A corporation sponsors a money purchase plan as well as a 401(k) plan. Both run on a 10/1-9/30 year.The corporation's fiscal year is also 10/1-9/30. Normally the increased EGTRRA contribution and deduction limits would not apply until the year ending 9/30/03.Can the plan/fiscal years be amended to accelerate the application of the EGTRRA limits,and therefore the elimination of the MP plan by merging it into the 401(k) plan?

Does anyone out there have experience with the Relius "user-defined" fields? I have a plan where I have data in the user defined fields 1-10 and am trying to create a report with that data. I spoke with Relius tech support and was advised that the ud fields in database PLANEE2 for rows 1-5 are the only ones available at this time. She advised me that I could use the PARTUDF database and create a sub-report with reference to the lines after line 5 (ie., 6 - 10) but it was rather a complex operation and she wasn't even sure I could get it to work. There is a variable in the PARTUDF database that references the row number of the user-defined field. I've been trying to incorporate that and get Crystal to look, for example, at row #6 and print the data in row 6 and beyond but to no avail. I'm not super proficient in Crystal, but any advice would sure be appreciated. Thanks in advance.

Is the following permissible with respect to a cafeteria plan:

An eligible employee may make an election to participate within 30 days of employment, the election becomes effective retroactive to the employee's date of hire and the employee's salary is reduced after he makes the election to pay for the retroactive and prospective coverage.

Suppose a cafeteria plan permits an employee to change his elections mid-year due to a status change event if he/she submits a new election form within 30 days of the event. May the new election be effective retroactive to the date of the event (especially in light of the modification made to Example 2 in the January 10, 2001 final cafeteria plan regulations)?

I have a final 5500 to complete for the 2001 plan year. With the new forms, can I complete the 2001 5500 on the 2000 forms?

I have an employer who currently sponsors a Money Purchase Pension Plan. We are establishing a new 401(k) plan and the employer wants to merge the assets of the MPP to the 401(k) rather than terminate the MPP. I have advised the client that this merger could be looked at as a "termination" of the MPP and 100% vesting would be required. Since they don't want to 100% vest, I advised that they apply for a determination letter and let the IRS determine if full vesting is required. In the meantime, I have heard that the IRS is now of the opinion that the 100% vesting is not required in this situation. Is there anyone out there with a reference for this opinion????

Plan Sponsor has been filing 5500's in the past, but now has no employees other than the owner.

I believe that 5500EZ may now be filed, since there are no employees.

Is the final return marked for the 5500 and/or first return marked for the 5500EZ when making this switch?

John G's recent response on high turnover funds in an IRA brought to mind a few thoughts.

John's response was--I thought-- thoughtful and correct in that for MOST people focusing on the long term with conventional, diversified investment strategies in an IRA is the best policy.

But if one had a succesful short term strategy [a BIG "IF"!!] from soley a growth perspective there would be no doubt that it would be better in the IRA than in a taxable account.

If we take this ST strategy as a given are there any issues in particular that one should be aware of to maximize such a strategy and to avoid any future problems associated with a BIG IRA?

For Example:

1. Leverage. It's intruiging to me that it is a prohib. trans. to use

your IRA as security for a loan (ie to margin your IRA assets) but you CAN have a very similiar effect by buying a mutual fund that uses leverage. In the last 5 years there are a few funds that have come out that have beta's > 1 using swaps and futures on indices that are very popular with ST traders. Does anyone know any other ways to leverage a ST strategy via an IRA?

2. Big IRA's. What's the biggest IRA anyone has seen or heard of?

Are there any case studies that have gotten over say $100M.

This sounds stupid (and trite) but I'm curious as to how big IRA's have become in the past. Since we no longer have to strategize against the excessive accumulation tax are there any other issues that one should be aware when your IRA get's really big?

[by the way, as a whimsical side note how can IRA's get really big? I can think of three key factors and one special situation:

i) growth through a long stretch out (e.g. an inherited IRA by a grandchild)

ii) rollovers from company plans into conduit IRAs (ie taking advantage of the larger contribution in company plans)

iii)asset performance

iv)special loopholes (big FSC dividends)]

3. Obviously, the designated bene. is an important issue and if the IRA was really that significant compared to the over all estate various qual. trust ideas could be proposed. (With a sharp eye on the trust's affect on a sps rollover and the LE to use for MRDs)

Reg Jones

What Form if any must be filed with the IRS/DOL when one employer in a multiple employer plan decides to terminate participation. Also is there an issue with GUST amendments, if the participating employer is not the sponsoring employer?

