Can the plan administrator of a stock bonus plan reallocate employer stock (non-registered) that is already allocated to certain employee accounts? The employee accounts that are debited employer securities will be credited with an amount equal to the value of the employer securities.

The annuitant recently passed away with $300,000 in an annuity. She originally assigned only 2 beneficiaries to the contract with the mindset that these 2 children would divide up the annuity amongst the 8 children. Other facts are: The Annuitant lived in Louisiana, one beneficiary also lives in Louisiana, the other beneficiary lives in Georgia, and the remaining children lived throughout the United States and Canada.

1) Now that she has passed away, how can this be divided?

2) What are the tax ramifications of dividing this? Federal and state? Beneficiary and/or children?

3) Can the beneficiaries be "reassigned" according to the will? (The will is very generic and basically states that the estate is to be divided equally among the children.)

4) What are some other methods that can be used to divide up this annuity?

The bottom line question is “What should they do?”

What happens to forfeitures from (hanging, orphan, related, "attributable-to", associated) match? Do these forfeitures get treated the same way as any other forfeiture unless the plan document specifically provides otherwise? If the plan document does not specifically address how these match forfeitures are to be handles, can the plan sponsor choose what to do each year (use to reduce expenses, use to reduce future contributions, reallocate)?

Suppose an employee and his spouse are covered under an employer's insured group health plan for the plan year beginning January 1, 2000 and ending December 31, 2000. The employee and his spouse are in the middle of a divorce during the annual open enrollment period for the plan year beginning January 1, 2001 and the employee decides not to cover his soon-to-be ex-spouse. For plan years prior to January 1, 2001, the employer only offered group health care. However, for plan years beginning on and after January 1, 2001, the employer will offer group health care, dental care and vision care.

Assuming that the employer concludes that the employee is dropping his spouse from coverage "in anticipation" of a qualifying event (i.e. the divorce) so that the ex-spouse will be entitled to COBRA coverage beginning on the date of the qualifying event(the date of the divorce), what COBRA coverage must the employer offer the ex-spouse? Is the ex-spouse only entitled to group health coverage under COBRA since this is the coverage she had prior to the date she was dropped in anticipation of the divorce or is the ex-spouse entitled to group health, dental and vision coverage under COBRA since this is what the employer offers active employees at the time of the qualifying event?

In determining the matching contribution for a SIMPLE, do you include the value of excess group-term life ins and personal use of auto in compensation?

The Required Minimum Distribution for an active employee in a 401(k) plan is calculated incorrectly (caluclated using single life rather than the correct joint life calculation), resulting in too large a distribution for 2 consecutive years. The plan document does not allow for in-service distributions. Must this be corrected? If so, what is the correction (follow the overpayment correction guidelines in Rev. Proc. 2000-16)? How is the 3rd year required minimum distribution calculated (using the actual prior year 12/31 balance, or the 12/31 balance that would have resulted from paying the correct amounts)? Can this be corrected by reducing the 3rd year required minimum distribution by the amounts of the overpayments (possibly adjusted for interest) in the prior 2 years?

In opening a Roth IRA for a minor (16) with earned

income is there a minimum contribution amount in

Massachusettes. I have looked in state sites but

can only find info on minimum distributions. Any

other info on this topic would be appreciated

More than one of my tax clients has inquired about the possibilty of annual SEP to Roth conversions. I have received mixed opinions on the feasibilty of this, but I think it can be done, providing there is sufficient income to fund a SEP, and income remains below the Roth limit. Please, if anyone has additional insight, or perhaps a Code or Reg cite, I would greatly appreciate it. Thank you.

Is a Notice of Intent to Terminate ever required for a money purchase or other defined contribution plan, or is it strictly a defined benefit plan requirement?

A company with a June 30 fiscal year maintains a MPPP with a December 31 plan year. The company wants to raise the contribution to 8% from 6%, effective July 1. In other words, if the amendment is effective July 1, 2000, can a 6% contibution be made on compensation in the first 6 months of the plan year and 8% on compensation in the second six months, effectively 7% for the plan year? The reason is that the increase was budgeted for the company fiscal year beginning July 1, 2000.

Has anyone heard of a plan that would not allow an employee to take health insurance if his or her spouse had a plan under which the employee would be eligible? I don't understand why the employer would want to do this, since it would raise nondiscrimination flags, but one of the brokers we deal with has the situation. The employer does not want to offer coverage to anyone whose spouse has coverage that would be available to the employee. Would this present a state law issue?

We have had inquiries f rom clients who want to make employer contributions to

their 401k & profit sharing plans - safe harbor, non-elective (pro-rata and

cross-tested), but the plans have either a 500/1000 hour and/or last day rule.

Question - how do we account for these funds when contributions may be made for

employees who do not subsequently qualify because of hours or termination. Also, if

all of the contribution are not allocated, how do we treat the excess. In those

situations were there is a gain or loss on this money, how are those elements treated.

Compound the problem with individual participant accounts into which these

contributions are deposited. Your comments please.

Can an employer that identifies itself as having a 457(B) plan be either Governmental (thus subject to the SBJPA) OR a Private/Top Hat plan? I'm pressed for time and struggling to find a black & white answer. Any help would be appreciated.

Can I calculate a RMD for a participant in a DC plan, using the single life method if I have not received the election form back from the participant specifying which calculation method to use. This plan does not allow for a joint and survivor annuity form of payment. My concern is to get a number to the plan sponsor today or tomorrow so the distribution can by made by 12/31. Any cites?

Thanks

Season's Greetings!

I have two questions regarding the so-called "ESOP Notes."

1. I understand that the ESOP Notes carry a floating interest rate; this should protect the note holder against interest rate risk. Is my understanding correct? [if the rate were fixed, given that the notes have a 60 year maturity, the interest rate risk would be huge.]

2. It seems that Ford Motor Credit, GE Capital, ITT Financial and others offer ESOP notes. However, at least these three companies make no mention whatsoever of ESOP notes on their web sites. Where can I find more information on the practical aspects of buying ESOP notes with the proceeds of an ESOP stock sale?

Thank you in advance for your help.

Vladimir M

A 401(k) Plan document requires that Plan loans be issued at an interest rate Prime plus two percent. The new Plan Trustee issued Plan loans at an interest rate equal to prime. Upon discovering the error, the Plan loans were reamortized using the correct interest rate and the Plan's participants were asked to pay the back interest based on the Plan's required rate. One Participant refuses to pay the back interest ($24.00) claiming that it was the Trustees error and they should pay the back interest.

What would be the result if:

The Trustee did pay the back interest?

Nothing was done to collect the back interest but all future payments used the correct rate?

Is there any way to force the Participant to pay the back interest ?

A plan began as an ESOP with most of its assets in employer stock. Over time, however, the plan has come to hold about 50% of its assets in employer stock, and 50% of its assets in unrelated investments.

Is this plan still an ESOP? If it's not an ESOP, do ERISA's diversification rules apply to all the assets in the plan's trust, such that with respect to the 50% of the assets that remain in employer stock, the plan may now fail to satisfy ERISA's diversification requirements?

Can parents gift their Roth IRA to a child? For instance, can both parents and the child open a Roth for $2,000 each, then after 5 years remove the $6,000 basis to pay tuition costs and gift the interest remainder to the child for his retirement? If so, what are the tax implications of doing so?

Would a forfeiture reallocation to participants result in different amounts when allocated on 1/10/01 or 6/10/01?

Thank you for your insights.

Charles

Can prior year ADP testing be used for SARSEP plans?