Does anyone know whether any of the prototype plans that are currently being reviewed by the IRS will accomodate a governmental plan? I have a client that maintains a fairly simple money purchase pension "Fica replacement" plan that I would like to put on a prototype document if there is anything out there that would accomodate such a plan.

I am looking for an answer to a question regarding contributions for my wife.

I make an income and my wife does not. Can we still contribute $4,000 to a fund? Or by her not working limit it to only $2,000?

Thanks in advance for any help

Andy

An unmarried participant in a 401(k) plan had a loan outstanding at her death. She did not name a beneficiary, and under the terms of the plan, the default beneficiary was her estate. Most (though not all) of her account consisted of appreciated employer securities.

Soon after her death, the plan treated the loan as being in default, and issued a Form 1099 in her name (not in the name of the estate).

1. What generally happens upon the death of a participant with an outstanding loan?

2. How does this affect the requirement of a lump sum distribution in order to elect NUA treatment?

Mid year entrant gets correct contribution based on half year comp. However discrimination tests show him with $0 benefit( not benefiting). I checked the average NHCE rate and indeed it was included as not benefiting in the test. In other words it was not a "report" bug only. Any ideea why it happened and how it coild be corrected?

Thanks....AC

In the EGTRRA literature I've read I can't find any reference to changes in the IRA phaseout limitations. Are the phaseouts unchanged?

I have two quick questions:

1) The QDRO answer book seems to imply that unless the QDRO so stipulates that the law does not require that the alternate payee ever share in any early retirement subsidy paid to the participant (Q&A 25). Have I read this correctly?

2) Typically a separate interest QDRO will split the participant’s accrued benefit on the earlier of when he begins to receive his benefit or when the alternate payee begins receipt of her benefit. Assume a defined benefit plan pays the participant his unreduced accrued benefit as a disability benefit.

(A) If this is it seems to me that the participant’s accrued benefit would be split when he begins receipt of his disability benefit. At that time we would calculate the portion of the participant’s accrued normal retirement benefit payable to the alternate payee. Since the participant has now separate from service and is in receipt of his benefit, she is now entitled to receive her benefit too.

(B) Must the alternate payee (by law) receive a portion of the unreduced disability retirement benefit or is she only entitled to her portion of the normal retirement age accrued benefit, actuarially adjusted to be paid over her lifetime? You can see how this could make a big difference.

I would think that the answer to the second question would be somewhat analogous to the answer to the first question.

Can ESOPs be drafted to permit in-service hardship withdrawals? I found one authority supporting such withdrawals -- Rev Rul 71-224 -- but it is dated.

Regarding the required vesting schedule change to a minimum of 3-year cliff or 6-year graded by 1-1-2001 (calendar year plan), there is an extension for "plans Maintained under a collective bargaining agreement."

We don't know whether that applies to us. We have a single employer 401(k) for non union employees and for the employees of two unions. One of the unions has a 5-year cliff vesting on the match which was subject to bargaining. All other employees have 5-year graded vesting.

Nothing else about this plan is impacted by collective bargaining. The plan is not created for a union, but for all employees.

Does the extension apply? - Meaning the vesting schedule does not change until the current bargaining agreement expires? Or was this extension meant for Multiemployer plans or some other definition of collectively bargained plan?

:confused:

Can a non-elective Safe Harbor contribution use integration for taxable wage base? Can you stack an integrated contribution on top of a 3% non-elective contribution?

Can't find anything saying you can't, but also can't find anything saying you can.

Does anyone know if there will be a new code on Box 12 of the 2002 W-2 to identify "catch-up contributions?" Or will the catch-up contributions be commingled with 401(k) deferrals as code "D?"

due to the increasing cost of health insurance, an employer would like to shift more financial responsibility for health insurance to employees. currently, the employer pays 100% of the cost for the employee. the employer has a flex plan with a premium conversion/salary reduction component used for dependent care, health insurance for dependents etc.)

Would it be permissable to make such a change (ex. employer pays 85% employee pays 15%) and allow the employee to use the premium conversion/salary reduction plan to accomplish this so the employee can use pre-tax dollars?

Plan provides for annual valuations and interim valuations at discretion of trustee. This is o.k. under Rev. Rul. 80-155 as long as the interim valuations do not discriminate pursuant to 401(a)(4).

However, what are you looking at under 401(a)(4)--benefits rights and features testing? Also, when the market goes down, who are you testing? Are those that are "staying in" the Plan and not receiving a distribuiton actually the ones who are enjoying the benefits right and featrue?

This issue has been touched on in other threads, but I wanted to see if anyone has any additional thoughts on how to handle demutualization compensation distributed to a terminated noncontributory defined benefit plan.

Two specific questions:

1. Where do you intend to park the stock until you allocate the shares to employees (to avoid any reversion under section 4980)? (The plan I am dealing with has a group annuity contract held by the employer.)

