Cartoon in recent local paper (sorry…can’t remember which cartoon it was). Let’s see if I can describe it with the same effect as the visual.

Older couple in their living room. The husband is standing up, looking puzzled, reading what appears to be some sort of invoice. There are also dozens and dozens of boxes of “409” cleaner stacked up in the living room (assume that’s what the invoice is for).

The caption says: “Honey! You know that 401(k) we’ve been investing in all these years????!!”

I'm interested in how others handle daily accrual of interest in money market and bond funds. Is there a standard industry practice?

For example, if a money market fund pays interest quarterly, do you account for daily accrual of interest during the quarter, or do you only add the interest when actually paid? Do you handle bond funds differently than money market funds?

If a company has not been taking interest accrual into account, does the company need to take any actions?

Does anyone know if a person who has previously elected a life annuity choice, ( because realistically what other choices were available ) from their 457 plan at retirement - will they now have the flexability to amend the prior choice, given that they can now roll a lump sum into an IRA:

1) without tax consequences

2) be given greater choices in investments and payout options as compared to previous choices

It just seems that there would be some form of a window allowed for people that had no other choces before. Perhaps I'm the ignorant person and they did have other choices? Just trying to learn from this end.

Can anyone share some input with perhaps some reference material I can obtain?

Thanks - Shawn

Is it possible and allowable for an organization to operate both a 403(B) plan and a SEP?

There seems to be some confusion regarding when employer contributions to a health plan are included in the Line 5 total. This is a typical premium only plan. I have two separate references and they contradict each other.

The 5500 Preparer's Manual, pg 13-4, example 1 indicates that they are not. The PPC's 5500 Deskbook, example 9B-1, indicates that they are.

Here is the Preparer's Manual, --

An employer provided health plan costs $3000 per employee. The employer contributes $2500 to the cost of the health plan. The employees pay the remaining $500 in premiums through a Section 125 premium conversion plan. 20 employees reduce their salaries by $500 to pay for health care. There are no other payments or administrative expenses. When completing Sch F, this employer enters $10,000 ($500 x 20) on line 5.

The other example is more detailed, but seems to contradict this example and would state that the amount reported would be $60,000 (20 x $3000).

Any feedback on interpretation would be appreciated.

If a health insurance plan is not part of an employer's group plan (for example a self-employed individual's health insurance policy) is it a requirement that adopted children be covered under the policy effective as of the date of adoption? If so, what is the cite? If not, what is the cite?

Is a leave of absence a "change in status"? What happens if an employee takes a leave of absence, but never returns? Do pre-tax contributions, say for unreimbursed medical, cease at the time he/she leaves?

I've had employees take a leave of absence, but pre-pay their contributions until they return. I've never had the situation where an employee takes a leave of absence, but never returns to work.

Joe

Due to the repeal of 415(e) and the 2001 Act what are the funding limitations when there is a DC and a DB plan?

Have a client who finally submitted year end data for 12-31-00. They have a participant who stopped making loan payments in March 2000. Do we go back and issue a 2000 1099-R for the loan and have the individual amend their 1040 or can we issue a 2001 1099-R?

I have a question regarding valuation of employee stock in a 401(k) plan. Regulators are telling a particular bank that their current process does not comply with ERISA.

Their current process is that they get an annual valution, which they then convert to multiples of book ( a term I do not understand) at time of valuation, then use that as a multiple of whatever book is at time of transaction. Does this sounds proper?

Can a participant sign the spousal consent on their loan request on behalf of their overseas military spouse if he/she has a power of attorney?

Participant in cafeteria plan is divorced. Ex-spouse elects coverage under participant's group health plan under COBRA. Divorce agreement requires participant to pay ex-spouse's premium. May the participant use the cafeteria plan to pay the ex-spouse's premium on a pre-tax basis?

Assume a large corporation sells off all the assets of a small division of 50 employees (and all 50 employees go to the buyer). The division has its own 401(k) plan. The corpoation would like to terminate the division 401(k) plan and distribute assets in 2001. (Assume the asset sale exception for 401(k) distributions does not apply.)

Since there are other defined contribution plans in the controlled group the corpoation can terminate and distribute assets only if the 2% test is met. The 2% test looks at the eligible employees as of the plan termination date.

Is this rule avoided simply by choosing a termination date after the closing date? On the day after the closing there will be no employees eligible for the division 401(k) plan- they will all have terminated employment.

If instead the corporation terminates the plan prior to the closing, is the 2% test violated if one of the terminated employees is rehired into the corporate controlled group within 12 months following the termination date? That is, for purposes of the 2% test do you need to track terminated/rehired employees?

Thanks.

card

Guys,

Although we all seem to be aware now that 457's can be run out into an IRA starting the first of the year, does anyone know about the circumstances of the roll?

i.e - most people at retirement have a lump sum option to a degree. However, I am unaware if a person is already retired or considering retiring under the new law, will they havea lump sum option, and to further the question - will tehy face tax consequences on rolling the plan to the IRA?

I look forward to insight - thanks, I'm a new user who has found reading from this site quite profound.

Does anyone know the web address where the new Form 5558 can be downloaded?

A client has asked me about asset management fees.

They have been told that according to investment industry standards, that equity management fees should not exceed 50 basis points and that fixed income management fees should not exceed 30 basis points.

Does anyone have a web site or resource that I could use to address this issue?

A client has asked me about asset management fees.

They have been told that according to investment industry standards, that equity management fees should not exceed 50 basis points and that fixed income management fees should not exceed 30 basis points.

Does anyone have a web site or resource that I could use to address this issue?

If a Terminated vested employee dies after his NRA and never applied for and therefore never collected a benefit, I would say that the benefit due upon discovery and payable to the estate is the retroactive benefit payments accumulated from NRA to date of death and based on the normal form of annuity. If married at NRA and the normal form is J&S, then I believe the estate is entitled to retroactive J &S payments accumulated from NRA to date of death. If the spouse survived the participant, then would you agree that the spouse (or the spouse's estate) is due the back survivor payments? And lastly, if the spouse is still living, she will continue to receive the survivor annuity until she dies.

This all seems logical, however, I'm confused over the forfeiture rules under 1.411(a)-4(B)(1)- Death. Can someone explain what is being said here and perhaps I need to alter the above analysis?

Thanks

I am conducting a survey as part of a research project I am currently working on for my Master's Degree. This survey is intended for employees who have access to their company's employee benefits and basic human resources information via a web-based tool (i.e. a benefits website or company Intranet). I am requesting a few moments of your time to respond to my survey. I don't have any incentive to offer for your participation other than my eternal gratefulness in aiding my research process. I also invite you to pass along this web address to anyone else you may know that would fit my target respondent profile. To take the survey please go to the following website:

http://www.inquisiteonline.com/VP7QT2

Thanks in advance for your assistance!

I am conducting a survey as part of a research project I am currently working on for my Master's Degree. This survey is intended for employees who have access to their company's employee benefits and basic human resources information via a web-based tool (i.e. a benefits website or company Intranet). I am requesting a few moments of your time to respond to my survey. I don't have any incentive to offer for your participation other than my eternal gratefulness in aiding my research process. I also invite you to pass along this web address to anyone else you may know that would fit my target respondent profile. To take the survey please go to the following website:

http://www.inquisiteonline.com/VP7QT2

Thanks in advance for your assistance!