP loan. the loan is now paid off and future company matches will be in the form of company stock, but purchase in the market on an as needed basis.

am i still restricted to the diversification requirements of the esop (age 55, 5 years, etc.)? there are no plans for a new loan.

Recently, a lot of information has circulated on USERRA's effect on retirement and welfare benefits. I have not seen anything that addresses the flex health care and dependent care accounts. Any comments, suggested readings?

Does anyone have any authority on placing a traditionaluniversal life contract into a 412i plan or must it be a whole life contrafct.

I have a default loan question I would like to tap some expertise on.

We have a participant who defaulted on a loan. The amount of the loan when it went into default was $20,158 back in 9/1999, The guy wants another loan. The current running interest loan balance is now $25,740.

When taking into considering the amount of his vested balance which would you take for coming up with his vested balance:

1?) 20,158 + his current vested balance of 30,444 or

2?) 25,740 + his current vested balance of 30,444

then we would take 50% of either option 1 or 2 above less the outstanding loan balance

We are busting our brains in trying to interpret loan language we rarely use.

Any actuaries out there already planning a greater use of smoothing methods in light of the recent market activity?

If the 401(k) Plan is frozen can you still pay out participants upon termination and if so do you make them 100% vested since the plan was frozen?