If a SARSEP is nearing the 25 eligible employee threshold, can it PROSPECTIVELY amend its eligibility requirements to exclude more employees (e.g., require service in 3 of previous 5 years, instead of only 1 year), and thus sidestep ineligibility for at least a few years?

If a governmental entity has a grandfathered 401(k) plan, is that plan subject to ERISA (i.e., Title I) or is it exempt because the sponsor is a government (a political subdivision of a state)?

Controlled group situation. Employer A and Employer B 100% owned by the same person. Employer B adopts a plan yet employer A does not. Lets assume 410(B) is not an issue. When an employee transfers from Employer A to Employer B who has a plan, does the employee receive credit for the service with Employer A and therefore would not need to satisfy the eligibility rules and would already have years of service for vesting requirements? Would you consider prior year compensation when determining Highly compensated employees?

What items would fall under the definition of compensation for a church-sponsored 403(B) plan? Where could this information be located in the tax code?

Suppose a target plan converts to a profit sharing. Now they want to add in-service withdrawals. Are there any regulations specifically allowing (or not allowing) this?

For a qualified transportation fringe benefit plan, if an employee regularly reports to two different office locations every week, may the employee be covered for transit and parking expenses between his or her home and each office location? For example, on Mondays, Wednesdays and Fridays, employee X reports to Office 1 in City A. On Tuesdays and Thursdays, employee X reports to Office 2 in City B.

There are many questions about 414(h) pickups-

Can anyone offer a brief summary of what this is all about- and can a Government Plan offer a Money Purchase Pension Plan under 401(a) with a mandatory 3% pre-tax contribution? how would you set this up.

A plan has a target benefit contribution at year-end. The plan sponsor (employer) would like to submit a set dollar amount per month to the bank trustee to be invested. The actual allocation would still be an annual allocation but they would still like to remit funds to the trustee monthly. The money would be put into a suspense account, where the employer would direct the investments. In the case where the market takes a dive and they do not have enough in the account to allocate to all participants, they'd be required to submit additional money to cover the contribution. Would that additional money be deductible to the company? If the market went the other way and the account earned more than what was needed for the allocation, would the additional funds have to be allocated to all participants in the plan (not just those eligible for the allocation)?

Can the employer set up an account in the plan?

My suggestion has been to set up an account outside the plan, but the employer seems insistent on having the account inside the plan. Any suggestions?

Assuming that a sound pre-installation ESOP study has been completed (and confirms that an ESOP will satisfy the plan sponsor's objectives), what are the next steps that must be taken to actually install an ESOP? Assume that the plan sponsor is a C-corporation. Thanks.

I am currently participating in my company sponsored 401k, my wife is a teacher and has a403b plan. Are we eligible to open Roth IRA's in addition to our other retirement accounts?

When a defined contribution plan with outstanding loans is terminated- what must the plan do with respect to outstanding loans. Example- Company has 50 employees in a Profit sharing/401(k) plan. Two employees have 5 year $15,000 loans and one employee has a 5 year $30,000 loan. Now the plan is terminated and wants to give everyone a rollover distribution. (All company's assets are sold and employees are terminated) What do you do about the loans. Assume the plan document is silent- what should the plan document have said with respect to this-

What if all of the employees say they can't pay it all back if it were recalled? Please help.

I have two daughters presently in college and I would like to start a Roth IRA for them both. What is the mininum or maximun amount of money I would have to contribute on a monthly basis?

I am working with a Trust Company (A Holding Company) that is issuing a separate class of stock to a number of other smaller Trust Companies around the country that it is acquiring. We will be filing a consolidated tax return, but the acquired companies will maintain their idenity and operational control. The questions is can we maintain the separate benefit plans that these acquired companies presently have, and if so, do we have to aggregate them for testing purposes? What about employees; can they continue to be paid by their existing company, or do they have to go on the payroll of the Holding Company?

It is my pleasure to announce the Employee Benefits Congress 2001. Sponsored by the International Quality & Productivity Center (IQPC), Employee Benefits Congress 2001 will be taking place at the Sunburst Resort in Scottsdale, AZ, March 6-8, 2001.

The presenters at Benefits 2001 will show you how to leverage your benefits to become an employer of choice! You will learn how to use web technology to maximum advantage to not only transact your benefits business processes but also to deliver services quicker, easier and more effectively. These are just a few of the take-aways you'll learn at Benefits 2001.

For detailed information about Benefits 2001, please email me at marilyn.steinthal@iqpc.com. I will be pleased to get out to you our early-bird agenda. Sign up now for the conference and get an instant free workshop (value $400)! Email me and I will register you immediately!! Offer expires November 1st!

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Marilyn Steinthal

Managing Director

973-812-5186

We have a calendar year cross-tested PS plan with a last day rule. On 10/2/00 ten employees walked out of the office leaving behind five HCE's and two NHCE participants. In order to pass the coverage test, I brought in the terminated participants who had the most hours and was able to pass coverage by giving contributions to six of the terminees.

