As a Plan Administrator who would you contact to take action in face of a Corporate Merger or Tender Offer affecting your Corporate plan?

Can anyone give me a primer on the difference between fidelity bonds vs. ERISA/Fiduciary bonds? Are both required to be 10% of assets? Do both need to be in place before the beginning of the plan year in order to avoid an audit if the plan is small enough? What happens if a plan doesn't have a fidelity bond? Is it true that fiduciary bond is often covered under the umbrella of the company's general insurance coverage?

Thanks.

In order to qualify for the 1042 rollover, the selling shareholder to an ESOP can invest in stocks and bonds of US-based operating companies. Let's suppose Joe Seller buys 10,000 shares of GE as QRP. If Joe sells any of the GE QRP, will he trigger capital gains taxes on the entire ESOP transaction amount, or only on a proportional amount? Moreover, if the value of the GE shares grows, can he cash in on a portion of the gains, or is he locked into holding the shares and gains to his death? If this is the case, it appears the only logical investment for QRP would be in dividend-paying stocks, or interest-paying debt instruments.

My parents have set up an irrevocable living trust and are starting to place assets in it. They now have Roth IRAs with their 3 children as beneficiaries. Should these be changed so that the trusts are the beneficiaries?

My parents have set up an irrevocable living trust and are starting to place assets in it. They now have Roth IRAs with their 3 children as beneficiaries. Should these be changed so that the trusts are the beneficiaries?

I am a county employee whose department has found her unfit for duty, and put me on medical leave pending disability retirement. Now the retirement board sent me to a different psychiatrist and he says I should be able to return to work soon. So the retirement board is leaving the decision up to my treating psychiatrist. He says this is not his job and he won't get involved. What are my options?

I am in the Army currently serving a peacekeeping mission in Kosovo. This means I receive pay without taxes. My question is a longshot, but I'll try it anyway. I have approximately $10,000 I want to convert from a traditional to a Roth IRA. Does my situation exempt me from the taxes involved in the transaction?

My COBRA should have ran out in October 1999. I have paid my premiums during the entire period. The insurance company sent me a letter on April 30, 2001 that they should have discontinued my coverage in January 1999. They are going to cancel my policy effective June 1, 2001. I have applied for individual coverage, but the 30 day notice does not give me enough time to get coverage by June 1, 1999. Is there any regulation that requires at least a 60 day notice?

I am relocating to South Carolina, and will be taking a leave of absence from My current employer the, State Of Maryland. How much will will my health care cost me under COBRA and for how long. Can I continue my life insurance and 401 plans as well?

Where can I find information on the tax implications if one chooses to keep the shares of company stock which is a part of ones 401(k)?

My employment ended on Dec 31,2000. I informed my former employer to set me up with COBRA coverage for my wife and me. At that time the Health Plan was a PPO with Empire BLue Cross. I was advised that the premium would be $548.00 monthly . At that time the companies policy was that the employee paid 30% of single coverage and would absorb any additional cost for family coverage. The employer picked up 70% of Single coverage.I made 4 payment of $548 to date.

The company went into a partial self insured program March 1,2001 and i have now been advised that family coverage will now run over $1000 per month for essentially the same coverage. Contributions by employees are about the same as before, $240 a month for family.

I know this company well and there is no way they are going to increase their contribution to the tune of $7000 a year for each employee covered for family. They went into self-insured to save money. I am told that actuarials were used to come up with the premiums. I believe that something is wrong here. I would appreciate input from anyone that has a comment.By the way this is a company with about 500 employees,of which 150 employees in about 15 different states are enrolled in the health insurance plan.Thanks

I'm always at a loss for good, detailed secondary source material on qualified defined benefit plans with mandatory employee contributions. Can anyone recommend a sourcebook?

Can anyone please direct me to a comprehensive reference for understanding

ESOP's?

