We have just discovered through background checks that we have a number of immigrants who have been working with our company using falsified social security numbers. These employees have been terminated from our company. Our question is, do we have to offer COBRA benefits to these employees?

Hello-

Has anyone come across a creative way to avoid the imposition of the 4978 excise tax? The ESOP at issue bought $11 million dollars of employer stock 1-11-99. As sale of the company is contemplated. I am looking for any ways to avoid or minimize the excise tax? Any thoughts?

The Eye, Nose & Throat LLC disolves, and three new business: Eye LLC, Nose LLC and Throat LLC are started. All of the employees from the original company perform their same functions at their respective brand new companies. There is no sale of assets. The 401(k) Plan from the original employer is terminated.

Are the employees of the original employer subject to the same desk rule?

Are the new employers restricted from beginning their own 401(k) plans (successor plans)?

Any guidance is appreciated.

I am trying to find a survey or study that will show how doctors/hospitals rate health plans (PPO's specifically). Currently with Cigna but group considering changing. Please send me links or places to look (already have IFEBP looking for me) for this kind of survey. My dream report would show several different health plans rated on various issues, such as fee's, timliness of paying, administration, etc. Thanks much fellow benefits dudes and dudettes.

After several attempts I have just received a copy of the 401k & mpp plan doc. from my former employer. As I was a plan trustee and did the 1999 y.e. calculations for both plans I was familiar with the plan's provisions as they applied to computation of er contributions and forfeitures. The plans I just received have been amended effective June 1, 1999 and "signed" Dec. 22, 1999. The 401k plan was previously a std. plan, now suddenly non-std w/ last day rule language and no loan provisions, which were present in the previous docs. I guess my first question is: are these docs legit. since I know for a fact they were drafted within the last 30 days to keep me quiet and back dated to when I was still an employee and plan trustee, never formally removed from either plan. Do I have any reason to be concerned that my trustee status could be in a fiduciary breach? I only left in Oct. of 2000 and these changes were never provided in a smm or verbally discussed by the owner of the co. Its pretty obvious that these plans were deliberately altered to eliminate 2 employees from receiving any 2000 plan year $.

How can my 6 year old max out in a Roth IRA? Does he have to show earned income? Are there ways to get around that?

I know part-time employees may not be excluded from participation in a 401(k)plan. Can an employer provide for different match formulas for part-time and full-time employees? Would this be illegal as non-discriminatory on its face, or would it depend on the outcome of the ACP test? (Most of the part-timers are NHCEs.)

Assuming the plan permits it, is there any reason why a 401(k) plan could not accept a rollover contribution (an eligible rollover distribution from the plan of a subsequent employer) by a former employee who is still a participant?

I am doing the GUST amendments to a DB plan where the only lump sum distributions permitted are involuntary cash-outs where the present value of the accrued benefit is under the cash-out limit. As amended for TRA '86, the plan provided in the specific provision governing cash-outs for use of the "applicable PBGC rate" determined as of the proposed distribution date. Elsewhere, in a general catch-all provision governing actuarial factors to be applied in general under the plan, it provides for use of an 8% interest rate and 1971 group annuity table (based on 50% male/50% female rates) with the exception that in calculating any lump-sum payment the interest rate to be used will be the interest rates for Valuation of Plan Benefits published for the preceding January 1 by the PBGC for purposes of valuing benefits with respect to immediate annuities under terminating plans covered by Title IV. I believe that this latter provision must have been retained in the plan for 411(d)(6) reasons -- in particular, it seems from reading IRS Notice 87-20 that the 411(d)(6) relief granted there w/re to the switch from the use of the immediate PBGC rate required under 1.417(e)-1T (the temporary regs issued under REA) for 1985 and 1986 to the "applicable PBGC rates" required under Section 1139 of TRA '86 was specifically conditioned upon not changing the date that the rate was to be determined. Here, the date was changed from January 1 of the year of a distribution to the actual distribution date. My question is, under the 417(e) regs as amended to reflect GATT, and in particular the 411(d)(6) relief granted there for switching from applicable PBGC rates to GATT rates, do you think that that relief also applies where the plan kept the immediate PBGC rate for January 1 of the year of a distribution as an alternative? In other words, can I substitute GATT rates for PBGC rates across-the-board under this plan without continuing to protect the use of the immediate PBGC rate for the preceding January 1 that seems to have been kept in the plan because there was no 411(d)(6) relief granted w/re to it back when the TRA '86 amendments were made? I have puzzled and puzzled over the 417(e) regs on this point and am nearly going crazy, so any help would be enormously appreciated!!! Many thanks for any thoughts.