For the cross-tested formula, I have three categories: 1 - physicians, 2 - actively employed staff members, and 3 - terminated staff members. Do the Class 3 employees have to receive a minimum 3% top heavy contribution if Classes 1 and 2 receive in excess of 3%? The plan is top heavy for 2000.

Suppose an employer receives a federal construction contract which requires it to comply with the Davis Bacon Act. Under the Davis Bacon Act, the employer is required to pay its employees a "prevailing wage." The employer would like to pay a portion of the "prevailing wage" in the form of a "bona-fide fringe benefit." Specifically, the employer will "contibute" an amount equal to the cost of single/family health insurance (whichever was elected by the employee). For all practical purposes, this means the employer gets a "credit" towards its payment of the prevailing wage.

In this case, the employer's health insurance plan, which is self-insured, has a COBRA premium rate of $142.51 for single coverage and a COBRA premium rate of $406.16 for family coverage.

Further, suppose the employer's work on this contract is seasonal so that some of its employees work nine months and are laid off the other three (only to be brought back in the spring). In order to determine an "hourly" charge for the fringe benefit contribution, the employer has assumed the employee works, on average, 140 hours/month for the nine month period of active employment. Thus, the hourly "single premium" charge is calculated as follows:

140 hours x 9 months = 1260 hours per year

$142.51 x 12 months = $1710.12

$1710.12 divided by 1260 hours = $1.36 per hour for single health insurance benefits

The employer would like to create an hour bank that will operate as follows:

       Total   DB     Benefit  Benefit  Current   Cumulative

Month Hours Hours Earned Cost Bank Bank

1 0 0 0 142.51 (142.51) (142.51)

2 0 0 0 142.51 (142.51) (285.02)

3 0 0 0 142.51 (142.51) (427.53)

4 150 150 204.00 142.51 61.00 (366.53)

5 160 160 217.60 142.51 74.60 (291.93)

6 150 150 204.00 142.51 61.00 (230.93)

7 160 160 217.60 142.51 74.60 (156.33)

8 160 160 217.60 142.51 74.60 (81.73)

9 160 160 217.60 142.51 74.60 (7.13)

10 140 140 190.40 142.51 47.40 40.27

11 140 140 190.40 142.51 47.40 87.67

12 60 60 81.60 142.51 (61.40) 26.27

Under this hour bank program, the employee must use the amounts allocated to his/her hour bank account to pay for benefits during the months he/she is laid-off (January through March). Is this permitted under the Davis Bacon Act? Specifically, does this violate the requirement under the Davis Bacon Act that fringe benefit contributions may not be used to fund a fringe benefit plan for periods of non-government work?

Finally, please consider the fact that non-prevailing wage employees for this employer are paying nothing towards the cost of health insurance.

I have some very basic questions about a Roth IRA:

1) I actively participate in an employment-sponsored retirement plan and make about $35k a year. Is a Roth a good choice? As far as I can tell it would be, but I've heard that contributing to a Traditional would really make no difference for me since not too much of it would be tax deductible under current rules.

2) I understand there are income limits affecting contributions to a Roth IRA. Let's say that I start a Roth and 20 years down the road (I will only be 42) I find myself exceeding the income limit, making me inelgible to contribute to a Roth. What happens to the IRA? Does it just stay a Roth, except I can't contribute, or would I switch itto something else?

3) Knowing something about my situation, is there anything else I should know?

Thanks

We are considering immediate eligibility for participation in our 401(k) Savings Plan, eliminating the current 6 month waiting period.

If we decide to make this change, does anyone know of any ERISA or other requirements that obligate us to ensure an employee can enroll and contributions begin within a certain time frame? Any suggestions/experience on this is appreciated.

THANKS!!

I've retired early and now make my living as an active, full-time private investor. I could qualify as "trader" for some of my activities, but I prefer to seek long-term capital gains, and marking to market would not help me at the present time. And, my expenses are not so large as to make Schedule C worthwhile.

Am I eligible to contribute to any sort of IRA, including a Roth IRA? Or, am I totally out of luck in terms of being able to contribute to any retirement program?

Thanks,

JSB

A plan provides a gross accd ben of 1.5% of FAP * CS (unreduced at age 62),

and an offset of 2/3 of the age 62 soc sec benefit.

Clearly a short service employee based on the formula above could have an offset larger than the gross benefit.

This seems ridiculous.

However, we don't see too many SS offset plans nowadays and I'm not sure of the restrictions. I've seen things like limited to 50% of gross benefit, prorations for service/proj svc, etc.

The Plan also says eff 1/1/89, the offset shall not be greater than what is allowed by law. My first reaction is that that means no more than say the 0.75% of cov comp per year, with adjustments for commencement prior to SSRA and differing SSR ages.

Any thoughts on what is specifically in violation w/r/t this formula and more importantly how this can be researched in greater detail.

Of course my understanding is that a plan need not pass integration to pass non discrimination, but this seems a bit out of hand.

PS this is a company that is a railroad company and I don't know if that is relevant in this situation.

Look forward to getting help.