Our law firm is considering purchasing a proposal program for qualified retirements plans so that we can do quick plan proposals for new clients. We have only looked at a few, but it appears that two of the better programs are Relius Proposal and Datair's Proposal component for their Defined Contribution System.

Is anyone familiar with either of these programs? Would you suggest any other programs? Any comments would be greatly appreciated.

Aloha

Our law firm is considering purchasing a proposal program for qualified retirements plans so that we can do quick plan proposals for new clients. We have only looked at a few, but it appears that two of the better programs are Relius Proposal and Datair's Proposal component for their Defined Contribution System.

Is anyone familiar with either of these programs? Would you suggest any other programs? Any comments would be greatly appreciated.

Aloha

Our law firm is considering purchasing a proposal program for qualified retirements plans (so that we can do quick plan proposals for new clients). We have only looked at a few, but it appears that two of the better programs are Relius Proposal and Datair's Proposal component for their Defined Contribution System.

Is anyone familiar with either of these programs? Would you suggest any other programs? Any comments would be greatly appreciated.

Aloha

My understanding is that a Plan has a great deal of flexibility w/r/t the definition of compensation for determining accd benefits. i.e. for example, it can include 401(k) deferrals or exclude them.

However, for discrimination testing there are strict guidelines w/r/t the definition of compensation. i.e. 414(s) definition.

Is my understanding on target?

Does anyone know what the SEP limit is for 2002?

Thanks.

[SEE POST DATED 08-22-01 (below)

We have a participant who never responded to our Profit Sharing distribution requests. Her balance was less than $5,000 so we finally made a taxable distribution to her in April 2001. The 20% federal tax was also deposited in April 2001. The participant has never cashed her distribution check so it is being reissued to her. She is now wanting to roll the money over to her IRA. Will this be considered an eligible rollover since more than 60 days have elapsed since the check was written in April? Or do you start the 60-day clock over again when the replacement check is issued? The original check was not lost in the mail - the participant had it in her possession all this time.

Also the participant thinks we should refund her 20% federal tax to her so it can also be rolled over. I know that can't be done.

My COBRA coverage is coming to an end. I have ascertained by all I have read that I am eligible for HIPAA, and I need it, but I can't find information on how to go about getting a policy. Any suggestions?

Thanks.

Thom

A participant requested a a new loan (paper based) about 2 months ago. Since then a loan repayment has come in and been processed. The participant never cashed the check and know wants to cancel the loan, reprocess the check into his account as of current and have the recordkeeper reverse the loan repayment and issue him the funds. Outside consultants have actually said that this is ok to do, but I have a serious concern with doing that. Any thoughts or feedback...

We have a client whose plan currently has a 401(k) component and a pro-rata nonelective contribution component. They want to add a third component, which would be a point allocation based on compensation and service points.

Because of the demographics, they don't stand much chance of passing the general test. Their intent is to have this component be a non-design based safe harbor (uniform points plan), and to satisfy the average allocation rate test.

The problem is, they won't be able to do this if they count all past service for the purpose of determining points. They only want to include service since the effective date of this component. Does anyone know if there is a way to do his without bouncing it out of safe harbor? Capping the total number of points doesn' t help because it affects a couple of NHCE's as well.

I am also assuming that the points component and the pro-rata component can be treated separately for 401(a)(4). I figure if they could accomplish it in two separate plans, why not in one.

Unmarried profit sharing plan participant dies without an executed beneficiary designation. Plan document specifies that death benefit is paid to parents and siblings per stirpes, and these beneficiaries are Mexican citizens.

I have reviewed a previous thread on the subject of payments to foreign citizens (b2kates contributed) and reviewed various IRS forms and publication 515. It looks as though the procedure would be as follows:

- Mexican beneficiaries get a ITIN using Form W-7.

- The beneficiaries complete Form W-8BEN using the ITIN and submit this to the plan administrator. The W-8BEN allows the plan administrator to have no tax withholding on the death benefit distribution (under claim of Mexico/US tax treaty benefits).

