I have read conflicting items as to the proper definition of compensation for determining the match in a SIMPLE plan. Is it the 401(a)(17) definition or something else?

After leaving employment at a private, Catholic affiliated hospital, my wife rolled her 403(B) plan to her IRA. It has been a complete nightmare, primarily due to the plan's administrator, Lincoln Life. Their delays and general lack of cooperation caused her account to lose over $3000 in value, plus an additional $150 in illegal fees.

I call them illegal because the process for acount liquidation is clearly defined in my wife's contract. The loss in account value also occurred because LL did not adhere to their own policies, also outlined in the contract.

We have been informed by her former employer that this plan does not fall under ERISA, therefore the Dept. of Labor will not intervene. Can anyone suggest another avenue? Lincoln Life obviously insists that they have done no wrong, and hiring an attorney would exceed any possible financial recovery (as LL well knows !!). Any help or suggestions would be GREATLY appreciated. Thanks.

Doug

This is intended as a poll of how the different readers of this message board would handle the following situations.

Assume Company A is a Fortune 500 company and maintains Plan X. Company A is in the process of making several acquisitions. In certain cases, Company A merges the plan of the acquired business. How would you determine the qualification of the plan that is being merged into or that is spinning off a portion of its plan into Plan X in the following situations: (a) Company A buys Company B and merges Plan Y into Plan X? (B) Company A buys the assets of a small trade or business of Company C and has Plan Z spin off the account balances of the employees of the sold trade or business into Plan X?; © Company A takes Officer M from its subsidiary A-1 and wants to spinoff his account balance under Plan W?

The problem is that the official IRS position is that a plan that violates the qualification requirements and is merged into another plan taints the surviving plan. Should you do a compliance audit on the other plan; obtain an indemnification from the other employer? There is no clear guidance on what would be sufficient to protect the surviving plan. In the area of rollovers, the IRS has published regs stating that if the receiving plan reasonably concludes that the transmitting plan is qualified, the receiving plan is protected if the transmitting plan is later disqualified.

Non traditional investments for pension plans

What creative strategies are there for putting current assets into my IRA?

Has anyone been hired as a contractor by his IRA? Is there anything special needing to be done?

If buying and selling real estate within an IRA, significant profits can be garnered quickly. What triggers an IRS audit of a IRA?

If you have had your pension plan invest in non traditional investments, such as real estate, mortgages, mobile home paper,tax leins, etc., could you express the pitfalls?

Which pension plan custodians administer non traditional investments, brainstorm strategies and help raise funds for their business minded pension plan clients from their other more passive minded pension plan cleints?

Where can I get good info regarding the Unrelated Business Tax issue?

The Demo 9 Instructions are asking me to provide the 415©(3) definition of compensation used in determining total compensation (for purposes of computing the individual ratios). The actuary is telling me that they used the W-2 definition BUT DID NOT INCLUDE DEFERRALS OR ELECTIVE CONTRIBUTIONS.

I know the 415 regulations intimate that your definition can exclude these contributions but aren't these regulations outdated and didn't GUST amend 415©(3) to specifically add these back in? And, wouldn't this apply to the TOTAL COMPENSATION determination under Demo 9? Does this mean, then, that the question of whether you have added deferrals into the definition of total compensation is a trick question on the Demo 9 and that stating NO would be cause for a bounce-back from the IRS?

I appreciate any response! Thanks.

Would Day Care services be reimbursable for a 26 Yr. old with Downs Syndrome? If he gets sick during the year the parents put him in a special needs daycare in order to work would this be a reimbursable expense?

I'm searching for daily val software, and would greatly appreciate any input/advice from anyone who has experience with the software vendors and NSCC clearing agents.

I'm currently looking at ASC, InvestLink, and Trustmark. I don't know of any others, except Quantech. We do complex nondiscrimination testing, and I know InvestLink & Trustmark are weak in this.

Thanks.

When counting the 12 "workweeks" for FMLA, are you allowed to count holidays as FMLA days? For instance, if you have 2 holidays paid at Thanksgiving, do those 2 days count against the 12 workweeks?

I know the Code does not permit distributions upon termination of a 457 plan. I have two questions relating to this point.

Has the IRS ever commented on this issue?

