If an employee in a 401(k) plan designates minor children as the beneficiaries under the 401k plan, what would happen in the event of the participant's death? Would the money go into an account in the children’s' names, which they could then access once they came of age? Could a legal guardian access the money before they came of age? Does this vary by state? If it varies by state, is there a good resource to research state law?

If a government sets up a self-inusred medical reimbursement plan, is it subject to the nondiscrimination rules of IRC 105(h). I don't see an exemption, but it seems unlikely that a governmental plan would be subject to a nondiscrimination rule. Am I missing something? Thank you.

I work for a unionized steel company that employees 1375 and is close to filing chapter 7 bankruptcy. Is an ESOP a viable option for keeping the company operating? It is being discussed by company and union officials. Much of our operations have been shutdown already and mothballed. To restart these departments and bring in the necessary supplies and equipment would cost millions. We are currently operating under Chapter 11 (since January 12) and could file for chapter 7 as soon as February 13th. From what I have learned about ESOP programs, it is not used primarily to save a failing company. However, there is a local steel mill that did so over 15 years ago, and it is still operating with a profit. However, it did not start up all operations - it was a much reduced work force. So, again, is an ESOP a viable option to pull a failing company out of bankruptcy and how might it work with all the money required to do so successfully?

I've contributed last year to our new 401-K. I'm filing single (not married), gross income $50K, adjusted $31K. Is it allowable to also contribute to my existing Traditional or Roth IRA (would like to put $2k in either IRA before I file, for TY-2000)?

Carl

Employee who is getting "divorced" revealed to employer that he had never actually been married but had assumed he had a common law marriage. Employee is in state that does not allow common law marriage but that recognizes common law marriages from other states. Presuming employer offers COBRA to employee and to his three children (who had been covered as dependents), what does the employer offer the "common law" spouse??

The 1099-R instructions seem clear that, in the case of an excess deferral refund of $400 ($500 excess deferral with a $100 loss) paid in January from deferrals in the prior year, the 1099-R would show $400 in boxes 1 and 2a, with a code of P in Box 7. However, the instructions also indicate that the participant must show $500 on their 1040 for the prior year (the year of deferral), and may show the $100 loss on the 1040 for the year the distribution was made. How is a participant supposed to know that their 1040 is supposed to disagree with the amount shown on the 1099-R? Does anyone out there have a standard notice that is sent with the 1099-R to the participant?

My college age son "grossed" $900 this year and, let's say $100 was withheld in taxes. Can he contribute the full $900 to a Roth IRA or only the $800 "after taxes" amount?

Thanks ahead of time for sharing your expertise. This is my first attempt at a message board, hope it makes sense. I'm mostly cofused -- this is the third time I'm typed this message. (And what are all those antimated icons about, anyway? Nevermind.)

A 401(k) plan currently allows "participant loans" for "parties-in-interest" participants. By this I mean that loans are only available, basically, to participants who are also employees. This approach is described as being permissable in DOL Information Letter to Gordon H. Mattson dated May 4, 1995.

The Sponsor is exploring the idea of opening the availability of "participant loans" to retirees. Retirees are not "parties-in-interest." Again, referring to the Mattson letter, the DOL does not have a problem with opening the participant loan availability to "non parties-in interest" as long as it is available to all "non parties-in-interest" participants.

I sort of remember hearing or reading something for DOL stating that DOL felt it was imprudent to have a participant loan extend beyond a participant's normal retirement age without pledging outside collateral. I cannot find anything in print on this point. I was hoping that someone could shed some light in this for me.

Can Title I 403(B) assets be held under a trust agreement or are they required to be held in only annuities or under custodial accounts? Cites would be VERY helpful.

We have a client, who is a non-profit organization running a SARSEP plan. Their accountant has told them that they were not allowed to accept employee deferrals into the plan since 1997. He said this was a rule that came down for non-profits only. Is this true? If yes, where can we get more information? IRS Pub 590 does not mention anything like this.

If a governmental money purchase plan has only employer contributions is participation in the plan mandatory or may employees elect not to participate in the plan? I've heard that participation is mandatory in this case, but I haven't been able to find any supporting authority.

Can someone tell me (or direct me) to what information I must capture to be sure I have everything I need for 401k/403B discrimination testing?

I have a question that I guess is based on technicalities.

The new COBRA regs state that a "qualified beneficiary" must be allowed to change plans if they move out of a HMO area into an area that doesn't service HMO and that the employer has another plan (i.e. PPO, indemnity). Well, what about a former employee who is not yet a "QB." Said employee termed mid January, has HMO benefits thru 1/31. During Jan., she moves to FL, out of Kaiser California HMO area. She would be effective for COBRA 2/1 and wants to enroll in Aetna HMO which the employer offers. Employer (who is a COBRA admin. company) says no, you elected Kaiser during open enrollment and can't change. My question is: is this correct because she wasn't a QB when she moved? If so, could she just elect HMO coverage for the month of Feb., even though it's useless to her, and then change to Aetna in March? She's pregnant, so that's the issue.

Any help/ideas/suggestions are much appreciated!

On Schedule R - We are counting distributions for lump sums, rollovers, and residual distributions only. Is this correct? Should we be counting hardships too?

An employee terminated from employer about 50 days ago, and did not elect COBRA coverage, but now wants COBRA coverage.

His prior employer told him that he can get medical, but not dental. He was told that the COBRA election period for medical coverage is 60 days, but the COBRA election period for dental coverage is only 30 days. Is this correct?

An S-corporation maintains a one man DB Plan. He has 30,000 in salary for 2000. His required contribution for the year is $60,000. His S-Corp income is also $30,000. How much can he deduct from the business? Can he take a loss of $30,000? Or can he only deduct the $30,000 from his profits?. Section 172 seems to indicate that you can't deduct net operating losses. What is done in this situation?

When are plan sponsors required to provide SPDs to alternate payees? Is it immediately after a QDRO is received and accepted? Or only when requested or when new SPDs are issued?

question: We have a group that has 4 Flexible Spending account participants in it. (1 employee has Dep. Care & a Medical Acct. & the other 3 participants have Medical Accounts.All are clearly non-highly comp employees. There are no officers or Keys participating.Only these 4 employees.Do we still have to do a discrimination testing for 4 people who are clearly not highly comp? Is there a min./max. # of participants to do a testing? Please advise. Thank you.

email: cglass@bcbsde.com

I've contributed last year to our new 401-K. Filing single (not married), gross income $50K, adjusted $31K. Can I contribute to my existing Traditional or Roth IRA (would like to put $2k in either before I file, for TY-2000)?

Carl

A mortgage broker would like to start a qualified retirement plan and invest a portion of the plan's assets in mortgages that his firm puts together. Is this allowed?

If it is allowed, how acceptable would it be for him (or his firm) to receive the commission from the resulting transaction?