While reading the thread about whether to withhold tax on a distribution in satisfaction of a tax levy, I received a demand from a U.S. Attorney that a plan distribute part of a participant's account to pay a judgment under the Mandatory Victims Resititution Act. There has been at least one (lower court) case that concluded ERISA plans are NOT exempt from MVRA liabilities. Like federal tax levies, MVRA judgments seem to be a liability to the federal government and, under the Federal Debt Collection Procedures Act and can be extracted from the ERISA Plan. However, Reg 1.401(a)-13 mentions federal judgments but really describes tax levies. Also, the exemption from the 10% penalty also seems to apply only to tax levies. Does anyone have any hands-on experience w/ MVRA judgments regarding enforceability and the 10% penalty??? Thanks

1.Is alternate value the same as

date of death value on jointly held property,

POD Accts, and IRA's with named individuals as beneficiaries?

2. which alternate value for 401(k) is used where estate is named beneficiary?

a.the same as date of death; or,

b.the value on the date account is transferred to estate, if within 6 months of death; or,

c.the value on date six months after death.

Question 7c on the new IRS Form 5300 asks if a plan is a "collectively bargained plan" and refers to Regulation section 1.410(B)-9. I don't see a definition of that term in the cited Regulation.

If a plan covers all employees (bargaining and non-bargaining), and certain provisions of the plan apply only to bargaining employees pursuant to a collective bargaining agreement, is the plan a "collectively bargained plan" for purposes of question 7c of Form 5300?

Employer A was a controlled group member with Employer B under Plan #1. Controlled group no longer exists and Employer A wants to establish their own plan and spin-off the assets attributable to Employer A and merge them into their new plan. Employer A workforce is aprox. 40% of A & B. Plan #1 will still exist for Employer B.

Do you think this would be a partial plan termination requiring 100% vesting in Plan #1 for Employer A's participants? Or given the fact they are merging their portion of Plan #1 into their new plan, and vesting can continue for them, they don't have to vest them 100%.

I have a plan that started 1/1/01. Do I still use 2000 compensation in determining HCEs, or since it's a new plan are they considered as not having look-back comp in the first plan year?

Plan Document excludes moving expenses and other fringe benefits from definition of compensation (satifies 414s). For the 2000 plan year, Employer includes those items in calculating the safe harbor match, but did not allow deferrals on those items. Thus, the Employer has made too much of a match for 6 ee's.

Plan also failed to follow eligibility in document and allowed all ee's in plan to defer.

Possible solutions include:

1. VCP (expensive?) to amend plan for 1 year to include fringe in comp and amend retroactively for eligibility.

2. forfeiting excess match and using to reduce future contributions and amend plan for eligibility under EPCRS.

Any comments on either of those solutions or any that I may have missed? I've looked at the notices, but nothing seems to address the compensation issue. The eligibility problem (by itself) is quite clear on the solution.

Thanks.

Ervin Barham

Hello,

Does anyone have a sample year end benefits compensation analysis they can send me?

Greatly appreciated,

Maria Markis, PHR

Ablest Inc.

I've been asked to find some information on how to implement an integrated SEP and I've found very little guidance. This is what I know so far...SEP experts, please feel free to comment:

1. An integrated SEP is a non-model SEP, meaning Form 5305 may not be used.

2. If all disclosure requirements are met (to participants), there are no reporting requirements to the IRS or DOL (meaning no 5500 need be filed; same as a model-sep).

3. There are two ways get started with an integrated SEP: draft an integrated SEP from scratch, or purchase a prototype from a financial services co.

Are these assumptions basically correct? Have you come across any good resources online that I could take a quick look at?

Here's another question:

Depending on whether you draft an integrated SEP, or purchase one from a bank, et al., would it be prudent to seek a Determination letter?

Thanks,

Maxwell

Can the minimum lump sum as calculated under 417(e) include pre retirement mortality?

For Example...

Assume Plan's AE is

7% Pre

7% Post

GATT Pre mortality

GATT Post mortality

And...

NRA is 65

Current Age is 50

1,000 a month benefit at NRA

5.32% applicable interest rate

Which of the following is the correct lump sum?

1000 * 134.83 GATT APR@65 * (1.0532)^(-15) = 61,964

or

1000 * 134.83 GATT APR@65 * 0.4223501 D65/D50 = 56,945

Association of employers (approximately 20) sponsor a fully insured health plan that is a MEWA. No individual sponsoring employer has 100 or more employees. Is the MEWA required to file a 5500?

Some beneficiaries of an IRA owner who passed away a couple years ago have been receiving the owner's RMD which was initiated before the owner's death.

