I am working with a 73 year old Doctor who has never had a DB plan and is making approx. $130,000/ yr. I was contemplating a plan design which would have a NRA of age 65 or 1 Year of Participation and would allow for in-service distributions after NRA.

I would calculate the value of his max 415 ben at his age, he would make the contribution equal to that amount (ie:pure Unit Credit w/ funding assumptions equal to current GATT rates) and immediately roll the contribution out to his IRA.

All Min. Req. Dist's would be paid from his IRA's.

Does anyone see anything wrong with this? I realize that it may not be the traditional way of doing it, but I can't put my finger on any real problem with it?

If a calendar year Plan uses prior year testing for 2001 and wants to switch to current year in 2002 (and assuming no further extension of the remedial amendment period) what is the deadline for an amendment to change the method for 2002--12/31/01 or 12/31/02?

If an ADP/ACP failure is corrected after March 15, there is a requirement to withhold taxes on the distributions. Since these amounts are not eligible for rollover treatment, they are subject to the 10% withholding rules. What are TPAs, etc. doing with respect to these rules? For example, are participants actually being given the election (via Form W-4P) to have withholding apply before the refund is made. Is withholding being done automatically, without an election by the participant? Is withholding being done regardless of the size of the refund? There is a $200 de minimis exception under the direct rollover withholding rules, but there does not appear to be a similar provision under the 10% withholding rules.

Any input would be helpful.

An individual who turned 70 1/2 in 2000 is preparing to take his first required minimum distribution sometime before April 1, 2001. Under the new proposed regs, however, 2000 remains the individuals "distribution calendar year" as defined in 1.401(a)(9)-5 A-1(B).

The new proposed regs provide that "For determining required minimum distribuitons for calendar year 2001, taxpayers may rely on these proposed regulations..."

My reading would be that the April 1, 2001 distribution for someone turnding age 70 1/2 in 2000 would still be a "required minimum distribution for calendar year 2001" even though it is based on a "distribution calendar year" of 2000?

Do you think that I can apply the new regs in this situation?

New to the 403(B) world. We currently have a 403(B) plan with employer matching feature that is only offered to a certain group of employees. This plan also allows after tax contributions (immediate participation). There is a one year wait for the employer match.

We are currently performing the ACP test for the matching portion of the plan. It is my understanding that I need to include "all of those employees eligible to made after tax contributions" and not just those who are actually making the contributions. If I am reading this correctly, won't my ACP test now include all participants eligible for the plan and not just those eligible for the match (the one year wait would not come into play since there is no wait for the ability to make after-tax contributions.

I would appreciate any feedback I can get.

An employer timely filed a Form 5500. The DOL recently rejected the filing as incomplete under ERISA Section 104(a)(4), informing the employer that a revised filing must be made within 45 days. The employer plans to file a revised Form 5500 within that time period.

Is there an obligation to distribute a new Summary Annual Report to participants? Does it depend on how significant an impact the Form 5500 changes would have on the SAR? Is anyone aware of any DOL position on the issue?

From my understanding of the 403(B) regulations state that investments are limited to mutual funds and regulated investment companies. However, one of our clients who was unaware of this rule purchased stocks, AOL etc. in his 403(B)(7) account. How can this be corrected? Does it disqualify the account? I the customer liquidates the stocks, does this resolve the issue.?

Does anyone know of a publication that covers all 50 States health care continuation laws?

I am withdrawing part of my Roth Ira for a first time home purchase. Do I need to do anything special when I take out the funds to avoid penalty and taxes or is this handled at a later date. I will be getting an accountant or financial planner in about 3-6 months. Thank you,

I have a $2000 roth IRA purchased for the year 2000. It was in an index fund and now is worth $1100. I am over 60 years old. It appears that this investment(?) will never again be worth $2000. Can I somehow cancel the Roth IRA or recharacterize it so I get some tax benefit from the loss?

i.e., can I change it to a regular IRA and thereby take the tax deduction allowed for the traditional IRA? Or is recharacterization only permitted for traditional IRA's that were converted to Roth?

