A participant in a qualified defined benefit plan and his/her former spouse were divorced in 1982 (i.e. pre-REA), and the Separation Agreement (incorporated into the 1982 final decree of divorce) awards a portion of the participant's benefits to the former spouse, payable when the participant begins receiving his/her benefits at age 65. The participant turns 65 in 2001 and the former spouse has requested her benefits as specified in the Separation Agreement. In determining whether it must comply with the terms of the Separation Agreement, must the Plan Administrator consult pre-REA law only, post-REA law only or may the Plan Administrator require the parties to the Separation Agreement to obtain a QDRO now?

I've just been given a takeover plan. It's a balance forward 401(k) plan with quarterly valuations. I'm beginning with the 1st quarter of 2001. This 401(k) plan has about one-third of its assets invested in employer stock. Is this a problem?

The plan is on a standardized CODA prototype document. All p.s. and match contributions to the plan have been in company stock. The only contributions that the employer has made in cash and not stock are employee deferrals and rollovers and QNECs made in the past to pass failed ADP tests.

The deferral, QNEC, and rollover sources are employee directed with five investment choices (employer stock is not one of the choices). The other two sources, profit sharing and match, are employer directed and are 100% invested in employer stock.

I thought non-ESOP plans are limited to 10% invested in employer stock, unless the employer stock was chosen by the participant within a participant directed account.

A Plan failed the ADP test for the 1999 plan year and is also top heavy. To correct the ADP test and satisfy the top heavy contribution requirement for 1999, the client decided to put in a QNEC. When does the contribution have to be deposited to satisfy the top heavy contribution requirement for the 1999 plan year? Normally, the QNEC would have to be deposited by 12/31/2000 but for top heavy requirements, would the contribution have to be deposited by 9/15/2000?

A Columbine High School Student Wrote:

The paradox of our time in history is that we have taller buildings, but shorter tempers; wider freeways, but narrower viewpoints; we spend more, but have less; we buy more, but enjoy it less. We have bigger houses and smaller families; more conveniences, but less time; we have more degrees, but less sense; more knowledge, but less judgement; more experts, but less solutions; more medicine, but less wellness.

We have multiplied our possessions, but reduced our values. We talk too much, love too seldom, and hate too often. We’ve learned how to make a living, but not a life; we’ve added years to life, not life to years. We’ve been all the way to the moon and back, but have trouble crossing the street to meet the new neighbor. We’ve conquered outer space, but not inner space; we’ve cleaned up the air, but polluted the soul; we’ve split the atom, but not our prejudice.

We have higher incomes, but lower morals; we’ve become long on quantity, but short on quality. These are times of tall men, and short character; steep profits, and shallow relationships. These are the times of world peace, but domestic warfare; more leisure, but less fun; more kinds of food, but less nutrition.

These are days of two incomes, but more divorce; of fancier houses, but broken homes. It is a time when there is much in the show window and nothing in the stockroom; a time when technology can bring this letter to you, and a time when you can choose either to forward this message and make a difference … or just hit delete.

Say a spouse beneficiary, of an IRA owner who dies before age 70 1/2, moves the assets to an inherited (beneficiary IRA) and takes a death distribution. Can the spouse beneficiary later move the remaining assets to an IRA in his/her own name (i.e. treat the remaining balance as his/her own?)

I have recently been working with a company that has had a somewhat spotty history when it comes to getting elective deferrals into its plan in a timely manner (at least according to DOL). As I have been trying to prepare the appropriate ritual sacrifice to the DOL and IRS to attone for these misdeeds, something keeps bothering me about the process, and I wondered if anyone out there could cite me to some authority--formal or otherwise--that will remove this burr from my saddle.

The standard fix for late contributions of elective deferrals seems to require (aside from actually getting the contributions and earnings into the plan) the plan sponsor to file a 5330 and pay some excise tax to IRS.

Here's my problem: the whole reason that the untimely contribution of deferrals is a PT is because of the DOL plan assets reg. The 5330 is an IRS form. The excise tax goes to IRS, not DOL. DOL may not even know that you filed a 5330. By paying excise tax on a "transaction" that the IRS has not (as far as I know) classified as a PT, aren't we just giving IRS some free money?

Does anyone know of any IRS pronouncements, etc. that indicate one way or the other that filing a 5330 in such circumstances does anything other than give you that warm and fuzzy feeling that comes from paying some money to Uncle Sam?

Can a Domestic Relation Order, which is entered by a court after the participant in a profit sharing plan remarries and which assigns some or all of the participant's benefit in the plan to the participant's former wife, qualify as a QDRO under Code Section 414(p)?

Can a terminated participant take a hardship distribution? Not exactly why you want to..but I haven't been able to find anything.

