Can a money purchase plan provide for the following formula: 5.7% integrated formula; provided that each HCE physician in his/her first year of participation is limited to a $500 allocation, and each HCE physician in his/her second year of participation is limited to a $2,500 allocation? Doctors in their first couple of years of practice need as much $ in cash, so they asked regarding limiting allocations during these years.

I don't think there's a discrimination problem because its limited to HCEs, but is there something I'm missing?

I have had two situations this year where the value of clients converted Roth IRA has dropped significantly. In one case, the conversion was made at $30,000 of value, reporting $7,500 of income per year for 4 years and now in year two, the total value of the Roth is $9,000. Does the taxpayer still have to report the full $30,000, and when, if at all, does the taxpayer take a tax loss and, if so, what type of loss would it be. I see no discussion of this type of situation in any literature.

Anyone know where I can obtain IRS Announcement 95-99?

Can a waiver of participation be revoked by the participant? I'm looking at a form that is titled "Election not to Participate". The last paragraph of the form states that the election will remain in effect until the participant revokes the election. I thought that a waiver of participation had to be non-revokable.

Also, if there is a valid waiver of participation, is the participant included in the ADP test? 410(B) test?

I made a $2000 Roth Contribution this year for Tax year 1999, and an additional $2000 for tax year 2000. I have recently discovered that I will be above the allowable income limits for contributing, and will therefore have to take $2000 out of my account for Tax year 2000.

With the $4000, I bought 80 shares of a stock that is now worth under $2000. Can I transfer those shares out of my Roth, or do I have to sell them first, and transfer cash? If I can transfer stock, how many of the shares can I transfer (what part needs to add up to $2000, my cost basis, or what they are worth now?) Will I be able to take advantage of the losses for tax purposes? Finally I have some other losses from stock that I bought several years ago in my Roth account. Can I transfer those shares to satisfy the excess contribution even though I bought them several years ago, and if so, can I take advantage of those losses.

Any help is appreciated.

We have 3 nephews (the oldest is 7) whom we'd like to help financially with college when they're 18. We are planning on opening taxable accounts in our name, and making a series of gifts when they graduate high school. Keeping the accounts in our name will exclude them from financial aid applications, although the redemptions will trigger tax penalties for us. We've been told that Roth IRA's in the student's name may not be required on a financial aid application. If true, this would greatly change our family support strategy. Can anyone set the record straight on this?

Is it sufficient for NQ deferred compensation plan drafting purposes that the contribution formula be defined as an amount equal to the difference between (1) 10% of the participant's compensation, and (2)the percentage of compensation allocated on the participant's behalf as a matching contribution under the employer's qualified 401(k) PSP [irrespective of any later corrections or changes to the match as a result of ACP testing]?

Can an employee enter into a sufficently specific salary deferral agreement prior to each plan year, with the contribution expressed in such terms??

Although I saw this question discussed in previous postings, they are a bit old. I am seeking any up-to date info on the requirements for initial COBRA notices, which I understand to be notices provided upon entry into the plan.

Our SPD's contain an extensive COBRA chapter and are provided to all members. Is this sufficient under the current regs?

I noticed some people considered distribution of the SPD to the new member insufficient, on the grounds that the spouse might not see it. In the context of notices provided due to triggering events (loss of job, etc.), I was under the impression one notice mailed to the member's current address was sufficient, unless a dependent was known to reside at a different address.

As you have probably gathered, we do not send these initial notices, relying instead on distribution of the SPD.

Any opinions?

We have mandatory plan enrollment (participants cannot elect "No Coverage"), and participants with other comprehensive coverage typically take our $10,000 deductible Cat plan in order to take advantage of our liberal "cash back" allowance. When they lose their comprehensive coverage through their spouse, they want to switch to one of our higher-level plans. We permit them to add their spouse and/or other dependents, but do not permit plan changes. Searching for cites to HIPAA regs that would permit a participant to make a mid-year election change from a Catastrophic type health plan to a comprehensive plan, based on the occurrence of a qualifying status change event (eg. spouse loses coverage under other plan, birth of a child, etc.). We'd like to permit the change, if we could find something in the regs to "hang our hat" on. Thanks.

