I am looking for a company that provides brochures with details on New Comparability and Age-weighted plans. We have used the brochures from Corbel for GUST Restatement and Safe-Harbro 401(k) Plans but need something comparable for these cross-tested plan. Does anyone know of a company that prepares these or will our retirement plan department need to create our own?

In California, for State employees adding a domestic partner, the employee is subject to additional tax withholding on the differential premium/contribution as ti is deemed as taxable income. Is there any IRC reg., interpretation of reg. of ruling that would lend itself to allow the relief of this imputed tax liability either in and of itself or based on the enacting of State tax law relieving this imputed tax on the State level? We're trying to see whether of not there is a way, should it exist, to relieve this part of the imputed tax for State employees in this situation.

In California, for State employees adding a domestic partner, the employee is subject to additional tax withholding on the differential premium/contribution as ti is deemed as taxable income. Is there any IRC reg., interpretation of reg. of ruling that would lend itself to allow the relief of this imputed tax liability either in and of itself or based on the enacting of State tax law relieving this imputed tax on the State level? We're trying to see whether of not there is a way, should it exist, to relieve this part of the imputed tax for State employees in this situation.

Hello. This is my first time posting a question on this board.

A PS plan has a whole life policy for the principal. The pension firm that set up the policy used a method of calculating the maximum employer contributions available for premiums by taking 100% of the PS contributions that had been in the plan at least 2 years.

What are the risks in using this method to calculate the Incidental Death Benefit limits? FWIW, the plan allows for in-service distribution, but the premiums are paid by the corporation.

Thanks for your assistance.

With the new EGTRRA rules, a person can now roll over IRA balances into qualified plans. I have heard from a client who wishes to do the following:

1. Set up a new profit sharing plan

2. Roll over into the plan a substantial IRA account balance

3. Take that balance and purchase life insurance with it (within plan limits, i.e., 50%). The insurance will have a low CSV until year 5 (springing Cash value policy), and then increase.

Ignoring the "recurring and substantial" contribution requirement for profit sharing plans, is this something that anybody has run across, and if you have, do you think it would fly? Any answers appreciated. Thanks.

Can someone please help? We are involved in a disagreement with a CPA who insists that Publication 590 be used to determine life expectancy for a 70 1/2 distribution. Is Pub. 590 intended solely for IRA's? Has anyone heard of using any table other than the MDIB table intended to be used under the new regs. ????

My client would like to allow their employees the option of purchasing up to seven days of additional vacation time, pre-tax as a benefit in their flexible benefits plan. Is this form of benefit allowed? And can an employee purchase the time on a pre-tax basis? Does the plan document need to be amended to add a pre-tax vacation benefit?

Does a standard plan 401(k) document require true up match contributions if matching contributions are made per payroll and there is a liability at the end of the year? What specific guidance is available on true up contributions?

When a plan document is unclear about applying earnings on matching contributions that are being forfeited due to a return of excess contributions (the excess contributions are subject to gap period earnings), what guidance applies? Is the forfeited match required to receive and earnings allocation?

We have a standardized 401(k) Plan with 7 employees. The Father is the sole owner of the company. He is 82 years old and does not take a salary. His son and daughter work in the business, but they are NOT owners. They both make around $30K/year. There plan will begin on 1-1-02. Are they attributed ownership under attribution rules. Are they considered HCE in regard to ADP testing? Any help with this would be greatly appreciated. Thanks! Mike

Can a required minimum distribution based on an IRA balance be satisfied by taking the distribution from a qualified plan? I know you can't do it the other way around, but I can't find anything that says the IRA RMD must come from an IRA.

Company A acquires company B in june of 99'. Company B's employees can't contribute to Company A's 401k plan. Company B employees must contribute to the existing plan. My question is why can't Company B's employees contribute to Company A's 401k plan? Are there Govt. Regulations preventing company B employee from contributing to company A's plan? I'm a company B employee and my company is telling me I can't contribute to the plan offered to new employees due to govt. regulations and that the company is in the process of merging the two plans. Should it take over two years to merge the plans?