Plan terminated 5 years ago. All assets were distributed, at least, that is what the trustees thought. Now, as result of a class action settlement, the trustee has received a check for $325. Must the trustee locate all 20 former participants and distribute to each their share? A successor corporation has started a new plan in which some of the old plan's participants now participate. Could the trustee simply add the money to this plan?

It will be my first year, when I will be making ROTH IRA contribution for Year 2000. Do I need to submit any forms to IRS indicating that I have made ROTA IRA contribution for year 200 along with my income tax Return?

My client failed to properly follow investment elections. Fortunately most people ended up making money, rather than losing money. How do you correct for those people who lost money because of a failure to follow the terms of the plan.

Is there any reason that an employer could not adopt a Board Resolution (or a plan amendment) that specified a 4% contribution for compensation during the first 6 months of the year and a contribuiton of 5% for compensation during the last 6 months of the year?

Could anyone explain how COBRA works for core and non-core coverages? I read somewhere that core coverages must be continued as a package or not at all. For example an employee would have the option of dropping their dental or vision but could not drop their rx while keeping their medical coverage. Any advice would be appreciated.

Could anyone advise me on the rules for disability and termination? I have an employer with a self-funded health plan that terminated an employee while he was on disability, reason unknown. Are there ERISA regs regarding this?

As an added complication, the claims processing company was never notified of any change in status. The SPD for this plan does not address this at all. A new SPD is being produced, and by coincidence one of the questions asked in that process was "Do you provide continuation of benefits during periods of leave, disability or layoff?" The answer was no.

Could the fact that policy was in place but not described in the existing SPD have any effect on the continuation of benefits?

Employer establishes a new 401(k) intending to be a Safe Harbor Plan effective 1-1-01. They distribute Notices in a timely manner and indicate the S-H contribution will be the 3% nonelective. It's now learned that their intent was, and the plan was written, to say the Basic Matching formula will be used.

Will the wrong information in the Notice preclude them from operating as S-H for the 1-1-01 plan year?

My client is purchasing a company that is a participant in a multiple employer 401(k) Plan in a stock deal. The selling company will cease to be a participant in the old plan as of the closing date. All employees will be re-hired under the new company and will participate in my client (the buyer's) 401(k) Plan. The transferring participants would like to roll over their new balances to the buyer plan but appear to be limited by 401(k) distribution rules because, although, the seller is discontinuing contributions in the old plan, it is not terminating this plan. Is there any way that monies can be removed from the multiple employer plan or do the participants have to wait for a distributable event?

I would appreciate any help as soon as possible.

Thanks.

What pricing would be charge to a client who refuses to authorize electronic participant transactions, such as loans,disbursements,and enrollments ?

Corporation A sponsors a 401(k) plan. Corporation B, a wholly-owned subsidiary of A, participates in the plan, along with several other subsidiaries of A. In 1999, Corporation A sells Corporation B to an unrelated purchaser. In connection with the sale, the parties agree to spinoff the assets of the 401(k) plan relating to B's employees to a new plan sponsored by B. The parties also agree that all forfeitures in A's plan as of the date of the spinoff will be allocated to participants' accounts as of that date.

When the transfer of assets to B's plan occurs, A's plan inadvertently transfers too much to B's plan. The excess relates to forfeitures that should have been allocated to employees of other subsidiaries of A not involved in the sale and spinoff--thus, those amounts should have remained in A's plan and should have been allocated to participants in A's plan. How and why the error occurred is not clear. The error is not discovered until approximately a year after the transfer.

Now that the error has been discovered, the parties agree that B's plan owes to A's plan an amount equal to the amount of the excess transfer, plus an earnings factor based on what that amount would have earned in A's plan to date.

The question is, can existing forfeitures in B's plan be used to cover the earnings amount that must be paid to A's plan, or must Corporation B come up with the cash to cover the earnings amount?