Some beneficiaries of an IRA owner who passed away a couple years ago have been receiving the owner's RMD which was initiated before the owner's death.

Can the beneficiaries switch to the new distribution rules in calculating the RMD based on the new life expectancy talbe or must they follow the rules of the calculation prior to the recent law changes?

In another situation, an IRA owner passed away in May, 2000. The beneficiary's first MRD is due December, 2001. Can he apply the new MRD rules for that first distribution?

Can a terminated participant from an ERISA 403(B) plan rollover his distribution to a non-ERISA 403(B) plan?

Must a provision allowing for 100% vesting upon disability be retained in a plan restatement for all participants in the plan as of the restatement date? Or only those participants who have 3 years of service at time of restatement and who elect to retain the old vesting schedule?

Presume the following: Paired MPP Plan and PSP provide for 100% vesting upon disability.

MPP plan is merged into PSP, and PSP restated, effective January 1, 2000. Disabiliity vesting provision is NOT carried over to restated PSP.

Participant with fewer than 3 years of service at time of merger and restatement is injured in 1999 and injury results in disabiility during 2000, after effective date of restatement eliminating 100% vesting upon disability.

Participant terminates in 2000 and demands 100% vesting due to disability.

Any comments appreciated.

several questions please: effective for plan years beginning in 2002, is it ok to have a ps at 25% and also a mp at 25% as long as the increased limit of the lesser of 100% of comp or $40k is not exceeded? next: I have been trying to find what the penalty is if a plan does not carry an ERISA Surety Bond. An attorney is telling me despite it being a requirement there is no penalty if the plan sponsor does not have one. next: I have read 2001-77 several times and am trying to clarify if a cross-tested psp (Corbel volume submitter document) has automatic reliance. Safe harbor comp definition being used, along with 1000 hours and last day provision. OK not to submit because of "partial" reliance? HELP please. Thanks so much.

My review of the new proposed regulations leads me to believe that a spousal rollover can be made at any time after the death of the IRA owner as long as the minimum distribution has been made to the IRA owner. So that seems to mean that a surviving spouse could take required minimum distributions from the IRA for 20 years and then roll over the IRA if the surviving spouse so elected.

Furthermore, there does not seem to be any rule that would prevent a surviving spouse from taking a partial distribution from the IRA as a beneficiary and then doing a spousal rollover of the remaining account. This is significant where the spouse wishes to take a distribution of some of the account and is under age 59 1/2.

Does anyone disagree with my analysis? Noel, I would love to hear your opinion.

Kurt

After reading the age 50 catch-up proposed regulations, what questions have you come up with?

Here's one I have:

Say a participant has $500 returned as excess deferrals [402(g) excess] for 2001. The participant defers $10,600 from 1/1/02 to 11/30/02 in a plan that allows age 50 catch-up. The ADP limit for the plan year 12/1/01 - 11/30/02 turns out to limit HCEs to $10,000.

Under 1.401(k)-1(f)(5)(i), only $100 would need to be distributed to the participant as a corrective distribution.

Does the participant have $600 in catch-up contributions, or $100 in catch-up contributions, as of 11/30/02?

A participant in a qualified plan can't own life insurance in the plan after he or she retires. The required beginning date under Section 401(a)(9) is the calendar year following the later of the calendar year in which the participant attains age 701/2 or retires.

Does anyone have a sense of what the IRS thinks it means to "retire" in either situation, particularly in the case of a self-employed individual? Is working one day per month enough? What about less?

Has anyone had any experience with this issue on audit or have a sense of the IRS's position on this?

Thanks?

When Processing a valid status change, are we limited to 31 days? Our current practice is to process the paperwork as if the event date

assuming we receive the paperwork within 31 days of the event.

Howeve, if we receive the paperwork after 31 days, we process the

status change as of the dates we are notified. Is it acceptable to

accept these status changes after 31 days, or must we tell the

employee to wait until open enrollment?

If someone would be able to assist me on this? Or point me into the right direction I would certainly appreciate it!

Thank you.

I am trying to determine if there are any providers of participant-directed investments (with recordkeeping/sub-accounting by contribution source) that offer investments among various fund families, similar to that offered by insurance company group variable annuities.

I know some of the mutual fund families (e.g., American Funds, MFS, etc.) offer a vehicle using their own family of funds.

