Annuities will be purchased in conjunction with terminating a DB plan. The plan has the early ret provision of age 55 and 10 years (1000 hrs= 1yr) The participants are not being terminated from employment.

Must the annuity contract contain the same early retirement provisions of the plan so that all participants can eventually reach ERD via age and service? Does the answer depend on whether or not there are ER subsidies? There will be no employer reversion.

Right now the annuity contract states that ER is available but only based on age 55 and 10 yrs of service. Service is the service earned as of the plan term date.

In an integrated Profit Sharing Plan it is possible for a participant with compensation >$170,000 to get a contribution larger than $25,500. Is it also possible to do this in an integrated SEP? Thanks for all input.

This is a follow up to the thread started last Fall on the Plan Terminations board regarding "un-terminating" a DC plan (thread started 10/2/00). BACKGROUND: the plan sponsor of a 401(k) plan has executed board resolutions "terminating" the 401(k) plan as of Date X, vested plan participants 100% as of Date X, amended the plan for legislative changes and received a determination letter, BUT has made NO distributions yet. The plan sponsor would like to "un-terminate" the plan before making distributions and begin allowing deferrals, etc. again

I was hoping that someone might have some additional insight, cites, or have had informal or formal comunications with the IRS on whether or not this presents a qualification problem for the plan (assuming the 100% vesting in benefits at "termination" is not going to be changed).

What is the risk in "un-terminating" a 401(k) plan for which there are board resolutions authorizing the termination, but where no distributions have been made at all and all participants will remain 100% vested?

This is a follow up to the thread started last Fall regarding "un-terminating" a DC plan (thread started 10/2/00). BACKGROUND: the plan sponsor of a 401(k) plan has executed board resolutions "terminating" the 401(k) plan as of Date X, vested plan participants 100% as of Date X, amended the plan for legislative changes and received a determination letter, BUT has made NO distributions yet. The plan sponsor would like to "un-terminate" the plan before making distributions and begin allowing deferrals, etc. again

I was hoping that someone might have some additional insight, cites, or have had informal or formal comunications with the IRS on whether or not this presents a qualification problem for the plan (assuming the 100% vesting in benefits at "termination" is not going to be changed).

What is the risk in "un-terminating" a DC plan for which there are board resolutions authorizing the termination, but where no distributions have been made at all and all participants will remain 100% vested?

Sps election to treat a decedent's IRA as inherited or as sps' own IRA is irrevocable and must be made by year following date of death (assuming sps rbd is not later).

So if sps elects to treat IRA as inherited there is no way to do a sps rollover from that account.

Is this true?

I am trying to get clarification on who is responsible for the tax liability of an offset of an outstanding loan balance upon the death of the participant who has named a beneficiary? Any guidance will be appreciated.

Defined Benefit Plan. Pensioners receive monthly installments. A portion of their installments is used to purchase medical insurance and/or dependent life insurance, if elected by the pensioner.

How are these insurance premiums reported on the 1099Rs?

We have a 401(k) and an ESOP. I understand that normally if you have two or more trusts you treat them as one for purposes of the 404 deduction limitations. However, what happens if you have a 401(k)and an ESOP. Are you limited to 15% or can you still utilize the 25% deduction limitation under 404? How does this work?

A DB plan participant is taking early retirement at age 55 and will be receiving monthly payments as calculated by the plan's actuary. What is the proper code to use in Box 7 of the 1099R? Should it be a 2, early distribution - exception applies, or 7 for normal distribution?

Anybody have a cite for the due date for a profit sharing plan sponsored by a non-profit organization?

A plan with pooled investments pays out a participant 100% of her account balance even though she is only 20% vested. In addition, the distribution was a lump sum to the participant and no taxes were withheld from the distribution. How do we handle this? Should we try to recover the 80% she is not entitled to (probably a lost cause) as well as the 20% that should have been withheld for taxes. Then, deposit the 80% back to the plan, forward the 20% withholding as taxes and amend the 1099-R for 2000?

