In 1983, the Supreme Court's Norris Decision revolutionized the way we calculate actuarially equivalent benefits by requiring the use of unisex or gender-neutral mortality assumptions. My question is whether a plan can provide that actuarial equivalence for benefits accrued prior to the Norris decision would continue to be determined on a sex-distinct basis and amounts accrued after the Norris decision would be based on gender-neutral mortality. Any cites to support an opinion one way or another?

My husband took a $25,000 withdrawal from his 401K plan in April of this year. He is 60 and was over 59-1/2 when he took the money. They withheld $4,206.05 for IRS. Roughly 8,000 of the withdrawal came from employee before tax. The rest came from Employer Profit Sharing. What will be the tax consequences be for this? He is still employed by the company. They did list it as a hardship withdrawal on the check receipt.

If I convert my rollover IRA to a Roth IRA and instruct the trustee to have 20% withheld for federal taxes, are the taxes considered a penalty distribution? Can I also, within 60 days, redeposit the amount withheld for taxes? Thanks

Jason Cooke

Does anyone have a checklist showing the steps involved in pulling a package together for the purpose of requesting an IRS determination letter for an individually designed plan that has been amended for GUST? I know that a notice has to go out to participants prior to submission, so I would like to see that (for ex) as part of the check list.

What is the feeling regarding the new 401(a)(9) regs where IRA beneficiary is the estate and the surviving spouse is the estate's sole executor and a residuary beneficiary with the power to allocate estate assets. Do the proposed regs change PLR 200032044 with regard to the spouse "inheriting" the IRA.

1) Proposed regs only specifically mention trusts rather than estates, but the regs do say that the spouse must be the "sole beneficiary" of the IRA. Does the trust rule apply to estates as well?

2) If the proposed regs apply to an estate as beneficiary as well, what do you think the risk is of a spouse inheriting" an IRA through an estate in 2001 given facts identical to prior PLRS? Since the only thing out there previously were PLRs with no precedential value, and since the proposed regs are the first formal "guidance" in this area, do you think there is a risk associated with such a trnasaction in 2001 even though the new proposed regs provide that distributions in 2001 can be under the old proposed regs?

FASB 87 requires the computation of the 'average future lifetime' for a plan.

A question has arisen, which I will try to use an example to clarify.

2 employees with future service of 30 and 0 (last one is at or beyond retirement age BUT still working so active).

What is the average future lifetime???

(30 + 0)/2 = 15

30 / 1 = 30

Something else????

We are finally getting an existing 401(k)Plan on track and changing from a 5/31 year end to a 12/31 year end. Question: I realize all the pro-rated limits in effect for the short plan year, but is the 402(g) limit also prorated??? (i.e. 10,500 to 6,125)...I understand the 402(g) limit to be a calendar year limit only. Part 2 of the question is if the 401(k) limit must be pro-rated, than how do I categorize the excess contribution/deferral the participant has already done for 2000??? He has not exceeded 10,500 for the 2000 year, but he has exceeded the 6,125 for the short plan year.

I am working on 6.0 version of quantech and I am working on the 2000 plan year. In 1999 there was a forfeiture reallocated and it was put into the receivable forfs account. In the year 2000, the trust received the reallocated forfs and I have to put a negative forfs to zero it out but it is messing up my vested account balance since my plan is immediate vesting. Quantech told me to put it into transfer instead of negative forfs to zero out but it is messing up my 415 test. Has anyone experienced the same dilemma?

Thanks for your input.

Have a Great Day!

Ineligible employee is allowed to make elective deferrals. I know this has been addressed before, but I'd like to know the most recent position. I saw postings that said the IRS would not consider this to be a "distributable event" and the money should be returned to the employee outside of the plan and then the deferrals forfeited. The Q&A portion of this site, Question 141-143, seems to indicate that these deferrals can in fact be distributed from the plan to the participant. What is the IRS' current position?

Can an employer fire an employee and then notify him that his health insurance was canceled 4 days prior?

Our health insurance providers store dependent data for the purposes of printing HIPAA certificates. Do we, as the employer, also have an obligation to store this data electronically?

Are there any good 401(k)/403(b)industry statistics on the following plan loan questions: (1)average participant 401k/403b loan repayment period, (2) percent of plans that allow loans on employee $, and (3) percent of plans that allow loans on employer $?

