Can a current calendar year 401(k) Plan still change to a safe harbor plan for 2001? That is, what is the deadline date to give the notice to the participants for 1) a safe harbor match?, 2) a safe harbor 3% non-elective. If it's too late for 1/01/01, can it be done anytime during 2001?

Would appreciate comments on the following situation: Employee was hired on Feb 1, 2000 when the company's 401K plan operated under six-month waiting period. Plan sponsor amends plan, extending the wait period to twelve months on June 1, 2000. This change is then applied to all employees hired in the first five months of 2000. Is the plan sponsor within its legal rights to apply the extended wait period retroactively?

A 401(k) replacement plan will be set up coincident with the termination date of the DB plan. The 401(k) plan is a qualified replacement plan and at least 25% of the DB surplus assets will be placed in a suspense account from which the employer will draw for purposes of the employer match over no more than a 7 year period.

I understand that the 7 year period starts with the date assets are transferred; however, given the timing constraints, surplus assets will not be available for transfer for perhaps up to one year.

Question: If the employer makes monthly matches to the 401(k)plan during the 1st year and surplus assets are determined and available for transfer 11 months into the 401(k) plan year, can the employer reimburse himself out of the surplus for the matched contributions made thus far?

I believe the answer is no- because the contributions made are the property of the pension trust and there was no "mistake of fact" to warrant reimbursing the employer. Can anyone substantiate or dispute this conclusion?

I believe that if the employer was able to wait on the match until the end of the initial 401(k) plan year, then he could use up one of the 7 years of the surplus starting with the first plan year of the 401(k) plan. If the distribution of surplus assets should occur after the 1st plan year, then the 7 years would have to start in the year of transfer.

Thanks

Has anyone amended/converted a money purchase plan into a defined benefit plan in one plan year. Assume the mp allocation requirements have been met for the year. Also assume that the db minimum funding requirements are greater than the mp contribution. How do you coordinate 412 and 404(a)(7)? Is their only one minimum funding standard and one deduction limit?MP/DB conversion

One of our unions would like to allow employees injured by a third party (i.e. victim of off-the-job auto accident)to buy back sick leave that they had to use while they recovered from that accident. The theory is they would take some of their cash settlement from the guilty party's insurance company and use it to reinstate their sick leave bank.

Are there any legal or taxation restrictions that would prevent us from doing this?

Can Non-Qualified Plans allow non-highly compensated employees in the plan?

A participant in a 401(k) Plan turned 70 1/2 in July 1999. The required beginning date to receive his first distribution was 4/1/2000. The plan sponsor did not make an election whether to allow active participants who are non-5%owners to defer there payment until actual retirement. Can the plan sponsor now make an election to provide the participants this option and can the effective date be retroactive to the date of the first required payment????

I'm looking for marketing ideas on how I can locate EXISTING 457(f)plans(or "risk of forfeiture plans") with tax-exempt and other non-profit organizations. I understand they do not show up with 5500's and 990's. Any help would be greatly appreciated.

A participant has made an excess deferral into the

employer's 401(k) plan for the 1999 plan year which

was just discovered. If a corrective distribution is

made now, will the distribution be subject to the early

withdrawal penalty assuming the participant is not

59 1/2 and is still working? Both the statute and the regs. seem to provide

that Sec. 72(t) does not apply but only when the correction

distribution is made on or before April 15 of the year

following the year the excess deferral was made. I am also

concerned that Reg. Sec. 1.402(g)-1(e)(8)(iii) says that

a corrective distribution made after the correction period

must satisfy 401(k)(2)(B). Does this mean that if the

participant is still working and is not 59 1/2, the cor-

rective distribution cannot be made?

My DB plan has a 5/1 to 4/30 limitation year and my K plan has a calendar year limitation year; the DB plan is primary; for the K plan's 1999 calendar/fiscal/limitation year, would the "accrued to date" DB fraction be based on the accrued benefit as of 4/30/99 or 4/30/2000 ? The plan document is silent !!

Is the following a correct understanding of nondiscrimination testing for controlled groups?

1) All employees of the controlled group will be treated as employees of one employer for qualified plan purposes.

2) If different employers within the controlled group have different plans, each covering only their own employees, then:

1. If each plan passes 410(B) coverage testing, then the other nondiscrimination tests (ADP,ACP,401(a)(4)) can apply to each plan separately.

2. If each plan cannot pass 410(B) coverage testing separately, then the plans will be treated as component parts of the same plan, and must pass the other nondiscrimination tests (ADP,ACP, 401(a)(4)) combining all participants from both plans.

What else is important when doing nondiscrimination and other qualified plan testing for controlled groups?

We'd like to amend a profit sharing plan to not allow life insurance as an investment option anymore. It will still be an option for those who already have policies in the plan. What are areas of concern?

Can participants take a "distribution" of policy from plan without distributable event?

Is selling the policy within the plan the same as changing any other investments (that is, no tax consequences).

Any help is appreciated.

Is the annual fee for Embryo Cryopreservation (Storage/Freezing of Embryos) a reimbursed expense under a medical FSA? We have told the employee that the storage process cannot be reimbursed, however the actual surgery/procedure could be. The employee is arguing that this is a medical process and, therefore, it should be reimbursed.

Thank you.

Outside of the cafeteria plan, would the presence of an election/choice between various benefits, such as deferred compensation plan, health or vision benefits, offered by the employer to an employee mean that normally pre-taxed deferrals become included in the employee's gross income?

If a doctor teaches at a university and participates in the school's 403(B) plan (contribution $20,000) and also participates in the school's 401(a) plan (contribution $10,000); may the doctor also participate in his own profit sharing plan? If so how much may he contribute to his own plan?

This year we installed a MP plan and a SEP (using proper prototype)in '99, both one person plans - in '99 and this year, he contributed $30,000. SEP is now valued over $200,000 due to rollovers, making assets of both plans greater than $100,000. Does a 5500EZ need to be filed due to the SEP or does the EZ requirement refer simply to 'real' qualified plans? Thanks.

I could not find an answer to this question on the message boards, but please forgive me if it's already been asked. An employer overfunded matching contributions for an owner in a SIMPLE IRA for 1998 and 1999 (i.e. more than 3% of compensation). When returning the excess, should the principal be returned as well as earnings? Moreover, should there be a 1099-R produced, and if so, with what distribution code for principal, and with what distribution code for earnings? Any other issues that I should be aware of here?

Can an individual applying for individual coverage through an HMO be denied coverage, under HIPAA, because she/he only recently (six months ago) quit smoking? The individual has been without coverage for more than a year.

The HMO, in its inestimable wisdom, has decided not to cover individuals who have not quit smoking earlier than 36 months before applying.

Can a 501©(3) organization sponsor a safe harbor 401(k) plan?

I was just asked by a TPA if, when doing the non-discrimination test for a cross-tested allocation for the year, are salary deferrals in the (k) portion of this plan included in the test?

The TPA said that when only looking at the PSP portion (Employer contributions allocated on a cross-tested basis) the average benefits test passed. But the computer added deferrals from the (k) portion and the test failed.

This TPA said that the computer grabbed any amount that was considered an annual addition and counted it in the cross testing.

I certainly thought the (k) portion and the PSP portion were totally separate, but if I'm wrong, I need educating fast.

This is such a strange concept for me that I'm not even sure I'm wording my question clearly.

Thanks for any responses.