If I have a Safe Harbor plan with the Safe Harbor matching option for salary deferral contributions, should I use characteristic code '2K' for this? '2K' would be used if the Safe Harbor match is considered a 401(m) arrangement; however, since the Safe Harbor match is not subject to 401(m) discrimination testing, is it really considered part of a 401(m) arrangement? The instructions DO specify that QMACs should not use the '2K' characteristic code, and the Safe Harbor match seems to me to have more in common with QMACs than with regular matching contributions subject to ACP testing. How are other people reporting the Safe Harbor matching and, for that matter, with the SIMPLE 401(k) matching contribution on line 8(a) of the 5500 Form?

To what extent are SEP-IRA's protected from a participant's creditors (judgment or otherwise)? To what extent, if any, does 401(a)(13) apply to SEP-IRA's? I would think that the normal IRA rules would apply.

I have a small medical practice considering going from a profit sharing plan to SEP-IRA's and the issue has come up. I have already pointed out the other differences, e.g., 100% vesting, comp to comp allocation, etc.. but this one is the important one to the doc's.

I have been searching the internet looking for help regarding a problem that i am having with my retirement benefits.

I am a new employee who was hired on 7/10/00. I had 31 days to select either one of two retirement plans: cash balanced pension type plan that included a 401k company match of 50% OR investor plan which is soley a 401k with a 100% company match. I had selected the investor plan on 7/14/00 by mailing in the forms.

On August 29th, I received a letter from my Employee Benefits group stating that I had been automatically enrolled in the pension plan since they have not heard from me. (NOTE: This benefit is a ONE-TIME enrollment.) Within in this letter, it states to call the employee infocenter hotline immediately if any information is incorrect. I called them the next business day and I was told that I had to send an "appeal " letter to my Employee Benefits Committee board and they will review the case, afterwhich they will render their decision which is binding and final!

I'm am really upset. I selected to work for this company because of the 401k investor plan. This is the most important benefit to me at this time in my life (I'm single and young).

My question is: Do you know of any websites/periodicals/references that I can use to write my appeal? Do I have strong enough case to win the appeal?

I don't know what to do. Should I contact a lawyer?

Also, please note that due to the nature of my job (telecommuter/home-based), my new employee orientation was conducted via teleconference in less that an hour! I strongly believe that if I had attended the orientation in person, all forms could have been collected on site and this issue would not have arisen.

Thank you so much for listening!!!

Teresa

In the current proposals for creating Roth-type 401(k) plans, are federal employees included? If the proposed legislation creates these plans for all workers except for federal workers, who can be contacted about fixing that?

Can a Money Purchase Plan allow for In-Service Withdrawals? If so, can it be withdrawn before age 59 1/2?

Is a hardship withdrawal or hardship distribution from vested match an eligible rollover distribution?

It is clear to me that a hardhip distribution taken from the employee deferral source is no longer an eligible rollover distribution. I am not clear about whether or not hardship distributions taken under Rev. Rul. 71-224 from non-employee deferral sources are or are not eligible rollover distributions. (Does Rev. Rul. 71-224 allow distributions due to hardship from vested match, or just from profit sharing?)

The language in the document I am working with is:

"Upon at least 30 days' written notice to the plan administrator, a participant may make a withdrawal of all or any portion of his salary reduction account or the vested portion of his matching account at any time after he has attained age 59 1/2 or in the event of hardship, provided that any hardship withdrawal from a participant's salary reduction account shall not include earnings accrued after 1988."

Am I correct that, when Plan A is merged into Plan B, all participants that had been reported on past Schedule SSAs for Plan A (and have not yet been paid or forfeited) should be reported on the Schedule SSA for Plan A in the year of merger as Code C?

If one of our 457 members receives a hardship withdrawal from a 403(B), must we stop his deferral to our 457 plan?

At one time we were part of a university, however, when we split away, we froze our employees' participation in the university's 403(b)and began our 457 plan.

One of our employees has applied for a hardship withdrawal from the 403(B) but not from the 457. (1) He has more funds in the 403(B) and (2) his request meets the 403(B) hardship withdrawal guidelines but not the more restrictive 457 guidelines.

If he were to be approved for a 457 emergency hardship withdrawal, we would stop his current deferrals. But, we cannot find any information on whether a similar withdrawal (from another plan) would have the same requirement.

Are we required to stop his current deferrals.

Assume a pension plan satisfies the QJSA component of the

QJSA/QPSA rules by providing the following benefit forms:

(1) an annuity for the life of the participant with a survivor annuity for the life of his spouse which is 50% of the amount of the annuity payable during the joint lives of the participant and spouse (the "normal form of benefit");

(2) an annuity for the life of the participant with a survivor annuity for the life of his spouse which is 60% of the amount of the annuity payable during the joint lives of the participant and spouse;

(3) an annuity for the life of the participant with a survivor annuity for the life of his spouse which is 70% of the amount of the annuity payable during the joint lives of the participant and spouse; and

(4) a lump sum distribution which is actuarially equivalent to the normal form of benefit.

As I read the final regulations under 411(d)(6) which were

issued last week, the plan could be amended to eliminate,

for example, all benefit options except (1) and not violate

the Code's anticutback rule. Alternatively, the plan could be amended to eliminate (1), (2), and (4), without violating the anticutback rule. Is it true that any combination of optional benefit forms may now be eliminated so long as the plan retains one benefit form that satisfies the QJSA rule?

