A participant died and had a valid loan outstanding at the time of his death. Surviving spouse wants to continue to make loan repayments on loan. Loan docs. and promissory note silent on issue. Is this permissible??

Sec 4.04 of Rev. Proc 95-51 - Approval for Takeover Plans - states that if the net charge in the funding standard account produced by the new actuary does not differ by more than 5% from the net charge caclulated by the prior actuary, than it will not be deemed a change in funding method.

Does this technically mean that even though I may be within 1% of the prior actuaries liabilities, but because of FF limits, my required contribution may be 2 times or 1/2 of the prior actuaries "net charges", than I should disclose a change in funding method?

For example: If Plan expected EOY assets were $15,400 and the prior actuary determined the EOY OBRA CL to be $10,000 and I determined it to be $10,100 OBRA CL, this would actually increase my "net charges" by 255% (10,000 *1.55 - 15,400 = 100 vs. 10,100 * 1.55 - 15,400 = 255)

Would you say that I had a change in method? This particular plan is using FIL and has a UAL.

If W-8BEN is solicited and received in connection with a distribution from a state governmental qualified plan from a non resident alien who is residing in a foreign country, and the form as completed by the NRA states that there is a tax treaty provision that exempts withholding, can the plan administrator accept that statement at face value or is there some due diligence imposed upon the plan administrator to ascertain if there is a treaty,and if there is in fact an exception to withholding? If you can rely on the certification, what's to stop NRAs from putting whatever they want on the form. It appears abuses could develop. On the other hand as a plan adminstrator, I would like to be able to just accept the form and not become an international tax expert. Any thoughts?

David G.

DOES ANYONE HAVE A SAMPLE LETTER FOR COBRA DISCONTINUATION THAT I CAN REVIEW?

A client has an oerfunded DB plan. Part of the overfunding will be soaked up when they cover some controlled group employees which were, until now, not participating in the plan. When we correct using the SVC program, can you use plan assets to pay the use fee ahd the attorneys' fees. I can't find any prohibition, but I can't find anythnig in support of using plan funds either.

Thanks

I have been asked to conduct a benefits analysis and need to determine how competitive our company is in the benefits we provide our employees. I am looking for a benefits survey that can provided me with data as to what the most competitve firms are offering employees. We would like to see data on a Regional Level as well as on the National Level. My company is in the IT/Software industry in the Northeast (Boston Area). Any suggestions on where I could find this type of info.?

Participant in 401(k) plan (segregated accounts) with 2 outstanding loans comes back to work after maternity leave and now works only 2 days a week (previously full time). Loan payments were payroll deducted prior to leave, but part-time pay is not enough to cover loan payments. Loans were amortized over 5 years originally, so cannot re-amortize to lower payments. If she takes a deemed distribution, is she still required to pay back loans? If so, how? If not, will loans continue to be an investment of the plan and accrue interest?

Does anyone know if there are any audiotapes covering the C2(DC) material? I commute and would like to try to study while commuting. Thanks for your help.

Ann Monaghan

aam@ebrworld.com

Can monies be withdrawn from the Roth Ira to pay for College expenses, i.e. tuition. If so, tax free or not?

Is there any guidance on who can be considered a family member for purposes of the hardship withdrawal rules and the funeral expenses example? Can a plan document define family member any way at all (2nd cousins counted, for example), should the definition under 414(q) be used, etc.?

Are there any instances where protected benefit issues apply to non-qualified plans?

Is there any restriction on the timing of a participant's election to use the section 457 catch-up provision? In other words, would a participant be able to elect to have catch-up apply for a given year during the week before the participant retires, or does this election need to be made at the beginning of the three-year (or lesser) period to which the catch-up is intended to apply? Does the fact that amounts may be deferred for any calendar month only pursuant to a deferral agreement entered prior to the first day of the month suggest that the catch-up election must be made in advance, because it's essentially a new or different election?

Under IRC 415, what is the maximum retirement benefit from a governmental DB plan starting at age 55?