Does anyone have any comments?

Under a Dependent Care Reimbursement Program can we reimburse for household care for a dependent over age 13? I know that for services perfomed outside the house, the age limit is 13 years.

Any help would be appreciated.

Other than a couple of articles, I haven't seen anything on DROPs. From the articles, there appear to be qualification and ADEA issues relating to this type of arrangement.

Am looking for official pronouncements. Are there any? If so, where can they be found?

Has the concept of DROPs been approved by the IRS? Have plans been written using this concept and if so, has the IRS issued favorable determination letters?

Other than a couple of articles, I haven't seen anything on DROPs. From the articles, there appear to be qualification and ADEA issues relating to this type of arrangement.

Am looking for official pronouncements. Are there any? If so, where can they be found?

Has the concept of DROPs been approved by the IRS? Have plans been written using this concept and if so, has the IRS issued favorable determination letters?

Other than a couple of articles, I haven't seen anything on DROPs. From the articles, there appear to be qualification issues and possible ADEA issues relating to this type of arrangement.

Am looking for official pronouncements. Are there any? If so, where can they be found?

Has the concept of DROPs been approved by the IRS? Have plans been written using this concept and if so, has the IRS issued favorable determination letters?

I have a Roth Contributory IRA, which I opened in 1998 and have been contributing $2,000/year. I also have a Roth Conversion IRA, which was converted in 1999 from a Regular IRA. All taxes were paid in 1999 on the Roth Conversion IRA. Can I merge these two Roth's and make my paperwork simplier? Are there any drawbacks to merging them? What will my 5 year holding period be, since they were opened in different years? Thanks, Kathleen

To whom do self-insurance rebates belong? Our non-profit organization self-insures for medical, dental and disability. Employees pay about 20% of the total insurance bill and the non-profit pays the balance (about 80%). There is never any employee balance in the fund. The amount in excess of claims is rebated and the EO believes that the rebate belongs to the organization because the employee dollar is considered the "first dollar in." Employee money is spent on claims first, then the organization's contribution pays the balance so that the rebate belongs to the employer as excess contributions and this excess is put into another fund to pay for additional benefits such as vacation vouchers, tuition reimbursement, and to fund investments. Is this acceptable practice under ERISA?

I mistakenly had taxes withheld from my conversion from my IRA to my Roth IRA. Schwab is telling me I can't redeposit those funds even though it's within 60 days. Is anyone aware of a law that says I can't redeposit the amount I withheld for taxes thereby avoiding a penalty. I know I can't get my original tax withholding back but why couldn't I redeposit the same amount and have my original tax withholding just represent a tax credit. Please help. Schwab is telling me I can't do this but if the conversion tax withholding is a penalty distribution then I have 60 days. Correct?

Can a sole proprietor (no employees) make his employee elective contribution for 2000 as a $6,000 lump sum now (by the 2000 tax filing date), or was he required to make regular contributions throughout 2000?

The Florida Legislature has directed the Office of Program Policy Analysis and Government Accountability to conduct a special review which will explore the feasibility of privatizing Florida’s Division of Retirement. The Division of Retirement is responsible for administering Florida’s statewide retirement system and providing oversight of retirement plans administered by local government. The Division’s services include distributing benefit payments to retirees and beneficiaries, determining eligibility for benefits, enrolling members, maintaining retirement records, counseling members on their rights and benefits, and processing requests for benefit estimates.

As part of this review, our office is examining other states’ efforts in privatizing or outsourcing the administration of state retirement systems. We would appreciate the assistance in identifying 1) states that have outsourced or attempted to outsource some or all of their retirement benefits administration, and 2) private contractors who can provide some or all of these services.

Any information, such as contact names and phone numbers or recent research efforts in this area, would be greatly appreciated.

Respectfully,

Marti W. Harkness

Senior Legislative Analyst

Office of Program Policy Analysis and Government Accountability

Florida Legislature