A question about excluding participants from ACP Test.

Participant must have 1000 hours (no last day requirement) to receive a matching contribution. If I have participants (terminated or not) with less than 500 hours, can I exclude them from the ACP Test?

Are there any durational requirements for the loan in a leveraged ESOP? For example, can the loan be a one year loan?

Are a fertility monitor and thermometer that are not prescribed, but recommended by a doctor, proper expenses to reimburse under Sec. 213?

I am trying to find out what is the impact of forefeitures from a money-purchase plan. The plan has a cliff vesting schedule 100% after three years. The employee leaves after two years and all his money is unvested. The forefeited money would revert to remaining participants in the plan. I am not sure how it is distributed among the remaining participants. If money purchase plan was set at 25% of the compensation, would the corporation be able to contributed 25% in addition to the forefeitures?

Employer sponsors two group health plans: one for part time employees, and one for full time employees. Assume part time plan is not identical in terms of benefits, to full time plan.

When employee drops from full time to part time status, is COBRA triggered even though the employee would be eligible under the part time plan? And if the employer normally subsidizes individual premiums for part time employees, must it subidize COBRA premiums for the employees who switch to part time?

I just need some validation on the termination of a 401(k) plan. Client terminates 401(k) plan effective 3/31/00. No elective deferrals are made after that date. In my opinion, they cannot start a new 401(k) plan until 12 months after final distribution of assets of old plan, irregardless of the fact that they made no deferrals for the last 12 months. Am I correct?

If they start a new plan 4/1/01, it becomes a successor plan and no distributions can take place from the old plan.

"This question keeps coming up and we would like someone else's clarification. Our document states that for an Employee's first year of participation,Compensation shall be recognized as of the first day of the plan year. Our plan year is calendar year. I have a new participant who entered the plan on 7/1/00; she earned $26,474.82 in 2000. She deferred $1326.48 from 7/1-12/31; 10% for the 6 months she was in the plan which equates to 5% over the plan year. We match 100% of the first 4%. Would I match 100% of the first 4% of $26,474.82 which would be $1058.99? Or since I deposit match as I do payroll, do I base the match only on the earnings from 7/1/00 when she became a new participant which comes to $530.59?"

I have a client which is a group of Doctors. this group of Doctors employes 200 or so employees through a leasing company. The Leasing company provides these employees with a 401k plan. The Doctors set up two plans. One 401k plan for themselves and a Cross Tested PS plan for everyone. The question is: If the Leasing company doesn't provide a match in their 401k plan, can the Doctors provide a match for themselves in their 401k plan??

Employer with ERISA-covered 403(B) plan wants to set up cross tested profit sharing plan. The 403(B) had both employer money and employee deferrals. Still has 403(B) deferrals.

For the average benefits test component of the 401(a)(4) test, do the employee deferrals need to be included?

Would the answer be different if the 403(B) plan were non-ERISA employee deferrals only (on the basis that it was sponsored by the employee, not the employer?)

POSTSCRIPT:

I think I found the answer, which is tht the 403(B) is not aggregated with the 401(a) plan under any circumstances for purposes of testing the 401(a) plan.

My daughter (4 yrs old) was the beneficiary of my deceased Aunt's Pension plan, in the form of a lump sum check written directly to her. I've received no 1099-R from the administrator of the pension plan. My question is simply - is the beneficiary of a pension plan liable for taxes on the principle amount if paid as a lump sum at the time of death? (Seems like this must happen all the time, right?)

I have three questions concerning the top paid group election:

1) In the case of an employer with more than one plan, must the employer use the top paid group election for both plans?

2) Does the employer use the totals of employees participating in both plans combined when determining who is in the top 20%? In this case, no one who participates in plan A is a participant in Plan B and vice versa.

3) For the employees with less than 6 months of service, is that 6 months of service for the lookback year or total service?

I would appreciate assistance on any one of these points.

