Long time reader, first time poster. This is a great site. I believe I know the answer to my own question, just wanted to run it by people who see this stuff more than me. I have a client that had a calender year SEP up until August 2001, then ixnaed that and adopted a 401k profit sharing plan. SEP had not been funded for 2001. Client wants to make a contribution to that terminated SEP, mostly because the employees who are now in the 401k plan were not in the SEP due to eligibility requirements (the owners of this S corp want everything going to them)...

Anyhoos, although the deadline for making a deductible contribution for a SEP extends to the due date of the tax return (so conceivably you could have until September 15, 2002), I believe it's implicit that a SEP actually exist at the time that contribution is made. I would recommend that they "really quick adopt and terminate" the SEP so they could do the contribution, but one of the basic req's is no other qualified plan can exist (as now they have a 401k plan).

Anybody disagree with me? Any thoughts appreciated. By the way, you guys really are sicko's for choosing this profession.

Have a client that provides research and analysis to a Public Mutual Fund. Client get's paid on a contract basis.

Can anyone see a reason why the client shouldn't or wouldn't be able to offer the fund as an investment option in the 401(k)?

Only issue I can think of goes toward insider trading, however the client does not have any influence over the way the research is used, or what is derived on the Fund Family side - so I think that would be a mute point.

Any other thoughts?

Thanks

A closely held corporation wants to repurchase company stock from its formerly-leveraged ESOP.

However it wants to use a "note" from the Company to the plan to do this!

Seeking confirmation that (a) this would be a prohibited transaction; (B) it is likely to be a fiduciary breach (imprudent investment), independent of PT rules; © this would render the ESOP a non-ESOP; and (d) the correct approach would be to terminate the ESOP and distribute cash or stock, as the case may be, to participants, after obtaining a valuation of the company by an independent appraiser, as of the date the employer purchases company stock.

Can you tell me where in the IRS regs, Treasury regs or otherwise, I could get the guidelines for establishing benefit classes under a 125 single employer plan. For example, it is common that employers pay a higher percentage of premiums for their management class than for their hourly class. What other classes can be made? Is there a restriction on the number of classes a plan may have? Can you create different classes based on years or months of service to the company?

Also, under the same 125 single employer plan, can I offer some, but not all, benefits of the plan to different employee classes? For example could I offer detal to the managers and not the line level?

I am SO far from an expert, as you can see, so speak slowly and use small words so that my little brain can understand. Thank you!

Withing 30 days of marriage, I understand my wife can alter her contributions to her flexible spending account.

Previously, it had been zero. If she now contributes, can that money count towards her own medical expenses incurred prior to the actual date of marriage?

Is Fidelity Bond coverage required for VEBA plans? From what I've been able to determine, coverage is not required but may be obtained.?.? Any advice out there?

Just a quick survey,

When looking at an "ongoing funding ratio", are you typically using the actuarial value or the market value of assets?

"Ongoing funding ratio"- is a term we use to describe a comparison of the present value of the plan's total expected liabilities (PVB + PV of future expense) to the present value of the assets (AV or MV of assets + PV of Future expected contributions). It is a calculation that is typically done for multiemployer plans to make sure that the expected contribution rates are in balance with the expected benefit accruals.

It seemed to me that since this is a projection type calculation, based on the various actuarial assumptions and future events, that the Actuarial value should be used, but I have seen other actuaries using Market Value.

I'm not suggesting either is "wrong", I'm just interested in other opinions.

Looking at passed posts there is a consensus Terminated ROTH Ira losses can be taken, and it is in Pub 590, I cannot seem to find it, I emailed the irs and they stated"there is nothing in either pub 590 or pub 529 allowing a taxpayer to take

this as an itemized deduction. the only expenses associated with an ira would be investment

fees & expenses you paid for managing your investment that produced taxable income, or

ordinary & necessary trustee's administrative fees that are billed separately & paid by you

in connection with your ira. see pub 529, pages 9 & 10. "

If someone can point me to where it says you can take a loss on a terminated IRA I would appreciate it.. I think we will see some of them this year, and it does seem logical TNX Fred EA

5. If Alternate valuation is elected for an estate what date is used as the alternate valuation date for an IRA and a 401(k) each of which has a named beneficiary? (e.g., when is this property considered to be sold, exchanged or otherwise disposed of?).