Assume a pension plan satisfies the QJSA component of the

QJSA/QPSA rules by providing the following benefit forms:

(1) an annuity for the life of the participant with a survivor annuity for the life of his spouse which is 50% of the amount of the annuity payable during the joint lives of the participant and spouse (the "normal form of benefit");

(2) an annuity for the life of the participant with a survivor annuity for the life of his spouse which is 60% of the amount of the annuity payable during the joint lives of the participant and spouse;

(3) an annuity for the life of the participant with a survivor annuity for the life of his spouse which is 70% of the amount of the annuity payable during the joint lives of the participant and spouse; and

(4) a lump sum distribution which is actuarially equivalent to the normal form of benefit.

As I read the final regulations under 411(d)(6) which were

issued last week, the plan could be amended to eliminate,

for example, all benefit options except (1) and not violate

the Code's anticutback rule. Alternatively, the plan could be amended to eliminate (1), (2), and (4), without violating the anticutback rule. Is it true that any combination of optional benefit forms may now be eliminated so long as the plan retains one benefit form that satisfies the QJSA rule?

We are in the process of adding new and/or creative benefits for our <50 employees. Does anyone have any ideas? I've keep hearing about free (to the company) benefits but can't seem to find anything. Any suggestions?

I am inquiring if a Qulaified Plan is allowed to invest in a Limited Partnership and / or a Venture Capital Fund. If allowed, I would appreciate if you can tell me the section of the code where I can find this information. Also, if there is any liability the plan should be concerned about. Any help is greatly appreciated. Sincerely, A Milano

I'm trying to find authority on the issue of whether or not enrollment meeting gifts and giveaways (provided by the plan service provider and not the sponsor) constitute a prohibited transaction. The types of gifts and giveaways we're talking about generally are nominal in scope (calculators, pens, etc.) and may be accompanied by food and beverage (of the adult variety!) as an inducement to get employees (and sometimes spouses) to attend the meetings. I can't seem to find any good discussion or authority on point. Any help would be appreciated....

I would appreciate input on the extent to which the prohibited allocation rules apply to "recycled" shares. PLR 9001035 seems to indicate that shares may be allocated to all participants without regard to the section 1042 rules if they are allocated to "permissible participants" and are either distributed and sold back to the ESOP or are simply reallocated because the participant takes a cash distribution instead of stock.

I have seen articles that seem to unanimously say otherwise. How are most administrators handling the recycling of 1042 shares? What about forfeiture reallocations (which aren't addressed in the PLR)?

A cash balance plan preserves an early ret. subsidized benefit. The CB plan allows for lump sums, prior plan did not. A person who retires early w/ subsidized annuity benefit wants a lump sum. Must it be required that the person get PVAB of early ret benefit (under 417) or could they pay a lump sum equal to PVAB of deferred to age 65 benefit (under 417)?

It would seem that they s/ get PVAB of immediate annuity.

Any thoughts?

A plan provides a life annuity for retirees and upon death 50% of gross benefit(benefit is reduced at age 65) to surviving spouse. Much like a 50% j&s. However, if the person does not have a spouse he gets a life annuity. It would appear that a person w/out a spouse (or one choosing a life annuity) should get an annuity that is increased in order to be the actuarial equivalent of the normal form w/ a spouse. I am most concerned with opinions related to the case where an individual does have a spouse, but wants a straight life annuity. i.e. should it be increased?

Any thoughts?

Assume a pension plan satisfies the QJSA component of the QJSA/QPSA rules by providing the following benefit forms:

(1) an annuity for the life of the participant with a survivor annuity for the life of his spouse which is 50% of the amount of the annuity payable during the joint lives of the participant and spouse (the "normal form of benefit");

(2) an annuity for the life of the participant with a survivor annuity for the life of his spouse which is 60% of the amount of the annuity payable during the joint lives of the participant and spouse;

(3) an annuity for the life of the participant with a survivor annuity for the life of his spouse which is 70% of the amount of the annuity payable during the joint lives of the participant and spouse; and

(4) a lump sum distribution which is actuarially equivalent to the normal form of benefit.

As I read the final regulations under 411(d)(6) which were issued last week, the plan could be amended to eliminate, for example, all benefit options except (1) and not violate the Code's anticutback rule. Alternatively, the plan could be amended to eliminate (1), (2), and (4), without violating the anticutback rule. Is it true that any combination of optional benefit forms may now be eliminated so long as the plan retains one benefit form that satisfies the QJSA rule?

I have a takeover plan which was amended 12/28/94 from a PIA offset formula to a unit benefit formula. The amendment was made effective 1/1/89. Do I have to grandfather the PIA offset AB as of 12/28/94?

Second question: what might one use as assumptions in calculating the PIA in this situation (ex: actual salary history and then a salary scale going back, level future salaries, 3.5% wage base, 3.5% CPI)? I will try to duplicate the prior administrators work, but some background info will help.

Thanks.

401(k) Plan provides for immediate eligibility and entry into the Plan. Sponsor wants to test "under 21/1 participants" separately in 401(k)/(m) test.

Assuming plan year is calendar, I'll use 1999 plan year for an example. Who is tested separately in the 1999 test?

Is it employees who are hired after 1/1/99 and would not have a year of service as of 12/31/99?

Or is it employees who are hired after 7/2/98 and would not enter the plan if the plan stretched out entry as far as allowable under the code - to the 1/1/ or 7/1 following one year of service?

Has anyone obtained any informal reading from the IRS on the permitted frequency for participant investment election changes under a non-qualified deferred compensation plan? I have seen PLRs approving plans which allow participants to change their investment elections as frequently as monthly and 3x per quarter. Would daily or weekly elections be permitted, analogous to a qualified plan? Theoretically, I see no difference between monthly and daily changes for non-qualified plans; however, this may be

a "smell-test" factor more than anything else. Your views are appreciated. Thanks in advance.