I havn't filed my 1999 tax return yet.I converted my traditional ira to a roth ira in 1998 with a 4 year payout.

My question is,can i still recharacterize my roth ira back to a traditional ira for tax years 1999 and 2000 or am i locked in to pay taxes on the original ira conversion?

How is the top heavy test ratio calculated if an individual is a key employee in the plan year (2000), but was one not as of the determination date (12/31/1999)?

I am not sure if the 12/31/99 balance is include in the key employee total balances. I know the individual would not receive the top heavy contribution.

A medical partnership sponsors a money purchase and profit sharing plan. The three equal partners consists of two PA's and an S Corp with the respective Dr. Partner owning 100% of his corporation partner [No plans in the individual corporation]. All employees are in the partnership and are covered under both partnership plans. The Dr.'s perform services on behalf of the partnership and their respective corporations receive a K-1's in the amount of the partner's [corporation] distributable income. The Plans are paired and both are PPD Standardized documents and the individual medical corporations are participating employers in both plans.

For determination of contribution and allocation purposes and Section 415 limits, etc., what compensation should be used for the Dr's in the partnership plans? K-1 distributions from the Partnership? W-2 Income paid to the Dr. by his PA who is a Partner? What about the Dr. whose partnership entity is an S Corp? His could be taking distributable net income.

Any thoughts?

Would a reversal of a vasectomy be an eligible expense?

Thank you!

What Code Section dictates that only cash can be used to fund Pension / Profit Sharing Plan contributions and not stock? I have a partnership low on cash who wants to fund their 2000 contribtion by transferring stock shares, I have told them this is not correct, that the contribution must be made in cash, however I am having a hard time finding the proper site. Also their investment advisory firm told them they would accept stock shares for the profit sharing contribution but not the money purchase...could this be correct????

While restating the document can a Plan change its normal retirement age from say age 55 to age 65?

I don't see any problem the other way - from age 65 to age 55 because your benefits are accelerating.

I know early retirement is a protected benefit. Does the same rule apply to normal retirement age?

Thank you.

Please comment if you have dealt with allocation or reversion of demutualization proceeds received from a group annuity contract that is used to pay retirees under a DB plan that terminated years ago

Are employers required to give special notice to employees being laid off where a 401k loan will be due upon layoff, and/or is the lender required to give notice to the borrower before exercising its option to take an automatic distribution from the 401k? This particular case is for when the loan documents make no mention other than the loan becoming due upon termination.

Partnership sponsors Safe Harbor 401(k)P/S Plan. Partners originally had 52/48% Partnership Equity split and allocated earnings/expenses accordingly (including Plan contributions).

One of the partners has now sold/transferred their equity interest to the other and will now receive only a guaranteed Partnership draw based the client hours he bills. He is still a Partner, and will not receive a w-2 but continue with K-1, but will receive no share of Partnership equity or expenses.

The partnership still has to contribute for the non-equity partner but it appears that the 100% equity partner will now bear the entire Qualified Plan contribution expense (even for the non-equity partner).

Where does the equity partner take a deduction for the non-equity partners share of the contributions? Can the Partnership agreement state that the non-equity partner still is allocated that expense (has to contribute his own QRP allocation but the equity partner pays all other "employees" contributions) even though he has 0% equity interest in partnership? If that is possible, does the non-equity partner then take the deduction on his 1040?

Any help would be appreciated.

We are looking for feedback from employers who have used direct reimbursement dental plans (good experiences and bad). Everything we get is from ADA or someone selling the product or selling the administration. We are considering such a plan for our employee through our dental school and are looking for information on employee acceptance.

How would one take care of an excess Roth IRA recharacterization? I switched my Roth and Traditional IRAs from Janus to another brokerage in November 2000. In October 2000, I converted 100 shares of a mutual fund from a Traditional to Roth IRA. Between then and December 31, I changed brokers and the value of the shares decreased by ~35%. Instead of specifying a share amount, I specified the amount of the October conversion, so the new broker ended up converting 139 shares, due to the drop in share value.

I already held shares in the fund due to a 12/98 conversion from Traditional to Roth IRA, so I had already begun paying taxes on the 39 shares.

Because the new broker does not know my past history with Janus, they refuse to put those 39 shares back in the Roth. My AGI for 2001 will be over $100k, so I don't think I can convert from Traditional back to Roth. My AGI for 2000 is under $100k, so how long would I have to make a conversion if I file a tax extension? What other alternatives are there?

We have a profit sharing plan for a sole proprietership. It has always been my understanding that to begin the calculation I start with Net C and then subtract 1/2 SE tax. I have come across a position stating that you should actually take (Net C *.9235) and then subtract 1/2 SE tax. Is this alternative view correct?