Does anyone else think the new simplified rules for Required Minimum Distributions just got confusing for 2001? The IRS seems to have clarified that plan participants can use the new rules to calculate the amount of their Required Minimum Distribution (RMD) despite the plan not being amended to use the new rules for 2001. In that case, why not just make the rules effective for 2001? Does the plan sponsor have any obligation to calculate the RMD under the new rules and inform the participant that the participant is allowed to use those rules even though the plan did not? Does it make any sense that the plan would not have to do 20% withholding but the participant could roll over the amount of the difference? Should TPAs just have every plan sponsor adopt the amendment to avoid any confusion?

Reg 1.417(e)-1(d)(1) says that the PVAB of any optional form of benefit must be at least equal to the PVAB of the normal retirment benefit determined under the app interest rate and app mortality table.

Reg 1.417(e)-1(d)(6) seems to imply that d(1) does not apply to say a life annuity pension form for eg.

My original thought was that say a reduced early ret. benefit must be at least equal to the PVAB of the normal ret benefit under the app. factors, but based on the above it appears that this may not be the case.

Any thoughts about this one?

Gary

We have been approached yet again by a marketer who claims that under IRC Section 106, an employer can save huge amounts of money by withholding 100% of the health insurance premium on a pretax basis and then also reimburse the employees for that amount on a pretax basis. Does anyone have any experience with this sort of "double dipping"? Thanks.

How does your company respond to ee requests for ergonomic accessories e.g. back rests, monitor risers? Assessment by Worker's Compensation carrier already confirmed ergonomically compliant workstation and chairs? Can we request medical documentation for accessories above and beyond?

I opened a Roth IRA in Jan. 2000. Do I have to report interest made on it to the IRS on my federal tax return?

I was b Aug 1932. Which of the following dates is the

latest date for me to transfer my traditional IRA to a Roth? Dec 31,2002 or Jan 3, 2003.

I am 50, annual income 10,000. My husband is 53 annual income 40,000 (25,000 taxable). Neither of us have a retirement plan other than Social Security. We could probably invest between 3000 and 5000 a year until he reaches 65(12yrs), Would an IRA or Roth IRA be a good thing to get or is there any hope for us this late in the game? Thanks

In counting employees to see if the employer has less than 100 employees and may offer a SIMPLE IRA plan, does any one know of any guidance which would allow a U.S. subsidiary (which is part of a control group with a foreign entity) to disregard the foreign employees who are employed outside the U.S.?

As I read IRS Notice 98-4, Q & A B-1, employees who can be excluded from participation in the SIMPLE under Code Section 410(B)(3) (union employees, and nonresident aleins with no US source income) still have to be counted for purposes of the 100 employee threshold. This would preclude the U.S. sales office of a foreign corporation from offering such a plan.

What policy purpose can be served by precluding a small sales office of a foreign entity from offering a SIMPLE?

Employer has an 10/31/99 plan year end. We added 401(k) provisions (safe harbor 401k) effective 7/1/1999. I'm wondering if we have a problem. The regs say that safe harbor is effective for plan years beginning in 1999. Since we tried to do for only part of the plan year (7/1/99-10/31/99) do we have a problem? If so, exactly what?

Are we not really a safe harbor and must pass ADP? If we made the 3% safe harbor nonelective contribution and now have to test for ADP and fail (only by $26.50), can we use the 3% as a QNEC to pass ADP?

Any suggestions?

I opened a Roth IRA account this year and have saved up enough cash to pay for the taxes to convert my traditional IRA into a Roth IRA. Is that allowed?"

Can anyone tell me how I can calculate how much money (approximately)I will have in my deferred comp when I retire? $100.00 every 2 weeks for the next 20 years, Also how much do you recommend putting in a deferred comp plan? I have a pension plan with the State of Illinois 80% of salary at retirement so it's not my only means of retirement funds...

We have a situation where the spouse of the owner has worked for the company for 20 years without compensation (worked full time 40 hours a week). As of /1/1/2000 she started drawing a salary. What is her service for eligibility, vesting, accrual?

Company sponsors a DC with outstanding loans. I don't think it matters, but it could be a 401(k) or a PSP. Company shuts down and files a 5310 for its plan. During the waiting period for an approval letter, how are loan repayments handled? There is no more payroll.

Here are a couple of thoughts:

1) Amend the plan to provide that, as soon as administratively possible following the plan termination date, any participant with an outstanding loan will receive a partial distribution in an amount sufficient to offset the amount due, and the remaining portion will be distributed after IRS approval. (Participant is fully vested, of course, due to plan termination.) It seems we would have a valid distributable event - plan termination - and we would be following the plan's terms (as amended) to distribute to a segment of the participants.

Possible problems - would this distribution option have to meet the 410(B) BRF test? Would this idea be any better if a full distribution (and offset) was made to participants with loans?

2) Another idea - suspend payments until 5310 approval. Unless there is an exception to the regs, the cure period would most likely expire before IRS approval of the 5310.

There is no new plan to roll in to.

What can be done?

I would appreciate any insights from out there in "Loan Land."

I have a client with a 401(k) plan who was self-employed from 1/1 - 3/31 and then he incorporated 4/1. He will have Schedule C income through 3/31 and wages through 12/31. If he earns over $170,000 from 4/1 - 12/31 do I have to do any self-employment calculations for the portion of the year that he was self employed? In other words can he allocate and deduct his 2000 plan year contribution under the corporation only or is it prorated between self employment income and corporate income?

I cannot find anything on this topic, but I am inclined to think that I need to prorate for the period that he was self employed.

Thank you.

I am student completing a major in Administration of Human Resources, and what I would like to know are some general advantages and disavantages of the 401k retirement plan.

A non-owner plan participant terminates employment past age 70-1/2 and is now required to take the minimum required distribution from the Plan. This person also has money in a traditional IRA. Does the MRD have to be calculated and taken separately from both the Plan and the IRA, or can they be taken entirely from either the Plan or the IRA? Does it matter if the IRA is a Roth IRA?

We have two employees who are convinced that if we give them

the amount the employer paid for LTD premiums for the year

they can include the amount as taxable income on their W-2

and pay the taxes on that income, thereby rendering any LTD

benefits received in future non-taxable.

I have my doubts. Any thoughts?

Can a COBRA QB (the former Employee) with COBRA family coverage drop a QB spouse at any time (adversarial situation, but not a divorce or legal separation)? Only at Open Enrollment? With or without the QBspouse's knowledge and consent? What is the Plan's responsibility to notify the QB spouse of being dropped from COBRA coverage at Open Enrollment? Or anytime? What are the "dopped" QB spouse's legal right to continue COBRA coverage?

If a government plan is over-funded, do the employers and/or employees have any right to the excess contributions?

2001 ERISA OUTLINE Book, ELECTIVE TRANSFERS page 6.42. This discussion of elective transfers is not a scenario that our company has been exposed to. It is not clear from the examples as to when this type distribution would occur.

Is it only when the employer maintains more than 1 qualified plan?