I need clarification please on the rules related to hardship distributions from 457 plans. What are the requirements and where do I find them? I've read Reg. 1.457-2(h) where it talks about "unforseeable emergency". In particular, is a participant that receives a hardship distribution required to stop making deferrals for a 12 month period, as in a 401(k) plan?

I work for a county govenment that is not subject to ERISA. We do have a 125 plan in place and have a consultant telling me that we need to publish an SPD. I always thought this was an ERISA requirement and have never done one before. SO...whats the deal? Is an SPD required for 125 compliance or for ERISA compliance.:confused:

Our firm administers numerous small, trustee-directed, balance forward DC plans. We find that we spend WAY too much time holding hands with plan sponsors concerning the collection, deposit, and reporting of income taxes withheld from distributions from these plans. We are considering the idea of setting up our own "omnibus" tax account and EIN to collect, deposit and report distributions from all of these plans (under agreements with the sponsors.) This would be a great additional service to the sponsors and would probably SAVE us time.

I know many larger financial institutions handle distributions this way. Does anyone know what is involved in setting up the system? What do other TPA firms do to minimize distribution inefficiencies?

Thanks!

Quasi-governmental employer establishes "ineligible" deferred compensation plan under 457(f) for a limited number of executives and department heads. Plan assets are to be held in a rabbi trust. If it turns out that the participants are too numerous to satisfy "top-hat" criteria, is the plan now a 457(B) plan subject to trust requirements ?

And would plan assets be subject to tax for lack of an adequate trust?

Recently, some of the claims I submitted for reimbursement under my cafeteria plan were denied because of the date of service.

I was under the impression that the expenses became deductible when I paid them. The dates of service on these medical bills were December of 2000. However, I did not pay my portion due until 2001 therefore I turned them in to be reimbursed under the 2001 calendar year.

They were denied due to date of service being the prior year.

Is this right? My insurance company never gets around to processing these claims for several months after they are incurred, so I don't even know how much I'm going to owe as a balance due. So I had nothing to submit last December. This is telling me that if I wish to deduct an expense I incur in December, I must pay it in full and then wait for reimbursement of the portion that insurance paid? Because if I turn in the entire amount, that would be fraudulent, as far as I'm concerned.

Help?

Thanks much!

Jo

Question:

My company was purchased, they started the close of our eployer sponsered pension and retirement plan April 30th, 2001. The new company laid off about 6 employees, myself included. I was laid off August 1st. The job market is tuff, and I need my retirement and pension, or a portion of it, to survive until I am employed again. The management told me, that since the plan was in closure status, they do not have to pay out benefits. Everything I found out stated that they have to continue to administer the plan, including putting eligible participants into pay status. I also found out, and just need verification, that they were supposed to pay, or roll over by the 61st day of the end of the plan year, which I was told was when I was terminated, Aug 1st, 2001. They have exceded that 60 days. Am I correct here that they should have settled my pension and retirement plans by now? Thanks for any info anyone can provide...

Dan Weaver

One site I found that helps me with benfits is

www.iworkwell.com

they have a lot of good articles and guidelines in their HR 101 section.

I emailed them with a few questions and they sent me a code for a free trial. With it you can access the whole site.

gehrett

Is anyone aware of IRS guidance re: at what point a self-insured welfare plan is discriminatory when the contributions made by highly compensated employees are lower than those made by other plan beneficiaries? I'm looking for a formula for a mechanical (rather than conceptual) analysis. I.e., how is Reg. 1.105-1(e) actually implemented? All leads are appreciated

Assume plan sponsor has adopting employers of a 401(k) plan, but there isn't common control within the meaning of Section 1563. Each adopting employer utilized a different matching contribution rate. Is there any requirement that the matching contribution rates be disclosed to other adopting employers?

Is the result different if the plan is a multiple employer plan of totally unrelated employers?