We took over a plan this year with a plan year end of 10/31. I was just preparing their 5500 and discovered that the company that prepared the 5500 last year listed an incorrect number for the End of Year Total Plan Assets. The number they listed does not include the outstanding loan balance. I believe that balance should be part of this number.

I want to include the loan balance in the beginning balance for this year's 5500 but then the ending balance from last year would not match the beginning balance for this year.

1.) Am I correct in thinking the loan balance should be included?

2.) What should I do about it if I am right?

Thanks.

Our group of companies has one combined 401(k) plan. During 2001 our parent company sold one division and closed down a second resulting in a partial plan termination. These people were subsequently fully vested on termination. In addition we had one person let go and two laid off from other divisions unrelated to the above plant closures. Do we need to vest the three people who terminated but had no connections to the plant closures. Are they "affected employees"? Thanks for the advice.

In an article called "The pitfalls of defined benefit schemes" at

http://www.townhall.com/columnists/bruceba...b20011123.shtml

the author says a "new study suggests that defined-benefit pension plans were a key culprit in the stock market bubble of recent years. As the value of such plans were inflated by stock market gains, companies were able to withdraw excess pension assets, which went directly into corporate profits, further buoying stock prices. This is yet another reason for shifting workers away from defined benefit (DB) plans to defined contribution (DC) plans."

The article was included in the list of linked articles in the November 26 issue of the BenefitsLink Newsletter, Retirement Plans Edition.

A reader, Eric Hansen, has the following comments about the article, which he asked me to use to start a message thread:

The above article appears to be a poorly veiled attempt at convincing us we should abandon traditional pension plans in favor of defined contribution plans.

First, the author suggests pension plan sponsors have withdrawn "vast sums" from their pension plans and that these withdrawals were "a key culprit in the stock market bubble of recent years." He goes on to suggest "shifting workers away from defined benefit plans to defined contribution plans" will solve this problem. Nonsense. In my experience, since the excise tax on "reversions" was generally increased to 50% (effective October 1, 1990), the number of pension plan sponsors taking reversions has decreased dramatically. And he neglects to mentions the vast sums being withdrawn (and spent) from defined contribution plans by participants who change jobs. Who is going to pick up the tab for these folks when they retire?

Next, the author suggests the back-loaded nature of traditional pension accruals is bad. What makes a back-loaded accrual worse than a front loaded accrual? These patterns are simply a function of the ERISA requirement that retirement plans not discriminate in (pick one) contributions or benefits.

The author also says participants "cannot withdraw their assets before retirement without paying a hefty penalty" and suggests defined contribution dollars are more likely to be available at retirement. Again, this is nonsense. The hefty penalty is just a fraction of the reversion penalty. In fact, as employees quit or change jobs, there is a ton of money pouring out of defined contribution plans.

I'm not suggesting traditional pension plans are superior to defined contribution plans. Rather, they have different characteristics and are more appropriate in some circumstances than others. But to suggest we should shift workers away from defined benefit plans to defined contribution plans regardless of circumstances is naive.

Is there any problem with the following situation:

Floor Offset arrangement with DB benefits offset by actuarial eqivalent of employer contributions to a profit sharing/401(k) plan, where the sole employer contributions to the dc plan are safe harbor non-elective (3% contributions) used to automatically satisfy the ADP test.

I guess the more precise question is whether such an arrangement could qualify as a safe harbor under 1.401(a)(4)(8)(d).

Anybody see a problem using the 3% SHNEC contribution towards the safe harbor?

Any official information (or educated estimates) about whether the $85,000 prior year compensation amount will change for 2002 determination years?

We have a client who provides a daycare facility there. All employees who utilize that Daycare per the client automatically has the money coming out of the employees check with taxable money. If that employee wants the Dependent Care Account on FSA how would it work?

Individual inherits an IRA from her father who passed away in 2000. The father reached age 70 1/2 a couple of years before his death. The beneficiary (daughter) took a distribution in 2000 based on 1/5 of the balance of the IRA. Does this constitue some kind of irrevocable election requiring her to complete the distribution over 5 years or can she take the 2001 distribution based on her life expectancy?

Can an IRA invest in real property located in a foreign country? I haven't found a prohibition of such an investment, and the ERISA prohibition on foreign investments doesn't apply.