Can a plan that has not been terminated, but has no participants and no assets be merged with another plan?

One of our subs has a plan that is separate from the parent’s plan, everyone in the sub has separated from service and will be taking distributions. Only one participant remaining and will be gone soon.

The sub plan was frozen and everyone in the sub plan was eligible under the parent plan. Therefore, the parent plan was a successor plan and, because 100% of the sub plan participants were eligible to participate in the parent plan, the 2% exception did not apply.

Thanks for your help.

If an individual hires a "babysitter" and pays him/her up front, withholding applicable payroll taxes and submitting Form 1040, Schedule H, could the salary being paid to the babysitter be taken out of pay through a Section 125 dependent care program?

Thanks for any replies.

Are most people restating their Section 125 plan documents to include the recent final regulations? I have an insurance agent friend, with over 100 clients with POP plans, that was told by Ceridian that no restatement was necessary. It seems to me that most documents will need to be restated. I realize the language in the current document will need to be looked at, but as a general rule won't most plan sponsors need to restate their documents by January 1, 2002?

Any references you have would be appreciated.

A man was walking along a California beach and was in deep prayer to the Lord. He said, "Lord, you have promised to give me the desires of my heart. That's what I am asking you for right now. Please give me a confirmation that you will grant my wish." Suddenly the sky clouded up over his head and the Lord in a booming voice spoke to him.

"I have searched your heart and determined it to be pure. The last time I issued a blank wish request it was to Solomon. He did not disappoint me with his request for wisdom. I think I can trust that you won't disappoint me either. Because you have been faithful to me in all ways, I will grant you one wish you ask for."

The man sat and thought about it for a while and said, "I've always wanted to go to Hawaii, but I'm deadly afraid of flying and I get very seasick on boats. Could you build a bridge to Hawaii, so I can drive over there to visit whenever I want?"

The Lord laughed and said, "That's impossible! Think of the logistics of that! How would the supports ever reach the bottom of the Pacific? Think of how much concrete...how much steel! Your request is very materialistic, a little disappointing. I could do it, but it's hard for me to justify your craving for worldly things. Take a little more time and think of another wish, a wish you think would honor and glorify Me as well."

The man thought about it for a long while and tried to think of a really good wish. Finally, he said, "Here's the deal, Lord. I've been married for many years. My wife always said that I don't care and that I'm insensitive. So I wish that I could understand women...I want to know how they feel inside and what they're thinking when they give me the silent treatment...I want to know why they're crying...I want to know what they really mean when they say 'nothing'...I want to know how to make them truly happy...That's the wish that I want, Lord."

After a few minutes, God said, "You want two lanes or four on that bridge?"

In restating an ERISA 403(B) plan for GUST compliance, is it advisable to state different effective dates for each component of the GUST changes - e.g., make the cash-out increase to $5,000 effective for plan years beginning after August 5, 1997, but make the elimination of the look back rule for purposes of determining $5,000 cash out effective March 22, 1999.

Won't this make for a very confusing document? Is stating each effective date even necessary given that there is no IRS review process? And, even if each effective date were stated, shouldn't the effective date be keyed to when the adopting employer actually changed its procedures to be in line with the GUST provisions?

I am employed by a county government in the state of Florida. My county/employer will pay for single coverage health insurance with no charge to me. I do not take this insurance because I am covered under my wife's family plan with her job. I have heard of "alternative medical reimbursement benefit plans" that allow a person, such as my self (that does participate in their employer's HMO), to use the funds that were allocated for my single coverage health insurance with my job to be used for medical expenses that are not covered by a family plan in reimbursement format for items such as co payments, prescriptions, mileage to the doctor, eyeware, dentistry work, etc.

My county government would like to implement such a plan and run the plan itself. We have only heard of insurance companies running these plans. Has anybody ever heard of a governmental agency running such a plan and what does the law allow?

The IRS people I have spoken to seem to think it would be an employee welfare benefit plan under ERISA USC 3 (1) ? My superiors do not want any problems with IRS or DOL. Can anybody offer any advice?

I just received a new professional liability policy from a carrier which is replacing Lloyds.

The policy is headed "Professional Liability Policy for Specified Professions"

The declarations page lists the occupation as "actuary"

Then, in the body of the policy we have "Exclusions ...This policy does not apply to any 'claim' ...arising out of .... Services as an attorney, accountant, actuary..."

