The owner of an S-corp funded his SEP during 2000. When it came time to file his tax return (with extensions on 9/15/01) he decided he doesn't have the money to contribute for eligible employees and would like his contributions returned to the S-corp. Can he have the contributions returned? Any penalties? If he gets a 1099-R in 2001 from the IRA custodian, what do you do with it?

Hi-I currently work for a small company that pays 100% of employee+dependent health coverage. We are looking into asking employees to start contributing for at least some portion of dependent coverage.

What is standard? Do most companies ask empees to pay 100% of dependent coverage?

Thanks

I have some 401 (k) Clients with account balances at Manulife. The people have terminated with outstanding loans. Manulife continues to accrue interest on these balances. Is it the Employer's OGLIGATION to advise Manulife to default these loans? The participants have not requested a distribution. Do you see any problem with the loans just remaining on the books as an asset?

Employer sponsors cafeteria plan, plus 4 separate self-standing benefit plans (health, dental, AD&D/life and LTD).

Employer wants to do a megawrap document to consolidate health benefit plans but does not want to include cafeteria plan.

Does this make sense?

Would cafeteria plan reporting consist only of Form 5500 and Schedule F, or does reference need to be made to the underlying welfare plans?

Employer has a SEP; wants to estalish a Safe Harbor 401(k). It is my understanding that this is permissable as long as the SEP doesn't use the 5305 model agreement. The contributions to the SEP would reduce the deductible amount to the 401(k).

Here is my situation: Owner makes 170,000 and is the only person eligible under the SEP. We can do the SEP contrib. at 15% and get him 25,500. There are two other employees making 35,000 each. Neither will defer, but will receive 1,050 for the 3% nonelective. It seems to me the owner can also get a 5,100 nonelective contribution and then defer 3,300. This keeps the total company contribution at the 36,000 limit (240,000*.15). I just want to make sure that the owner can receive 15% under the SEP and still receive an additional contribution from the 401(k).

Thanks in advance for any guidance.

DC plan is being amended for (1) GUST and (2) corporate changes related to the a spinoff of a company. Deadline for GUST is 12/31/01. Amendments related to corporate transaction will go in at the same time. Is a Schedule Q or other 410(B) testing necessary for (2)?

We currently are looking at updaing our firewall protection for our VRU and Internet servers. Does anyone have any recommendations?

Thanks in advance.

I have an odd situation I can't seem to figure out even though we have received guidance on this issue from Notice 2001-56. A law practice "divorced" in 2000 and 2 of the 3 partners received distributions in 2001. The 2 partners owned no stock in 2001. I understand that distributions in 2001 are taken into account for the 2002 top heavy determination. But are the former partners considered Key, Non-key or Former-key? It doesn't appear that they would be Key under EGTRRA (no stock ownership in lookback year), but it seems odd that I can use their distributions to essentially bring the plan out of top-heaviness. Any thoughts?

Any recommendations on firms/consultants to use who can help me put together a written policy governing use of our corporate aircraft?

Prior to EGTRRA 2001, the last day to make a contribution o an Education IRA, was the day before the beneficiary attained his/her 18th birthday.

Also, before EGTRRA, the deadline for making a contribution to an education IRA was 12/31 of the year for which the contribution was being made.

EGTRRA extended the deadline for making the contribution to the tax filing date of the beneficiary. Although EGTRRA did not address the age 18 issue, with respect to making the last contribution, it would appear that the extension of the deadline,(to tax filing date) would enable an individual to make a contribution, for the year they reach their 18th birthday, up until April 15 of the next year.

Some practitioners seem to think that the April 15 (tax filing deadline) applies only to contributions that are made for ages 17 and lower.

Any opinions on that?