I have a client who desires to sell his interest (24%) of a closely held

business, controlled by his parents. A fourth shareholder, my client's

sister-in-law, also desires to sell her interest (also 24%). The parents

(52% shareholders) have proposed a leveraged ESOP to allow both kids to

sell their shares and exit the business (neither one has been currently

employed with the business for at least two years).

I am aware there are significant tax advantages to the seller of stock, but

I am most concerned with ensuring my client doesn't unwittingly place

himself in a difficult situation. There are significant trust concerns

between all family members.

Thank you in advance for your help.

Now that FDP's Contact Partner will no longer be maintained, I would like to know what client databases any of you may be using and if you like it or not.

Profit sharing plan not amended for TRA 86, etc.... No 5500's filed since 1986. Sole shareholder of professional corporation which sponsored the PSP passed away 18 months ago. Decedent had a beneficiary designation naming A and B. Insurance company has advised that A and B can advise trustee, which is a bank, to purchase a non-transferable annuity with A and B as the beneficiaries. Ins. co. says that the annuity purchase/distribution is not required to be reported in any manner since the trustee is purchasing the annuity??? Ins. co. has also advised that, once done, the insurance company maintaining the annuity can report payments under the annuity as A and B receive them.

Seems to me as if there is a potential that the annuity is fuly taxable to A and B on date of purchase under Reg Sec. 1.402(B)-1©(1). Anyone run into this type of situation before???

Does anyone know of good websites that explain the different methods of funding health plans, describe how premiums are set up differently, etc... Something that discusses HMOs, self-funding arrangements, intermediate risk sharing arrangements, risk pool type arrangements, etc... Thanks!

401(k) Plan has made participant loans as a "pooled investment" rather than "earmarking" the loans as part of the borrower's account balance.The loans are secured by participant's vested account balance, however, the participant's account balance does not reflect the loan balance. The loans are taken from and paid back to a bond fund option. All participants invested in this fund share in the loan interest payments. One of the basic concerns is the potential for paying out a participant their entire vested balance forgetting to offset by the outstanding loan balance. Another concern is that participants with outstanding loans are able to direct the investment of their entire account balance. Should they be mandated to invest an amount equal to their loan balance in the bond (loan) fund or is that a fiduciary decision?

If possible the client would like to convert the loans to earmarked loans as part of the participant account balance. Any thoughts, comments, recommendations about the conversion and potential problems would be appreciated. I have not been able to find much guidance in this area. Thanks.

A shareholder has elected non-recognition under IRC 1042. The shareholder remains an active employee and a participant in the ESOP and does not share in the allocation of stock subject to the 1042 election. Shares allocated to terminated vested participants are distributed to and reregistered in the name of the terminated vested participant. If the ESOP reacquires this same stock, is the selling shareholder prohibited from receiving an allocation of the reacquired stock?

Cites?

I have a client who has a top-hat plan that includes 11 of the 40 employees. (I was not involved in setting it up or running it, and just heard about it now) They have done some reading, and now fear that they are including too many people for the definition of "select group". Does anyone have any ideas on acceptable correction methods to get them back in compliance? What issues does this raise on the historical operation of the plan? Thanks for any feedback.

If we as recordkeepers make a mistake & lose money, we make it up from our profits. But when an error correction results in a gain, it's less clear what should be done with that money.

In this instance we were sent a contribution with the wrong SSN associated with it. Therefore we applied it to the wrong person. Upon discovery & correction, due to the different investment elections the participants had, we find ourselves with a gain of approximately $1700.

This plan uses daily recordkeeping. It seems fair to fix this by reversing the shares purchased by the erronious contribution, thus the gain is not kept by the person who accidently received extra contribution.

Since we'd be making this right out of our pocket if the market had gone the other direction, it does seem reasonable to put this aside to offset errors that do result in a loss. Traditionally, we've never done this, instead allocating this gain somehow to the plan, perhaps thru a reduction in fees.

Does anyone have any thoughts on the proper way to handle these situations? Any references to IRS/DOL documentation would be great.

Thanks.