We have a client who put an early retirement window in who wants it to be recognized in a beginning of year valuation. We'd be interested in any comments as to whether this is feasible, practical, or impossible, and what might have to be done to accomodate this (i.e. change the valuation date?)

I don't know all the details, but I think it's a calendar year plan with maybe 200 actives. A window was put in mid-year 2000. The 2000 val was done before the window was put in. The client wants the val revised to reflect the cost of the window. We're looking to (1) talk him out of it, or (2) tell him it is not practical or is problematic, or (3) tell him, if we do that, here's the approach we suggest (which we haven't figured out yet).

Obviously, as of 1/1/2000, we don't know the actual experience of who took the window and how much that increased liabilities, so is it proper to change the val date?

Any comments or experiences would be appreciated.

We have a doctor who is a 10% shareholder in a large medical practice. She receives a $30,000 annual contribution from the medical practice's money purchase pension and profit sharing plans.

This doctor also runs a food brokerage business with her husband which is a partnership. The doctor and her husband are the only employees. Can a SEP be set up for the doctor's earnings in the food brokerage partnership even though she is already receiving $30,000 from the medical practice?

When Long Term Disability is approved for an employee does the employer terminate the employee as they are now receiving payment from the insurance carrier and not working?

According to 457©(2)(B)(ii) the dollar deferral limits

of rural cooperatives to not have to be coordinated making

it possible for a participant to contribute $8,500 to

the 457 plan and $10,500 to a 401(k)plan.

Are these limits coordinated under 415? Do the combined

limits for an individual under both plans (457 and 401(k))

held to the 415 limit of the smaller of 25% of compensation or $35,000. I can find no reference that would

indicate this is the case.

What type of benefits can be included in a Cafeteria Plan?? I am hearing some people say, only medical and daycare, but others are saying life insurance, std, ltd. What is the real answer?? Also could someone point me to the IRS code that spells this out. Thanks

In an old-style contributory DB plan, part of benefit payments to a participant are nontaxable. This is because the participant made after-tax contributions; the amount of these contributions (without interest) is the tax basis in the benefit.

Let's assume the benefit is a lump sum; this avoids the complicated basis recovery rules that I once knew a long time ago.

What happens if neither the employer, the plan sponsor, the plan administrator (who happen to the the same company) nor the trustee (who happens to be an external bank trustee) have the records that show the amount of employee contributions? Who is ultimately responsible if this information cannot be located?

Any suggestions on what to do if the information is truly unavailable. To assume zero contributions would overstate the participant's tax liability. To arrive at any nonzero amount would essentially be a made up number. And salary records for the time that employee contributions were made (over 10 years ago) are unavailable.

Any ideas?

We are two large medical practices merging to form a large medical practice with approximatley 100-125 employees. One practice has a formal PDO policy established approximately five years ago. The other practice does not allow for accrual of PDO.

Practice A

No formal PDO policy. Does not allow for accrual of either sick leave or vacation time. Employees are allocated ten sick leave and ten vacation days annually. At a certain point during the year, employees may sell back any unused sick leave (3:1) and any unsued vacation (1:l)

Practice B.

Formal PDO policy in place for five years. Sick leave and vacation days are accrued into one bank. Employees have an opportunity to sell back PDO time once a year.

Holidays are not accrued in the PDO policy.

It has been decided that the merged practice will have a formal PDO accrual policy with separate banks for vacation, sick leave and reserve sick leave bank.

Our dilema is how to equitably establish PDO amounts for the employees of the new practice and yet not place a financial and potential scheduling hardship on the newly merged practice

Practice A employees may not have any time to bring forward to the new practice. While some employees of Practice B may have a significant amount of accrued time.

The inital proposal is to set an across the board allocations to each bank for all employees with some allowance for tenure.

Practice B employees would be offered the opportunity to bring forward or sell back on a 1:1 basis any accrued vacation time. Practice B employees would lose any accrued sick leave. However, as I indicated earlier we would establish an initial allocation in the sick leave bank and reserve sick leave bank for all employees.

Has anyone experience a similar situation. Looking for other recommendations, pitfalls, reference sources. Help

Linda Wallace

odwlbw@bellsouth.net

I am making elective contributions to my 403(B) plans, and max out at $10,500. My salary is $90,000. Can I still make additional contributions to Roth IRA, and if so, up to what amount? My employer also makes contributions to my retirement plan @ 12.5% of my salary.