- The plan pays the beneficiaries with no withholding.

- The plan files Form 1042-S to report the distribution (not 1099R).

Do I have this right? Any confirmation/comments appreciated.

We have a small S_corp with three employees each earning 55K/Year. Two of the employee (me and my wife) would be considered key employee because of my ownership. We want to establish a 401K plan starting 2002 Jan because employee deferrals are not counted against the 25% profit Sharing contributions.

Me and my wife want to do the maximum tax savings. The other employee does not want to defer any.

Starting 2002, if S_corp contributes 100% vested 3% of salary contribution for the employee can it make 25% contributions for the key employees and in addition would the key employees be able to defer 11k/year?

Is it unlawful to request disclosure of medical history greater than the HIPAA pre-existing exclusion period?

For example, currently the health plan requests medical disclosure for the 5-year period prior to enrollment. HIPAA allows for max. of 12 (or 18) month preexisting condition exclusion. Is this allowable under the Regs?

Company A maintains 401(k) plan including employer securities. Many plan participants hold highly appreciated shares of Company A stock through the Plan. Company B acquires Company A, exchanges shares of Company B stock for shares of Company A stock, and amends Company A's plan to provide that the plan can hold Company B stock as the new employer security.

Question 1: Is plan participant's net unrealized appreciation (NUA) in Company B stock determined based on the historical purchase cost of Company A stock that was exchanged for the Company B stock, or based on the acquisition price by Company B?

Question 2: Assuming that NUA is based on historical purchase cost, can participants elect capital gains treatment on a future sale of Company B stock, assuming shares are distributed in-kind and are liquidated outside the plan? If yes, how long do they need to hold Company B stock to qualify for long term capital gains treatment?

What do you do if a company which was required to file a 5500 is purchased by a company not required to file a 5500?

The plans are still seperate, not merged, but the sponsor of the plans is now the entity which is not subject to ERISA and is not required to file (gov entity).

Is the custodian of qualified retirement plan assets who is not the trustee required to file Schedule P?

I've got a client with a 401(k) plan which when aggregated with other plans (mp/ps) is Top-Heavy. Turns out the Dad is deferring 3%+, which makes a 3% of pay contribution a requirement. (Dad is key solely by attribution - owns no stock).

We've rounded up enough forfeiture money to meet 2001 allocations. For 2002, Dad will elect 0% deferrals.

I thought the new law (EGTRRA) in 2002 was supposed to have a provision where deferrals by Key EEs weren't counted as employer contributions for Top-Heavy minimums. I can't see anywhere where this was enacted. Anyone know?

Since the rules were changed so that only 5% owners had to receive minimum distributions, what happens when the person is no longer a 5% owner? Somewhere, the regs refer to the TH definition of owner which goes back to 4 prior years. Doesn't this new law change the look back for TH to only the prior year?

Is any of this going to affect whether the person has to continue the MRD?

Thanks

Jim's anecdote reminded me of a story...because I'm in pensions my best friend KNEW I would find humorous. She was working for a car dealership as a title clerk and worked closely with the girl who processed the credit applications. One day the girl was reviewing a form and said "Oh, this customer will have NO problems getting credit from the bank!" "Why do you say that?" questioned my friend. "He has $401,000 in his retirement plan at his job and he's only 30!" she replied. My friend glanced over the girl's shoulder and, as we all might have guessed, the applicant had written in the "Employer Retirement Plans" box...401k.

Got a 401k plan sponsored by a brokerage house.

Everyone's got their own account. Sometimes commissions on stock trades are going directly to the participant as agent of record (that's a no-no). Sometimes the commission goes directly to the firm (also a no-no).

Question is, what can we do with commissions generated? Keep them in the participants' accounts so that no outside income is generated?

Can an ERISA 403(B) plan have eligibility and entry requirements for elective deferrals?

If so, what are the parameters?

If not, why not?