someone please help settle this disagreement concerning distributions. a 40 year old participant in a 401(k) dies. his beneficiary is a designated non-spouse. which rules apply? it is my contention that the new proposed regs apply. specifically the rules concerning a participants death before required beginning date. someone else says this is not applicable since the participant has not reached 70 1/2 and that there is a window period between 70 1/2 and the Required beginning date.

in this case i believe the beneficiary has a choice under the new rules to receive payment in a 1) lump sum; 2) 5 year payout or 3) the beneficiaries life expectancy. is this correct?

We are setting up guidelines for our calculation methods for RMD's. We heard a rumor that a client can switch between the single and joint life expectancy and were unaware that this option existed.

We were aware that a client can elect calculation/nonrelcalc, but have never heard about a separate option to elect between single/joint. We had always thought that one needed to rely upon the most current beneficiary designation when determining the life expectancy factor used in the denominator.

If a client indeed can elect between single/joint, wouldn't that mean they would need to change their beneficiary designation from year to year?

Need to know if anyone has heard of this option, or if this is just a rumor. P.s. not finding anything clear in the Code - a code reference would be helpful if this rumor is in fact true. Thanks,

An employer is in the process of establishing an ESOP. The trustee has hired an appraisal company. The appraisal does not contain a fairness opinion. The bank is insisting on a fairness opinion. The trustee has taken a neutral position, he could have or not have it.

ERISA does not require a fairness opinion, but is it standard for an appraisal to have a fairness opinion when valuing an employer's stock for an ESOP deal?

Thanks.

A client just informed me that she recently discovered that a participant in a 401(k) plan had taken a loan in February, 1999 but the company neglected to take the loan payments from the participant's paycheck and, evidently, the participant never noticed that he was not repaying his loan.

What is the correction for this problem?

It appears to me that the loan was in default in 1999 and that the participant should have received a 1099 for that year. Does the participant have to amend his 1999 tax return?

During the audit of a 401(k) plan, we discovered that a number of employees who were not eligible for the matching employer contribution did in fact receive a contribution. Since the employer contribution was made as a % of each participant's compensation, the error did not result in other participants receiving less of a contribution.

I think the employer should leave the money in the participants' accounts since it was their error. Is there any legal reason that they would have to leave the money there? What else am I not considering? Any help is appreciated.

I have a union money purchase plan negotiating a new contract. Currently, the contract has X+Y dollars allotted for benefits with X dollars per hour for pension and Y dollars per hour for insurance (health, dental, life, and disability). The union wants to give participants the ability to elect to have the pension dollars applied to the insurance costs on an annual individual basis. Is this type of wording allowable in the union contract?

After January 1st the rules for those monies eligible to be rolled in to a Qualifed Plan will relax and allow for rollovers of IRAs, 403(B), etc., but what about the client who terminates a

401(k) Plan and sets up a Simple IRA Plan. Can the Simple IRA plan receive the 401(k) rollovers?

We are relatively new to Quantech. I went through training in Jacksonville, but remember forfeitures being specifically left unaddressed - just that they are different from FDP.

Now I have a plan with 2 paid out participants whose unvested portions are ready to be forfeited. They remain in the main pooled trust account with 0% vesting. How do I reallocate these forfeitures with the contribution to other participants?

A pension i am reviewing uses Moody's Aaa monthly bond ratesas the interest rate for lump sums.

Does anyone know where I can find historic data for these rates?

Thank you.

Gary

I thought IRS Notice 96-8 allowed plan sponsors to use 1-year treasuries plus 100 basis points with deemed compliance with 417(e), am I wrong or was this Notice changed???

Say a plan invests in variable annuity contracts with an insurance comapny. Is that considered a "pooled separate account" and therefore a Schedule D would be required?

The sponsor of a 457 plan has been approached with a new program that includes a "supplemental disability" element. Essentially, if a participant becomes disabled, he/she receives disability benefits under a group contract offered by the insurance company that is providing the investments for the 457 plan. The employer (i.e., the sponsor of the 457 plan) reports the disability payments on a W-2, as compensation to the disabled employee. And under the disability policy, the insurer pays a certain amount to the 457 plan (pre-tax) on behalf of the disabled employee. It strikes me as suspect, because the 457 plan contributions are tied to a percentage of "includible compensation," and it doesn't seem appropriate ot label the disability insurance proceeds as "includible compensation." Anyone have any experience with this type of arrangement?

My post is not going so well on the distributions board

so I thought I would give this board a shot....

Does anyone know how to fix a 401(k) plan loan that inadvertently did not obtain spousal consent?

In addition, the plan provides for loans only for certain reasons, this participant said he was buying a home, apparantly is not purchasing a home.

Basically the check was sent by mistake before the trustee got the promissory note or the copy of the purchase and sale, which is normal procedure.

The participant refuses to return funds to the plan.

Any cites would be helpful

thanks a lot

When an employer puts in a premium only plan do they need to file plan documents with the IRS and DOL or does the filing of the form 5500 at the end of the plan year suffice? Would the answer be different if other types of benefits were offered in the same plan?

If a participant has a 401k loan and files for personal bankruptcy, is he required to default on that loan rather than be seen to be paying himself for a loan? This is what his atty. has said but it seems wrong to me. If he is getting a paycheck, then shouldn't he continue to pay the loan off? Also isn't bankruptcy somehting that can't touch on your 401k plan, but doe that apply to loans? Thanks for any input.

A client has a Simple 401(k) plan in place. They have choosen to make the matching contribution in order to comply with the Simple 401(k) requirements. However, they have not made the matching contribution for the plan year ending December 31, 2000 and do not have the cash to do so. If they do not ever make the 2000 matching contribution does this disqualify the plan?

What are the correction methods available to them if they are able to come up with the money at a later date and make the contributions?

Can an employer establish a Safe Harbor 401(k) Plan with the required matching contribution of 100% of the first 3% and 50% of the next 2% of salary reductions, and then make additional discretionary profit sharing contributions up to the maximum deductible limit?

401(k) Profit Sharing Plan has loans allowed if for certain reasons...purchase of home is one.

Employee took out loan, did not purchase home. EE signed loan request form which indicated his reason for loan was "purchase of home"

also spousal consent was not received and we just found out that ee is in midst of divorce

can anyone cite the correction for this? ee is refusing to return money to plan, spouse is refusing to sign.

thanks

I need a copy of the 71 TPF&C mortality table. My hard drive crashed and I cannot retrieve my file.

Does anyone know where I can obtain one or can anyone help me with this?

The SOA table manager does not contain this table.

Thank you,

GAry

When a plan sponsor is using an IRS correction program and has filed with the IRS to determine the appropriate correction, how should the 5500 be completed while the appropriate correction is pending? Should the 5500 reflect the expected correction, or should the 5500 be completed ignoring the expected correction? Should the 5500 later be amended once the correction is completed?