Can the beneficiaries switch to the new distribution rules in calculating the RMD based on the new life expectancy talbe or must they follow the rules of the calculation prior to the recent law changes?

In another situation, an IRA owner passed away in May, 2000. The beneficiary's first MRD is due December, 2001. Can he apply the new MRD rules for that first distribution?

Can a terminated participant from an ERISA 403(B) plan rollover his distribution to a non-ERISA 403(B) plan?

Must a provision allowing for 100% vesting upon disability be retained in a plan restatement for all participants in the plan as of the restatement date? Or only those participants who have 3 years of service at time of restatement and who elect to retain the old vesting schedule?

Presume the following: Paired MPP Plan and PSP provide for 100% vesting upon disability.

MPP plan is merged into PSP, and PSP restated, effective January 1, 2000. Disabiliity vesting provision is NOT carried over to restated PSP.

Participant with fewer than 3 years of service at time of merger and restatement is injured in 1999 and injury results in disabiility during 2000, after effective date of restatement eliminating 100% vesting upon disability.

Participant terminates in 2000 and demands 100% vesting due to disability.

Any comments appreciated.

several questions please: effective for plan years beginning in 2002, is it ok to have a ps at 25% and also a mp at 25% as long as the increased limit of the lesser of 100% of comp or $40k is not exceeded? next: I have been trying to find what the penalty is if a plan does not carry an ERISA Surety Bond. An attorney is telling me despite it being a requirement there is no penalty if the plan sponsor does not have one. next: I have read 2001-77 several times and am trying to clarify if a cross-tested psp (Corbel volume submitter document) has automatic reliance. Safe harbor comp definition being used, along with 1000 hours and last day provision. OK not to submit because of "partial" reliance? HELP please. Thanks so much.

My review of the new proposed regulations leads me to believe that a spousal rollover can be made at any time after the death of the IRA owner as long as the minimum distribution has been made to the IRA owner. So that seems to mean that a surviving spouse could take required minimum distributions from the IRA for 20 years and then roll over the IRA if the surviving spouse so elected.

Furthermore, there does not seem to be any rule that would prevent a surviving spouse from taking a partial distribution from the IRA as a beneficiary and then doing a spousal rollover of the remaining account. This is significant where the spouse wishes to take a distribution of some of the account and is under age 59 1/2.

Does anyone disagree with my analysis? Noel, I would love to hear your opinion.

Kurt

After reading the age 50 catch-up proposed regulations, what questions have you come up with?

Here's one I have:

Say a participant has $500 returned as excess deferrals [402(g) excess] for 2001. The participant defers $10,600 from 1/1/02 to 11/30/02 in a plan that allows age 50 catch-up. The ADP limit for the plan year 12/1/01 - 11/30/02 turns out to limit HCEs to $10,000.

Under 1.401(k)-1(f)(5)(i), only $100 would need to be distributed to the participant as a corrective distribution.

Does the participant have $600 in catch-up contributions, or $100 in catch-up contributions, as of 11/30/02?

A participant in a qualified plan can't own life insurance in the plan after he or she retires. The required beginning date under Section 401(a)(9) is the calendar year following the later of the calendar year in which the participant attains age 701/2 or retires.

Does anyone have a sense of what the IRS thinks it means to "retire" in either situation, particularly in the case of a self-employed individual? Is working one day per month enough? What about less?

Has anyone had any experience with this issue on audit or have a sense of the IRS's position on this?

Thanks?

When Processing a valid status change, are we limited to 31 days? Our current practice is to process the paperwork as if the event date

assuming we receive the paperwork within 31 days of the event.

Howeve, if we receive the paperwork after 31 days, we process the

status change as of the dates we are notified. Is it acceptable to

accept these status changes after 31 days, or must we tell the

employee to wait until open enrollment?

If someone would be able to assist me on this? Or point me into the right direction I would certainly appreciate it!

Thank you.

I am trying to determine if there are any providers of participant-directed investments (with recordkeeping/sub-accounting by contribution source) that offer investments among various fund families, similar to that offered by insurance company group variable annuities.

I know some of the mutual fund families (e.g., American Funds, MFS, etc.) offer a vehicle using their own family of funds.

Does anybody know of anybody that has a "best of the best"-type product - other than via a variable annuity?

Thanks!

We're considering offering a stable value fund as an investment option to participants in our 401(k) plan.

What sorts of issues should we address before deciding whether to offer a stable value fund? For example, how do you deal with market adjustment charges that the insurance company can impose if the plan decides to terminate the stable value contract with the insurance company? Market adjustment charges permit the insurance company to pay over the lesser of market value or contract value (the value as determined under the contract) on termination.