If IRA holder is already taking RMD and dies this year without taking this year's RMD, then the RMD must be reported under the tax ID number of the beneficiary.

My question is, since the beneficiary can be determined by 12/31 next year and the RMD has to be taken by 12/31 this year, how do we know who to distribute the assets to, since the beneficiary can change next year?

The elective deferrals described in s. 402(g)have a per-person per-year limit, not a per-plan limit. Thus in 2002, an employee can contribute up to $11,000 to all of the following plans combined: 403(B), 401(k), SEP, and SIMPLE IRA. The same limit applies whether the employee has one or more than one employer. Deferrals to a 457 plan are not included in this definition, so an additional $11,000 could be contributed to that plan.

The over-age-50 catch-up in s. 414(v) is described as an "additional elective deferral." The definition of "elective deferral" provided--in s. 414(u)(2)©--includes 457 plans as well as the others listed above. Is the catch-up limit per-person per-year, or per-plan?

In other words:

1. Employees at my public, state-sponsored university can make voluntary contributions to both a university 403(B) and a state-sponsored 457 plan. Can a participant over age 50 make the full catch-up contribution to each plan, or is she limited to just one catch-up contribution, $1,000 in 2002, to both plans combined?

2. The over-age-50 catch-up is not available in the 457 plan when the employee is using the more generous provisions of s. 457(B)(3). Would it be available in the 403(B) plan during that year?

Client is considering merging their money purchase pension plan (MPPP) into their profit sharing (PS) plan as of September 30, 2001 (last day of both plan years). As the surviving PS will be updated for GUST before the remedial amendment period (on a prototype, so by 12/31/02), I am assumming that the MPPP does not require GUST restatement prior to the merger.

Any agreement or disagreement?

Does everyone read Announcement 2001-77, the way I do, namely, that through December 31, 2001, a determination request for a collectively-bargained plan cannot be submitted on Form 5303, but may be submitted on either the old or new Form 5300?

I'm very confused - I've been trying to find out how to start a qualified pre-tax parking benefit program for employees parking at or near the office. Can you help?

EGTRRA amended section 404(a)(3) to increase the amount of deductible contributions to a profit sharing plan from 15% of compensation to 25%. This change elimates the need for both a profit sharing and money purchase pension plan. Does anyone have any thoughts on whether it would be better to merge the two plans or to terminate the money purchase plan and allow participants to make rollovers into the profit sharing plan? My specific concerns are as follows:

I believe merger would subject the profit sharing plan to the qualified joint and survivor annuity requirements. However, I believe a merger would probably be more cost effective than a termination, especially if a favorable determination letter is sought.

Finally, if the profit sharing plan does not permit rollovers, could it be amended to permit rollovers only from the specific terminated money purchase plan?

Any thoughts are appreciated.

We are recordkeeper on a large quarterly-valuated 401(k) Plan that has approx 1000 employment termination distributions per quarter. The terminated participant sends their withdrawal form to us, then we instruct the trustee who to pay, and how much.

Our withdrawal form says that, if the participant is doing a rollover, the rollover must be to another qualified plan or an IRA. We are curious about our duty to make sure the rollover institution is either a qualified plan or an IRA. It is obvious when the rollover institution is, for example, Charles Schwab, or Joe Blow 401(k) Plan, but what about when it is something not obvious like "Golden American" or "Lutheran Brotherhood"? (These are two real-life examples from this quarter.) Do we have a duty to contact the participant or try to investigate this ourselves somehow to make sure these are qualified plans or IRAs?

401(k) plan fails ADP/ACP testing in 1998 (no remdial action taken at that time), and is top-heavy for 2000 plan year (barely). Is it possible that the corrective measures taken now to remedy the first defect can throw the plan out of top-heavy for 2000?

Any help is appreciated.

