Do the provisions of EGTRRA relating to elimination optional forms of benefit in a DC plan apply at all times, or only when a participant's benefits are transferred from one plan to another?

Do the EGTRRA provisions override the fairly recent regulations that allowed elimination of optional forms if you met certain requirements, including special notification of participant requirements?

i noticed that the revised 5500 series does not include a question re: 5310 filing in the event a plan is terminated. the 5310 question used to be an audit trigger for terminating plans.

i have a client that wants to know the risks of not filing form 5310. i'm trying to get a handle on the potential audit risk. anyone have any experience terminating a plan but not filing it via 5310 during or after the 1999 plan year (when the 5500 was revised)?

any input is greatly appreciated.

I am working with a document that limits contributions to the HCEs in order that they receive no more than 1/3 of the contribution. It dawned on me that since the 415 limit will now be 100% rather than 25% of copensation per individual, does it make sense to have that feature in the document? I suppose if you were going to have mega-forfeitures or mega-dividends it might make a difference, but any other scenarios, or am I missing something.

In 2002 the §415© percentage limit will increase to 100%, but the §404 deduction limit for target benefit plans will remain 25%.

Assume a target benefit plan where there are several participants who have been limited to 25% due to §415©; but without the application of the §415© percentage limit, their normal cost could be much higher (even higher than 100%).

In 2002, if the normal cost is allowed to go up to 100%, and as a result the total cost exceeds the §404 25% deduction limit, what do you do? Or should I ask what should you have done?

Does the existing plan language limiting total cost to that which is deductible prevent the nondeductible contribution? If yes, how should the document allocate this limitation amongst participants?

Can you leave the §415© percentage limit at 25% even though the law allows it to be 100%? (Or is it required to be raised?)

Can you raise the §415© percentage limit to 100% but specifically limit each participant's normal cost to 25%? If you do so but the only participants who are limited to 25% are Non-HCEs does the plan violate §401(a)(4)?

I have been asked to head a project committee that will investigate the possibility of implementing a compressed work week -- where do I begin and does anyone have a policy? thanks

I have a multiemployer situation; benefits were retroactively enhanced & a few participants went over the involuntary threshold upon re-calc. ; they've already been paid lump sums based on the former benefit level; does anyone know what the recommended or even legal way of handling this is ??

A company at the end of 1999 had 10,000 in forfeitures which were used to reduce match in 2000. The company contributed 90,000 to the plan in 2000. Our report would show a total contribution of 100,000 (90,000 cont. + 10,000 forfeit) The question is: On question 2a(1) of schedule "I" when listing the total contributions, would we list 90,000 or 100,000

I have been asked to head a project committee that will investigate the possibility of implementing a compressed work week -- where do I begin and does anyone have a policy? thanks

We have a client who, in his late seventies, started a business that is now sponsoring a DB plan. There are no other employees. His NRA is 83. Will putting 83 on line 6b of the Schedule B practically guarantee an audit? The doc defines NRA as 65 and 5P, but it's my understanding that you have to put the actual average age on line 6b. Does anyone have a different interpretation?

When an employee has a status change and elects to change coverage in a Section 125 plan, is backup documentation required? If not, do we have any leeway? If we choose not to require backup, what negative consequences could this present?

If a participant has a 403(B) and a 401(k) with the same employer, can the participant roll assets from 403(B) into 401(k)?

A Canadian company purchases a U.S. company that has a 401(k) plan. The Canadian Company becomes the plan sponsor.

One of the employees participating in the U.S. 401(k) plan is a Canadian citizen living in the U.S. (resident alien).

If that employee leaves the U.S. company to live in Canada and work for the Canadian parent company, what happens?

Can a distribution be made to the participant?

Does service with the Canadian parent company (and plan sponsor) count towards vesting service in the U.S. plan?

Can the plan document specify the answers to these questions (is there a choice)?

Are 403(B) plans required to be amended for GUST?

