Is there any problem if a defined contribution plan document reads that the DC plan will be reduced for the 415(e) limit and the plan document has not been amended to reflect the repeal of 415(e)?

(1) How do you define an Operational Failure? For example, assume you do an audit of plan loans and discover that a number of them are defective for reasons A, B, and C. Is this one Operational Failure or 3?

(2) Assume you have a single Operational Failure in 1997 that is obviously no longer within the 2 year significant failure correction period. By itself you have determined that this failure is insignificant. But assume you also have similar failures that occurred in 1999 and 2000, and that in the aggregate you have determined that all the failures are significant.

Can you treat the 1999 and 2000 failures separately from the 1997 failure? Ie, correct the 1999 and 2000 failures under SCP, leaving only the 1997 failure, which can now be corrected under APRSC as insignificant? Does this work or have you failed to fully correct since this is all one Operational Failure and you can't correct 1997 under SCP?

2000-17 says that in when determining whether failures are in the aggregate insignificant you ignore failures corrected under SCP.

Thanks for any thoughts.

card

Can a plan document be amended to change a profit sharing allocation formula during the plan year, or does the amendment need to be adopted prior to the beginning of the plan year for which the change will be effective?

I have a client who sponsors a DB/PS floor-offset plan. The DB portion has frozen accruals but contributions are still being made to the PS portion. The top-heavy minimum is being met in a stand-alone MP plan. Can the post-freeze PS contributions still be used to further offset the frozen accrued benefits on the DB side of the plan? This question was asked at the 1998(?) Enrolled Actuaries' Meeting and the IRS representative was non-commital. Has anyone heard anything more definitive since then?

How is ADP/ACP testing done after an APRSC correction in which the plan sponsor made correcting contributions for missed deferrals and match? Are the correcting contributions for missed deferrals treated as QNECs and the correcting contributions for match treated as QMACs? Is interest included in the correcting contributions ignored for purposes of the ADP and ACP tests?

I just encountered a strange conflict with a former insurance company.I retired from work in 1997 for health reasons and continued making monthly patments for the Cobra extension coverage with the same insurance company that I was covered with when I was still working.

After a few months, I qualifyed for SS disability and became eligible for medicare and, as I was instructed, imformed the insurance company I was now on medicare and stopped making payments for the Cobra coverage.

About two years ago I was involved in a serious car accident and was still covered by Cobra. So that information remained in the system.

Recently, I made an appointment with a surgeon I had never met, but another surgeon, who happen to have treated me in the past when I was recovering from the accident, stopped by and asked me a few questions.That was a $150 consult.

Later, I received a bill from my exsurgeon, and they brought up my records from the past and didn't bother to update the info. and sent the bill to my former insurance company. So I called the doctor's office and thought everything was updated. Then I just received a summary of the charges and my exinsurance company and, would you believe, the company processed the claim.

So I called the surgeon's office again and explained I am only on medicare, but the woman insisted that my exinsurance company and medicare are both listed as the primary insurers and I would have to clear that up by calling my former insurance company. Wouldn't you think an insurance company would have received a clear message, that I havn't sent any payments to them for about two years? Why in the world, would I have to clear up a problem, when I don't see any major problem?

Bruce

When an employee is pregnant, can withholding be done for the dependent care plan, or can it only be done once the child is born?

Does the annual top-heavy test for SARSEP include contributions for each year stand-alone, or does it include cumulative contributions since the inception of the plan? Example: Year 1 contributions were not close to being top-heavy, but Year 2 contributions were slightly top-heavy. Does the test for year 2 use the cumulative 2 year results which indicate not top-heavy, or does it use year 2 contributions only which indicate it is top-heavy? Any help?

A restructured plan (less than 21/1 year of service) wants to fund a bottom up QNEC to correct a failed ADP test. However, the lowest paid employees are in the restructured plan and funding a contribution to these employees will not benefit the failed test. Can the employer fund a bottom up QNEC in a restructured plan or must all employees be tested together (with no regard for less than 21/1 year of service) and the bottom up QNEC determined from the results of that test?