Two state-funded universities merged in 1997 into a separate entity, while the original universities still had employees working exclusively for themselves. The non-merged employees were allowed to continue contributions to their own separate 403(B) plans administered by the universities; the merged employees were allowed to contribute to a separate 403(B) plan with an employer match (up to 5%).

The entity de-merged in 2000. The merged employees again became university employees no longer allowed to contribute to the entity's 403(B) plan, under the "same desk rule", but were once again allowed to contribute to their individual university's plans.

Now...comes the fun part.

Because of the de-merger, some employee's have over-contributed to the plan, exceeding the $10,500 for PY2000.

The dispute lies in who should refund to the employee the overpayment amount: the merged entity or the individual universities.

Both are claiming that the other is responsible, but, as the end of year looms mightily on the horizon, someone (one of the the entities) must come up with the funds so that the affected employees are not penalized for over-contribution.

Any thought on who is responsible for this?

Has anyone heard of the practice of state insurance commissioners requiring COBRA administrators to obtain third party administrator certificates?

I believe this is required here in California.

I have a question concerning MRD for a 401(k) and an IRA.

Husband and Wife are both past age 70 1/2 and Husband has been taking MRDs out of his 401(k) plan. Husband dies in March of 2000 and Wife does a spousal rollover to a new IRA with her daughter as DB. Wife then dies in October of 2000. 1. Is there an MRD from Husband's 401(k) in 2000?

2. Based on some Private Letter Rulings I've read, I believe that Wife, if she had survived, would not have to take an MRD until December 31, 2001. Is that correct and is there an MRD from Wife's new IRA in 2001?

3. What distribution rules apply to Daughter and what distribtuion must she take in 2001?

Thanks.

The situation is this: a company had a severance "package" it offered to those employees they have had to lay off. Recently the company has downsized tremendously, placing them under the requirements of the WARN Act. Because of this, the company adopted a formal severance "plan" which says that those employees falling under WARN will have their severance benefits reduced by the amount the employer has to pay them under WARN. Is this fair? How can 2 employees be treated differently under ERISA just becuase one employee falls under WARN? And what about WARN, does the statute say you can reduce payment if the employer has set up some sort of severance package for the outgoing employee??

What is the 2001 employer limit for SIMPLE Plans. I realize that $6,500 is the employee limit, but have not seen anything regarding the employer limit.

Thanks in advance for your assistance.

A hospital with a 414(h) pick-up provision has now been bought by a for-profit organization that has a 401(k). Can the assets be transferred to the 401(k)? Is so, are there any rulings or IRS guidance supporting this?

Do SAR's have to be distributed to terminated employee's? We have a Section 125 Premium Only Plan, Medical and Dependent Care FSA's and a 401(k) Plan.

Can they be distributed electronically?

We are considering various pension document software. I have heard through the grape vine that there is a program called Doc Man that is very good. Has anyone heard of it? If so, where can I get more information about it? Is it worth the price?

Employer purchases business and agrees to continue SARSEP retirement benefits employees had received with predecessor company: 5% salary deferral and 10% employer matching contribution. However, employer later learns that predecessor maintained only a SEP, not a SARSEP. IRA custodian has been depositing deferrals and matches into IRA as undifferentiated lump sums.

Is there any way to convert this arrangement to a SIMPLE IRA so as to preserve the salary deferral feature? If not, and employer maintains SEP, what is the best way, from a tax reporting standpoint, to make the employee whole?

Leverage ESOP note matures in two years and the Employer wants to "reload the plan" with a new ESOP note. If the employer wants to continue the ESOP, is a new loan permissable and what are the requirments? How soon is the plan allowed to purchase new shares from the employer with a new leverage loan?

Is anyone considering converting their health plan to a defined contribution plan? If so, when and how? If not, why?