Does anyone have examples for wording to be used in 403b salary reduction agreements next year when the changes take effect?

In 2002 as a result of EGTRRA would a 403(B) participant be eligible to use the "15 year of service catch up provision" and the $1000 "Age 50 catch up" and defer potentially $11,000, plus $3000, plus $1000 for a potential $15,000 max. deferral ?

When determining compensation for salary deferral purpose in a 403(B) or 457 plan, if the participant is making mandatory contributions into a defined contribution plan of the employer are such contributions counted in the definition of compensation ?

Would the answer be different of the mandatory contributions were "picked up by the employer".

Would the answer be different if the mandatory contributions were going into a defined benefit plan ?

If company A is in a brother-sister controlled group with Company B and Company B is in a brother-sister controlled group with C, then is A in the same controlled group with C by why virtue of its relationship to B, even if A and C are not truly a brother-sister group without B?

Logic seems to say "yes", but we know logic does not always prevail.

Thanks

Client maintains a final average pay defined benefit plan, and a nonqualified excess plan to make up for the limits imposed by 415 and 401(a)(17). Client has allowed the NQDCP participants to pay FICA tax on each year's vested accrual, per the 3121(v) regs which permit inclusion before the date the amount deferred is reasonably ascertainable.

Now client will adopt EGTRRA's $200,000 401(a)(17) limit retroactively per Notice 2001-56. This will result in significantly higher qualified plan accruals for certain participants, and a corresponding reduction in the nonqualified plan accruals. Therefore the FICA tax for years prior to 2002 would have been significantly overestimated.

The regs don't seem to permit an adjustment until the resolution date.

Has anyone addressed a similar situation? What about a "negative accrual" for 2002 to offset other income?

Thanks-

card

As I understand it, a Special Tax Notice is supposed to be provided no less than 30 days and no more than 90 days before an eligible rollover distribution, and the 30 day notice can be waived under certain circumstances.

We do offer waiver of the 30 day period. But we have not always monitored the 90 day requirement.

We are allowing web-initiated distributions, and those are of course OK because the notice is there when they make the request. But if the participant gets the distribution form and Special Tax notice from their local HR person, we have no way of tracking the date that it was delivered.

So my question is whether other sponsors actively monitor the 90 day requirement, or if there is some way around it. Any advice would be greatly appreciated.

Does anybody know of any products marketed to DB plans and the companies that promote them?

I thinking along the lines of communications products to help employees understand their benefits.

Fiscal Year Plan, 10/1 - 9/30. Plan terminates 9/30/00, assets are distributed 12/15/00. Employer wants to adopt new S/H plan effective 10/1/01. Can we treat this as a "new" plan for safe harbor rules or does the fact that assets from the old plan were not distributed until 12/15/00 make this a "successor" plan.

Any guidance is appreciated.

someone please help settle this disagreement concerning distributions. a 40 year old participant in a 401(k) dies. his beneficiary is a designated non-spouse. which rules apply? it is my contention that the new proposed regs apply. specifically the rules concerning a participants death before required beginning date. someone else says this is not applicable since the participant has not reached 70 1/2 and that there is a window period between 70 1/2 and the Required beginning date.

in this case i believe the beneficiary has a choice under the new rules to receive payment in a 1) lump sum; 2) 5 year payout or 3) the beneficiaries life expectancy. is this correct?

We are setting up guidelines for our calculation methods for RMD's. We heard a rumor that a client can switch between the single and joint life expectancy and were unaware that this option existed.

We were aware that a client can elect calculation/nonrelcalc, but have never heard about a separate option to elect between single/joint. We had always thought that one needed to rely upon the most current beneficiary designation when determining the life expectancy factor used in the denominator.

If a client indeed can elect between single/joint, wouldn't that mean they would need to change their beneficiary designation from year to year?

Need to know if anyone has heard of this option, or if this is just a rumor. P.s. not finding anything clear in the Code - a code reference would be helpful if this rumor is in fact true. Thanks,

An employer is in the process of establishing an ESOP. The trustee has hired an appraisal company. The appraisal does not contain a fairness opinion. The bank is insisting on a fairness opinion. The trustee has taken a neutral position, he could have or not have it.

ERISA does not require a fairness opinion, but is it standard for an appraisal to have a fairness opinion when valuing an employer's stock for an ESOP deal?

Thanks.

A client just informed me that she recently discovered that a participant in a 401(k) plan had taken a loan in February, 1999 but the company neglected to take the loan payments from the participant's paycheck and, evidently, the participant never noticed that he was not repaying his loan.

What is the correction for this problem?

It appears to me that the loan was in default in 1999 and that the participant should have received a 1099 for that year. Does the participant have to amend his 1999 tax return?

During the audit of a 401(k) plan, we discovered that a number of employees who were not eligible for the matching employer contribution did in fact receive a contribution. Since the employer contribution was made as a % of each participant's compensation, the error did not result in other participants receiving less of a contribution.

I think the employer should leave the money in the participants' accounts since it was their error. Is there any legal reason that they would have to leave the money there? What else am I not considering? Any help is appreciated.

I have a union money purchase plan negotiating a new contract. Currently, the contract has X+Y dollars allotted for benefits with X dollars per hour for pension and Y dollars per hour for insurance (health, dental, life, and disability). The union wants to give participants the ability to elect to have the pension dollars applied to the insurance costs on an annual individual basis. Is this type of wording allowable in the union contract?

After January 1st the rules for those monies eligible to be rolled in to a Qualifed Plan will relax and allow for rollovers of IRAs, 403(B), etc., but what about the client who terminates a

401(k) Plan and sets up a Simple IRA Plan. Can the Simple IRA plan receive the 401(k) rollovers?

We are relatively new to Quantech. I went through training in Jacksonville, but remember forfeitures being specifically left unaddressed - just that they are different from FDP.

Now I have a plan with 2 paid out participants whose unvested portions are ready to be forfeited. They remain in the main pooled trust account with 0% vesting. How do I reallocate these forfeitures with the contribution to other participants?

A pension i am reviewing uses Moody's Aaa monthly bond ratesas the interest rate for lump sums.

Does anyone know where I can find historic data for these rates?

Thank you.

Gary

I thought IRS Notice 96-8 allowed plan sponsors to use 1-year treasuries plus 100 basis points with deemed compliance with 417(e), am I wrong or was this Notice changed???

Say a plan invests in variable annuity contracts with an insurance comapny. Is that considered a "pooled separate account" and therefore a Schedule D would be required?

The sponsor of a 457 plan has been approached with a new program that includes a "supplemental disability" element. Essentially, if a participant becomes disabled, he/she receives disability benefits under a group contract offered by the insurance company that is providing the investments for the 457 plan. The employer (i.e., the sponsor of the 457 plan) reports the disability payments on a W-2, as compensation to the disabled employee. And under the disability policy, the insurer pays a certain amount to the 457 plan (pre-tax) on behalf of the disabled employee. It strikes me as suspect, because the 457 plan contributions are tied to a percentage of "includible compensation," and it doesn't seem appropriate ot label the disability insurance proceeds as "includible compensation." Anyone have any experience with this type of arrangement?