We have a leasing organization client that sponsors a multiple employer plan with several separate organizations adopting the plan. The research we have done tells us that the recipient employers that have adopted this plan must be tested for non-discrimination separately. The recipient employers must include the leased employees that are employed at their site in their individual ADP tests. The one question that we can't answer is whether the leasing organization must also include ALL of the leased employees in their test as well. In other words, the leased employees would be counted in two tests, one for their respective recipient employer and one for the leasing organization. Can anyone answer this or at least point us to a website or reference that can?

We had an employee go out on a medical leave on his 9 month anniversary. Because he had not been employed by our company for 1 year, his leave was not covered by FMLA. Three months later, he is still on leave and has reached his 1 year anniversary with the company. Do we now have to offer him 12 weeks of FMLA?

In the Los Angeles Times "Parade" section on October 22, 2000 is an article entitled "Is the Roth Ira for you?" -- In the last paragraph, it states, "Consider opening a Roth IRA as a gift to your children."

Can this be done even without earned income? I like to open one for them by giving them a gift.

Also, what about from the money earned as dividends from their stock portfolios?

I WOULD LIKE TO INVEST IN A ROTH IRA. I AM PRESENTLY INVESTING 20% OF MY INCOME IN A REGULAR IRA THROUGH COMPANY PAYROLL DEDUCTIONS. WILL THIS CONFLICT BY HAVING TWO IRAS? ALSO MY SPOUSE WHO IS 65 AND RETIRED WOULD LIKE TO INVEST IN A ROTH IRA WITH ME. IS THIS POSSIBLE?

THANKS, FRANK

I was named beneficiary of my ex-husbands 401k plan. He worked at this company while we were married, and left them before we divorced, retaining his 401k plan with them. We agreed to leave me as beneficiary mainly because we have children, I in turn left some of my policies in his name.

He passed away last year and I could find no paper work to contact this company, until they mailed me last month. I promptly called them and was told I was still beneficiary of his 401k. I was asked to supply several pieces of information to verify all this. When I informed them we had divorced the lady became very curt and stated simply that I was entitled to nothing because we had divorced. I explained that we had not known that a divorce would affect this or we certainly would have not left it this way. She said she could not help me, that she was following federal guidelines that stated I received nothing if we were not legally married at the time of his death. She then asked me to obtain and send her a copy of his death certificate so she could close out his account with the company and that the company would absorb all funds from this account. I asked for the policy and the federal guidelines that she said she must follow to be sent to me and she said she could not do that. I am now at a loss as to what to do. If I have no rights to the funds, so be it, but don't I at least deserve to see the paperwork? She also said I may need to sign a paper stating I am not entitled to anything. I have looked for information on this and can find nothing really helpful. My ex-husband was only 35, so he did not reach retirement age, is this the reasoning behind no benefits? Can someone enlighten me on this subject and possibly where to find these federal regulations she spoke of? I tried to get answers from her but she said she could tell me nothing more, once she confirmed I was divorced, even with me named as his beneficiary. Thanks so much.

In a money purchase ESOP plan about 15% of the assets of the plan are currently in the money purchase source. The MP source includes both employer stock and other investments. The ESOP loan has been paid, so there is no leveraged stock in the plan at this time.

An employee is eligible to make a diversification election for 25% of the employer stock in his account.

How do I determine what source to take that diversification election from? Pro-rata? Money purchase first? Money purchase last?

The employee has the option of taking a cash distribution or transferring to the employer's employee directed 401(k) plan. The plan does not specify any other options for divesification. Should it include an annuity option? Otherwise, without spousal consent, can the participant elect to diversify the MP portion?

If the transfer to the 401(k) plan includes assets from the MP source, does the 401(k) plan have to track it as MP source or something else, like rollover? If MP assets are transferred to the 401(k), does the spouse have to sign a J & S waiver? I would think so, unless the 401(k) plan tracks the transfer as MP source.

when a beneficiary inherits a roth IRA, does that indiv have to take MRD's over their lifetime or could they continue to let grow tax-deferred during their lifetime and pass on to a future generation?

Is the deadline for 2000 roth contributions 4/15/01 or 12/31/00?