A participant dies and his beneficiary (55 years ol) takes a direct rollover of the account balance into her own IRA. She wants to be able to take distributions from the IRA each year (about $3600 or so for living expenses) without incurring the 72(t) excise tax. Any suggestions on how this can be done? The payout over life expectancy option provided for in 72(t) is not going to work because the distribution amount is not going to be high enough.

Is there something about a 5 year payout that approximates or exceeds a life only annuity payment that would avoid the 10% excise tax?

how do you get your prescription card reinstated thru cobra my son was laid off on 8/30'2000 insurance terminated on 9/14/2000 his preiumn has been mailed for his cobra when he went to pick up his medicine today his card was no longer valid and he was asked for new card which he doesn't have.........thanks for any help we are new at this.

A plan is subject to the J & S rules. The same plan has a loan provision. Is a waiver of the QJSA required before a loan may be issued? The regs indicate that spousal consent is required, but only state that it: 1)must be in writing, 2)acknowledge the effect of the loan and 3)must be witnessed by a plan rep or notary. (Treas. Reg. 1.401(a)-20, Q-24) I have been told that the waiver must be completed due to the possiblity of a later deemed distribution or offset. I think I disagree. Any opinions?

Is there any reason that, as long as the plan document does not contain language preventing it, a 401(k) plan participant could not defer any $ amount up to the 402(g) limit from a single paycheck (presuming the paycheck is large enough)? So it would be theoretically possible for a 401(k) plan to allow a participant to defer $10,500 - or whatever the 402(g) limit is for the year - out of the participant's first paycheck for the year?

Currently my wife has a TSA (tax shelter annuity). We are interested in getting an Roth IRA. Can I transfer the money in her TSA to the Roth IRA without being taxed. Is there anything else we need to know about the possible transfer? Thanks

Also, Can I invest in mutual fund with a Roth IRA?

The thread originally begun by Garnett in January has been closed. Garnett- were you able to find out any additional information about these arrangements? I've seen similar marketing materials, and they do imply a double dipping if the intent is to reimburse the employee for the insurance premiums they've paid on a pre-tax basis. Are they instead suggesting the employer reimburse for other medical expenses?

thanks.

rob

My husband works for a large company who has a 401(k) plan for the unionized employees. I assume the company has more than 1 of these plans, but anyway, what the company has JUST done (and yes they are on a calendar year) is to send some employees letters saying that they were over $80,000 for W-2 wages last year (hence HCE) and were chosen at random (by lottery) to now lose their ability to defer anymore income this year (and thus receive a match).

These employees are naturally upset. The company doesn't want to run amok of the ADP or ACP tests so I understand why they have done this. (These employees reached the $80K limit by working mandatory and voluntary OT in 1999.)

Is this random selection of HCE's to give up deferring common practice? This is news to me as we don't represent any companies who have so many employees that they wouldnt just make ALL HCE's stop for the year.

What are other ways or more common ways of addressing this kind of problem?

TIA

SPrince

A calendar year plan sponsor starts a new safe harbor 401(k)plan on 10/01/00, having given timely notice, with an effective date of 01/01/00 (mostly for p/s purposes). 100% of deferrals up to 4% of comp is the safe harbor contribution. Deferrals begin 10/01. Employees can do normal deferrals and also elect to defer up to 100% of bonuses received in December. The employer bonuses everyone at least 4% of annual comp, which they defer. Employer deposits the safe harbor match of 4% of comp. Does this arrangement qualify as a safe harbor plan?

I wish to use the APRSC program to correct a plan's operational failures and would like to use one of the correction measures listed under Appendix B (which I understand to be appropriate for both APRSC and VCR). My confusion comes from the fact that the correction measures listed in Appendix B use the term "SVP correction method" and this term is associated with the VCR program, not APRSC. Thus, may I use a correction measure listed under Appendix B even though the plan will use the APRSC program?

Client refuses to remove excess contributions from the trust. He would rather simply reduce what he remits to the trust for future contributions and pay the distribution to himself from the corp. I'm not really fond of this client and need a good argument as to why this won't fly...something other than "IRS wants to see a paper trail".

Has anyone had success negotiating market value adjustments upon transferring a plan's assets?

My question pertains to "retirement income accounts" for churches.

