We have a Profit Sharing Plan with a last day rule. Each employee self directs his own account. The employer prefunds the employer contribution quarterly directly into each participant's account. There have been occasions where we had to remove a contribution from a participant's account at the end of the year since the participant terminated employment prior to the end of the year.

We keep getting conflicting reports from various sources. Some say we are not allowed to remove contributions already deposited into a participant's account. Others say this is not a problem if it is explained to the participant. Which is correct?

I have a question regarding the laws on cobra. I terminated my position with a major New York based retailer on 11/11/00. I recieved my letter of continuing coverage (cobra) form on 11/26/00. I recieved three messages from Doctors offices on 11/28/00 saying my coverage terminated on 10/11/00. I went back to the letter recieved on Saturday and the date of termination states 10/11/00, however the date the letter is issued states 11/17/00. I have phoned my former employer notifying them that there paper work is incorrect, and causing me alot of embarrasement as well as emotional distress one Dentist wants 585.00 by the end of the week. They have been less than helpfull. I gave a letter of formal resignation effective 11/11/00 and have copies of this, and I was working for this company as a manager until 11/11/00 my last physical day of work was 11/09/00 and the 10th and 11th were vacation days. I have a terminally ill spouse, and I need any advice you can give me. I don't know if they are going to take care of this and correct the paper work, but even if they do they will have violated the 14-day rule for me to recieve a correct form. I'm not sure if I should send in the form I have, I'm afraid that(cobra) will bill me from 10/11/00 and I have already paid for coverage up to 11/11/00. Thanks for any advice you can offer!

Hello, I am trying to work on an academic (read graduate student) piece on the effect of the change of premium structures on employee opt-in insurance products. Specifically I am looking at dental insurance.

Right now I have a large dental insurance enrollment package from a large southern quasi-public organization (85 k eligibles, large public university system). This organization uses the simplest premium structure (EE, or FAM, with both inclusive of ortho whether you want it or not).

I am curious to compare how their employees select dental insurance compared to another organization that uses a more complex premium structure (Three tiered, ortho-optional rider, etc.)

Specifically, I am looking for raw enrollment data for a dental plans, I can do all the work from there.

If you are interested in helping a struggling (read starving) grad student out with his research, I can assure you, your help would be greatly appreciated.

Can an ER who provides flex credits stipulate that the credits NOT be used for FSAs?

Does a non-electing church employer, such as a Catholic Archdiocese, need a qualified plan document if they have a matching provision for some of their employees?

or

Is it sufficient to prepare a "Statement of plan operating provisions" that also states which employee groups are eligible for the match since the church plans are not subject to ERISA?

This particular Archdiocese has a 403(B) custodial program allowing deferrals only for the schools and parishes, while it also has a 403(B) that has a match component for two high schools and the main administrative offices.

Is AD&D subject to IRS status change and HIPAA rules? If I am not currently enrolled, but have a child, can I now (within 30 days) enroll myself and my dependents for coverage? And if so, does coverage for everyone begin as of the date of my child's birth? What if I had a child on Nov. 1, and on Nov. 2 another child had a dismemberment accident that would qualify under the plan. When I call to enroll everyone on, say, Nov. 5th, would I be permitted to enroll that child and would she be covered for the accident sustained between the time of eligibility (birth of child) and actual enrollment?

Does a non-electing church employer, such as a Catholic Archdiocese, need a qualified plan document if they have a matching provision for some of their employees?

or

Is it sufficient to prepare a "Statement of plan operating provisions" that also states which employee groups are eligible for the match since the church plans are not subject to ERISA?

This particular Archdiocese has a 403(B) custodial program allowing deferrals only for the schools and parishes, while it also has a 403(B) that has a match component for two high schools and the main administrative offices.

I have an established 401(k) Plan that uses prior year testing. This is the first year the ER has contributed. What do I use for prior year ACP for NHCEs??

I have two related questions regarding 401k's. My Brother-in-law(B-I-L) owns 60% of a company with an existing 401k. He and the other two shareholders are going to sell the Corp to another person so that the new majority shareholder will own 70%, my B-I-L 30% and the other two no ownership effective June 2001. The new majority owner already owns two S-Corp's and a sole proprietorship. He plans to start up 401k's for the employees of the S-Corps and a Keough for himself and his wife in the sole proprietorship. The new majority owner does not want the employees of the three Corps to know about the cross ownership so he does not want the SPD(s) to show one Corp as sponsor.

First, can he setup separate 401k's and/or a separate 401k and a keough?

Second, what happens to my B-I-L's existing 401k if the new owner already has implemented a separate 401k before he takes over?

I am trying to determine if terminating a Defined Benefit Plan and replacing it with a defined contribution plan makes sense for all employees involved.

I need to calculate what the defined benefits would be for employees aged 35 / 45 / 55 / 60 with 5 / 10 / 15 years of service in the D/B plan.

