Is it possible for a 457 plan to limit distributions, both in-service and after separation, to a participant's attainment of normal retirement age? As I read the regulations under section 457, the one-time, irrevocable election to choose a different distribution date and emergency withdrawals are permitted (i.e., they won't result in amounts being made available to a participant), but are not mandatory. However, I haven't seen any plans that do not permit the one-time election, or that don't allow emergency withdrawals.

Section 457(e)(11)says that the one of the only forms of compensation a bona fide volunteer can have is "nominal fees". Is there a specific amount that is considered to be nominal? Would $10,000 per year be considered nominal? Section 457(e) says volunteers can receive "reasonable benefits (including length of service awards)" and it limits the accrual in a length of service award program to $3,000. Which is bigger "reasonable" or "nominal"?

I am already 59, wy wife is 57 and we both work. Does it make any sense to initiate Roth IRAs at this age, with only a few years left til retirement? We each have traditional IRAs (to which we have not contributed in recent years since we can no longer contribute pre-tax money).

With current income over $1000000, conversion of the existing ones to Roth has not been considered.

Thanks

An employer missed out a HCE to be able to enter the Plan on July 1. The employer did catch their mistake in September. The employer realizes that they will have to make a QNEC in the amount of the average deferral percentage. However the question arises whether the HCE can still max out his full $10,500 as well as receive his QNEC on top of it. I feel that the total can not be more than $10,500 (including the QNEC) since he is a HCE. If it was a NHCE then QNEC+$10,500 would have been feasible. Is that correct?

Thank you & Happy Holidays to all the members!

My 70-year old friend converted a Traditional IRA to a Roth in 1998. He elected to pay the conversion taxes over 4 years. He wants to make a withdrawal from the Roth this year but was told he would have to pay taxes on the entire withdrawal amount (not just the earnings). It would be treated as accelerated income. Is this correct or can he apply the withdrawal to the amount he already paid conversion taxes on in 1998 & 1999? Please advise.

An employer has a cash balance plan and wants to provide vested participants who leave employment prior to early or normal retirement age with a "portable" benefit by allowing them to rollover their accrued benefit into their new employer's plan. The only form of distribution under the plan eligible for rollover is a lump sum. The plan sponsor does not want to allow terminated participants to receive annuities until early or normal retirement age.

Can a cash balance plan (or any DB plan, for that matter) provide that a vested participant can elect a distribution upon separation from service prior to his early or normal retirement date, but ONLY if the participant waives the QJSA (with spousal consent) and elects a lump sum?

To take it a step further, could the plan condition the payment of the separation benefit upon the election of a lump sum AND an election of a direct rollover?

Could anyone explain what timely payment regulations (and possible penalties) apply to a TPA processing claims for self-funded group health plans?

I am wondering what the obligation would be for a self-funded health plan that never came into compliance with the MHPA (with no exemption claimed). Even if the plan amended retroactive to the deadline, what about all the claims improperly subjected to dollar maximums?

Could anyone tell me what agency or agencies enforce the MHPA, and what form that enforcement might take?

I have a client that wants to sponsor an employee pay all VEBA. What happens if an employee terminates service with the employer or dies. What happens to his contributions?

The outcome of Arizona v Norris resulted in the requirement of using the same mortality tables for males and females for determining act equiv. benefits.

Is there a section in Code that requires use of same mort. table or is this requirement just based on Civil Rights established from the case?

A Plan doc has Gatt assumptions for lump sums, but the most up to date SPD has PBGC basis. How likely of a case does an employee have in this case and does anyone know any precedents out there?

The ee wants PBGC basis as it results in greater lump sum.

The 83 GAM is used for GATT purposes and is considered a current mortality table. Does anyone know how to explain to a client why this table is considered current if it has the year 1983?

Does anybody know of a VEBA sponsor located in California?

Thanks

Can a company contribute, as a corporate contribution to the company's qualified profit sharing plan, the stock of a publicly traded company (not related). The corporation owns the stock and they want to "transfer" it to the plan as a company contribution. They would record it on the corporate books at the market value on the date of transfer, realizing any gain/loss for tax purposes. The company wants to avoid the transaction costs of selling the stock and buying it again for the pension trust.

What recourse does a self-funded group health plan have in the case of a member who did not disclose a serious health condition upon enrollment? Could they apply a 12-month pre-ex condition exclusion retroactively? Could they deny all claims based on the member's failure to disclose?

Can anyone advise me on the possible ramifications of a self-funded group health plan denying a member entry into the plan's coverage because of an ongoing illness? Would it make any difference if it was a new hire vs. an existing employee? I am not sure what regulations apply.

When a shareholder sells his stock to the ESOP and elects the 1042 tax treatment, can he also participate in the ESOP shares at a later time?

I have a takeover client that previously adopted a Volume Submitter document circa 1992. IRS auditor is asking for amendments required under UCA '92 and OBRA '94.

Even though he's now with me, isn't his document still maintained by the former TPA, who would have added these amendments to the Volume Submitter document?

Opinions? To my knowledge, client was never sent an "I'm giving you the boot" letter.

I have always considered it a given that nonqualified elective deferrals can not be included in the definition of compensation for allocation purposes in a qualified plan. These deferrals would not technically be employee compensation. They would be employer contributions to the NQDCP on the employee's behalf.

Of course, a client has told me there is new legislation or case law that changes this result and allows nonqualified deferrals. I don't know of any such new law.

But it occurred to me to ask the following question: Does anyone permit the inclusion of NQDCP elective deferrals in the definition of compensation for allocation purposes, and then test for discrimination under the compensation ratio test? If the employee population is large enough, and the top hat group small enough, presumably you could have a small enough difference in the ratios to be de minimis.

Again, however, since these deferrals are employer contributions to the NQDCP, and not employee compensation, my understanding is that this is not permissible at all.

thanks.

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Does anyone know of any debtor/creditor laws in Massachusetts that would require any special consideration when drafting a rabbi trust in that state?

Thanks.

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