Is there any latitude under IRC regs for employees of a state governmental plan to change the election amount for their IRC 125 MRA election after the open enrollment period and/or after the first fo the year - eg., reason being an increase in HMO premiums for the new year?"

MUST A PLAN CONTAIN AN EXPLICIT PROVISION ALLOWING A ONE TIME IRREVOCABLE ELECTION NOT TO PARTICIPATE OR IS THE FACT THAT AN EMPLOYEE EXECUTED THE ELECTION ENOUGH? ANY CITES?

Has the IRS released a notice either changing or confirming the $175 qualified parking expense limit (from the proposed regulations) for 2001?

If a Trustee is leaving a company. He rolls over his account without completing the Election of Non-Annuity Form of Payment. He is advised and won't sign, even after the fact. Why annuity rights are in a 401(k) I don't know, but they are. The guy is married.

Then the IRS audits the plan.

What do you think would happen? We are documenting the requests and everyhting but the guy is an ass.

I think the IRS would look to the sponsor with regard to any fine. Would then the sponsor have recourse against the Trustee for malfeasance in office?

Clienht sold substantially all of the assets used in a trade or business, thus permitting a distribution of account balances attributable to elective deferrals. Plan distribution options limited to lump sum and installments. However, law requires distribution to be a lump sum distribution. Old definition of lump sum included the distribution of an annuity contract. New definition does not include that language. However, I understand that President Clinton is set to sign a bill into law that would be a technical correction to the definition of "lump sum distribution" and add the annuity contract language back in.

Assuming the bill becomes law, does client have to offer annuity contracts to the transferred employees? Client would prefer to offer only lump sums.

I left a job with a 401(k) plan in February. The company I now work for does not have any retirement plan. Am I eligible for a traditional IRA?

Also, my wife changed jobs in September. Her old company had a 401(k) plan. Her new one does also, but they have a waiting period so she is not eligible to contribute yet. Is she eligible for a traditional IRA?

Our combined AGI is over $100,000.

Have final regulations been issued on IRS Intermediate Sanctions 4958 ?

Can a current calendar year 401(k) Plan still change to a safe harbor plan for 2001? That is, what is the deadline date to give the notice to the participants for 1) a safe harbor match?, 2) a safe harbor 3% non-elective. If it's too late for 1/01/01, can it be done anytime during 2001?

Would appreciate comments on the following situation: Employee was hired on Feb 1, 2000 when the company's 401K plan operated under six-month waiting period. Plan sponsor amends plan, extending the wait period to twelve months on June 1, 2000. This change is then applied to all employees hired in the first five months of 2000. Is the plan sponsor within its legal rights to apply the extended wait period retroactively?

A 401(k) replacement plan will be set up coincident with the termination date of the DB plan. The 401(k) plan is a qualified replacement plan and at least 25% of the DB surplus assets will be placed in a suspense account from which the employer will draw for purposes of the employer match over no more than a 7 year period.

I understand that the 7 year period starts with the date assets are transferred; however, given the timing constraints, surplus assets will not be available for transfer for perhaps up to one year.

Question: If the employer makes monthly matches to the 401(k)plan during the 1st year and surplus assets are determined and available for transfer 11 months into the 401(k) plan year, can the employer reimburse himself out of the surplus for the matched contributions made thus far?

I believe the answer is no- because the contributions made are the property of the pension trust and there was no "mistake of fact" to warrant reimbursing the employer. Can anyone substantiate or dispute this conclusion?

I believe that if the employer was able to wait on the match until the end of the initial 401(k) plan year, then he could use up one of the 7 years of the surplus starting with the first plan year of the 401(k) plan. If the distribution of surplus assets should occur after the 1st plan year, then the 7 years would have to start in the year of transfer.

Thanks

Has anyone amended/converted a money purchase plan into a defined benefit plan in one plan year. Assume the mp allocation requirements have been met for the year. Also assume that the db minimum funding requirements are greater than the mp contribution. How do you coordinate 412 and 404(a)(7)? Is their only one minimum funding standard and one deduction limit?MP/DB conversion

One of our unions would like to allow employees injured by a third party (i.e. victim of off-the-job auto accident)to buy back sick leave that they had to use while they recovered from that accident. The theory is they would take some of their cash settlement from the guilty party's insurance company and use it to reinstate their sick leave bank.

Are there any legal or taxation restrictions that would prevent us from doing this?

Can Non-Qualified Plans allow non-highly compensated employees in the plan?

A participant in a 401(k) Plan turned 70 1/2 in July 1999. The required beginning date to receive his first distribution was 4/1/2000. The plan sponsor did not make an election whether to allow active participants who are non-5%owners to defer there payment until actual retirement. Can the plan sponsor now make an election to provide the participants this option and can the effective date be retroactive to the date of the first required payment????

I'm looking for marketing ideas on how I can locate EXISTING 457(f)plans(or "risk of forfeiture plans") with tax-exempt and other non-profit organizations. I understand they do not show up with 5500's and 990's. Any help would be greatly appreciated.

A participant has made an excess deferral into the

employer's 401(k) plan for the 1999 plan year which

was just discovered. If a corrective distribution is

made now, will the distribution be subject to the early

withdrawal penalty assuming the participant is not

59 1/2 and is still working? Both the statute and the regs. seem to provide

that Sec. 72(t) does not apply but only when the correction

distribution is made on or before April 15 of the year

following the year the excess deferral was made. I am also

concerned that Reg. Sec. 1.402(g)-1(e)(8)(iii) says that

a corrective distribution made after the correction period

must satisfy 401(k)(2)(B). Does this mean that if the

participant is still working and is not 59 1/2, the cor-

rective distribution cannot be made?

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.