With a KSOP, is the entire plan (both ESOP and 401(k) portion of the plan) required to be primarily invested in employer securities? Is it alright to only have the ESOP portion of the plan primarily invested in employer securities and allow multiple investment options for the 401(k) portion of the plan? I was under the impression that it was okay to treat the 401(k) and ESOP portions of the plan as two separate plans for purposes of the "primarily invested" rule. However, I came across a treatise which says that a KSOP must be designed to invest primarily in employer securities and that all benefits under a KSOP must be distributable in employer stock. Thanks for your suggestions.

We are in the process of implementing a commuter reimbursement plan and are trying to determine the required audit requirements.

POsted this in distribution thread and didn't get any help - so I will try it here!

Without our knowledge, an owner-employee S-Corp shareholder took a loan from his plan in 2000. The new EGTRRA regs would exempt this transaction from the PT rules if it were to happen after December 31, 2001. In write-ups on the new rules, I have seen it said that the IRS will also waive penalties for these transactions made before 2002 if the loans would have been allowed had the new law's change been in effect throughout the period of the loan. However, I can't find any official documentation of this. Can anyone help point me in the right direction to determine if I have a problem

Paul Harvey Writes:

We tried so hard to make things better for our kids that we made them worse.

For my grandchildren, I'd like better.

I'd really like for them to know about hand me down clothes and homemade ice cream and leftover meat loaf sandwiches, I really would.

I hope you learn humility by being humiliated, and that you learn honesty by being cheated.

I hope you learn to make your own bed and mow the lawn and wash the car.

And I really hope nobody gives you a brand new car when you are sixteen.

It will be good if at least one time you can see puppies born and your old dog put to sleep.

I hope you get a black eye fighting for something you believe in.

I hope you have to share a bedroom with your younger brother. And it's all right if you have to draw a line down the middle of the room, but when he wants to crawl under the covers with you because he's scared, I hope you let him.

When you want to see a movie and your little brother wants to tag along, I hope you'll let him.

I hope you have to walk uphill to school with your friends and that you live in a town where you can do it safely. On rainy days when you have to catch a ride, I hope you don't ask your driver to drop you two blocks away so you won't be seen riding with someone as un-cool as your Mom.

If you want a slingshot, I hope your Dad teaches you how to make one instead of buying one.

I hope you learn to dig in the dirt and read books.

When you learn to use computers, I hope you also learn to add and subtract in your head.

I hope you get teased by your friends when you have your first crush on a girl, and when you talk back to your mother that you learn what ivory soap tastes like.

May you skin your knee climbing a mountain, burn your hand on a stove and stick your tongue on a frozen flagpole.

I don't care if you try a beer once, but I hope you don't like it.

And if a friend offers you dope or a joint, I hope you realize he is not your friend.

I sure hope you make time to sit on a porch with your Grandpa and go fishing with your Uncle.

May you feel sorrow at a funeral and joy during the holidays.

I hope your mother punishes you when you throw a baseball through your neighbor's window and that she hugs you and kisses you at Christmas time when you give her a plaster mold of your hand.

These things I wish for you - tough times and disappointment, hard work and happiness. To me, it's the only way to appreciate life.

Written with a pen. Sealed with a kiss. I'm here for you. And if I die before you do, I'll go to heaven and wait for you.

Paul Harvey...

We are considering web enrollment for FSA's and benefits enrollment. What are the main legal compliance issues involved?

We are thinking about Web enrollment for FSA's, benefits and possibly new hire paperwork. What are the hotest legal compliance issues involved?

Our client just died in January of 2001 (he was over 70 1/2 and already taking his MRDs). He had not yet taken his MRD for the year 2001. The sole beneficiary of his IRA is his wife. Is the MRD for the year 2001 (computed based on his age I understand) an asset of hers for the year 2001 or is it paid to his estate and thus an estate asset to be reported on the estate return? Thanks for your help. BJW.