A political sub-division (not educational) has a 403B plan that was started over 10 years ago to be in lieu of Social Security when the mandatory Social Security was enacted. We have recently learned that this plan is not a legal option for this political sub-division and need to know what to do now. Can this 403B be transferred into a 457? Is 457 the only option for a plan in lieu of Social Security?

I coverted my IRA to a ROTH IRA in Dec 1998 with 4 years to pay taxes. When may I draw from it? I know it must be in existance for 5 years but when do I start counting?

Can an employer who wishes to make the 3% nonelective safe harbor contribution specify that it be invested into company stock?

Can the match be earmarked for company stock? Can the match investment be decided by the employer and still qualify for safe harbor?

During a 5500 Webcast, we were advised that Liife Insurance as part of a 401(k) plan should be reported as code 4B on the 5500 Form and then on Schedule A, Part III. Part III deals with premiums or benfits paid. Do you still report the opening and closing value of these policies under Schedule A part II. Have tried the DOL and IRS and no one has answers. Any suggestions?:confused:

If an Employee Stock Purchase Plan allows for a 15% discount purchase price, is the discount value considered in evaluating the Section 162 (m) compensation threshholds?

Does anyone have any S Corp ESOPs that will not meet the broad ownership test in the new bill? If so, what are your plans with any action to take on the plan. If the S corp is considered owned 50% by disqualified perons, then not only are future allocations in the ESOP to disqualified persons taxed at a rate of 50%, but in the first year effective (1/1/2005 for existing calendar year S corp ESOPs) the "allocated stock" (i.e. exisitng account balances?) of disqualified persons are also taxed at a rate of 50%, even if no new allocations are made.

Will these S corp ESOPs be forced to terminate prior to 1/1/2005. Will that solve the problem, or will the IRS apply the same type of logic to an S corp ESOP that terminates? Per NCEO article "The conference report directed the IRS to develop regulations to define exisiting plans as subject to this legislation, regardles of when they were established, if their purpose is "in substance, and avoidance or evasion of the prohibited allocation rule".

This situation is a company that had their ESOP for many years as a C corp, and when the S corps were allowed to sponsor ESOPs they converted. They have a few large shareholders, and this will be a problem for them. Any problems with terminating the plan? I realize this is a fiduciary decision, that must be made in teh interest of the participants, but if the employer has to pay a tax bill of $xxx, the long term prospects for the company itself may be effected. I also realize that this is the type of situation that this legislation is designed to prevent, but what to do about those already in place. They were simply taking advantage of the fact that converting to S corp made sense for them at the time. Any insight?

We are looking at taking over an existing 401(k) plan that is currently using The New England. The client is wanting to keep the existing annuities, due to the fact that there are outstanding loans through the New England and also have Fidelity Investments for their deferral money. In other words they do not want to put anymore money with the New England other than for those participants that currently have loans. The other question I have is that they are currently using the New England non-standardized document, which they are wanting to know if they should switch that document or stay with the New England. Does anyone have any advise on this issue?

It seems that I’ve seen this discussed before, but can’t find the thread. If your doctor stops participating in the HMO you are in does this result in a qualifying event? Can you change to another HMO that the doctor participates in, or do you have to find another doctor and wait until open enrollment to make a plan change?

Employee terminated employment June, 2000. Submitted request for hardship disbursement of 401K 10-17-00. Ex-employer received disbursement check 1-30-01. Repeated requests from both plan administrator, plan representative and ex-employee have been ignored. To the best of ex-employee's knowledge and according to conversations with plan administrator, it is believed that the assets have been liquidated. Additional info.: end of plan yr. for ex-employer: 12-31-01 (due to ERISA quidelines for qualified plans, ex-employer has 9 1/2 mos. to disburse funds from end of plan yr.) However, funds have been taken from plan and are not accumulating any possible benefit from being in that plan. Suggestions to get plan assets disbursed to ex-employee?

Are there any exceptions to the 20% withholding rule for partcipants of a DB plan who rollover their contributions? For example: a DB plan member is issued a check at retirement directly from the pension plan and no tax is withheld. Are some government plans permitted to not withhold?

Currently I am a participant in an employer sponsored 401(k) plan. I am interested in buying this company's assets - I do not want to take the plan on also. Therefore, the current company will terminate it. Can I rollover my distribution from my current employer's plan and invest in my new company through my IRA?

Specifically, can my IRA own shares of my new company? Is there any limit on what percentage owner I can be before it becomes a prohibited transaction?

With the new 401k limits slowly going up to a maximum amount of $15k each year will there still be the 15% maximum amount of your salary that you can contribute or will it be moved up as well. If not you would have to make $100K a year to max a 401K out and I don't see where that will help many of us.

How do you withhold income taxes on payments made

to the beneficiary of a non-qualified plan participant, when the payments are made monthly

over a period of several years?

When a 401(k) plan terminates, elective deferrals cannot be distributed if the employer sponsors a successor plan. SEP's and ESOP's are specifically eliminated as successor plans by regulation. Most concur that SIMPLE IRA's are also excluded since they are not qualified plans under 401(a). Does the same reasoning exclude section 457 plans?

I'm having a stupid attack!!! Dealing with a Plan that has a discretionary profit sharing contribution with a last day/1000 hour rule. What identity should I give to this contribution on line 4d of Schedule T?

None of the seven options in the instructions seem to apply, and my software check feature is giving me an invalid entry if I use anything but one of the seven options. What am I missing?

Thanks in advance.

Rudy

What steps are plan administrators taking to make sure they do not engage in prohibited transactions? What are the requirements for holding a fiduciary liable?( ex. Knows or should know?). What is the civil/criminal liability for a fiduciary engaging in a prohibited transaction? With the 2001 Advisory Opinion, what are plan administrators doing to make certain they are in compliance? What corrective actions are being taken to avoid the liability and have no penalties?

Any and all help is greatly appreciated.

Thanks

Dave

The ERISA Regs on 404© say that you must disclose the plans investment manager(s). Who are the referring to in the case of a cross-fund platform 401(k) with several families of mutual funds selected by a registered investment advisor that does not actually manage the funds? can there be several different investment managers as that term is defined in ERISA?

I am trying to find some commonly used techniques for avoiding liability, and/or correcting liability for engaging in prohibited transactions. For clarity, the requirements seems to be that the fiduciary knows or has reason to know that he is engaging in a prohibited transaction. What is the potential liability I can face for engaging in this activity? What techniques are plan administrators using to make sure they are in compliance, and, if applicable, correcting a problem w/o liability? Especially, with the DOL 2001 Advisory Opinion, how do I make certain I am not incorrectly charging the plan, and if I am, how can I avoid liability while correcting the problem? What is my potential liability? What do I need to do?

Any and all help is needed?

Thanks

Dave

If a company is establishing a new ESOP (with plan year and Company fiscal year end of June 30) is there a requirement somewhere (I swear I read one and it may be a Tax Credit Employee Stock Ownership Plan requirement) that would require the trust to be funded PRIOR to the time required by 404(a)?

Any help would be greatly appreciated.

Thanks

I have a 401(k) and an ESOP plan of the same Employer. For 415 testing purposes, the ESOP has an Limitation Year of 10/1-9/30 (its Plan Year), while the 401(k) has a calendar year limitation year (its Plan Year).

Shouldn't these two plans be tested together, but with differing Limitation Years, not sure how to accomplish this smoothly, if at all.

Any feedback will certainly be appreciated.

Thank you,

Andmik