Employee (attorney) has been working out of her house, and either keeping her infant at home or having her mother-in-law watch the baby at no cost. The employer decides the employee must now work out of the office 120 miles away. The employee must move and begin day care for the infant. Is this a change of status that would allow her to elect dependent care mid-year?

No change in number of hours or employment status, just the location.

(1) Is the employee's life the measuring life for the straight life annuity referred to in 1.401(a)(4)-5(B) for payments to a beneficiary or alternate payee of a restricted employee? 1.401(a)(4)-12 states: "Straight life annuity means an annuity payable in equal installments for the life of the employee that terminates upon the employee's death."

(2) If the employee's life is the measuring life, do 401(a)(11) and 417 override 411(d)(2), and what is the employee's life expectancy after the employee's death?

(3) If the beneficiary's or alternate payee's life is the measuring life, does 401(a)(9) override 411(d)(2)?

I have converted my Traditional IRA to a Roth IRA for 2000 based on my AGI being less than $100,000. If the IRS were to determine (say through an audit)in the future that my income was actually over 100,000 for the year of conversion, would there be any financial penalty for the improper conversion. Am I right in presuming I would have to recharacterize the Roth back to a traditional IRA, and would be refunded the taxes that I mistakenly paid. But would there be any penalty?

What are the contribution limits for SIMPLE IRA's for 2001, and where can I find them authoritative source for the limits?

A corporation sets up a cafeteria plan so health insurance premiums can be paid pretax. To avoid violating the 25% key employee concentration test, only 1/2 of the premiums for key employees are paid through the plan. 100% of premiums for non-keys are paid through the plan. Is there a problem with this arrangement? Could the contributions and benefits test be a problem even if the concentration test is ok?

A question about excluding participants from ACP Test.

Participant must have 1000 hours (no last day requirement) to receive a matching contribution. If I have participants (terminated or not) with less than 500 hours, can I exclude them from the ACP Test?

Are there any durational requirements for the loan in a leveraged ESOP? For example, can the loan be a one year loan?

Are a fertility monitor and thermometer that are not prescribed, but recommended by a doctor, proper expenses to reimburse under Sec. 213?

I am trying to find out what is the impact of forefeitures from a money-purchase plan. The plan has a cliff vesting schedule 100% after three years. The employee leaves after two years and all his money is unvested. The forefeited money would revert to remaining participants in the plan. I am not sure how it is distributed among the remaining participants. If money purchase plan was set at 25% of the compensation, would the corporation be able to contributed 25% in addition to the forefeitures?

Employer sponsors two group health plans: one for part time employees, and one for full time employees. Assume part time plan is not identical in terms of benefits, to full time plan.

When employee drops from full time to part time status, is COBRA triggered even though the employee would be eligible under the part time plan? And if the employer normally subsidizes individual premiums for part time employees, must it subidize COBRA premiums for the employees who switch to part time?

I just need some validation on the termination of a 401(k) plan. Client terminates 401(k) plan effective 3/31/00. No elective deferrals are made after that date. In my opinion, they cannot start a new 401(k) plan until 12 months after final distribution of assets of old plan, irregardless of the fact that they made no deferrals for the last 12 months. Am I correct?

If they start a new plan 4/1/01, it becomes a successor plan and no distributions can take place from the old plan.

"This question keeps coming up and we would like someone else's clarification. Our document states that for an Employee's first year of participation,Compensation shall be recognized as of the first day of the plan year. Our plan year is calendar year. I have a new participant who entered the plan on 7/1/00; she earned $26,474.82 in 2000. She deferred $1326.48 from 7/1-12/31; 10% for the 6 months she was in the plan which equates to 5% over the plan year. We match 100% of the first 4%. Would I match 100% of the first 4% of $26,474.82 which would be $1058.99? Or since I deposit match as I do payroll, do I base the match only on the earnings from 7/1/00 when she became a new participant which comes to $530.59?"

I have a client which is a group of Doctors. this group of Doctors employes 200 or so employees through a leasing company. The Leasing company provides these employees with a 401k plan. The Doctors set up two plans. One 401k plan for themselves and a Cross Tested PS plan for everyone. The question is: If the Leasing company doesn't provide a match in their 401k plan, can the Doctors provide a match for themselves in their 401k plan??

Employer with ERISA-covered 403(B) plan wants to set up cross tested profit sharing plan. The 403(B) had both employer money and employee deferrals. Still has 403(B) deferrals.

For the average benefits test component of the 401(a)(4) test, do the employee deferrals need to be included?

Would the answer be different if the 403(B) plan were non-ERISA employee deferrals only (on the basis that it was sponsored by the employee, not the employer?)

POSTSCRIPT:

I think I found the answer, which is tht the 403(B) is not aggregated with the 401(a) plan under any circumstances for purposes of testing the 401(a) plan.

My daughter (4 yrs old) was the beneficiary of my deceased Aunt's Pension plan, in the form of a lump sum check written directly to her. I've received no 1099-R from the administrator of the pension plan. My question is simply - is the beneficiary of a pension plan liable for taxes on the principle amount if paid as a lump sum at the time of death? (Seems like this must happen all the time, right?)

I have three questions concerning the top paid group election:

1) In the case of an employer with more than one plan, must the employer use the top paid group election for both plans?

2) Does the employer use the totals of employees participating in both plans combined when determining who is in the top 20%? In this case, no one who participates in plan A is a participant in Plan B and vice versa.

3) For the employees with less than 6 months of service, is that 6 months of service for the lookback year or total service?

I would appreciate assistance on any one of these points.

Anyone have any ideas as to what to include in an interim valuation procedure? Profit sharing plan has an Anniversary date of 9/30. Participant(HCE) terminated employment as of 9/30. Participant wants distribution of her account as soon as possible. Value of participant's account now is about 70% of what the value was on 9/30. I think there is a recent case regarding plan trustee's obligation to do an interim valuation in such a case. I need to draft the interim valuation procedure such that discrimination will not be an issue(e.g., later on, if DOW goes up, a terminated participant could get account valued under the interim valuation procedure to the detriment of remaining plan participants). Initial thought is to tie it to fluctuations in the DOW and have it apply to all distributions without pegging it to distributions of a certain size. I understand that the interim valuation procedure can cut both ways. I appreciate any comments... Thanks.

Our client sponsors a DBP for employees under two different collective bargaining agreements. All requirements are met for treating each unit as a separate plan under 410(B).

In determining whether or not a partial termination has occurred, do you look at the entire participant population (both unions) or only the one union population that is experiencing the layoffs and ultimate closing? In other words, to determine a significant percentage, is the denominator the total participants, or the number in the affected portion, which is treated as a separate plan under 410(B)?

What have employers who switch to PTO programs done with employees' accrued sick leave? Converted to PTO in some ratio -- if so what ratio? Or, has sick leave been grandfathered and left on books?

How is the value calculated on a Defined Benefit Plan in a divorce action? Are Health, medical, benefits figured in to it?