I guess it could be worse. They could have added a surcharge to the premium.:confused:

Our internal audit department is entertaining a proposal from a claims audit firm (BMI Audit Services) to audit our health plan. I am somewhat opposed to the audit because I don't want our employees to be chased down to repay monies that may have been paid to them in error. BMI says they are not paid on a recovery basis and that they focus on corrective actions that need to be taken as a result of their audit findings. Has anyone been through a claims audit? Anyone used BMI for the audit? Results? Am I worried about nothing?

2001-17 states that the sponsor cannot use VCR if they dont have a determination letter. can this be rectified by simulatenously submitting the plan for a determination letter with the VCR? There is a considerable difference in fees for plans with 300 or more participants.

An IRA owner wishes to have assets distributed via check made payable to his spouse. His election to have funds distributed is in writing (via custodian's distribution form), but what is your interpretation of the "distributee" or "payee"? Should distributions be required to be received by the IRA owner, or could payments be made to another individual (or entitiy, for that matter)?

Thanks in advance,

Chris

I have a client with a SIMPLE 401(k) experiencing financial difficulties. It would like to suspend the match (100% up to 3% of comp.) Because Match is required in a SIMPLE 401(k) would this client also have to suspend the EE deferrals? Is there any way for the company to suspend the match but allow EE deferrals to continue? Thanks for the help.

I have a husband and wife that closed their corp. and terminated the DB plan and rolled their lump sum distributions to a segregated acct. in their new sole proprietorship DC plan. My limited understanding of loans is that loans are not allowed from a qualified plan of a sole proprietorship. If that's true, in this case does it apply to the segregated acct. as well?

Assume that an employer has a 401(k) and a nonqualified "mirror" plan. If an employee who is eligible for the nonqualified plan changes his or her deferral election to the qualified plan, is it permissible to also change deferrals to the nonqualified plan?

In other words, is the deferral rate to the nonqualified plan irrevocable until the end of the year?

Would it make sense to convert a 401(k) that matches with employer securities into a KSOP since deductions will be permitted for reinvested dividends pursuant to EGTRRA?

The hardship safe harbor definition clearly allows a distribution for education, but what about to pay down student loans? Does anyone have any experience with this? Would the plan have to abandon the safe harbor and specifically allow for this?

Would back taxes typically qualify for a hardship withdrawl? Would there be a penality if the withdrawl was distributed directly to the IRS?

Can anyone explain the significance of the following from EGTRRA?

"SEC. 632. EQUITABLE TREATMENT FOR CONTRIBUTIONS

OF EMPLOYEES TO DEFINED CONTRIBUTION

PLANS.

(a) EQUITABLE TREATMENT.—

...

(2) ...

(B) by striking paragraph (2), and © by inserting ‘‘or any amount received by a former employee after the fifth taxable year following the taxable year in which such employee was terminated’’ before the period at the end of the second sentence of paragraph (3).

How do you calculate the Top Heavy percentage where one of the Key employees (now legally dviorced) has transferred half of his account to his ex-wife (the alternate payee)?

He is a more than 5% owner.

She has never been an employee.

In this case the plan is not top heavy for 2001 even if her balance is included. I'm just curious.

It seems to me that her balance would not be included as she wouldn't meet the definition of Key employee (as she was not an employee). However, if she was an employee her balance would be included for the look back period as she was a more than 5% owner during 2000.

May a plan loan be taken to buy out a former spouse's interest in a principal residence? Prop. Reg. 1.72(p)-1, Q&A-8 says refinancing does not generally qualify as a principal residence plan loan. However, if the plan loan is used to repay a loan from a 3rd party, and the plan loan qualifies as a principal residence plan loan without regard to the loan from the 3rd party.

How to analogize?

I have been given conflicting information regarding an IRA belonging to a parent. At the time of death (2000), my sibling took their 1/2 of the account and I was so overwhelmed at the time that I thought it best if I just leave it be. My local bank, where the account is held, said that was fine and the fact that my sibling took $ out met the minimum distribution for the year. So now a year later and the account is still there, accruing interest and they say I can leave it there indefinitely but need to meet the minimum distribution yearly. I was not sent a 1099 last year and my sibling did not receive one either as one was sent to the deceased parent for tax filing. Just want to know if this is correct or if I need to do something else with this....my bank has been incorrect before about products etc....................Thanks in advance for any help anyone can send!