GATT Tables for annuity to lump sum conversions (30 year bond %, monthly multipliers. male female and blended)does anyone know how i could get these off the net? or a book? My financial calculator, hp12c, cannot get the exact figures that are derived from these tables! THX

Taxpayer sold shares to ESOP in 1999. Taxpayer intended that sale qualify under Code section 1042. Sale satisfied requirements of section 1042 (i.e., ESOP owns at least 30% of stock, 3-yr holding requirement), but -- taxpayer did not file Statement of Election or Statement of Purchase with his 1999 Federal or State income tax returns. Taxpayer is considering filing an amended 1999 return and including such statements. And, we're considering requesting a private letter ruling that by filing amended return and statements, taxpayer should be treated as having complied with 1042 requirements. PLRs seem to distinguish between statutory requirements (e.g., the Statement of Election must be filed by due date for 1999 return under 1042©(6)) and requirements under regulations (e.g., notarized Statements of Purchase). I've seen conflicting PLRs where IRS granted relief even though Statement of Election was not timely filed, but other PLRs where IRS denied relief because Statement of Election was not timely filed. My question is: Does anyone have thoughts/comments on what the likely result of a PLR request would be under these circumstances?

For the new small plan audit rules, when does the bonding requirement on nonqualifying plan assets have to be in place? Is it enough for the bond to be effective as of the last day of the plan year? Would it have to be effective on every day of the plan year?

For plan years starting May 1, 2001: if a plan has 15% nonqualifying plan assets as of April 30, 2001, when does the plan need to meet the additional bonding requirement in order to avoid the audit requirement?

Is anyone up to speed on SSAP#8? I have a copy of the statement but would like more information on it. Examples of calculations would be extremely helpful.

When performing a top-heavy test, if active HCE's have received refunds due to failed ADP (and ACP) tests in the past 5 years, do these amounts count as distributions for calculating the top-heavy ratio or can they be excluded?

Also, if, as of the date of the test it has been determined that some HCE's will need refunds due to a failed ADP or ACP test, can those amounts that will be refunded be excluded from their account balances for purposes of calculating the top-heavy ratio?

If ownership of a company is based on A and B shares of stock, with the difference being that B shares are non-voting shares, would that impact HCE determination?

For example, if there are 100 A shares and 100 B shares for a company, and Mr. A. owns 4 A shares and 20 B shares, is he an HCE?

YES: He owns 24 out of 200 shares of a company, which is 12%, making him HCE.

NO: Since only 4 of the shares are voting shares, he only owns 4 out of 100 shares, which is 4%, making him NHCE.

Thanks for any comments.

Is there any type of law in existance that says that employers cannot create a "use it or loose it" vacation policy? I know I remember reading somewhere that it is illegal for employers to do that but now am unable to find it when I need it. Any help would be appreciated.

The plan document says that participant loans are treated as general investments (the interest is shared among all plan participants).

Aministratively, all participant loans have been treated as individual investments (the interest is credited to the account of the participant who took the loan). The outstanding loan balance has been reflected as a portion of the participants account balance.

I'm looking for suggestions on the best way to fix this discrepancy. Thanks for your consideration.

mck

Is the heartscan/lifescane an eligible expense through FSA? We had said no previously, however, now it looks like insurances are covering up to 80%, so I am wondering if that has changed.

Thank you

I have an employer who has exceeded the 15% employer deductibility limit by $6,000 for their 2000 plan year (it's a calendar year). I know that the employer is supposed to file a form 5330 to pay the 10% excise tax. Am I correct in saying that they also need to amend their 2000 tax return to reduce the amount deducted by $6,000?

Also, what if the employer says that they don't want to file the 5330 and just reduce contributions for the next year? What could the ramifications of that be? Is there a dollar amount that upon audit, the IRS would say that the excess is immaterial? Any information would be helpful:-)

COBRA and EAP - I know the issue has been discussed several times, but I guess I would like to find out the trend. Are most TPA's offering COBRA for groups that offer an EAP(if it classified as a medical plan)? As I have researched the topic, it is pretty clear it should be offered, but not really clear that people are actually doing it. What are the potential risks? The real issue for most groups is that the EAP is available to all employees, but the medical plan is by election. Would all of the employees need to be offered the EAP? I am assuming so, and that really is a administraive nightmare for both the TPA and the group. Any help would be appreciated!!!