I have contributed toward a Roth IRA which I purchased through Merrill Lynch for 2 years and would like to know how I would go about putting this years $2000 contribution in a fund only offered by ETRADE. Would I have to take my money out of Merrill's account and move it into ETRADE, or can I have part of my Roth IRA with Merrill and part with others? Would I just buy the fund I want through ETRADE and that contribution be recognized toward my Roth?

A top-heavy defined benefit plan was terminated 6/30/00 and all assets paid out.

A new 401(k) plan was effective 1/1/00.

What is the top-heavy contribution requirement in the 401(k) plan (3% of full-year compensation, 3% of compensation for 7/1/00-12/31/00, required for all participants, required only for participant that did not benefit in the DB plan, other)?

Is the top-heavy contribution requirement in the 401(k) plan affected by any top-heavy accrual in the DB plan? For example, if a participant had 1,000 hours of service in 2000 and received a year of top-heavy service in their accrued benefit determination, does that person have to also receive a top-heavy 401(k) plan contribution (since there was a short plan year ended 6/30/00, the participant did not get the benefit of using 2000 compensation in the top-heavy determination, but did get an additional year of top-heavy service)?

The safest and easiest course of action would seem to be to just give a 3% contribution to everyone in the 401(k) plan for 2000, but does anyone know it the plan sponsor could be okay not giving it to some participants (that had DB benefits), or giving less than 3% to participants who had DB accruals?

Anybody given thought to how to adjust a plan that would satisfy the 5% contribution gateway if the contribution were sufficient, but isn't in 2002.

Example, plan designed with rate groups of 20% and 5% for 2000. Plan says contributions are allocated proportionately to those percentages. Testing passes in 2000 and 2001, but in 2002 the employer can only put in an amount resulting in 10% for one group and 2.5% (or 3% if top heavy) to the second group.

This fails the 1/3 and 5% gateways, so cross testing isn't available. Should such a plan, if designed in 2000, have a "fallback" formula in such contingency? How might it be worded? How then would it be definitely determinable?

Clearly a corrective amendment increasing the contributions for NHCEs would be allowed. How else could this be planned for in advance without restricting design to the 1/3 rule?

Business owner has Target Benefit plan they are considering rolling to an IRA. She is eligible for 10 year averaging. She wants to know if she should take her lump sum distribution this year (2000), or wait until next year when in July, she will be 70 1/2. Additionally, if she takes her RMD in 2001, will she lose her 10 averaging option? If she postpones her RMD until 2002, will she still lose her 10 averaging option since it is excercizes in or after the year in which she attained 70 1/2?

Thanks for your input.

I am hoping for some feedback on a procedure that I have never questioned before: who do you send a pre-existing lookback questionaire to? I always assumed the plan member. I spoke recently with someone who told me they send theirs to the person's treating physician, asking for medical records. In other words they never ask the member about prior treatment, diagnosis, etc.

I could see contacting the physician as a cross-check against the information provided by a member, but failing to ask the member at all seems imprudent to me.

Has anyone seen this approach before? I would be interested to know if this question is addresseed in the regs anywhere.

A bank sponsors a profit sharing plan. The plan has invested a portion of its assets in participation interests in loans made by the bank. In other words, the bank makes a loan to a third party, and then sells all or a portion of the note to the plan. This appears to be a prohibited transaction (sale or exchange of property) for which there is no exemption.

How is the excise tax calculated? Would the "amount involved" be the amount paid by the plan for the note? Is there a 15% excise tax liability for every year the plan holds the note, or is it just a one-time excise tax for the year in which the note was purchased?

Does anyone see a problem with a self-funded health plan using the following procedure in regard to claims possibly subject (based on diagnosis and date of hire) to pre-existing exclusion?

Claim is determined (based on diagnosis and date of hire)to be possibly subject to pre-ex exclusion.

Claim is denied, and request for certificate of creditable coverage and/or questionaire on treatment in the lookback period is sent to member.

When certificate info and or questionaire is received, denied claim is recalced if warranted.

