I have a basic expense question.... is a participant required to pay for the day care expense before it can be reimbursed from the dependent care FSA?

Thanks

Are many companies using Section 105 plans and what issues need to be addressed upon implementing and administering such plans?

I'm doing the 410(B) test for a terminated plan that was originally sponsored by a company that was acquired (stock sale). A portion of the excess assets were allocated to the active employees, with the remainder reverting to the new (acquiring) employer. Those employees who received an allocation of excess assets obviously benefitted for the year.

Let's say the acquisition was 8/1/99, and I'm doing the (calendar year) 2000 410(B) test for the entire group. In determining who is an HCE, I need to look at compensation during the lookback period. Can I use compensation for the entire 1999 plan year for this purpose (which would include 7 months of compensation paid by the prior employer and 5 months paid by the new employer).

1.414(s)-1(f)(1), (2) & (3) would appear to say yes. This is a large group (~3000 employees, ~100 HCEs) and passing or failing 410(B) hinges on this question.

TIA for your opinion!

Mark

Does anyone have any UPDATED information about locating missing participants?

What I have is a municipal plan - no minimum funding requirement - and one plan document that describes a different benefit provision for each of 3 groups of municipal employees (firemen,police, & office staff) - the town now wants to create 3 separate plans - for funding purposes, would this have to be treated as a spin-off with the current single asset pool split to each of the groups ? or being a municipal plan, could the single asset pool be retained and just continue to merge the liabilities ??

Assume a 401k plan w/ publicly traded employer stock as an investment option. Trading of the Eer stock is 'temporarily' suspended by NASDAQ. We have frozen the Eer stock option and are communicating situation to Plan participants. QUES:

1. Should Participant statements reflect last trade value (w/ alert it is not current)?

2. If #1 is NO, what value/procedure should be used?

3. Is there a fiduciary duty seek an independent valuation or negotiate a private sale while suspension is in effect?

4. Any other good advice or experiences on this situation?

I was researching an issue the other day and one of the threads referenced an article by Elinor Merl(inor) titled "Plan Administration of Tax Treatrment of Loans at a Participant's Death" -- The reference indicated the article was published in the Winter 1996 issue of Journal of Pension Benefits.

I have not been able to locate the article and wonder by chance if someone might have the article or a link to the article that would help in my search.

Thanks in advance for any insight provided.

Sincerely,

Andmik

With the EGTRRA changes that go into effect next year is my scenario below possible.

one-man company making $100,000 annually establishes a 401k P/S. Since the deferrals are not included in the 25% deductible limit can he defer $11,000 and the company make a 25% P/S contribution for a total of $36,000, since he would not be exceeding the $40,000 dollar cap?

The client has just provided termination dates for the first time in the past six years. Upon this new revelation, it is noticed that at least 20 participants terminated from 1996 - 1998 and still have an account balance without receiving distributions.

The question is this: Understanding the penalties associated with this ($1 per day per participant w/max of $5,000), would you just report them on the 2000 Schedule SSA and make client aware that it is possible they could be hit with these charges if ever audited or would you file each of the respective years SSA schedules which would clearly identify the problem in which case the DOL would issue the substantial fees to be paid? I am leaning with the latter but wanted some other opinions or other options that I may not be aware of. Thank You!

What happens if...

A sponsor with an individually designed plan document signs (before 12/31/2001) a certification that it intends to adopt a prototype. The prototype does not become available (because of IRS timing on issuing the opinion letter) until after 1/1/2002. The sponsor then discovers that its plan features don't all fit into the prototype, and the sponsor amends either the adoption agreement or the basic plan document. I know that the IRS may then come back and determine that this plan is no longer a prototype, but is an individually designed plan. Has this plan sponsor now missed the deadline for timely amending for GUST? I haven't seen anything hard and fast from the IRS, but what is the industry consensus? Thanks.

40 unrelated employers (that practice in the same industry), form a association in order get reasonable medical insurance premium rates for their employees. The "association" contracts with a national insurance company for group coverage and the association hires a professional TPA to process claims & deal directly with the insurance company. All 40 employers send their medical premium payments to the TPA each month.

