How do you handle a situation where a large employer (over 100 participants) came out of a multiple-employer plan (PayChex) in 2000 and transferred existing assets to their own trust. Client insisted they utilize their existing plan document with PayChex. Reviewing the document, I couldn't see why they couldn't use it. Plan name was the ABC 401(k), not PayChex 401(k). Then the issue arises on how to handle the 5500 reporting. In 1999, Paychex filed the 5500 and Schedule H based upon ALL participating employers. Only a Schedule T was filed on behalf of my client (as well as all other participating employers of course). So when I prepare Schedule H for my client for 2000, do I show beginning balances even though the assets at that time were in a separate trust inside the multiple-employer plan? Or do I show beginning balances as zero and a transfer of assets from another plan? Does the answer to this question depend upon the document issue above? :confused:

Can premiums for individual health insurance policies be run pretax through a Section 125 plan if the employer doesn't offer group health insurance? If so, what information is required in the plan documentation and SPD?

If a company has an employee who becomes ineligible to participate in a Flexible Spending Account mid plan year (based on S-Corp ownership status), does uniform coverage apply to expenses incurred prior to them becoming ineligible?

Would like to know how Medicare Entitlement length of coverage currently works when it's a secondary event.

Was told years ago that as a secondary event it would ADD 36 months to the date of the secondary event vs. where most secondary events (divorce, death) extend the 36 months from the date of the initial event. Hence, with Med. Entit. there could be a situation where a Cobra Beneficiary could receive 54 months of Cobra coverage if the Medicare Entitlement occured in the final month of coverage from the initial event. (18 months + 36 months)

Now, from what all I've read, it seems like the maximum time for coverage for ANY event (initial or secondary) combined can not be greater than 36 months. Is this correct?

Did the original method change (and when) or was I told incorrectly?

Thanks!!

Can a governmental entity who also has a 501©(3) exemption establish a 401(k) plan?

I have a client who is terminating the company SEP on 12/31 and starting a SIMPLE IRA 1/1/02. Can the existing SEP account money be rolled into the SIMPLE IRA account for each employee? Thanks in advance....

I initiated my Roth account with Morgan Stanley last year. I would like to transfer administration to Sharebuilder so that I can invest monthly incremently at a reasonable price. Is there any penalty or prohibition in changing administrators? Is there any additional information I should know about such a transfer?

Does anyone know of an easy access link to the Proposed Regs. 1.125-1 and 1.125-2 ?

Does anyone have examples for wording to be used in 403b salary reduction agreements next year when the changes take effect?

In 2002 as a result of EGTRRA would a 403(B) participant be eligible to use the "15 year of service catch up provision" and the $1000 "Age 50 catch up" and defer potentially $11,000, plus $3000, plus $1000 for a potential $15,000 max. deferral ?

When determining compensation for salary deferral purpose in a 403(B) or 457 plan, if the participant is making mandatory contributions into a defined contribution plan of the employer are such contributions counted in the definition of compensation ?

Would the answer be different of the mandatory contributions were "picked up by the employer".

Would the answer be different if the mandatory contributions were going into a defined benefit plan ?

If company A is in a brother-sister controlled group with Company B and Company B is in a brother-sister controlled group with C, then is A in the same controlled group with C by why virtue of its relationship to B, even if A and C are not truly a brother-sister group without B?

Logic seems to say "yes", but we know logic does not always prevail.

Thanks

Client maintains a final average pay defined benefit plan, and a nonqualified excess plan to make up for the limits imposed by 415 and 401(a)(17). Client has allowed the NQDCP participants to pay FICA tax on each year's vested accrual, per the 3121(v) regs which permit inclusion before the date the amount deferred is reasonably ascertainable.

Now client will adopt EGTRRA's $200,000 401(a)(17) limit retroactively per Notice 2001-56. This will result in significantly higher qualified plan accruals for certain participants, and a corresponding reduction in the nonqualified plan accruals. Therefore the FICA tax for years prior to 2002 would have been significantly overestimated.

The regs don't seem to permit an adjustment until the resolution date.

Has anyone addressed a similar situation? What about a "negative accrual" for 2002 to offset other income?

Thanks-

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As I understand it, a Special Tax Notice is supposed to be provided no less than 30 days and no more than 90 days before an eligible rollover distribution, and the 30 day notice can be waived under certain circumstances.

We do offer waiver of the 30 day period. But we have not always monitored the 90 day requirement.

We are allowing web-initiated distributions, and those are of course OK because the notice is there when they make the request. But if the participant gets the distribution form and Special Tax notice from their local HR person, we have no way of tracking the date that it was delivered.

So my question is whether other sponsors actively monitor the 90 day requirement, or if there is some way around it. Any advice would be greatly appreciated.

Does anybody know of any products marketed to DB plans and the companies that promote them?

I thinking along the lines of communications products to help employees understand their benefits.

Fiscal Year Plan, 10/1 - 9/30. Plan terminates 9/30/00, assets are distributed 12/15/00. Employer wants to adopt new S/H plan effective 10/1/01. Can we treat this as a "new" plan for safe harbor rules or does the fact that assets from the old plan were not distributed until 12/15/00 make this a "successor" plan.

Any guidance is appreciated.

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?