The city I work for currently has 2 pensions plans. ( the A plan has a 2.5% mulitplier, the B plan a 1.5% multiplier) They are termed a "68" credit plan. Whereas if you have a minimum of 15 years service and minimum age 50 but service and years must equal 68, you can retire with full pension. The city manager obviously has decided this plan is not cost effective. In the presently negoiated contract they are increasing the multiplier for both plans to A-2.6% B-2.5%. But in order to get the increased multiplier you must work 20 years and cannot retire before age 55. In addition they are offering a 3 year drop plan but only those who stay to age 55 w/ 20 years can participate in it. All are considered "normal" retirement plans in our contract. My question, and sorry this is so long, can they legally only offer the drop plan to the last group? Any help would be greatly appreciated. If nobody has an answer I would be forever greatful to anywhere you can steer me for an answer. Don't know if this matters but the plans we are discussing are for general bargaining employees, not police or fire. Thanks so much in advance.

The Plan document for this governmental plan gives the Plan Administrator the right to distribute the the vested account balance to the Participant after separation from service. Why woudn't IRC 411(a)(11)(A) apply, effectively precluding the Administrator from distributing assets without the Participant's election if the account balance is in excess of $5000?

My company notified the employees that they would be switching our 401k plan to another 401K provider. We were promised to have this transition completed within a 6wk to a max. of 8 week period. During this period which they called a "blackout" period we could not touch our funds... they remained frozen in whatever fund we mapped to.

This period should have ended 8 weeks ago or in other words it has been 16 weeks and no green light yet in allowing us move our funds. I had every intention of moving my complete portfolio from very agressive to stable until the market showed signs of strength. Now within this last 8 week period I have lost 40% of my portfolio. The majority of this could have been avoided if they had kept their promise to us on their transition time.

What is the legal amount of time a company can keep us from being able to move or touch our money. They have killed my porfolio. Any advice would be appreciated.

Hi,

I was hoping that someone would be able to tell me how to calculate the portion of the domestic partner benefit that should be included as taxable earnings. Is it the portion of the benefit that the company pays for? What part of the actual deduction can not be pre tax? I appreciate any and all help.

Thank you.

Talisa

If I opened a Roth IRA with my former employer's pension check, would it be considered taxable income?

I am looking at a prototype flex plan document that calls for the plan sponsor to "advance a sufficient amount to make the required contribution" in the event a plan participant does not have sufficient compensation to make his or her flex plan election contributions. Advanced amounts are to be recovered by way of future salary reductions.

Is this kosher? I can see state wage and hour law problems with the increased deduction from pay. And if this is meant to address an unpaid leave situation, wouldn't it be trumped by the FMLA/Flex plan regs that were issued some time ago?

My question is this.

I am a full time salaried employee who does not recieve benefits. I have worked for the same company for two years and now am realizing the necesity for health insurance. Other employees of the company are offered health insurance and when I questioned my avalibility for it I was giving the run around. I live in New York and I'm wondering if they have to offer it to me?

Any help would be great

Thanks, Kevin

I know this may be a non-issue next year.

Corporation S (seller) sponsors a 401(k) plan. Division D participates in the plan. Corporation S sells all assets of Division D to an unrelated Corporation B (buyer). Corporation B also maintains a 401(k) plan.

Under 401(k)(10)(A)(ii), a distribution may be made from Seller's plan to participants in Division D.

QUESTION: Does Seller still have the option to transfer the accounts to Buyer's plan in a trust-to-trust transfer? Or since 401(k)(10) applies, may the Division D participants demand a distribution? What gives the Seller the right to transfer and not distribute?

Even in 2002, would the Seller have the right to transfer and not distribute?

If it makes any difference, the asset purchase agreement included language that no distributions would be made, but the accounts would be transferred to the buyer's plan.

Thanks for any insight.:confused:

Have taken over a plan where 22% was contributed in 99 and

23 % in 2000. The contributions are made up of deferrals & employer money. Problem is in early 2001 a hce employee was paid out and part of the money was this excess. I do not know how to correct. Should I put this through EPCRS?

We have a medical practice that was bought out by the hospital. The group of doctors at the practice have incorporated and now lease the NHCE's from the hospital. The hospital has a 401k plan with an employer match which the NHCE's participate in. There is no employer discretionary contribution from the hospital.

The doctors have set up their own 401k plan. There is no match, but they do have an employer discretionary contribution. Would the doctors have to make a discretionary contribution for all of the eligible leased employees?

Does the doctors 401k stand on its own for testing? I need help in understanding how all this works (in plain English, please).