I am attempting to withdrawal from my 401k for Dental work I have to do. First Question- Is this considered a hardship? Second question- If not, can I simply withdrawal my 401k and pay the penalties? My employer is telling me as long as I work for them, I can not withdraw from my 401k. Would that be correct?

Appreciate any help you can offer. Thanks!

I have a foreign company located in a foreign country employing US citizens. The company owns a US company with few employees. My questions are: (1) Is it permissible for the foreign company to adopt a 401(k) or P/S plan for the US citizens who are working in the foreign country? (2) Should the US company adopt a plan and make the employees (who are US citizens) of the foreign company eligilbe? and (3)Is income earned while working for a foreign company in a foreign country eligible compensation?

Can a 401k plan be designed with a 2 year eligibility requirement of 2 years of service for a match source?

We represent a client that is a U.S. based subsidiary of an international holding company. the US company also has several subsidiaries. The US company currently sponsors a non-qualified deferred compensation plan. They would like to expand the scope of the plan and allow some executives from other subsidiaries in to the plan.

What issues does this raise in light of the fact that the contolled group rules in the code are not applicable?

Can this be as simple as amending the plan so that it is open to the executives of the other companies?

any information would be helpful.

Here is situation. Account owner of Traditional IRA dies after required beginning date (80 years of age), December 4, 2000. Two sons are joint beneficiaries, 50% each. They would like to separate the IRAs into two IRAs for several reasons including to give flexibility of one to take cash and other to get stretch. Also if the IRAs are able to be separated, do they each use own life expectancy or the life expectancy of the older of the two sons?

I made excess Roth-IRA contributions for 1998, 1999 & 2000 because I don't have "compensation" in these years. Here is how I did:

For 1998 tax year-I contributed $2000 in 2/99.

For 1999 tax year-I contributed $2000 in 2/99.

For 2000 tax year-I contributed $2000 in 2/00.

In 2/00, I found the mistake and withdraw all excess contribution plus income earned on the excess contributions. I reporated Form 5329 to 1998 and 1999 to pay 6% excise tax for 1998's excess. I also reported $322.00 interest income in 1999 tax returns for the earnings on the exess. In 2001, I received a Form 1099-R indicated that Total distributions are $7942 and taxable amounts are $6016. Is this correct? I thought I only need to report 10%penalty and as taxable income on 1998's $2000 plus $1942 earnings (total around $3942)? Should I deducted the $322.00 earnings that I have already included in 1999 income tax return? Please help!

Now the prospect in my earlier post wants the cross tested employer contribution to be in an existing 403(B) plan, or plans. Are the employer contribution non-discrimination testing rules the same for a 403(B) plan that doesn't satisfy the 403(B) safe harbor nondiscrimination rules? Admittedly, I haven't researched this yet. Anyone done this? Are the 403(B) deferrals included in an average benefits test in the same manner as a cross tested DC 401(a)(4) plan with a 401(k) provision if rate groups are not all at 70%?

Are the testing aggregation rules the same for commonly controlled organizations if such organizations are deemed to be under common control? I'm not asking about how the controlled groups are established, just if they are deemed controlled, are they subject to aggregation for the average benefit test component (if there is one) in the same manner as a plan tested under 401(a)(4)?

The one I'm dealing with has maybe 5 pseudo-related organizations, so I'm trying to figure out the "what if's".

An employee is covered as a dependent under his spouse's group health plan. He now wants to switch to his own employer's group health plan. Can he do so (and add his wife as a dependent) without any change in status other than dissatisfaction with wife's insurance? The example in the Sec. 125 regulation refers to different plan years for the spousal and employee plans - is this a prerequisite for the change??

I am a new york resident. If I become pregnant before my cobra expires (18 months), can I extend cobra coverage for a further period of time?

If a QDRO is established for the alternate payee of a participant in a 401(k) plan, does the participant's "amount available amount for hardship" from Salary Deferrals get prorated so that the Alternate Payee now acquires the right to a hardship distribution?

I have a 401(k) plan with 4 participants. 3 of the participants defer 15%, and the 4th defers 12%. The plan passes the 415 limits, but fails the 404 limits (since deferrals are not included in comp for 404 purposes). How should I correct this? Should I have deferrals returned to the participant with the most deferrals or the participants with the highest deferral percentage (15%)?