If I terminate the D/B plan and establish a 401k/money purchase plan will the employees be better off? How can I compare employees lumpsum plan values in theD/B plan against the value at age 65 of a Defined contribution plan earning 8% over the same time periods.

I have a question regarding how the rates for cobra coverage are determind. I terminated my position and was part of a group coverage policy, and I did a fair amount of research on cobra and estimated my payment to increase at 100% plus admin fees. I was completely shocked when my package arrived and the (cobra)insurance rates had tripled plus some! Is this legal and is there anyway for me to find out how these rates were determind? Thank you for your help.

Husband and wife own all of the stock of a closely-held business. In the event of their deaths, they would like to "give" the company to their 20 or so employees. The value of the company is such that federal estate tax is a

consideration. An outright gift may be possible, but does not seem practical. Has anyone ever seen anything like this or have any creative thoughts as to how this might be accomplished in a tax-efficient manner, using an ESOP or otherwise. One thought I had would be to create a private

foundation at death and bequeath the entire estate to the foundation (deductible for estate tax purposes). I believe the Foundation would be required to disgorge most of the stock as an excess business holding. Perhaps the directors could be directed, or at least encouraged, to sell the

stock to the employees in an ESOP-based transaction? Of course, that is not the same as a gift, and a bargain sale is probably not possible as it would likely violate state law. Nevertheless, this approach might be something

the client would consider. Any thoughts about this, or other ideas, would be welcome.

It appears that a while a custodial account arrangement of a 403(B) plan that is subject to ERISA may be exempt from the trust requirments of ERISA by qualifying under section 403(B)(7) of the tax code, the brokerage company that is the custodian must still be bonded under under section 412 of ERISA if company is not a regulated trust company or insurance company. Any arguments to the contrary?

My wife was married before. In her divorce decree, her ex-spouse is responsible for carrying the children (2) under his medical insurance plan. However, my wife will have to pay $25 per pay period (i.e. $650 per year) to her ex-husband to compensate his medical premium expenses. My wife pays from her after-tax dollars. Can this amount be considered as FSA reimbursable medical expense?

Thanks

Can anyone comment on the increased administrative burden (ie. paperwork, calculations, questions from plan participants) on 401(k) plans that offer multiple loans as opposed to those that just offer one outstanding loan? Advantages and Disadvantages??

Client wants to set up a 401k at dec 1, 2000, effective January 1, 2000 for 415 purposes, allow all employees to defer up to 100% of dec salary and depend on the 3% non hce rule in the first year to allow the HCE to defer up to $8,500 (170,000 x.05) I don't see why it is not ok, but would like some feed back

In 1998 I converted a $16,000 traditional IRA to a Roth IRA, and elected to spread the income over 4 years ($4,000 each year).

Can I, now in 2000, recharacterize the entire conversion back to a traditional IRA? Can I also reclaim the tax I paid on the conversion amount for both 1998/1999? If so how?

I am 31 years old, earn approx $60,0000 a year (gross) and contribute the full $2,000 each year to the Roth with no other investing. Is it worth me going back to a traditional IRA (I did not have losses in my Roth this year) to gain the present tax advantage or should I stick with the Roth?

Which safe harbor definitions of compensation include severance pay and which do not? The sources I have available seem to disagree.

All seem to agree that severance pay is included in W-2 wages (the Wages, Tips and other compensation box on W-2).

However, some say included and some say excluded for 3401(a) withholding wages, 415©3) "long list", 415©(3)"short list", and 414(s).

Can anyone clarify whether severance pay is included or excluded under these definitions? Any cites that specifically mention severance would be appreciated.

I'm a first time participant...my apologies if my question is a repeat. My wife and I have a combined AGI very close to $150,000 and I expect it to surpass that level, and the $160,000 maximum, within the next year or two. My question is this: on what income level are taxability of future withdrawals determined - AGI at time of investment, or at time of withdrawal? And what if I invest in a Roth while my AGI is below $160,000, and continue to add to the fund each year even after I surpass the $160,000 threshhold? Will I have to keep track of which investments were made pre-$160,000 and which were post-$160,000 and treat only part of the total withdrawals as tax-free?

For a small company that is terminating a PBGC-covered DB plan that is underfunded on a termination basis:

If I understand the rules correctly, a standard termination (as opposed to a distress termination) can be used if either (1) the plan sponsor (a corporation) agrees to contribute the amount necessary to make the plan sufficient, or (2) the majority owner agrees to take a benefit cutback. Is this correct?

I also feel that item 2 is superior to item 1, since the plan sponsor probably cannot use the tax deduction. Does this make sense.

Finally, if there are two 50% owners (exactly 50%), does that mean that both must agree to a cutback, either can, or neither can (since neither is a majority owner). [in this case, one of the two owners died about a year ago, which contributed to the demise of the business, etc.]

Thanks