A husband died and directed all of his assets (including the business he owned) into a marital QTIP. For purposes of testing, can the ownership be attributed beyond the surviving spouse? Does the daughter receive any ownership for testing purposes?

I was diagnosed with diabeties while on cobra, may cobra benifits run out in about 30 days and I was wondering if indivdual health oplans can treat this as a pre existing condition

Can a non-leveraged ESOP be subject to an option to sell shares to an unrelated third party in the future? The option could state that the price would be the fair market value at the time. Currently, the unrelated third party is not a party in interest or a disqualified person, but over time, may acquire an ownership interest to be considered one. Section 54.4975(B)(4) precludes a call with respect to shares acquired with an exempt loan. What if the ESOP is non-leveraged? I am uncomfortable with the concept, but other than general prohibitions, cannot locate anything specific. Any thoughts?

Company A has an unfunded severance pay plan which takes effect January 1, 2000. In order to be covered by the severance pay plan, an individual must a) be terminated on or after the effective date as the result of a just-completed corporate merger, b) sign certain agreements including a nondisclosure/limited noncompete, and c) not have a separate employment agreement.

The severance pay plan offers a choice between two types of severance pay, installment and lump sum.

The first individuals who could have been eligible for the plan were those terminated on January 1, 2000. Technically they worked on January 1. First question: are the members of this group eligible participants at the beginning of the plan year?

Over the course of the year, hundreds of people were terminated and became covered by the plan. However, all but a handful elected the lump sum option, so their participation ceased as of the date they received their lump sum payment. Only about 15 people took the installment method. Consequently, at the end of the year, only these 15 people were participants.

My boss is having trouble with the fact that, because we potentially have a beginning count of 0 and an ending count of 15, but processed hundreds (if not thousands) of people inbetween, we might be exempt from filing a 5500. That just does not seem right to him, even though it's fine by me (since I'm the one who has to prepare it!).

Does anyone have experience with the finer points of participant counting and welfare plan exemptions?

I will figure my MRD before the end of this year. Over my years of employment I acquired IRA's, TSA's, and 403B's. Are these all treated the same when figuring the MRD?

Have you or someone you know tried to get the investment options in your 401(k) plan changed.

My name is Clifton Linton and I'm a writer with mPower Inc., a free educational personal finance and retirement website.

I'm looking to talk to a plan participant who is trying to or has tried to get their plan changed.

I'd like to know what aspect of your plan you wanted to change, what strategy you used to attract management's attention, whether you succeeded or not and how long this process took.

You can reach me at 415-875-2864 (work) (I promise to call right back, so my company pays for the call) or via email at clifton.linton@mpower.com

What are common pitfalls relative to the administration of Davis Bacon Plans? For example, it seems like general non-discrimination could be a problem when there are different contribution rates for different classes of workers. Any comments would be appreciated.

I have a situation where a corporation is forming a joint venture with another corporation where each will own 50% of the new entity (so is not in the controlled group). The new entity will form its own DC plan and for the first plan year would like to include compensation earned during the calendar year at the first corporation (for purposes of allocation and calculating the permitted disparity limit). I can find an exception to permit prior employer compensation to be used for DB plans but it appears from the 1.414(s)-1(d) regulations that only DB plans are permitted to use prior employer compensation. Does anyone have any thoughts on this issue -- if compensation from the other corporation is not used, then essentially participants will be hurt because the first corporation has a last day/1,000 hour rule which would not be satisfied because the transferring participants would be leaving mid-year. Any authority for a facts and circumstances analysis, assuming that it does not discriminate in favor of highly compensated employees?

a client has been making contributions to his Money Purchase plan but does not have compensation to justify the contributions. He has K1 income and thus is not entitled to make contributions to the MP Plan. What should he do to remedy the situation? Is this handled like a typical "non-deductible contribution." Are these contributions subject to the plan asset rule?

