I have encountered a situation where a minimum required distribution for 2001 was calculated early in the year using the old MRD tables. Using the new (MDIB) table would have yielded an MRD approximately $11,000 less than using the old table. Client was advised to take the higher amount; now they are angry at having to pay the tax on the extra $11,000, and want to know if they can return it to the IRA saying the additional distribution was in error.

Has anybody dealt with this? Can the $$$ be returned? Any help would be appreciated!

Unfortunately, and extremely sadly, we have been

asked what proof of death would be required for a

participant missing as a result of the recent national

tragedy. I am at a loss. Has anyone had to look into

this in the past?

I used to work for a private company and I amassed an ESOP with aprox $20K in value. I did not invest any of my own money; these were bonuses awarded via the ESOP over the course of 5 years. I no longer work for the company, but I am 100% vested.

The company is being bought out for cash, and I'll soon be receiving (I assume) a check for the value my share in the ESOP.

I want to take most of the payout and invest it into an IRA, but I also have about $5K in debt I'd like to pay off with these proceeds.

Are there any tax implications with this plan? Any advice?

mtz206@yahoo.com

A participant retired at age 62 (his Early Retirement Age) and elected to have his benefit paid as a 100% J&S monthly annuity. After two years off payroll he was re-hired and his benefits were suspended with the proper notice given.The notice also contained a statement from the plan sponor to the effect that any payments missed during the suspension period would be made up when the particpant finally went off payroll. The plan sponsor says that this information was give to him by the plan's prior actuary.The plan makes no mention of any "make-up" contributions other than the standard 3-month catch-up required by the regs. The participant is still employed and is now past what otherwise would have been his Normal Retirement Age.The plan permits in-service distributions to participants adfter NRA.Questions are as follows:

1. Does the fact that the participant had retired and had started benefit payments preclude his re-entry into plan upon his re-employment? In other words,is the suspension of benefits supposed to keep him in the category of "retired,in receipt of benefits" as far as the plan is concerned?

2. If not,is he entitled to additional accrued benefits and post-NRA adjustments as per the plan?

3.Since the plan sponsor has already "committed" himself to the make-up of the suspended benefits is there anything to prevent the plan from being amended to allow for it?

4.Any opinion as to whether the post-NRA in-service distribution provision can be used to justify re-commencement of benefits,with or without adjustment per item 2. above?

5. If he is entitled to additional accruals must a new J&S notice be given at such time as benefits re-commence?

We have an employee who has rolloved over his money into our company 401(k) Plan and now wants to take out a loan. However, he is not a "participant" yet of our Plan because he has not completed a year of service with the company. May we still give him a loan since this money was rolled over by him into our Plan? (Our Plan states that a Participant may ask for a loan but defines a "Participant" as an employee who completes a year of service.) Thanks.

If an employer counts predecessor employer service when acquiring employees of a newly purchased company, do they enter the plan immediately or do they enter the plan on the next entry date?

A company recently went out of business (the owners abandoned the company) and there are legal issues amongst the owners. I'm still in contact with the trustee of the plan who was a former owner of the company. He wants to terminate the plan since the company no longer exists and the participants are asking for the plan distributions. Normally, a board resolution would have to be prepared but since the company no longer exists, can the plan trustee sign a resolution and amendments to terminate the plan?

We have a plan that we are setting up on Quantech. It will be tracked daily and involves modeling. The problem is that all the reports print all the underlying investments relating to each particular model. Our client just wants to see the Model Investments and does not want to confuse the participants with all the underlying investments. I have spoken with Corbel and they do not have any reports that suppresses the underlying investments, but says that Crystal says it can be done. Before we attempted to tackle it, I thought maybe someone may already have something like that.

I'd appreciate any help in this area.

Limited partnership company in SD is just starting a Simple IRA plan. The majority share holder (99%) of the company is also majority share holder (98%) of a limited partnership company in CA. The CA company already has a Simple IRA in which they selected employee eligibility requirements to be minimum 2 years of employment. Here in the SD company, we want the employee eligibility requirement to be 90 days which is perfectly fine with the brokerage firm administrating the Simple IRA for both companies. The accountant thinks there is a discrimination issue with the government if the two companies have different eligibility requirements being that both companies have the same general partner who own majority stock in both. Any ideas or thoughts?

I have an associate that is the managing partner of a partnership. The partnership has fallen on very hard times and has run out of money. There have also been 401k funds that have been withheld from employees pay that have not been deposited. As far as I can tell the partners had the best of intentions to keep the partnership viable but didn't so the money went toward other expenses. I have several questions: 1) What sort of liability do the partners have (i.e., criminal or civil or both); 2) If they can somehow find someone to help bail them out of this situation what is the remedy for untimely deposits; 3) What other issues should be considered?