Anyone have any ideas as to what to include in an interim valuation procedure? Profit sharing plan has an Anniversary date of 9/30. Participant(HCE) terminated employment as of 9/30. Participant wants distribution of her account as soon as possible. Value of participant's account now is about 70% of what the value was on 9/30. I think there is a recent case regarding plan trustee's obligation to do an interim valuation in such a case. I need to draft the interim valuation procedure such that discrimination will not be an issue(e.g., later on, if DOW goes up, a terminated participant could get account valued under the interim valuation procedure to the detriment of remaining plan participants). Initial thought is to tie it to fluctuations in the DOW and have it apply to all distributions without pegging it to distributions of a certain size. I understand that the interim valuation procedure can cut both ways. I appreciate any comments... Thanks.

Our client sponsors a DBP for employees under two different collective bargaining agreements. All requirements are met for treating each unit as a separate plan under 410(B).

In determining whether or not a partial termination has occurred, do you look at the entire participant population (both unions) or only the one union population that is experiencing the layoffs and ultimate closing? In other words, to determine a significant percentage, is the denominator the total participants, or the number in the affected portion, which is treated as a separate plan under 410(B)?

What have employers who switch to PTO programs done with employees' accrued sick leave? Converted to PTO in some ratio -- if so what ratio? Or, has sick leave been grandfathered and left on books?

How is the value calculated on a Defined Benefit Plan in a divorce action? Are Health, medical, benefits figured in to it?

I have a question regarding the benefit limits for contributing to a Roth IRA. I converted my IRA to a Roth a couple of years ago, just when the Roth started up. I have $10,868 per year added to my income, to pay for the taxes due on the conversion. I just contributed $2000 for last year, plus another $2000 for 2001. I then remembered that there is a limit of $95000 - $105000 for contributing (i'm single). My initial tax calculations shows an AGI of about $104000 for 2000. If I take out the $10,868 from the conversion, I'll be under the $95,000 limit. I seem to remember some talk about ignoring this when calculating the contribution limits. Is this true? An I OK, or do I have to back out this contribution?

On a related note, suppose I need to back out this year's contribution, the one for 2001? How easy would this be? I suppose I would need to contact Fidelity on this, But I know there is a procedure to back out these contributions. I'm just wondering how easy this is. Are there any penalties involved?

If an IRA owner makes a year 2000 excess contribution to his IRA this year (2001) , what is the deadline for removal?

According to my colleague, the deadline for removing this contribution is April 15 year 2002. However, I have been told differently.

My colleague cites IRC Section 408(d)(4) which states that the taxpayer has until the tax filing deadline for the year IN WHICH ("paid during the taxable year" /"for such taxable year") the excess was made, and not the year FOR WHICH it was made, to make a correcting distribution.

However, when I contacted a very reputable pension institution, they referred to IRC 219(f)(3), which states that the contribution is "deemed " to be made FOR the year for which it is designated. When challenged my colleague stated that 219(f)(3) only relate to the issue of the timing of purposes of taking a deduction for the contribution. My colleague states that a very reputable individual who authors books on the subject and has several qualifications, in addition to being an ERISA attorney backs her response.

Apologies in advance if this has been covered.

I have a (very) small traditional (rollover) IRA account. My past employer created a retirement account for me, when I left they required that I roll it over or take it as income.

I would like to open a ROTH IRA and make a maximum contribution for tax year 2000 (before 4/15/2001). I would also like to convert the above mentioned traditional IRA into the same account. My discount broker seems to think it's no problem. I seem qualified, my AGI is below $95K (I'm single).

1. Does the conversion affect the allowable contribution amount for 2000? for 2001?

2. Do I handle the contribution on my taxes for 2000 and the conversion on my taxes for 2001?

Thanks in advance,

Anna

A plan participant is building house that will become the participant's principal residence, and would like a plan loan with a term greater than 5 years.

Is using plan loan proceeds to pay costs of constructing a primary residence the use of a loan to "acquire" a primary residence within the meaning of section 72(p), such that the loan term may exceed 5 years? What authority supports the answer to the preceding question?

There are two companies: A C-Corp with two owners and an S-Corp with the same two owners. Both owners are 2% shareholders in the S-Corp as well as employees in the C-Corp.

1. Can either owner participate in the C-Corp cafeteria plan if the companies have seperate plans?

2. Can either owner participate in the cafeteria plan if the two companies jointly sponsor a cafeteria plan?

Thanks.