Is it clear when the new EGTRRA limits/rules such as 415, 401(a)(17), and catch-up contributions will apply for off-calendar plan years? For example, plan year and limitation year is 12/31-12/30. Will the new 415 limit apply for the period 12/31/01-12/30/02 OR 12/31/02-12/30/03??

I have a new client who took a $20,000 premature distribution from a 401(k) plan, but did not self-assess the IRC 72(t) penalty on her return. She used the monies to purchase a first home.

I am aware of an exception to this penalty if the premature distribution is from an IRA (up to $10,000). Had she rolled over a distribution to an IRA, then distributed the $20,000, half of the distribution would have been exempt from this penalty.

Are you aware of any PLR's or other cases in which the taxpayer got out of the penalty for first time home purchase from a 401(k) plan?

Several employees have changed to hourly or part-time status and their new pay will not cover their loan repayment amounts.

It is not possible to reamortize the loans to lower the payments since the terms already are at the maximum 5 years and some have only 1-2 years left.

There is the one-year extension for leave of absence but that does not apply in this case.

Besides defaulting on these loans, what are some other options?

If our recordkeeper will accept personal checks, I suppose we could offer that but I don't want to have to offer that for all active employees or terminated employees if they catch wind of this.

Thanks in advance for your suggestions.

Several participants (but not all) participants for 1 company received 1099-Rs with an incorrect code, indicating nontaxable distributions rather than the correct taxable distribution codes. The 1096 appears that it would not change.

How should the incorrect 1099-R filings be corrected?

Does the US Tax Code specify that $contributions to Sec 529 college tuition plans (paid by a business) are deductible by the business .... if the beneficiaries of the tuition plans are the children of the business' employees ?

My client (a LLC), wants to start making contributions to the Sec 529 tuition plans of its employees' children .... and deduct those payments as a tax-free fringe benefit to it's employees. Can it be done ?

If that won't work .... Can the business establish a Sec 125 plan and have the Sec 529 tuition plans as one of the pre-tax benefits of the Sec 125 plan ?

Did Defined Benefit plan documents have to be updated at the same time DC plans were updated for TRA '86, UCA '92, OBRA '93? My client has an old DB document (mid 80s). Is the plan out of compliance?

If a 457 plan does not adopt the amendment to use 2001 Required Minimum Distribution regs, is the participant essentially stuck with the old regs?

Participants in 401(k) plans would still have the opportunity to roll over the difference between the amount under the old regs and the amount under the new regs. Since distributions from 457 plans cannot be rolled over until after 12/31/01, it appears that participants in 457 plans have no comparable opportunity to use the new regs (unless it's a first time RMD that can be paid after 12/31/01).

Is there any reason a 457 plan would not just adopt the amendment?

I have the new chart for figuring RMD. The chart uses age..but what age? What do I do if a client is doing their 2001 RMD now, and is currently 72. But at the end of 2001, he will be 73. DO I use the age he is when he does the distribution or the age he will be at the end of 2001??? Thanks

Where can I go to rollover my 401k into an IRA account with a company that offers the following no-load funds?

Vanguard 500 Index

Janus

Janus Worldwide

Fidelity Growth & Income

I was going to rollover with Cigna, where my 401k is currently held, but they don't offer the funds I'm interested in.

Can anyone give me a lead? I need to have the election paperwork into Cigna by Aug. 19.

Suggestions and advice highly appreciated.

Thanks!

--Zelly

If an employer is late in turning over 401(k) contributions to the trustee, is the employer obligated to pay de minimis interest that would have accrued absent such (slight) neglect? By de minimis, I mean interest in an amount less than $1.00 (especially where the cost to cut a check to former employees under the plan would be in excess of $20). Any thoughts?

When drafting distribution election forms for 401(k) and 403(B) plans (ERISA), must one include an area for the approval signature of the Plan Administrator?

Can an employer selectively "assist" employees with Dependent Care Accounts? Instead of having an On-site daycare facility, the employer wishes to financially assist employees on a case by case basis. Is this possible?

If an ESOP purchases shares of company stock (and after the sale would own more than 30% of the total outstanding stock of the company) and the selling shareholders elect Section 1042 treatment is there any problem with, say more than a year later, the company entering into additional financing and other corporate reorganization which afterwards results in the ESOP owning less than 30%? Basically I am concerned with how any issues this may raise for the company and/or the selling shareholders if such percentage of ownership drops below 30%. Thanks for any thoughts you may have ...

Knowing that 401K loans are 5 years and 30 years for primary residence, my question is.

Does amounts required to prevent foreclosure on a primary residence qualify for 30 year treatment, or do they fall under the 5 year ceiling.

The answer is probably no, but I thought I'd getsome opinions.

Ray Setzer

Can an employer mandate that the employee's share of health insurance premiums be made on a pre-tax basis via the cafeteria plan. If so, how have you seen this structured? Thanks

Would it be feasable for a small community business/industry to band together to form a MEWA in order the procure better group health insurance rates? If so, what carrier(s)/TPA(s) might underwrite this?

A Plan Sponsor chooses not to hire an investment advisor or an investment consultant to assist in selecting investments, but rather appoints an investment/advisory committee (employees of plan sponsor) to select and monitor the investments. The plan has individual trustees that are also employees of the company. In this case the trustees are different from the committee. Clearly, the trustees are fiduciaries. The question I have is does selection, monitoring and evaluating investments make the members of the advisory/investment committee fiduciaries as well?

Can anyone send me or direct me to the right place - I need sample documents to use for open enrollment to send to cobra participants.

Thanks, Kary

I have been advised that a local IRS practitioner hotline told someone in my office that 5500 "items" should now be filed with the IRS Cincinnati office and that this is a new procedure. Has anyone heard about this? I can't find anything to back up a change in filing address for 5500s.

We are currently in the middle of salary reviews for our firm. Does anyone have, or can refer me to, comparative salary data for TPA administrators? We are located in the midwest. I want to pay fairly, but not too much. Thanks.