Does anyone have the telephone number for Covington. Thanks.

In the past three months, I have been asked to assist three separate clients with the same plan error:

Each client sponsors a qualified plan and is a member of a controlled group of corporations. The plan documents each allow "Employees" to participate in the plan after satisfying the age and service requirements. An "Employee" is defined as any employee of the "Employer." "Employer" is defined as the plan sponsor and any member of a controlled group, Affiliated service group, etc. The sponsor, however, has only allowed its own employees to participate and not employees of other members in the control group. I plan to use Walk-IN CAP to seek a retroactive amendment to conform the plan with prior practice. Treating this as an operational failure will get very expensive! Each client is a small company owned by a large parent

Help- Agree or Disagree? Suggestions?

I have a prospective sole-proprietor client with a money purchase and a profit sharing plan, who has never filed a 5500EZ. The plans were established in 1990, and assets exceeded 100K prob in 93 or 94. Does anyone have any experience on what penalties the IRS will assess if he comes forward voluntarily and files all the late 5500EZ's now? Or, does anyone have any experience on how the IRS may treat this if discovered during an audit?

OK - statutory exclusion question. Lets say an employee is hired april 1, 1999 and terminates august 1, 2000. I think you can exclude this person. Statutory entry dates can be the earlier of the first day of the plan year or six months after meeting the statutory 1-year requirements. This person was not employed six months after completing 12 months. Any thoughts?

If a tax exempt employer is funded by various Federal, State and local government grants, would they be considered an instrumentality of the government? They provide employment training for a county in PA.

The reason I ask, is that they are currently sponsoring a 401k plan, but I am lead to believe that they may not be an eligible employer. How is a government agency or instrumentality defined? Does anyone know of any additional questions I need to ask in order to properly assess taking over the admin for this employer?

Thanks

Has anybody run across an “automatic increase form” for a fidelity bond which says something like this: “ At inception of this policy, if you have a Limit of Insurance for your Plan that is equal to or greater than the amount of insurance required by ERISA, we will automatically increase the Limit of Insurance to be equal to the amount required by ERISA at the time the loss is discovered.”

Our firm is fairly new to Quantech. This is our first time with them for the end of year. I have already asked Quantech about Safe Harbor plans and they said they don't have the ability to run them yet, does anyone know how to run a New Comp Plan where the Employer contribution is based on different classes?

I'm looking for help with the "consistency rules" under a 125 cafeteria plan that allow to have employees make changes mid year to an election if they have a life event and the change is consistent with the life event. If an employee gets married, we know they can add a new spouse to an HMO. If they say their new spouses doctor does not participate with the HMO, can we allow a change to our indemnity option. Are we stretching the consistency rules?

Can anyone provide cites or tax code reference that shows that distributions to a spouse via a DRO, rolled into a "Traditional IRA" not a "Conduit IRA" can be rolled back into another qualified plan as long as the "TIRA" never had other assets?

Next - is there a cite that says it cannot be done?

Suggestions? We have a client who will be recieving a distribution from her now ex-husband but would like to roll it into her existing 401(k) - can this be done via a QDRO distribution?

Employer's health plan was canceled for issuing bad checks. I was placed on disability due to a lung transplant and elected COBRA coverage. I filed out the forms and sent in six months premimums (six checks) October and Novembers checks were cashed. Now I learn from insurer that coverage for the group was canceled October 1st because employer submitted NSF check. I was notified in late December long after 62 days had passed. Now I am uninsurable. What rights do I have and how do I procede?

A matching contribution and safe harbor contribution were deposited to a participant's account by mistake. Should both deposits be transferred to forfeiture and used to reduce future contributions? Is withdrawal of these contributions a correction under EPCRS?

We have a 401(k) plan that has two participants that took hardship distributions, therefore they can not defer for a year. There plan however has individual insurance policies that their match money goes to pay the premiums. If these two participants do not defer and therefore do not get a employer match who is responsible for paying the premiums on the insurance policies in order that they don't lapse?

We have a self-insured prescription plan and are considering raising the copayments mid-year. The prescription plan is the same regardless of which health plan election the employees choose during open enrollment. If we raise the copayment structure, can we do a 'one-way' enrollment period in which we allow employees to opt out of our health plan in order to enroll in a spouse's plan? In addition, if we make a plan design change on the health plans that includes increase of copayment, would we have to allow an open enrollment period for employees to switch plans? And one more... what are the rules for mid-year design changes? How much notice must be given, etc.

How are life insurance contracts reported on Schedule A? Should the face value of the contract be reported on Line 3 or should the surrender value be reported? Am I completely off base?

Thanks

In a transportation plan, is it considered pay as you go like dependent care reimbursment or can it be advanced like medical reimbursement? Also, must a check be cut directly to the participant or can the participant have the employer may be the bill?

We have an LLC that has an IRA as a 4.167% investor member. The beneficiary of the IRA is also a common member with a .09% interest in the LLC. He does receive compensation from the LLC and participate in management. Does this constitute a prohibited transaction?

I'm a small administrator with plain vanilla plans. I have a plan that will fail the ADP test unless I borrow from the ACP percentage. Never had this problem before. ( I use ASC software and am confidant in the calculations and compliance, however - I want to be able to determine this process without the software.) Can anyone tell me specifically the process for the borrowing method? or where to find good data on it? Is it simply a documentation process, or are assets actually recharacterized or what?

all advice is greatly appreciated.

A former employee's eligible COBRA coverage time period will expire on February 28, 2001. The current employer will not allow her to enroll her spouse and dependent children until an "open enrollment" period in July, 2001. Is it true that the spouse and dependent children are eligible for 36 months of coverage? 18 months over the former employee's covergae period?

__________________

joan s

Hi,

I converted a Rollover IRA in Sept, 2000 to a Roth IRA.

Since then, the value of the IRA has decreased 25%.

I want to avoid paying taxes on this 'lost' 25%.

It is now Jan 24, 2001.

An IRA specialist at Fidelity told me that I can recharacterize my 2000 IRA to a Traditional IRA.

However, I won't be able to convert the Traditional IRA

BACK to a Roth until January, 2002.

She said if I would have recharacterized by Dec 30, 2000, then I would have been able to reconvert to a Roth in 2001. I would just need to wait 30 days.

My question: Is this correct?

What is the shortest amount of time I can recharacterize my Roth conversion to a Traditional IRA, then convert the Traditional IRA back to a Roth?

Thank you very much for your help.

If the mandatory 20% withholding has not been done for a payout to a participant, how is the withholding (plus a 10% penalty) paid to the IRS? 8109? 945-V? I haven't been able to find the answer in the instructions or in Section 11 of Circular E. If I use 945-V, how will the IRS determine that that a portion of the money is for a penalty?

Thanks,

David