What happens if distributions are made anyway (is it just that the distributions are taxable and can't be transferred or rolled over into another plan or is there more)?

I work for a PEO that has a single employer 125 plan on a calendar year. The vast majority of our clients participate in our self-funded health plan; however, some of our clients maintain their own fully funded health insurance thru BCBS, HAP, etc. which we administer. Whether the client offers our self-funded or a fully insured product, all of our clients are offered the same dental & vision etc. thru the 125.

Problem: our OE is right now, as the plan year starts 1/1. Some of our clients with fully insured products have a mid-year renewal date and, per the contract with the vender, must have OE date that is mid-year. What do I do with these people for OE? Do they have an OE for everything BUT health? Do they have OE for everything (dental, vision etc.) when they have OE per the vendor contract? Do I need one 125 plan for most of our clients and separate 125’s for those clients with off-year renewals? I’m totally baffled. Please help!

A while back, there was a thread that discussed the limited circumstances in which a plan could enforce a bad boy clause. The IRS pronouncement on the topic--Rev. Rul. 85-31--basically says that, if the plan has a more favorable vesting schedule than the statutory minimum, it can enforce a bad boy clause to reduce the wrongdoing participant's vesting to whatever it would have been under the statutory minimum schedule. The ruling addresses one of the old graded vesting schedules.

The prior thread suggested that the ruling specifically precluded a plan with a graded vesting schedule from switching to a cliff schedule under the bad boy clause. I could find no such statement in the ruling and I was wondering if anyone can shed any light on this.

It would make a difference if a plan had a 7 year graded schedule that was more favorable than the 3-7 year schedule in the Code. If you have someone with less than 5 years of service, if you have to stick to the graded mininum schedule, you can only forfeit, say, 40% of the benefit but if you can switch over to the the cliff schedule, you can zero them out (at least prior to when the EGTRRA 3 year cliff rule kicks in).

Any thoughts on this?

We have several 12/31 paired mp & ps plans that our clients would like to merge into one plan. Assuming the joint life and vesting subjects are not an issue and we complete the merger paperwork correctly by 12/31/01, how and when do the funds need to be combined? I am assuming we can update the mp with the gatt provisions and merge into the ps by 12/31/01 and we'll be ok there on paper, but what about the assets. Most of our mp clients don't contribute until the last minute, which will be in Sept 2002. Should the funds be combined on 12/31/01 and then when the contribution receivable arrives simply allocate it to the appropriate participants-- or should we combine only on paper and move the assets in 2002 after the contribution posts to the mp? Bottom line, does the mp money need to zero out of the trust by 12/31/01 to avoid restating the entire plan?

Any feedback or suggestions would be appreciated!

If a participant is 73 and received a minimum distribution in 1998

but did not take one for 1999 or 2000, how do I correct this? Should it be factored into the 2001 calculation?:confused:

DOES THE 6 MONTH EXTENSION FOR SPONSORS OF PLANS IN NEW YORK CITY

APPLY TO BOTH THE DEPOSITING OF CONTRIBUTIONS AND THE FILING OF

THE 5500 FORMS?

Although a person would not have to pay income tax, would someone under 59 1/2 still have to pay the 10% early withdrawal penalty on after-tax distributions?

Thanks!

Does anyone have an Account Activity Report with an Insurance Premium column?

What should be done when a plan administrator (TPA) makes a mistake in the trust accounting, and therefore allocates way too much to the participants (pooled account), then pays out a couple of them. Later it is found that the terminated participants were paid out too much money. We are talking about $13,000 to $15,000 too much. Any advise out there?

i just read that if i roll money into a roth and later unconvert in the same year to lower the tax bill, i can't reconvert until the following calendar year. is that so?

Does the Gatt rate change again in January 2002 and if so how far in advance will it be announced. I am trying to decide whether to retire now or wait incase the rate goes down.

Sole practitioner sponsors Keogh/PSP for himself and spouse.

Due to financial problems, takes a loan of 100% of plan assets in 1997, to use for living expenses.

Does not file 5500 EZ for 1997 or subsequent.

Now has letter from IRS requesting filings from 1997 on.

Cannot restore 100% of plan assets but could probably restore 50% of borrowed assets.

Is there a voluntary disclosure program that offers a way to ameliorate or possibly resolve this situation?