How are GATT interest rates determined? Is there a website that lists past and current GATT rates?

If a governmental DB plan transfers excess assets to a 401(h) account, must IRC Section 503(B) be examined? IRC Section 420 exempts the transaction from IRC Sections 4980 and 4975, which already had an exemption for governmental plans, but does not appear to exempt the transaction from IRC Section 503(B). Assume that state statutory and constitutional law permits the transfer. If IRC Section 503(B) is potentially applicable, would it also apply if instead of a 420 transfer, a targeted distribution is made from the DB plan only to retirees who had health insurance costs? Would it matter if part of the retiree health insurance costs were normally an obligation of the employer?

My client adopted a mass-submitter standardized prototype profit sharing plan in Jan 1999. Now they want to terminate that plan and roll the assets over into a SIMPLE IRA (there are only the owner and 3 employees in the plan.)

We would recommend filing for a determination letter on the termination, but there are some complicating factors. First, the company that sold them the plan says that it was a new plan, and they filed for an initial determination letter, but haven't received a response yet. After they receive a response they will amend the plan for GUST.

Do we have to wait until the plan is amended and brought into compliance before filing for the termination? Do we have any other options? Thanks for any help you can give.

Two questions regarding adjustment of IRC 415(b)limits for age before NRA:

If someone retires at age 55, does the limit remain at $80,008 (with indexing for inflation) throughout retirement, or does the limit increase the next year (when the retiree is 56) to the $ amount for age 56, and each year thereafter, so that when the retiree is 62 the limit is $135,000?

What are the standards for determining the $ amount of the limit for ages before 55? Is a governmental DB plan free to use whatever standards its actuary provides?

[Note: I read Joe Hoho's reply to a previous question on 415(B) limits, but I did not understand his reference to GAM83, GATT and 5% interest rate.]

JSW

two people own a c-corp, 50/50. The are also the two directors of a non-profit orgainization.

How do control group rules work. does the director status in the non-profit equate to voting power and create a control group?

thanks!

With the increase of the 415 dollar limit to $35,000 for 2001 and the compensation limit remaining at $170,000, it appears that the most a self-employed participant can have allocated to him in a DC plan is $34,000.

If anyone knows a way to get more than $34,000 allocated to a self-employed participant in a DC plan, I would like to know about it.

I am taking over a new client. In the ESOP plan document, the Employer is the Administrator but has the ability to designate someone else. The employer designated one of its employees as the "Plan Administrator". I'm trying to figure out the reason for this. Is this a good idea? Doesn't such a move expose the employee to unnecessary personal liability exposure?

I would love to hear some opinions of what's been getting hyped lately as the 401(k) plan of the future.

Briefly, a participant could open up a 401(k) account at virtually any brokerage firm and have the whole world of investments to choose from - like an IRA, for example. Then (I believe) the broker would generate a "5500k" for the individual like a 1099 at the end of the year. I presume company matches would be directed to the respective broker /dealer.

What percentage of the participant population do you think will benefit/suffer from having his or her investment horizons opened up to unlimited choices?

Does the Super Top Heavy minimum designation change from 3% to 4% when dealing exclusively with a defined contribution plan?

Employer wants to offer extended COBRA benefits to retirees through its cafeteria plan. Employer's group health benefits are self-funded; active employees pay their portion of coverage through salary deferrals. Employer wants to allow retirees to pay for extended COBRA by allocating accrued, unused sick pay to the plan. Can it do so through the cafeteria plan? Sick pay is not on the "menu" of benefits under the plan for active employees.

If an organization has established a profit sharing plan and filed one or more Form 5500s, but has never made a contribution, can the plan be terminated or is it a special situation involving some other process? What differences (if any) exist from a "normal" plan termination filed with the IRS for a determination letter?

Is the only qualified owner of an IRA an individual personally? If the funds used to create an IRA or a Roth IRA came from a trust classified as a "grantor trust", would the trust be treated as the owner? I am aware this type of trust can be the beneficiary. This question is on the technical side of distinguishing the owner from the beneficiary.

An employer has a frozen money purchase plan. The employer starts a 401(k) plan and uses one trust for both the money purchase plan assets and the 401(k) plan assets. There is a section in the 401(k) plan covering how to treat frozen money purchase plan assets. If this section is used, are the plans merged automatically with no further action? Does there have to be a specific amendment to each plan document stating that the plans have been merged? Other than meeting the 414l requirements, what action is necessary to merge the plans?

We are trying to determine if two corporations are members of a controled group. Both corporations are owned by individual shareholders and by trusts. Some of the trust beneficiaries are the same as the individual shareholders of the corporations. How do you calculate the actuarial interest of the beneficiary in the trust in order to determine the interst attributed to that individual in order to determine if the companies are members of a controlled group? The individual shareholders are for the most part income beneficiaries in the trusts and the remaindermen are the adult children of these individuals.

My wife's open enrollment period is here. We live in the PA suburbs of Philadelphia. Has anyone heard anything about hospitals dropping Aetna PPO, QPOS or USHC coverage in the area (Norristown, Possible UPENN?). Several people have mentioned this to her, but I do not recall hearing this. I find it hard to believe given Aetna's (especially USHC's) pervasiveness in this area, but it causes me for concern. She has had them 3 years w/o problems and all other coverages are much more expensive with high deductibles, so she'd like not to change. But, if hospitals are going to stop coverage, then it's a no-brainer to switch. THANKS.

Is a retiring owner liable for the debts of an ESOP to which she has sold her stock?

I am investigating an ESOP Leveraged Buyout for the company I work for. Another executive told me a horror story about a company whose owner sold the company to an ESOP. Several years later the company went into bankruptcy. The bankruptcy court ruled that the seller was liable for the debt, and that his assets could be garnished to satisfy creditors. Is there anything to this? It sounds counter-intuitive to me, but I am not familiar with ERISA, etc.

Can Revenue Ruling 2000-27 be applied retroactively, for example to a sale of less than 85% of assets in 1999, so that the the seller can now make a distribution from its 401k) plan to the employees affected by that sale?

The Rev. Rul. provides that "with respect to any sale of less than substantially all the assets of a trade or business . . . occurring prior to September 1, 2000, the Internal Revenue Service will not treat the plan as failing to follow its provisions merely because the employer does not treat the termination of employment from the seller and the hiring by the buyer as a “separation from service” within the meaning of section 401(k)(2)(B) and therefore does not permit distributions from the plan to the terminated employees hired by the buyer."

I interpret this as saying that beginning 9/1/00, all sales of less than 85% of assets must be treated as a separation from service. Does this also mean that for a transaction prior to 9/1/00, the seller can choose whether or not to treat it as a separation from service?

Is anyone familiar with Documentary Stamp Tax on 401(k)plan loans? Any information is appreciated. Where can I find information?

Thank you

Are 403(B) plans subject to the Code's prohibited transaction rules?

Are 403(B) plans subject to top-heavy requirements?