I have a 401k plan which has contributions (deferrals & match) of 22 % of adjusted comp for the 1999 and 2000 Plan years. Major Insurance Co has been handling the Administration. Here is question, an employee was terminated & paid in Feb 2001 with money he is not entitled to, How can this be corrected? If no one was paid I could correct 1999 & file 5330, correct 2000 & file 5330, correct 2001 & file 5330. Any insight would be appreciated.

my hospital is implementing a PTO plan to replace the current one. Until now, minor sick leave has been accrued per pay period in the extended sick leave bank. On the employee's anniversary they could roll over the minor sick leave accumulated. In instituting the PTO program, all minor sick leave in each employees extended sick leave is not going to be rolled over into the PTO bank but will stay in the extended leave bank, converting it to extended sick leave. Access to extended sick leave is being changed from 3 days out to 5 days. We do not have a contract or any group representation. So some employees - those with anniversary dates just after implementation - are being told they will lose almost all minor sick leave accumulated for almost a whole year into extended sick leave. Extended sick leave not used by the employee at end of employment will revert to the employer. Is this legal?

:confused:

I recently married but had already made my full $2000 Roth IRA contribution for 2001. Unfortunately (or fortunately!) my new husband's income may disqualify these prior contributions. But there may be hope if we file separately...I will probably have an AGI very close to $10,000.

1. If my AGI turns out to be < or = to $10,000, how do I figure what my max 2001 contribution should have been? Will my eligibility to contribute still in part be determined by my spouse's AGI? I've read the tax law on this and find it to be very confusing! How do I get rid of any potential excess before filing and being penalized?

2. If my AGI is >$10,000 or my husband's income is still too high to qualify (even filing separately), what are my options? Conversion to a traditional? Any other options?

If it matters, neither of us participate in any qualified plans.

Any general advice or concrete examples will be appreciated. Walk me through it.

Sincerely,

C. Yelkovan

Plan A is a safe harbor 401(k) plan, effective Jan 1, 2001, sponsored by Company A. Plan year is the calendar year. Company B merges with Company A, effective July 2, 2001. Company B assumes control and becomes named trustee of Plan A. Company B's intention is to merge Plan A into Company B's plan, Plan B. Plan B is not a safe harbor 401(k) plan. Contributions in Plan A are frozen, effective July 31, 2001.

Would Plan A still have to pass ADP test for 2001 since contributions were not made for an entire year in the first year of existence?

We are trying to set up a cafeteria plan that includes flexible spending accounts. There are currently 25 employees, 10 of which are physicians and are considered to be key employees. We are concerned that the plan will not pass the key employee concentration test. Are there any suggestions as to how we can structure the plan so that it would pass?

Under what circumstance can an agreement between a privately held business and one key manager be considered to be subject to ERISA? Even if the document deals extensively with retirement and benefit matters, it is still a contract with one person who is a manager. There are other employees of the business and not one of them is subject to any similar type of agreement. It seems to me that the document between the manager and the company is more in the nature of an employement agreement than a retirement "plan". Can anyone cite any key authorities on the matter?

I need to know if Notice 2001-61 disaster relief for taxpayers just issued applies to contributions for Schedule B purposes that would be due no later than 9/15/2001 (if a 2000 calendar plan year).

Thanks

Beleive it or not, I have a client who has 15 household employees, all bieng paid W2 income. The employer (head of houdehold) would like to establish a 401(k) Plan, with no employer match, the employer will not participate in Plan. I see no reason they can not establish a Plan, but have found nothing to substantiate.

Can an employer that has previously maintained a defined benefit plan establish a SEP IRA utilizing a prototype?

Does anyone know if minimum funding deadlines (9/15) or 5500 filing deadlines (9/15 or 10/15) or any other pension related filings have been extended due to the terrorist attacks?? Thanks.

Because of the horrific tragedy on Tuesday, does anyone know if the DOL-PWBA plan on granting extensions past 10/15/2001 for anyone in an affected area? I know the IRS has just released notice 2001-61 allowing this for extended corporate and individual returns. However, I was uncertain if the DOL was prepared to take a stance.

We submit our payroll withholdings for a 401K Plan approx. every two weeks (bi-weekly payroll, gather files from 3 subs, proof, submit). Prices for mutual funds are invested at close of market prices.

As it turns out, we were a bit behind due to files snafu at one sub. That was fixed, I am ready to go with 3 payroll files--except market is closed. One payroll was submitted last week and will invest Monday (or whenever market opens).

In role as fiduciary, should I space out the other two payrolls over next week? Can I wait to see (1) if the markets are working okay, and (2) if the recent tragedies will skew the market?

I will (procedurally) send each payroll on a separate day as a separate transaction. (About 600 participants are involved and there are 9 mutual funds in the plan).

Gil