I have a perplexing question- one that people either can't or won't answer (leaving me confused). I am trying to figure out how a business owner -who intends on selling the business in a couple of years- can buy a ten-pay LTC policy via the company and have the company write it off as a valid insurance benefit expense. My one thought is to have the company buy an immediate annuity, with an amount being enough to provide a payout matching the monthly premiums of a LTC policy. Would the annuity have to be qualified or non-qualified? Would there be any discrimination rules if this were only done for one of the owners? If it's non-qualified to avoid any discrimination, would it be deductible thru the company as "insurance"- seeing as an annuity is an insurance product? (I feel like Ferris Beuller's teacher, "..Anybody? Anybody?...") Thanks,

The FTC issued privacy regulations under the banking reform law (Gramm-Leach-Bliley). The regs exempt employee benefit plans from the privacy requirements of the new law, but the regs also suggest that retirement plans which permit participant loans may be subject to the privacy requirements at the time of making such a loan.

I've heard informally that the FTC and banking regulators feel strongly that a plan which makes loans is subject to the privacy requirements and that a plan administrator must develop a privacy policy for annual disclosure to the plan's "customers" who borrow.

Does anyone have better info on this topic? And is anyone preparing privacy policies for their plans?

Section 404(a)(8) seems to say that a self-employed person can't make a deductible contribution to his/her qualified DB plan for a given year if their net Sch C is $0. Am I missing something? Is there a way around this?

A question for the "product people" (especially those of you who deal with insurance companies)-

A client was informed that they could not purchase an equity indexed annuity contract as an investment of their Profit Sharing Plan due to the "Harris Trust Ruling". Can anyone enlighten me as to what the "Harris Trust Ruling" is and says?

Thanks!

While doing some reading about the safe harbor non-elective contribution and the safe harbor match, it seems that all participants eligible to make 401(k) contributions would get the 3% s/h non-elective, while the match s/h contribution would only go to those participants who are actually deferring. Is this correct?

If so, couldn't that lead to an employer actually being better off with low NHCE 401(k) participation. For example, if there are 100 NHCE's in the Plan, and only 10 make 401(k) contributions, the employer would only put in match s/h contributions for those 10 people. Also, if 5 of those 10 NHCE's are deferring less than 5%, then the employer does not have to put in the full 4% contribution.

Surely I've misread something about safe harbors, because the above doesn't seem "right".

Same topic, different question: Do the safe harbor contributions apply only to NHCE's, or can they also be given to HCE's?

what is the rationale as to why owner-employees are not permitted to take loans under IRC 4975

Does a safe harbor 401(k) plan make sense if it covers only part of a controlled group?

If one company in a controlled group can pass 410(B) coverage, can it operate a 401(k) safe harbor plan as if it were not part of a controlled group?

If a company in a controlled group could not pass 410(B) coverage without bringing in employees from other members of the controlled group, how would a safe harbor 401(k) plan work?

When leaving employment on disability,does Cobra extend to 36 months instead of 18?

IS 1042 ESOP Rollover treatment availale t a C Corpration that owns real estate?

When I terminated my employment on 12/31/00, my insurance provider was company A. I continued to use the same physician and prescription benefit until I received my Cobra paperwork. I received it, filled it out, and paid the premium. Now three months later, I received Cobra information saying that my Cobra coverage has been changed to Company B and I owe more money on the premium. My question: Who pays for the claims I incurred during the period when I thought I was covered by Company A. I have received NO information on company B, but I did call and find out that my same physician is not on their PCP list. Can anyone address this?

my husband is switching jobs and his last day was today, his insurance runs out tommorrow and we elected not to carry his cobra insurance ,but found a short term insurance policy that we can carry for 6 months (until his new insurance will kick in, after about 4months of working.) the policy has a big deductable and it doesn't cover pre -excisting illnesses. is that going to be a problem when we start our new insurance since it will be over 60 days from carring our cobra plan. I heard today that if this short term does not cover pre-excisting-then our new job insurance does not have to either. does that make sence thanks your help would be wonderful since we are running out of time. thanks pam