IRS Publication 571 says:

A TSA plan can invest funds for participating employees in:

€ Annuity contracts

€ Custodial accounts holding mutual fund shares, or

€ RETIREMENT INCOME ACCOUNTS (defined-contribution plans maintained by churches or certain church-related organizations.

What exactly is a retirement income account? What can they invest in? Is it just for churches? How is different than the 403(b)or 403(B)(7) plans?

Thank you for your time and consideration.

It is contemplated that employees may contribute to adoption assistance programs (IRC 23 & 137)and that this is accomplished via a salary reduction agreement. It appears to me that in order for an employee to do so, the benefit must be offered under a Section 125 plan. My review of the literature and applicable statutes indicates this to be the case, but I have not found it stated explicitly. My question is, does anyone know whether it is required that such contributions be made within a cafeteria plan? If this is not the case, how are such contributions handled?

A man has two unrelated jobs. At one he is fully funding via deferrals to a SIMPLE plan ($6,000). At a seperate jod and unrelated employer he is maxing out a 401(k)($10,500) in deferrals. He has no ownership in either of these 1st two businesses. In addition he is self employed and wants to know if he can set up a plan(s) and fully fund it/them.

1)My 1st question is, is what he is currently doing OK?

2)What would he be able to set up (in the DC arena) for his self employed entity and what max limits could he fund to?

An employer wants to adopt a medical expense reimbursement plan whereby the employer sets aside a certain amount of money to be used for medical reimbursement and the employees do not have any taken out as salary deferrals. Is this a welfare benefit plan that requires a cafeteria plan document as well as a reimbursement plan document? Can the contributions be discriminatory? Does this fall under IRS Code Section 105?

Simple question: do most practitioners accept fax signatures on documents such as hardship withdrawal applications, termination distribution requests, and loan applications, or do you insist on original signatures? We are aware of the new laws regarding the acceptability of electronic signatures, but have not researched this thoroughly to see if there is anything specific about the acceptability of fax signatures. Our firm has been accepting them for several years now, but have heard of others that don't, so wonder if we're off base here.

In a situation where an employee leasing company is terminating its contract with the client company, are the employees entitled to obtain Cobra coverage from the employee leasing company even though the employee has not suffered a termination of employment and continues to work for the client company?

At one time, any matching contribution made by a partnership with respect to a partner's elective contributions was also treated as elective contributions made by the partner...I believe this was changed. Can anyone confirm this?

well, we are up and running. a lot less problems than last year at 5.0 . I believe most, if not all the printing problems we had at 5.0 are now fixed.

some initial problems because we had a more recent upgrade of NT then Quantech, but they were able to get around these problems rather quickly.

some points that aren't necessarily real clear in the notes:

All custom reports must now reside in one folder (unless you want to keep resetting the file location under Utilities) we had had our custom reports asigned to sub-folders. (under reports you are further able to assign your custom report to the custom folder, or, for instance, assign your certificates to the certificate section)

You are also limited to a file name of 8 characters. At 5.0 we had gotten real cute with the names since you could have more than 8 character names. However, nothing is lost, as you are now able to asign a desription to each report.

(under reports you are further able to assign your custom report to the custom folder, or, for instance, assign your certificates to the certificate section)

Since you should verify database on each of your reports it is simply a matter of renaming your reprots(If you used more than 8 characters) and assigning the reports to one folder (if you used sub folders)

Maybe we the only ones who did this anyway and so this note won't make a difference to you anyway

and, I guess I would add the following, before I get accused of it, I am not griping, I am simply pointing out our experience. we had verified the database on aa few reports, then tried to use them and discovered that we should have renamed them as well.

A standardized prototype money purchase plan (calendar year) was frozen 3/31/99. The plan has the usual standardized prototype language for contribution eligibility. Is there or is there not a contribution due for 1999, and for whom? There are three categories of participants we are concerned about:

a) employed all year with 500 or more hours by 3/31/99

b) terminated with 500 or more hours before 3/31/99

c) terminated with 500 or more hours after 3/31/99 but before 12/31/99.

An argument has been made (not by me) that for people employed all year, there is a last day employment requirement and the plan was frozen before that contribution was accrued. This seems to me to defeat the purpose of a standardized prototype (no 410(B) testing).

Any thoughts?