2. Is anyone taking the position that the employer can keep the proceeds, and that section 4980 does not apply?

Thanks.

card

(And thanks to Everett Moreland for his assistance.)

All nhces and hces benefited for the 401k part of the test.

There was no matching contribution, so no hces benefited for the 401m part of the test.

On line 3, can I check box 3d for the 401k part and also check box 3b for the 401m part of the test?

Or must I go to line 4 and enter information on each disaggregated part of the plan?

One of our employees has a dependent from a previous marriage that is on her insurance in WA. Her dependent is now living with the father in CA. As I am told by the insurance company, the only way the child can continue coverage is if he changes to the PPO plan, since they cannot have dual state HMO coverage. Is there any life event that would allow such a change? The employee herself is staying put in WA and has not had a change in job status.

Thanks!

I applied for a Hardship withdrawal to prevent eviction. My letter from my ladlord states: PLEASE BE ADVISED THAT YOU HAVE EIGHT (8) DAYS IN WHICH TO REMIT THE BALANCE DUE. AFTER 8 DAYS YOUR ACCOUNT WILL BE REFERRED TO OUR ATTORNEY TO SECURE PAYMENT DUE AS WELL AS REGAIN POSSESSUION OF THE LEASED PREMISES. Please avoid additional fees for attorney and court cost by paying tje Total Balance Due within (5) days from the date of this official notice.

It has the amount on the letter and it is dated. It also has been cc'd to their attorney. Now they're telling me that I need to show them a notice to quit and vacate the premises and that my letter was insufficient because it does not say eviction. It says regain posession. It means the same thing. I live in Missouri. Is this right?

I left my previous employer in early June of this year. I was sent a form to fill out and told that I had to return the form within 30 days to roll over my 401K to an IRA of my choice, or they would cash out the account and send me a check. I opened an IRA account with Franklin Templeton, filled out all the necessary paperwork for the rollover and submitted it well within the 30 day limit. It is now mid-November and my 401K has STILL not been rolled over. I was contacted by Franklin Templeton last month and they said that my money had not yet been rolled over; and was there a problem? I called my previous employer and spoke with the accountant. He said that he had delayed sending my rollover request to the payroll company for about a month because he wanted to put a bunch of them through all at once. He said that the payroll company was having some problems and that the rollover should be completed by September 15. Today, I checked my IRA account online and saw that the rollover has STILL not taken place. I sent the following message to the accountant at my prior employer:

"Can you please update me as to the status of the rollover to my IRA? I just checked my online account status at Franklin Templeton and it's still not showing the rollover. This is getting a bit ridiculous; I left SGS over three months ago now, and I don't think it should be taking this long, no matter what the circumstances."

He wrote back:

"Whether you think it ridiculous or too long does not concern me, however, in realization that some failure has occured, I have resubmitted your request hoping that it will be properly handled this time. Time will tell the effectiveness of that strategy."

Am I being unreasonable here? It seems to me that they are simply delaying in order to be jerks. I did not have a particularly pleasant break with this company (I turned in my two-week notice when I received a new job and they turned around and said, "Don't bother coming back in tomorrow.") This is rather typical of the company. I just don't want my 401K funds held hostage any longer. Should I consult an attorney to begin legal action against them?

As a result of EGTRRA.... Do the qualified plan direct rollover rules and the 20% mandatory federal tax withholding rules for distributions not rolled over apply to 457 plans next year ?

Also in 2002 may the surviving spouse beneficiary of a 457 plan participant roll a death dist. to an IRA ?

I would appreciate anyones input.

E/er has been incorporated 2 1/2 years. Employer blew safe harbor 401(k) (to be effective 1/1/01) b/c broker didn't get adoption agreement executed. E/er gave safe harbor notice prior to end of 2000. Alternative in mind is PSP with 100% vesting and fund at 3% of compensation. Get safe harbor 401(k) in place as of 1/1/02. Effective 1/1/02 amend vesting schedule of PSP to 6 year graded vesting. Issue is whether Reg. §1.411(a)-8T(B)(3) allows all employees who have been there since day 1 to elect to stay under the old 100% vested schedule? Does the Reg. actually mean what it says? Any help appreciated. Thanks

E/er has been incorporated 2 1/2 years. Employer blew safe harbor 401(k) (to be effective 1/1/01) b/c broker didn't get adoption agreement executed. E/er gave safe harbor notice prior to end of 2000. Alternative in mind is PSP with 100% vesting and fund at 3% of compensation. Get safe harbor 401(k) in place as of 1/1/02. Effective 1/1/02 amend vesting schedule of PSP to 6 year graded vesting. Issue is whether Reg. §1.411(a)-8T(B)(3) allows all employees who have been there since day 1 to elect to stay under the old 100% vested schedule? Does the Reg. actually mean what it says? Any help appreciated. Thanks