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.

An insurance agent of a client of mine proposes using approximately $400,000 of an $800,000 account balance in a frozen plan to purchase a paid up whole life first to die policy on the lives of the participant and his spouse. No insurance has been purchased in the past, so the $400,000 is available. I believe (but am not sure) that the goal is to take a distribution of the policy in about five years when the cash value is still low, apparently to avoid taxes. Does this seem reasonable? Can the policy be a first to die, thus insuring the life of a nonparticipant (the participant's spouse)? Thanks.

We've been retained by a new client to amend their MPPP to reflect a 6% contribution for participants with less than 10 years of service and 8% for those with service 10 years and over. I assume this will require a volume submitter document. If the plan passes rate group testing each year, does anyone see a problem? Does anyone have suggested language? Thanks.

After leaving my job, I continued my insurance under the Cobra coverage. Is it possible to extend the coverage past the initial 18 months?

A documentation question: Company A buys Company B and Company B's plan will now be merged into Company A's plan. Do both plans need some kind of "merger" resolutions? Does any one know of any sample language? Thanks for any guidance.

Is the following information accurate?

"When Contributions are due:"

1. Payroll deducted amounts, including 401(k) & 403(B) Elective Deferrals, After-Tax Employee Contributions (and loan repayments) are due as soon as they can be deposited to the Trust Fund. (Section 125 "payments'?)

2. Safe Harbor Matching Contributions, calculated on a basis other than annual, are due no later than the end of the plan year quarter following the quarter in which they are calculated.

3. Defined Benefit and Money Purchase Pension Plan contributions are due 8 ½ months after the end of the Plan Year.

4. Profit Sharing Contributions and non-Safe Harbor Matching Contributions are due by filing date of the Employer's tax return, including extensions. Corporations, Partners and Sole Proprietors have different extension periods although Partners and Sole Proprietors end up at the same deadline (Oct 15).

5. Qualified Matching Contributions and Qualified Non-Elective Contributions, used to solve ADP/ACP/MUT testing failures are due by the end of the Plan Year following the end of the Plan Year tested.

End.

501©(6) organization has a for profit subsidiary which

has a broker dealer as a subsidiary. It has been proposed

that the 401(k) plan sponsored by the ©(6) org be

invested through the bd sub. The for profit sub would

receive the commissions on the assets which ultimately

would go to the ©(6) parent. Is this a prohibited

transaction and/or fiduciary issue? As a trustee of the

plan, as well as an employee of the sub, I am concerned

with any potential violations. On the one hand, the

revenue can help keep membership dues and expenses reasonable for the parent org. On the other, we don't

need any violation problems either. Any information,

thought and references to DOL regs would be appreciated.

THANK YOU!!

Let's say you lose 90% of the value of your 401k investment in the year 2000. Are these losses tax deductible?

While most businesses offer employees some combination of health and/or life insurance benefits, virtually none offer employees auto, home, or other personal insurance benefits.

Is there any reason why an employer would not be allowed to offer employees auto or home insurance as part of a benefits package?

Is there any reason why an employer would not want to offer auto or home insurance as part of a benefits package?

Participant, age 76 and prior owner of Company A, says he has valid TEFRA eleciton for the Company A DB plan. He can not produce the election form. What, as plan administrator, is my responsibility when it comes to making MRD. This is a new plan for me - my company recently bought the assets of Company A and assumed sponsorship of the DB plan.