Will the new benefits i.e. roll-over options, contribution limits, catch-up plans, non-refundable tax credits, for 401(k) employees effective 1/1/2002 also be applicable to public sector 401(a) money purchase pension plans? If so will these benefits be an option of the plan administrator or required to be included in the plan?

Does a 3% safe harbor contribution also satisfy the minimum top heavy contribution for a top heavy plan?

When a Plan amends its definition of compensation, and/or adds a compensation exclusion (i.e., bonuses, overtime, or compensation earned before a participant's "entry date")...

Can these types of changes be made mid-plan year? Or, if the effect of these amendments is a reduction in the compensation that will be considered for that year, is that a reduction of an IRS protected benefit? Say this is for a 401(k) plan with a discretionary match and discretionary profit sharing made at year-end.

If any of the contributions were mandatory, would that have any bearing on the ability to amend the definition mid-plan year?

Does the presence of an "employed on the last day" requirement have any bearing on the ability to do this mid-plan year? (The impact of the definition of Compensation, however, extends beyond those provisions that can have a "last day" requirement...)

Thanks for your input...

Just wondering what others know regarding the Nov. 15th extension for 5500's normally due with extension on 10/15.

Are all plans automatically eligible for this extension regardless of where they are located? I spoke with a representative at the PWBA and she said "it applies to all plans and, considering the circumstances, proof won't be required so long as the return is filed by 11/15.... however, every effort should be made to file as soon as possible..."

The response wasn't exactly definite, has anyone else inquired with the PWBA directly and received a different response?

Concerned about the accruals and funding requirements under the MPP.

Employer with a Standardized MPP wants to amend to a 401(k) effective 1-1-02. The MPP plan year is 5-1 to 4-30. The MPP calls for an ER contribution of 5% of plan year compensation.

It seems the employer could amend the MPP plan to change the plan year so that it ends 12-31-01 and fund the MPP contributions to that date and then continue as a 401(k) with the new 1-1 plan year.

But the employer would like to keep the 401(k) plan year as 5-1 (coindcide with FY). Could they amend the MPP with a rate of 0% as of 1-1-02 and change to the 401(k) as of that date?

The employer could establish a 401(k)effective 1-1-02 with a 5-1 plan year and amend the MPP effective 12-31-01 changing the plan year to 1-1 and with a 0% going forward and then merge the MPP

into the 401(k), but they would prefer not to. But is this the best way to do it?

Suggestions?

Couple of questions concerning 401k loans and terminated employees.

1. Can a plan administrator allow a former employee to continue paying on his/her loan after termination?

2. If the answer to question 1 is no, is there an amount of time the employer must give the terminated employee to pay the loan back? Is the Plan administrator required to notify the terminated employee that the loan is going to be "deamed' a distribution?

Thannks.

my company match my contributions to the 401k with company stock from an ESOP loan. the loan is now paid off and future company matches will be in the form of company stock, but purchase in the market on an as needed basis.

am i still restricted to the diversification requirements of the esop (age 55, 5 years, etc.)? there are no plans for a new loan.

Recently, a lot of information has circulated on USERRA's effect on retirement and welfare benefits. I have not seen anything that addresses the flex health care and dependent care accounts. Any comments, suggested readings?

Does anyone have any authority on placing a traditionaluniversal life contract into a 412i plan or must it be a whole life contrafct.

I have a default loan question I would like to tap some expertise on.

We have a participant who defaulted on a loan. The amount of the loan when it went into default was $20,158 back in 9/1999, The guy wants another loan. The current running interest loan balance is now $25,740.

When taking into considering the amount of his vested balance which would you take for coming up with his vested balance:

1?) 20,158 + his current vested balance of 30,444 or

2?) 25,740 + his current vested balance of 30,444

then we would take 50% of either option 1 or 2 above less the outstanding loan balance

We are busting our brains in trying to interpret loan language we rarely use.

Any actuaries out there already planning a greater use of smoothing methods in light of the recent market activity?

If the 401(k) Plan is frozen can you still pay out participants upon termination and if so do you make them 100% vested since the plan was frozen?

Facts:

Client has w-2 income and is a statutory employee covered under a pension plan for company X.

Client also receives 1099 income from other source.

Can he establish a sep for the 1099 income?

I am auditing a MPP Plan that is part of a Master Trust with a 401(k) Plan. How do I report the investments for the MPP Plan on the Schedule of Assets Held for Investment and the Schedule of Reportable transactions . Do I show the entire activity for the Master Trust or do I somehow pro rata just for the MPP Plan?

Does anyone have an opinion as to whether or not sponsors should be submitting prototype plans for determination letters in light of IRS Announcement 2001-77. Typically we deal with clients that sponsor either garden variety non-standardized 401(k) and/or profit sharing plans as well as some cross tested plans which we will be restating under the volume submitter program.

As 2001-77 gives extended reliance that the plan satsfies the form requirements, is there any meaningful reason to submit these days?

We are a family of four. Two adults and two children (minors). I (Arther) work - currently under the income bracket of 28%. I plan to retire in about three years from now probably under the same income bracket (might move out of USA). Have a question on whether to go in for Trad IRA or Roth IRA this year (2001) onwards. I already have a Roth for the yrs 1999 & 2000. Very interested to hear from you.

IRA holder requests transfer of IRA funds from one investment broker to another. The transfer was intended to be a trustee-to-trustee transfer but was instead was miscoded as a taxable transfer.

The IRA holder never received a check or at any time had possession of the funds, however he received a Form 1099 from the investment broker that originally held and transferred the funds. What is the best way, if any, to disclose this error so as not to be required to include the 1099 amount in taxable income for the relevant year?

Does anyone know if 403(B) custodial agreements or plan docements need to be updated by the end of the GUST RAP ?

Will Governmental 457 plans need to be updated the end of the GUST RAP?

Will they need to file for determination letters and does state law play a role in determining if they need a determlnation letter?

My organization's Cobra rates are far below the actual cost of insurance. With a new health plan and rates going into effect soon, we would like to raise the Cobra rates to where they should be, but it is such a significant jump, most people (including long term employees who are now retirees) will not be able to afford it. We thought we could perhaps inform them what the costs will be, but raise them in 2 to 3 increments over a 6 month period. All legal regs I can find say "in general" you can raise rates once prior to a 12 month period. But, if we inform people what the final rates will be, and raise them incrementally to that point, is that acceptable? Thank you.