Thanks

Limited partnership company just signing up for Simple IRA plan in SD. The majority stock holder (99%) also has majority stock ownership (98%) in another limited partnership company in CA. The CA company already has a Simple IRA plan in place where they have set the employee eligibility requirements of 2 years employment before able to participate. Here in the SD company, we want the employee eligibility requirement to be 90 days employment. This is OK with broker, however, accountant says there are discrimination issues with government to be concerned about. Any ideas or thoughts?

I have been asked to be a Trustee for my employer's 401 k plan. There are 50 participants. A new administrator/investment advisor are taking over our existing plan that had previosly been through a bank's Trust Dept. They are also asking that we obtain fidelity bonds for each trsutee.

What questions do I need to ask concerning the exetent of my liabilities, responsibilities and should I have insurance to protect myself ?

Are the others issues that I/we need to consider ?

I have an employer that currently has a 125 plan with Flexibile Spending acccounts. He is renewing his health insurance plan and wants to move to a $500 deductible from a $250 deductible. His premium savings will be fairly large by moving to the higer deductible. But, in order not to "hurt" the employees, he wants to make an employer contribution up to $250 to cover the difference so the employee still only has $250 out of pocket. He knows that he must make it available to everyone but has been told that proabably less than 10% of the employees will use the $250 he contributes and he can specifiy in the plan document that the unused contributions will be returned to the employer at the end of the year. He envisions saving a bundle on the reduced premium he has to pay for the higher deductible and at the same time, not spending that much money covering the extra $250 deductible. My questions are: 1..Can this be done within a 125 plan. 2. What are the mechanics of it? 3. Does the employer have to make a contribution each payroll period towards his annual election? This sounds like a very good deal if it can be done. Would like everyone's opinion..Thanks

Our volume submitter document is being reviewed by the IRS and we are having trouble with the language concerning minimum coverage requirements. If you want to be able to pass 410(B) using either the ratio percentage test or the average benefit test, does the language for both have to be in the document? Or do you have to choose one method and include the language?

If you want to keep the maximum flexibility of choosing whatever method will pass, should you not include any language concerning 410(B)? Can you not include the language? Then if you fail both the ratio percentage and average benefit test, you would then do an amendment to provide benefits or add people back in to pass?

The owner of an S-corp funded his SEP during 2000. When it came time to file his tax return (with extensions on 9/15/01) he decided he doesn't have the money to contribute for eligible employees and would like his contributions returned to the S-corp. Can he have the contributions returned? Any penalties? If he gets a 1099-R in 2001 from the IRA custodian, what do you do with it?

Hi-I currently work for a small company that pays 100% of employee+dependent health coverage. We are looking into asking employees to start contributing for at least some portion of dependent coverage.

What is standard? Do most companies ask empees to pay 100% of dependent coverage?

Thanks

I have some 401 (k) Clients with account balances at Manulife. The people have terminated with outstanding loans. Manulife continues to accrue interest on these balances. Is it the Employer's OGLIGATION to advise Manulife to default these loans? The participants have not requested a distribution. Do you see any problem with the loans just remaining on the books as an asset?

Employer sponsors cafeteria plan, plus 4 separate self-standing benefit plans (health, dental, AD&D/life and LTD).

Employer wants to do a megawrap document to consolidate health benefit plans but does not want to include cafeteria plan.

Does this make sense?

Would cafeteria plan reporting consist only of Form 5500 and Schedule F, or does reference need to be made to the underlying welfare plans?

Employer has a SEP; wants to estalish a Safe Harbor 401(k). It is my understanding that this is permissable as long as the SEP doesn't use the 5305 model agreement. The contributions to the SEP would reduce the deductible amount to the 401(k).

Here is my situation: Owner makes 170,000 and is the only person eligible under the SEP. We can do the SEP contrib. at 15% and get him 25,500. There are two other employees making 35,000 each. Neither will defer, but will receive 1,050 for the 3% nonelective. It seems to me the owner can also get a 5,100 nonelective contribution and then defer 3,300. This keeps the total company contribution at the 36,000 limit (240,000*.15). I just want to make sure that the owner can receive 15% under the SEP and still receive an additional contribution from the 401(k).

Thanks in advance for any guidance.

DC plan is being amended for (1) GUST and (2) corporate changes related to the a spinoff of a company. Deadline for GUST is 12/31/01. Amendments related to corporate transaction will go in at the same time. Is a Schedule Q or other 410(B) testing necessary for (2)?