Does anybody know of anybody that has a "best of the best"-type product - other than via a variable annuity?

Thanks!

We're considering offering a stable value fund as an investment option to participants in our 401(k) plan.

What sorts of issues should we address before deciding whether to offer a stable value fund? For example, how do you deal with market adjustment charges that the insurance company can impose if the plan decides to terminate the stable value contract with the insurance company? Market adjustment charges permit the insurance company to pay over the lesser of market value or contract value (the value as determined under the contract) on termination.

Plan year-end is 4/30. Plan is a MP which has been frozen since '99. Vesting is 100% after five years. Forfeitures are reallocated same as ER contribution.

Received a call from client today advising that wrong census data was given to us for plan year ending 4/30/00. Per their original data to us, a participant terminated during the plan year without completing enough hours, thereby forfeiting his account; however, the Company now realizes he did complete enough hours and his account needs to be restored. News every administrator loves hearing. Not. To make participant whole, my thought is to use any forfeitures from the 4/30/01 valuation (hasn't been done yet) and if sufficient to pay him amount he should have received 4/30/00, fine; if not, have the Company make a non-deductible contribution to make him whole. Am I on the right wavelength for this? Secondly, is he entitled to the exact amount due him in '00 or do I figure in earnings/losses up to a current date? Thank you for anticipated help.

For a vesting 401k plan, the employee contributions and their returns vest immediately and the employer matching contributions vest over a period of time. What about the interest and other returns on the employer matching? And if they, too, vest over a period of time, are they held separately from the vested portion of the account? If the account buys different mutual funds, how is it tracked?

I need backup references if possible! Thank you.

One of our employers incorrectly allocated deferral money to employee A rather than employee B. In calculating the correction to make each employee as they would have been had the error not occurred, an "excess gain" occurs. Does anybody have any suggestions of what to do with that extra money? Does it get split between the two employees or does it get forfeited?

I understand that GATT does not apply for purposes of calculating benefit payments, but does it apply for purposes of valuing benefits under Code sec. 415?:confused:

If you satisfy the 5% Minimum Contribution Gateway, can you define your groups in any fashion you want? I have a Plan with 2 HCs and 2 NHCs, but the HCs compensations vary and would justify putting them into seperate groups in order to maximize their benefit.

Thanks,

Joe

I opened a Roth IRA in 1999 for the potential purpose of using the proceeds to purchase a house. It now appears that I may need to purchase a house before the end of the 5-year investment period. So I was trying to see if I could use the funds for the upcoming purchase.

I was told by a friend that I can withdraw my own contributions any time (even during the first 5-years) free of penalties and taxes. Only capital gains would be subject to the rules of the 5-year investment period. Is this true??

Company A's health insurance is run through their cafeteria plan. They have a new employee that doesn’t want to participate in the cafeteria plan, but wants to be part of Company A's health insurance plan. This new employee wants a company that he formerly owned, but is now owned by his former company’s employees to reimburse Company A for the employee’s share of the health insurance premium. There would be no withholding.

Can Company A allow this type of arrangement? Does this effect the cafeteria plan?

Can a Plan compute the soc. sec. benefit (used for purposes of the offset) on the basis or method that assumes that the person terminates due to disability?

That is, the soc. sec. benefit would be computed differently. As I was told, in the determination of AIME, the denominator would no longer be the typical 35 years, but would be based on years up to time of disability. i.e. a much lower number in the denominator.

A plan provides a pension of 1.5% of avg pay per year and offsets it by 2/3 of the age soc sec benefit (with no pro-rate or unit accrual on the offset). As a result the accd benefit is less than zero for short service employees. The offset is computed based only on compensation with the employer.

Does anyone have knowledge or thoughts as to if the Plan can meet 411(B)(1) by doing the test just based on the gross benefit or must the offset be included in the test?. That is as a gross benefit only, it clearly passes 411(B), but tested based on the benefit including the offset, it would fail.

One case (allegedly) supporting the concept of ignoring the offset in the testing is rev ruling 76-259. This ruling, however, refers to offsets of benefits from profit sharing plans.

Look forward to any comments.

Just wondering if anyone has, or is considering, setting up new DB plans with a Jan 2 - Jan 1 Plan Year in order to take advantage of the EGTRRA $ limit increases.