We have been notified by a client that one of his employees has embezzled $800,000 from his business(not the plan). Collateral damage(lawsuits,legal fees,lost clients) to his business amounts to another $4,000,000.He cannot make his contribution for 12/31/00 by 9/15.It's too late to request a waiver of minimum funding, or is it? This would seem to be an instance where the government should be able to grant some kind of relief.The Secret Service is involved and they're part of the Treasury Department. Does one side of the house help the other?

Calendar year employer to adopt brand new PSP (effective Jan 1, 2001) with safe harbor 401(k) provisions (effective Oct 1, 2001). Employer wants to cover everyone who is employed as of Oct 1, 2001 for both the PSP portion and the safe harbor 401(k) portion. Clearly, nothing wrong with the PSP allocation being based on comp for the plan year (Jan 1 to Dec 31), but can the 3% non-elective safe harbor contribution also be based on comp for the plan year (Jan 1 to Dec 31) or must it be based on comp for the short 3 month plan year (Oct 1 to Dec 31) as you can't have a retroactive 401(k)??

Help! Help!

I seem to be having a recurring bad dream. Similar issues continue to come up on my plans and I can't seem to get any sound feedback as to a reasonable direction to move in. I welcome and invite anyone that can provide some guidance on this issue to please respond.

- I have a plan 403b ERISA covered PNTSA.

- There are two plans of the the employer (PNTSA [ERISA]

& TSA [Non-ERISA]).

- The PNTSA plan has deferrals and a match.

- Everyone is allowed to defer to the TSA. However, those who

normally work less than 20 hours per week are excluded from

the PNTSA, the deferral piece as well as the employer piece.

My Understanding:

While the outside TSA covers the Universal Availability issue for the PNTSA. There is a potential violation of ERISA section 202(a). While 410(a) does not apply to a 403(B), ERISA states that

410(a) is applicable for the purposes of ERISA 202(a). I believe this may be a problem because the broadly available deferrals are not a part of the same plan.

Could someone please provide your thoughts on this.

Thanks

Nabiyah

We have had conflicting answers to this question from attorneys and from CPA's:

Can a self-employed person with employees open a 401(k) plan? May the business owner defer, and if so how? Do we define compensation in the document as something other than W-2 wages? This may seem like a simple question, but two or three different authorities have told us two different answers. Thank you for any assistance.

A person who contributed to an employer Simple IRA but did not contribute the maximum before the employer terminated the plan, can he contribute to a traditional IRA to make up for that? If yes, how much can he contribute to the traditional IRA?

A person who contributed to an employer Simple IRA but did not contribute the maximum before the employer terminated the plan, can he contribute to a traditional IRA to make up for that? If yes, how much can he contribute to the traditional IRA?

Client is adopting a safe harbor 401(k) plan with a short first Plan Year: October 1, 2001 - December 31, 2001. Plan allows for employee deferrals up to the lesser of 100% of Compensation for the Plan Year or the §415 maximum for the calendar year. Assuming that only the highly-compensated employees take advantage of the ability to contribute a maximum $10,500 within the three (3) month Plan Year (and the non-highly do not), do we have a problem?

Thanks.

XYZ Company adopted a prototype document provided by financial institution A. Financial institution A is in the process of being taken over (purchased) by financial institution B. XYZ Company was told that they would not have to adopt financial institution B's plan document because financial institution B will simply become responsible for the document that had orginally been provided by financial institution A. Was XYZ Company given correct information?

If I am investing in individual stocks in my Roth IRA and decide to sell to lock-in profit, am I taxed on this, or is there any limit to the amount of times I do this?

I have a couple of clients with funds tied up till the markets open. Is minimum funding for a calendar year 9/15 or 9/17 since that is the next business day?

Any cites? Thanks.

P.S. Everything we've found (including Question 8 from the 1995 EA meeting) says 9/15 is firm. Any dissenting opinions?

:confused:

Here is an example. You have a church employee who is able to contribute $5,000 to the 403b. The employee decides to contribute an additional $2,500. In regards to the special election, is the whole $7,500 applied to the $10,000 special election or just the additional $2,500?

Please Help.

Thanks.

Brandon Carr

Has any one noticied if the IRS has addressed the ability or inability of many governmental plans to adopt the good faith amendments required under the recent IRS notices within the timeframes apparently required? Usually governmental plans are granted additional time to adopt amendments to their plan greater than what is required for the private sector.

I suspect that many plans will have difficulties in getting state legislatures to move as quickly as may be required by the notices.

I figure we could all use a little of this today.

Originally written in the 1970's, hopefully just as appropriate now.

A TRIBUTE TO THE UNITED STATES

This, from a Canadian newspaper, is worth sharing.

America: The Good Neighbor.

