If an employer has elected to use the 3% safe harbor nonelective contribution and a participant terminates mid-year and wants a distribution as soon as possible, can the employer contribute 3% on this participant's behalf prior to year-end? Otherwise the participant will be cashed out but will still be entitled to the safe harbor contribution for the year. Seems impractical to have to cut a check to the participant at year end for the additional contribution.

Any thoughts?

A company maintains a union 401(k) plan and a salaried 401(k) plan. A participant in the union plan ceases to be a union member and becomes a salaried employee. Can he transfer (trustee to trustee) his balance in the union plan to the salaried plan? This doen't seem like a distributable event.

A small LLC has three employees, Mom age 70, Daughter age 38 and Son-In-Law age 38. Can the Mom waive out of the SIMPLE-IRA?

Has anyone heard anything regarding this concept of reverting to the old law? I'm specifically interested in 415 limits. Does this mean that if you have a person who's NRA is more than 10 years away, I can't fund for the new limit?

I would think we would need guidance fairly soon.

ABC Company has 3 family members employed..

Son 1 owns 100% of Company Stock

Son 2 owns 0% of Company Stock

Mother of Son 1 and 2 owns 0% of Company Stock

Due to family attribution Mother would be considered owning 100% of Company Stock (Indirectly) because of Son 1. She would then be considered HCE and Key EE.

Would Son 2 also be considered owning 100% of Company Stock (Indirectly) because of his Mother????? Or would this be double attribution????

Thanks...................

Most of the new stuff is effective for plan years beginning after 12/31/2001, but the DB 415 limit increases seem to be effective for plan years ending after 12/31/2001.

This is despite the fact that, according to the joint committee report, both the House and Senate legislation proposed effective dates for years beginning after 12/31/2001. Yet, for some reason, it was accelerated (for non calendar plans). Why?

1. given the recent pension reform, must the 403b plan first be terminated prior to transferring (actually a rollover, yes?) the $ to a 401k?

2. since a plan term is not a distributable event, how exactly can 403b money be transferred out to a 401k?

3. if the 403b is terminated, and since a plan term is not a distributable event, assets are frozen? so the participants just watch their $ and hope it grows over time? until they terminate employment from that organization, then rollover to an IRA... or another 403b or 401k...?

thanks for any assistance provided.

I would like to know if an employer can add at anytime additional insurance carriers to a current section 125 plan. Would there be any enrollment issues or tax issues?

I have a client that has a welfare benefit plan, is self-insured and has stop-loss coverage. They have recently found that there were commissions paid on the stop loss coverage in 1998 and 1999. They have not filed schedule A's for this coverage. Does a self-insured employer need to file schedule A's on their stop loss coverage?

A cafeteria plan has individual health insurance premium reimbursement accounts. Employee elected to use this spending account to get reimbursed for COBRA premiums paid to former employer. The COBRA rates have declined. Can the employee change the dollar amount of the election?

Here's an interesting perk -- Forbes magazine (5/28/2001) is reporting that Cognex Corp. of Natick, Mass. provides awards to the top 10% of its 800-employee workforce but also has its chief executive officer send a letter to each of the winners' parents describing their awards!

Sure sounds to me like a cost-effective way to make employees proud and happy. (Though the top-10% process at Cognex sounds like it involves employee ranking, which is controversial, I understand.)

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?