Anyone ever give negative enrollment elections to individuals before they become employees? Employer A is buying the assets of Employer B. A large number of employees will become Employer A employees as of January 1. Employer A's 401(k) plan allows immediate participation. In order to ease the recordkeeping during the transition Employer A wants to provide 401(k) enrollment material in November (while the individuals are still employed by Employer b). If an employee does not return the enrollment material, then the negative enrollment will take effect January 1.

This is similar to the fact pattern in Rev Rul 2000-8 except, of course, that the employees aren't employees yet.

I see no reason why the rationale in Rev Ruls 98-30 and 2000-8 should not extend to this situation. Here an individual will actually have more time than usual to consider their options.

Would anyone have any concern with this?

Thanks-

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Do shares in an S corporation held through an ESOP count toward the 2% shareholder limit in Section 1372?

What are spousal consent rules for distributions from 401k plans?

Please site the laws or codes applicable to spousal consent.

Given a company that has a cross-tested MP plan with NRA defined as 55 and a DB plan covering many of the same employees with NRA defined as 65 (which is more representative of the group's actual retirement experience).

Is it appropriate to use a Testing Age of 65 when performing an aggregate DB/DC nondiscrimination test under 1.401(a)(4)-9©?

The definition of Testing Age under 1.401(a)(4)-12 gives me the impression that the age to use is the latest NRA under any of the plans in the testing group (without regard to which plans the participant is actually participating in). However, I wasn't sure if I needed to be concerned with the Consistency Rule of paragraph (iv) of -9©. I would appreciate any thoughts shared or experiences during audit.

What happens when a controlled group existed between two companies, but no one (?) knew about it?

The same two individuals own two companies: 50% - 50% each.

The companies each had qualified plans - one a 401(k), one a plain profit sharing; each company had different recordkeepers and investment vehicles, so no one was aware that a controlled group existed (although I assume they have the same accountant, they did not answer the controlled group question properly on the year-end census that they received each year).

Also, what if both companies are on Standardized Prototypes, which would not allow any employees to be excluded?

Is this an IRS correction program problem / resolution?

Thank you.

Can anyone suggest a source for language on drafting a Summary of Material Modification for our 403(B) plan? Thanks.

Consider a defined benefit plan, for which the end of the GUST remedial amendment period is December 31, 2001.

Does the amended document need to be adopted by 12/31/2001 or does the IRS require that the GUST amended document be filed for a determination letter by 12/31/2001?

I have been told that in order to take advantage of the GUST remedial amendment the IRS requires that the amended document be submitted for a determination letter no later than 12/31/2001. Is this true? I always thought that determination letters were not required.

Is there a Rev. Proc. or Rev. Ruling that addresses this?

Thanks.

Assume that a defined contribution plan is subject to the QPSA/QJSA requirements and that a portion of contributions is used to purchase term life insurance. Are the life insurance proceeds also subject to the QPSA/QJSA requirements, or just the accumulated account balance? If so, would the normal form of payment of the life insurance to the survivng spouse be an annuity? The plan document identifies the insurance as part of the death benefit payable under the plan. Plan sponsors and administrators I've spoken to seem to think the insurance proceeds are subject to joint and survivor requirements, while others in the insurance industry say that 100% of the proceeds would go the designated beneficiary whether the participant was married or not.

If an employer establishes a plan to reimburse former executives and their spouses for medical expenses, is there any way around the Section 105(h) discrimination problem, other than to make the plan available to all former employees?

In my experience it is fairly common to have a private retirement plan or deferred compensation arrangement for an executive, that calls for reimbursement of medical expenses for the executive and his or her spouse, for a set period of time following retirement. Are these being established with knowledge of the discrimination problem, on the premise that the 105(h) problem is not strictly enforced, or is there some loophole that makes it permissible?

Would a dependent turing the age of 19 be considered a qualifying event for COBRA? Maybe loss of dependent-child status?

Thanks in advance.

In a non-qualified employee stock purchase plan that has 4 quarterly purchase dates (as stated in the Plan Document), is it possible to change the date as stated of the purchase. If so, would a Plan Amendment need to be done?

Does anyone offer a higher rate employer contribution toward health insurance for employees who have worked for long periods of time? Example, if the employer currently pays 50%, if the employees works more than 3 yrs. the employer pays 60%, 4 yrs. 70% etc.

Also, do you contribute the same amount for single as well as family coverage.

We are currently looking to update our policies and are trying to get a feel for what other people are doing. If you respond could you please include how many employees you have.

Thanks ahead of time.

Marcy