Widespread but only partial news coverage was given recently to a remarkable editorial broadcast from

Toronto by Gordon Sinclair, a Canadian television commentator. What follows is the full text of his

trenchant remarks as printed in the Congressional Record:

"This Canadian thinks it is time to speak up for the Americans as the most generous and possibly the least

appreciated people on all the earth.

Germany, Japan and, to a lesser extent, Britain and Italy were lifted out of the debris of war by the

Americans who poured in billions of dollars and forgave other billions in debts. None of these

countries is today paying even the interest on its remaining debts to the United States.

When France was in danger of collapsing in 1956, it was the Americans who propped it up, and their

reward was to be insulted and swindled on the streets of Paris. I was there. I saw it.

When earthquakes hit distant cities, it is the United States that hurries in to help. This spring, 59

American communities were flattened by tornadoes. Nobody helped.

The Marshall Plan and the Truman Policy pumped billions of dollars! into discouraged countries. Now

newspapers in those countries are writing about the decadent, warmongering Americans.

I'd like to see just one of those countries that is gloating over the erosion of the United States

dollar build its own airplane. Does any other country in the world have a plane to equal the Boeing Jumbo

Jet, the Lockheed Tri-Star, or the Douglas DC10? If so, why don't they fly them? Why do all the

International lines except Russia fly American Planes?

Why does no other land on earth even consider putting a man or woman on the moon? You talk about Japanese technocracy, and you get radios. You talk about German technocracy, and you get automobiles.

You talk about American technocracy, and you find men on the moon -! not once, but several times -

and safely home again.

You talk about scandals, and the Americans put theirs right in the store window for everybody to look at.

Even their draft-dodgers are not pursued and hounded. They are here on our streets, and most of them, unless they are breaking Canadian laws, are getting American dollars from ma and pa at home to spend here.

When the railways of France, Germany and India were breaking down through age, it was the Americans

who rebuilt them. When the Pennsylvania Railroad and the New York Central went broke, nobody loaned them an old caboose. Both are still broke.

I can name you 5000 times when the Americans raced to the help of other people in trouble. Can you name

me even one time when someone else raced to the Americans in trouble? I don't think there was outside

help even during the San Francisco earthquake.

Our neighbors have faced it alone, and I'm one Canadian who is damned tired of hearing them get

kicked around. They will come out of this thing with their flag high. And when they do, they are entitled

to thumb their nose at the lands that are gloating over their present troubles. I hope Canada is not one of

those."

Stand proud, America!

:confused:

Hello, I have a question regarding our Supplemental Life Insurance Benefit... It may be a procedureal issue - I'm not sure.

An employee has $200,000 of voluntary life insurance as a non-smoker. They have recently started smoking and since our rates are based on smoker status, we need to change her designation. However, I want to pose the question...

When should this change take place? Does their status change the following month upon receipt of new information or next policy anniversary or next payperiod following receipt of information.

Has anyone handled this before and if so, what was your procedure?

Any feedback is greatly appreciated.

Thanks, BettyG

Is it possible to have a loan policy that allows a loan to be made only from the employee 401(k) salary deferral contributions? The majority I have seen seem to be have a generic statement of "from the vested account balance". If this is okay, then is it possible to restrict loans to certain investment options?

My corporation would like to know what the industry standard 401(k) company contribution is for employees. We are a small, 100 employee corporation. Thank you in adavance.

We have a NFP client who hasn't filed Form 5500 for the past 5 years for its 403(B) plan which is subject to Title I of ERISA. The DOL recommends filing under the DFVC program which charges $2000 per return. Instead of costing the client $10,000 up front, wouldn't we be better to file the returns with Form 4571 (Explanation for filing late return) and wait to see if the DOL & IRS assess penalties? Since 403(B) returns require only limited reporting, what are the chances penalties will actually be imposed?

I have received conflicting information reagrding a Governmental organization being able to Opt-out of Social Security. One told me that no one is able to opt-out anymore except for possible seasonal/part-time employees. The other said it could be done provided they never had filed a 218 Agreement to remain in Soc. Sec.

Can anyone help clarify this for me. Thanks

I've got a MPPP that employer just notified me that they want to terminate as of September 30, 2001. Plan year ends September 30. Employer will fully fund for plan year ending September 30, 2001. I have just taken a closer look at 4980F contained in EGTRRA and saw the reference to the minimum 3 month notice period for amendments effective after the date of enactment of EGTRRA. Does that mean that employer will now not be able to terminate the plan until 3 months from today's date (assuming amendment to terminate signed off on today and participants given notice of amendment today? In other words, unless and until Treasury adopts regulations to address it (possibly exempting plans with fewer than 100 e/ee's under 4980F(e)(2)(A), will there always be a 3 month mandatory notice period? I will check to see if any interim guidance has been put out by the IRS which I have not yet seen which addresses this.