I need a clarification on an MRD issue I have recently encountered:

Husband and wife are both over 70 1/2. Distributions have been taken using Joint Life Expectancy with recalculation. The husband dies, and the wife elects to treat the IRA as her own.

Question: Can she elect new beneficiaries and set up a new payment scheme? Everything I have read (both in books and here on the message boards) seem to indicate that this is allowable. However, one of the largest banks in the US indicated that the distributions must continue "as least as rapidly" as they were before, thus having the wife continue the distributions on a Single life expenctancy, as the husbands expectancy dropped to zero in the year after death.

Who is right? Any cites on the boards or from the regs would be appreciated.

In computing EBAR's for a safe-harbor 401(k) plan with a tiered PS allocation is this the correct methodology?

A. Before imputing disparity:

1. Calculate EBARs for avg. ben. % test using contributions from all sources-deferrals,3% safe harbor,employer allocations.

2. Calc EBARs for 401(a)(4) general test including safe harbor but excluding deferrals.

B. To impute disparity,repeat these steps, but using employer allocations only.

Has anyone done an SAR for a 412(i)plan? I'm not sure what information I need to include, since the plan is exempt from filing a Schedule I for the 1999 year. Specifically, do I just mention that the plan is funded solely by allocated insurance contracts and forget about asset values, gains/losses, etc. What about payouts and plan expenses? The plan is a take-over and used the 5500-R in lieu of the SAR in prior years, which is no longer an option.

Thanks

David

If an employee becomes disabled and the company changes life insurance carriers during the period of disablity: is the employer obligated to cover the person with the new carrier? inform the disabled that there is a change of carriers? if he's not obligated to cover the person, must he give the disabled the option to take out coverage on his own? is life insurance coverage covered by COBRA? can the employer who failed to cover such person, now say that the person was terminated on the first day of disability? In essence, I'd like to know basics before approaching legal counsel. Cites would be helpful. Thanks. PS The employer has about 75 employees and is centrally located.

We are thinking of investing in a Roth IRA for retirement and our daughters college education. She is 6. I'm wondering if this is a good investment and/or if there are any other types of savings tools out there that might benefit us more. I'm in my 30's and my husband is in his middle 20's. We don't currently invest in any type of 401K's at work or any other type of investment tools.

Can someone give me advice on this? Thanks!

Are the review of investment options by an outside consultant and the search for a new recordkeeper expenses that may be charged to a plan? Does the answer depend on the plan's provisions?

If a participant requests a copy of the full annual report - should we just provide the form and ALL the attached schedules?

Thank you for any help.

A sole proprietor (who has employees) is setting up a 401k plan. How should he declare his income so it can be used in the plan? OR maybe I should be asking what types of compensation should we include in the plan doc so his compensation is covered? From what I understand, he should not declare w-2 income? Any CPA's out there?

A fiscal year plan has been amended to a calandar year with a short plan year. when determining HCE's, what period do you use for the look back year. Do you pro rate (using the short plan year as the lookback year) or do you count compensation for the last full calendar year? a citation would be appreciated.

We are a TPA firm and presently prepare annual particpant statements for the participants in all of the 401(k) plans we administer along with SPDs and SARs. In addition, these same particpants are sent quarterly cash investment statements that reflect current market values.

The annual statements are run on a plan year basis, and reflect vesting etc. I was recently at a seminar and found that most of the TPAs have stopped the annual statement and only send the quarterlys. Our "document" is rather vague as to what the reporting requirements are.

What is really required. What do most TPAs send out?

Your thoughts would be appreciated.

Any opinions on 6.0? We're wondering if we should convert soon or wait until the end of busy season next year.

Any feedback positive or negative would be helpful.

Anyone have problems with the conversion?

Anyone have problems with custom reports other than those experienced from the 4.1 to 5.0 conversion?

If a 125 plan allows for a taxabe cash benefit, can it automatically be used as a 401(k) contribution? Or, must the 125 plan specifically state a 410(k) deferral option? What is the benefit of deferring a taxable cash benefit through a 125 plan? And, would compliance testing under the 401k plan become more cumbersome?

I have a client who is closing its trust department. They have notified their plans and most have transferred their accounts elsewhere. However, they have a number of IRAs and one qualified plan that have not moved. Are they required to find substitute trustees for the IRAs and plans? I have not been able to locate anything in the Code or ERISA.

I have a frozen DB plan that the sponsor wants to "terminate" in phases. Liability is about 1.8 Million, assets about 1.2 million. Plan has active EEs (all vested), VTs, and retirees.

1. Buy an annuity for retirees now, about 800K. About 175 participants remain. There is no resolution to terminate yet.

2. When the sponsor has more cash, plan will undergo a standard termination for remaining participants. This could be in 2 months or 12 months, etc.

Any problems with this that I have not noticed?

Plan sponsor wishes to consider a "rule of 90" (or maybe 85) (combination age and service) unreduced early retirement subsidy.

Plan has maybe 100 actives, 175 total participants, no lump sum option.

What happens when the plan terminates? Must participants who don't have the age and service as of the termination date be given the opportunity to "grow into" the subsidy, presumably through an annuity contract?

Are there any ways to get around this from the sponsor's perspective, in order to make the termination feasible?

One option would maybe be a lump sum? Are there any other options if the "grow into" opportunity needs to be protected, and the sponsor wishes to terminate the plan?

Anybody take this yesterday? What was with the cash balance conversion wearaway/early retirement subsidy question? Did the question make sense to anybody?

If a trust is the beneficiary of an IRA, how do I determine the date that minimum distributions must begin? Cites would be appreciated.

An employee elects a dental plan in writing at open enrollment. Due to error by HR department, the deduction was never taken. Ten months into the year, the employee realizes error when claims are denied (never looked for deduction on pay check). Employee wants to pay back premiums for the year and enroll in the plan. Allowable?

Also, another employee enrolls newborn on day 35 (5 days after deadline). What does everyone do in practice? Deny coverage? Does it matter if employee already has family coverage and premium doesn't change?

Question on Roth recharacterization calculations for earnings: Who is required to calculate earnings on my initial converted amount? Is the trustee, my CPA, or am I solely responsible for this?

Thanks,

Chris

I have a question on the rules on "net unrealized appreciation" (or "NUA") for employer stock that is held in a participant's account under a defined contribution retirement plan. The source rules are in IRC 402(e)(4).

If a retired participant has an account with such employer stock, and the participant has already started receiving "required minimum distributions" due to attaining age 70-1/2, does the participant still have the ability to obtain NUA treatment for the stock, if he takes a lump sum distribution of the stock?

(I am also interested to know: (a) if this is a straightforward issue or a tricky issue, and (B) whether there is specific authority on this point.)