MY QUESTION:

Each of the 40 employers is the "fiduciary administrator" of its company's medical plan. But none of the 40 employers has a direct policy with the insurance company (There is only one insurance policy contract that the insurance company has in this matter .... namely: the policy is between the insurance company and the "association"). If the TPA refuses to process or pay a claim for a participant ... who can the participant hold legally responsible ?

I would think that he could NOT hold his employer/administrator responsible (even though the administrator is a fiduciary of his plan) because the employer has NO contract with either the TPA nor the insurance company ? Also: Although the TPA gave all participants a copy of the medical plan booklet ...the booklet says that it "is NOT a summary plan description".

Question I've never been asked before: Can a sponsor of a small DB plan make, as part of the required contribution, a contribution to the plan of corporate owned life insurance, presumably taking a deduction for, and credit for, the cash value of such policy?

Presumably the company's owner is the insured.

Is there anything preventing this from being viable?

What are the issues related to the deductibility?

Clearly there are issues such as PS 58 costs, tax issues upon death or distribution, need to provide equivalent BRF's to other participants, need to satisy incidental benefit rules. What else?

I'm not advocating this; just trying to answer a series of questions. Thanks for any comments.

Is anyone familiar with the Momentum contracts provided by Equitable Life Assurance? I have read their prospectus dated May 1, 2001, and it says Momentum is a group deferred annunity contract used as a funding vehicle for employers who sponsor qualified retirement plans. I'm confused because the contract owner can fund the plan by selecting several investment options which are contained in a pooled separate account. Aren't group deferred annunity contracts allocated contracts and excluded from a plan's financial statements? Aren't PSAs unallocated contracts and included in a plan's financial statements? I have a client who invests solely in Equitable and I'm having trouble determining how to report this investment on their financials.

thanks for the comments.

In a NQDCP, is Spousal Consent required if the primary beneficiary is not the spouse? Is this the case in all states or just community property states?

We are thinking of giving an employee an interest free loan, for $12,000, to be repaid over a period of 3 -5 years (not sure yet). Does anyone know what the taxable consequences to this employee would be, i.e. as a fringe benefit, etc.?

I know that 2002 will bring lots of changes to 401k Plans...does anyone know where I can find a concise listing of what those changes are? Our Plan trustee hasn't sent us anything.....

Any help is MUCH appreciated.

I realize a distribution from a "funded" 457(B) governmental plan can be transferred to another "funded" 457(B) plan, or even more portable next year. However, can an "unfunded" 457(B) for a private tax-exempt be transferred to a "funded 457(B) governmental plan? And if so, does a separate account have to be set up like rollovers from other plan types next year?

My aunt, age 81, passed away and had left her traditional IRA

to four children under the age of 13 (her greatnephews, and

greatgradnephews), I am the trustee.

She was receiving distributions based on her life expectancy,

as she had inherited this IRA from her deceased husband.

Our tax accountant is checking on the way it would be most

tax effective to transfer to kids. I've been reading on this subject and there are so many rules and regulations it's confusing. Our

financial advisor is taking care of the paperwork to do the transfer, but I'm afraid he does not know all the ins and outs.

Can we establish IRA's for the children as Inherited IRA's?

If so, at the time of transfer is the amount taxable? or can

we elect to receive distributions based on each child's life

expectancy, and only be taxed for that amount?

The financial advisor indicated we could take the 5 year depletion rule, but it is my understanding that only applies to a surviving spouse. Is this correct?

Would appreciate help.

:confused:

When the Roth IRA first was available (in '98?) they had a option, if you rolled it over then, to spread your extra tax payments over a number of years. Was this four years or three years? I need to know if I'm done with paying the extra.

Thanks in advance!!!!!!

If a plan is disqualified back to its effective date, are the excise taxes for nondeductible contributions applicable? After disqualification, the contributions would not have been made to a qualified plan, so once the income tax consequences are dealt with, can the excise tax be avoided? Will the IRS/DOL impose the excise taxes in any event?