There is an active participant who is not a 5% owner, and turned age 70 ½ in March of 1999.

The plan document has always required all active participants to start minimum distributions in accordance with the “old” rules and has not and will not be amended to allow participants to defer.

The plan document allows in-service withdrawals after age 65.

The minimum distribution for 1999, to be paid by April 1, 2000 was calculated to be $2,000. The participant took an in-service withdrawal of $5,000 on March 31, 2000.

The minimum distribution for 2000, to be paid by December 31, 2000 was calculated to be $1,500. The participant took an in-service withdrawal of $2,000 on December 31, 2000.

What amount is eligible for rollover from the 1999 distributions?

From IRS Notice 97-75:

Q-9: If distributions are made under a plan to an employee (other than a 5-percent owner) who did not retire before January 1, 1997 from employment with the employer maintaining the plan, is any portion of a distribution made after attainment of age 70 1/2 a required distribution under section 401(a)(9) for purposes of section 402©(4)(B)?

A-9: (a) General Rule. Section 402©(4)(B) provides that a distribution is not an eligible rollover distribution to the extent that it is required under section 401(a)(9). As noted in Q&A-6, for purposes of determining the amount of minimum distributions that are required after December 31, 1996, the required beginning date for an employee who did not retire before January 1, 1997 from employment with the employer maintaining the plan is redetermined under section 401(a)(9)©, as amended by the SBJPA. Therefore, whether or not a plan allows an employee who attained age 70 1/2 before January 1, 1997, but did not retire from employment with the employer maintaining the plan before that date, to stop receiving distributions in accordance with Q&A-7, a distribution to such an employee prior to the year the employee retires is not a required distribution under section 401(a)(9). Such a distribution is an eligible rollover distribution unless it is excepted for some other reason. An exception is provided under section 402©(4)(A) for a series of substantially equal periodic payments made for the life (or life expectancy) of the employee or the joint lives (or joint life expectancy) of the employee and the employee's designated beneficiary, or for a specified period of 10 years or more. If an employee's benefit is being distributed in a series of annual payments that would equal the required minimum distribution determined in accordance with Q&A F-1 of section 1.401(a)(9)-1 of the proposed Income Tax Regulations, then the series of payments will be considered a series of substantially equal payments over the life (or life expectancy) of the employee or the joint lives (or joint life expectancy) of the employee and the employee's designated beneficiary, or for a specified period of 10 years or more, in accordance with Q&A-5 of section 1.402©-2 of the Income Tax Regulations. Therefore, payments under such a series of payments are not eligible rollover distributions.

We have a number of cross-tested plans that identify allocation groups by age or year of birth. Contributions for each allocation group are discretionary. I recently read somewhere that this may violate ADEA. Any thoughts?

Am trying to get name(s) of vendors who provide "flex debit or convenience cards" used by third party administrators with their client's participants enrolled in the medical and/or dependent care reimbursement plans? Can anyone help?

SECTION CODE 415(B) and ©

I WAS LOOKING UP THE KEY EMPLOYEES AS DEFINED BY THE IRS AND IT REFERED ME TO THIS SECTION 415 b,c. PLEASE ENPLAIN SEC 415 b & c??? THANKS

When an employee's status goes from an excludible employee to an eligible employee are all years of service considered for participation purposes even for the period when the employee was excludible?

The Consolidated Appropriations Act 2001 signed into law by the President on December 21 includes provisions that seem to affect withholding for Roth IRA distributions. Are some Roth IRA distributions now not subject to federal withholding? I am not sure what impact these changes have. Any imput would be helpful, thanks

Can anyone recommend a stand-alone 401(a)(4) software package for DB (or DB and DC), or is this not available in a stand-alone setting?

We are very happy with our administrative/valuation software but do not like the testing package at all.

Could anyone recommend a publication or organization for helping TPA's and/or their clients maintain regulatory compliance? It seems like a full-time job staying on top of all the requirements. I need to stay ahead of federal and New Jersey state regulation.

Does the following excerpt from Rev. Proc. 2000-20 mean that sponsors of regional prototype plans do not need to send annual notices or the IRS certification letter in January of 2001 that was required in January of 2000 (required by Rev. Proc. 95-42 and 89-13)?

This revenue procedure simplifies the record keeping requirements that applied to regional prototype plan sponsors under Rev. Proc. 89-13 and applies these simplified requirements to all sponsors. Under this revenue procedure, every sponsor will be required to maintain or have maintained on its behalf, and to provide to the Service when requested, a list of the employers that have adopted its plan, but sponsors will not have to provide the annual notices that were required by Rev. Proc. 89-13.

Employer wants participants to enter the plan (make elective deferrals) as soon as they have completed 1000 hours. The employer doesn't want the employees to have to wait for a 12 month period to pass. At the same time, the employer doesn't want those who work less than 1000 hours to become eligible. Can this be done? If so, how do we define the eligibility and entry date requirements?

I have two 403B accounts. One with Great American Life Insurance Corporation and one with Travelers Insurance. Under my account with GALIC,I took a loan to purchase a house. Can I transfer the loan and assets in my GALIC account to Travelers in accordance with Section 1035 Exchange? I am not happy with GALIC and they have refused to execute such a transfer.

If an employee does not give notice upon termination, is the employee entitled to any payouts for unused paid vacation days?

Does an employee achievement award plan intended to satisfy Code § 274(j) have to file a 5500?

Does anyone know whether an employee achievement award program intended to satisfy Code § 274(j) is an "employee welfare benefit plan" for purposes of ERISA?

I have a participant who is a commissioned employee. Sometimes, he earns little or nothing and his paycheck will not cover a loan payment as medical insurance in arrears goes first, then SS, then medicare etc. For weeks there might not be enough for a payment and either none of or a piece of the payment is applied. Then he earns again and a normal payment is deducted. How should we handle the none or little payments? How do we make up the loan payment..require him to write a check?

Four years ago, A shareholder, who owned 10% of the company and is also an employee, sold 40% of his stock to an ESOP. In a transaction where the ESOP Acquired 40% of the Company. This Shareholder did not elect Sec. 1042 deferral treatment and has participated in allocations of stock in the ESOP. In December 2000 This shareholder sold his remaining stock to the ESOP. If this shareholder remains an employee and elects Sec. 1042 deferral treatment, (1)Can he receive an allocation of stock in the ESOP for the year 2000 (assuming only shares acquired by the ESOP in the first transaction are allocated in 2000)? (2) Could he participate in any remaining allocations of stock acquired in the first transaction in future years?

1. Have there been any changes to DFVC as a result of the implementation of E-Fast?

2. How will reasonable cause letters for a late fringe benefit filing be handled under the new system. (The plan in question is not required to file under ERISA -- just the IRC)?

Thanks for your help.

Under ERISA Section 407 a retirement plan may hold qualifying employer securities. Under the definition of a QES is the term "stock". I am unable to find a definition of stock. Would an interest in an LLC be considered stock for these purposes if the state in which the LLC is in treats as a corporation?

There is no folly of the beasts of the earth which is not infinitely outdone by the madness of men.

Melville, Moby Dick

What happens if someone chooses 10 year distribution of their 457 account and there are funds leftover after the ten year period? Or are all funds distributed in the tenth year regardless of the amount?

Thanks.