Since retirement services providers are now taking "paperless" distribution requests directly from married participants, how are providers ensuring that QJSA waiting period rules are being adhered to?

I have not ever done this before, so I am a little apprehensive about it. In a small cross tested plan one of the young NHCEs that is needed to pass a4 has terminated before becoming eligible. If the employer allocates 3% to all eligibles in the NHCE class, the plan will fail a4. Can the employer make a corrective amendment to give a 3% contribution to a named ineligible employee? The plan will pass if this person also gets a 3% contribution.

If this works, can the same approach be used to pass ADP/ACP test? That is, pick one or two terminated employees, and amend the plan to give them a QNEC in an amount necessary to pass ADP testing.

Can 403b deferrals be made from income received in the final year of service that was derived from annual leave earned throughout all years of service? Is this income included in total compensation amounts used to determine catch-up limits?"

Can anyone point me to a site or source that shows what States have opted out of Social Security other than Illinois and Texas?

Is a qualified plan direct rollover distribution check dated over 60 days payable to the new IRA trustee (not the particpant), still qualify for a tax free rollover?

Anyone know where I can obtain 2000 cov comp table?

Thank you, gary

A plan provides that NRD is 65 and 5 yrs participation.

It also provides that if you retire at age 65 you get your full pension.

However, if you terminate prior to age 65, then you can get your full pension at your SSRA. That is you would receive a reduced pension at age 65.

Has anyone seen anything like this and does anyone know where in IRC that such a provision is allowed?

thank you, gary

A plan allows hardship distributions of employee money only. A new TPA inadvertantly lets a few employees receive hardship distributions from both employer and employee money.

(1) To correct this I understand that the plan can either (a) use walk-in cap and retroactively amend the plan to allow the withdrawals (the er doesn't like this option) or (B) collect the distribution from the employee. Are there other options that have been blessed by the IRS?

(2) If the employee won't or can't pay, must the employer recontribute the distribution to the employee's account --giving the employee a windfall?

(3) Finally, if the plan actually allowed hardship withdrawals from both er and ee money, wouldn't the employer be obligated to withhold 20% on the er money (unless it was rolled over) and 10% of the ee $ since 401(k) deferrals are not rollover eligible (unless the employee returned a form W-4P).

Thank you for your help!

Client is considering adopting a new 401(k) Plan for 2001 (no existing or prior plan) and may need to go "safe-harbor" (i.e., 10 ees - at least half of whom will be HCEs). Ideally, the decision would have been made 60 days ago and the safe-harbor notice distributed by 12/01/00. However....

Am I correct in my understanding that, if the 401(k) Plan is to operate under the "safe-harbor" provisions, it cannot be made effective until at least 30 days following distribution of the safe-harbor notice, resulting in a short plan year?

Could the Plan be made effective 01/01/01 (so the Plan could use full calendar year compensation), with salary deferrals not starting until 30 days from the date of the safe-harbor notice - or is this too logical to be legal?!

I heard a rumor that for year 2000 .... an employee's $10,500 elective deferral does not have to be included in the "Section 415 annual addition limit of $30,000"... Thus, an employer can contribute $30,000 (not including the employee's $10,500 deferral). This would mean an annual addition of $45,000.

Has anyone heard of such a thing .... or is it simply nonsense ??

THANKS

Under the DOL’s new claims regs, I understand that a provider can force a group health plan to treat a “pre-service health claim” as “urgent.” But what about a plan that does not have pre-certification requirements (or other requirements for advance approval)? Can a provider force a plan to adjudicate a claim within the 72 hours, where the plan does not have penalized the participant for failure to get advance approval?

Any insight as to how the claims regs might fare under the Bush adminsitration? Should we still expect to have to comply in 2002?

Employer A has a money purchase plan and employer B has a profit sharing plan. Both employer A and employer B are part of a controlled group, but did not realize it. As a result, employer A's plan fails coverage for many years but employer B's plan does not. The IRS has discovered this mistake. The obvious solution is to include employees of employer B in employer's A plan. But employer's A plan is a money purchase plan, and the IRS wants to assess severe penalties for the failure of the plans to meet the minimum funding rules, which it says it will not waive. Is there any way to get the IRS to waive the minimum funding penalties or to get around such penalties?

Is there any latitude under IRC regs for employees of a state governmental plan to change the election amount for their IRC 125 MRA election after the open enrollment period and/or after the first fo the year - eg., reason being an increase in HMO premiums for the new year?"

Is there any latitude under IRC regs for employees of a state governmental plan to change the election amount for their IRC 125 MRA election after the open enrollment period and/or after the first fo the year - eg., reason being an increase in HMO premiums for the new year?"

MUST A PLAN CONTAIN AN EXPLICIT PROVISION ALLOWING A ONE TIME IRREVOCABLE ELECTION NOT TO PARTICIPATE OR IS THE FACT THAT AN EMPLOYEE EXECUTED THE ELECTION ENOUGH? ANY CITES?

Has the IRS released a notice either changing or confirming the $175 qualified parking expense limit (from the proposed regulations) for 2001?

If a Trustee is leaving a company. He rolls over his account without completing the Election of Non-Annuity Form of Payment. He is advised and won't sign, even after the fact. Why annuity rights are in a 401(k) I don't know, but they are. The guy is married.

Then the IRS audits the plan.

What do you think would happen? We are documenting the requests and everyhting but the guy is an ass.

I think the IRS would look to the sponsor with regard to any fine. Would then the sponsor have recourse against the Trustee for malfeasance in office?

Clienht sold substantially all of the assets used in a trade or business, thus permitting a distribution of account balances attributable to elective deferrals. Plan distribution options limited to lump sum and installments. However, law requires distribution to be a lump sum distribution. Old definition of lump sum included the distribution of an annuity contract. New definition does not include that language. However, I understand that President Clinton is set to sign a bill into law that would be a technical correction to the definition of "lump sum distribution" and add the annuity contract language back in.

Assuming the bill becomes law, does client have to offer annuity contracts to the transferred employees? Client would prefer to offer only lump sums.

I left a job with a 401(k) plan in February. The company I now work for does not have any retirement plan. Am I eligible for a traditional IRA?

Also, my wife changed jobs in September. Her old company had a 401(k) plan. Her new one does also, but they have a waiting period so she is not eligible to contribute yet. Is she eligible for a traditional IRA?

Our combined AGI is over $100,000.

Have final regulations been issued on IRS Intermediate Sanctions 4958 ?