I am not terribly familiar with the new regs concerning timely payment, improper denial of claims, appeals, etc. and was wondering if they had any bearing on the procedure described above.

Would it make any difference if the information had been requested at enrollment, but not received yet?

Qualifed Transportation Fringe and Transit Passes

Does anyone understand the IRS Proposed Rules on Qualified Transportation Fringe as it relates to transit passes?

The way I read the rules, if a community or transit district makes readily available (without significant administrative costs) to employers vouchers which can be exchanged for fares, then the employer cannot allow employees to purchase the fares with pre-tax dollars on a reimbursment basis.

If this is the case, it seems that the employer is expected to provide these vouchers to employees at the employer's expense, e.g. free to the employee (with no salary reduction). What is the incentive for employers to do this?

Is the IRS accepting Form 5310's during the restatement process? We have a company with 2 plans they want to terminate and file 5310's...a 401(k) and a MPP plan. Do we need to wait until we get the approval from the IRS on the 5310's to pay everyone out? They are anxious to terminate these plans.

An employer has two plans, a MP and PS. The MP plan was terminated and received a D letter on the termination. All assets of the MP plan were then moved to the PS plan in a trustee-to-trustee transfer, as if it were a merger of the MP and PS plans, not a termination. Shouldn't the participants have been given the option of taking a cash distribution or rolling it to the PS plan? The plan document says that on termination of the plan the Employer will direct that the plan assets be distributed to the participants. Can (or should) the MP assets, that are now in the PS plan, be distributed since they should have been distributed when the MP plan terminated?

Plan has GUST determination letter stating plan will use prior year ADP testing method for 1999 & future years. Now wants to change to current year ADP testing method for 1999 & future years. Can this still be done within the remedial amendment period or are they precluded from making another retroactive amendment because they have a letter?

Could anyone recommend a source (hopefully online) for a model initial COBRA notice. I recently saw a reference to ERISA Technical Release 86-2, but I have not been able to locate it online. The reference mentioned it is outdated anyway.

I was wondering what people were using for this. I am not sure what is required in the notice, and I need to estimate the approximate length of the text for printing purposes.

Any update on necessity of amending cafeteria plans prior to 1/1/2001? Are there compliance issues if no amendment is made or is it the employer's choice as to making the amendment??

Thanks,

Chris

Are there any exceptions to the general rule that any reimbursement of plan expenses by an employer will be considered an employer contribution? I have heard that an employer can reimburse the plan for the expense of getting out of certain annuity contracts without this being considered an employer contribution, and that this is "done all the time." Does anyone know of a letter ruling or some other guidance that indicates that this is true?

It is my understanding that as a general rule participants should not be charged a fee for processing a distribution upon termination. Is there a problem with the investment company charging a check fee? If so, how can the plan sponsor correct the situation without moving the money?

I assume the check fee is probably O.K. My concern is that the investment company does not call it a check fee, but rather it is clearly labeled an administrative fee. Should the plan sponsor be concerned?

Under what conditions can average comp exclude comp before entry?

Must it be general tested, i.e. no safe harbor treatment?

Is it ok except for integrated plans?

Is it ok for new plans only?

Is it ok for unit credit accrual plans only?

Can anyone clarify this. I find this very unclear.

Having read previous message boards about self-funding plans, I am still caught between the pros and cons of the program. As an adminstrator new to the self funding plan, what am I getting myself into? Please advise.

Do stock options need to be counted in a Cafeteria Plan (not 401k)in determining "key employees"?

Do any formal guidelines exist regarding valid reasons for a hardship withdrawal within a nonqualified deferred compensation plan? The current plan document states that a participant may apply for a hardship in the event of an unforeseeable circumstances beyond the participant's control. Could elderly care expenses apply in this situation and how would the amount be determined (expenses for 12 months, etc.)?

Thanks for any opinions.

The Plan Trustee, a bank has been asked to serve as an independent fiduciary in a prohibited transaction exemption filing to permit the plan to lend money to the plan sponsor. Any advice?