On Schedule R, question 3 states that profit sharing plans should not complete this line. When I look at the instructions from the DOL & Corbel they don't mention anything about skipping this line. Is anyone completing line 3 in part 1 for a profit sharing plan?

Do all qualified plans need to include Schedule T with their 5500 filing for the 1999 plan year or is Schedule T included just for cross-tested plans?

If a DB plan provides that a lump sum benefit is calculated by using the greater of GATT and the result obtained by applying a fixed rate and other mortality table, and it is desired to eliminate the fixed rate from the calculation, what needs to be grandfathered to avoid a prohibited cutback?

Assume a plan specifies that a lump sum is the greater of floating GATT (currently 5.85%) and UP84 at 7%, and we wish to eliminate the fixed rate. What must be grandfathered? It seems the options are:

1. Nothing

2. The PVAB on the effective date of amendment

3. The PVAB on the adoption date of amendment or effective date, if later.

4. The fixed rate applied to the accrued benefit as of 3 or 4?

We're interpreting having a fixed rate as potentially problematic for 415 purposes, and would like to eliminate it in some circumstances. But, that's another subject.

Opinions on what if anything needs to be grandfathered would be appreciated.

PLR 9009052 states that accrued paid time off is includible in an employee's income when not subject to substantial limitations or restrictions. "Limitations & restrictions" include maintaining a minimum number of accrued hours, a maximum number of accrued hours (above which hours are automatically converted to cash & distributed to employee) and the requirement that hours be cashed in in blocks of, for instance, 40 or more. What is not clear is whether a 40 hour block of time that can be cashed out, but is not cashed out, is taxed twice: once when it is "included in income" because not cashed out, and again when it is actually converted to cash and distributed to the employee. Any comments on or experience with this issue?

I'm a 23year-old college student who thought a Roth IRA was a good idea. When my bank mentioned "risk tolereance" though, I started getting nervous. Does anyone know of a website that explains how an IRA works in general? I'm really new at this, and I'd like to get an idea of what risks I'm taking. Honestly, I had no idea that risks were involved.

Thank you,

Tami

IRA Participant named Revocable Trust as of Required Beginning Date prior to New Proposed 401(a)(9) Regulations and therefore is taking Minimum Required based on Single Life Expectancy (Recalculating). Question is, now that the new Proposed MRD regs have been relaxed (Dec. 1997) and allow use of underlying beneficiary of Revocable Trust as "Designated Beneficiary" if certain requirements are met, is there any relief available? Can Participant now use Joint Life or upon Participant's death can beneficiaries use life expectancy of eldest Trust beneficiary to calculate distributions?

two things:

1) is there any limitation imposed by the regs or code on the amount of a hardhsip distribution? I am aware of the restrictions for the purpose and on earnings but i dont see any amount restriction?

2) does anyone know where i can get a sample hardship distribution form taking into account the 1999 law changes?

An employee's dependent loses full-time student status and elects to continue her coverage under COBRA. While on COBRA, the dependent has a baby who is enrolled as a COBRA participant. Subsequently, the employee's dependent elects to return to school on a full-time basis and becomes eligible to be covered by the employee as an active participant. The employee wishes to add the dependent back on to her coverage and to continue COBRA coverage for the grandchild.

My understanding is that the newborn (employee's grandchild) is not a qualified beneficiary under COBRA, and that coverage is tied to the parent's status (employee's child). Does this mean that if the child is no longer a COBRA participant the grandchild loses COBRA continuation rights? Any help would be appreciated - thanks!

I think preparation of the 5500's has gotten to me as I'm feeling our admin fees are too low! Has a survey ever been conducted here? If not, is this of interest to any admin firms? Let me know your interest and ideas on how this could be conducted. Thanks.

Professional Corporation, loan proceedures allow terminated participants to continue to pay on their loans. One term participant has a loan that has been habitually slow pay but never in default. We have been advised that the participant can only pay on the loan once a quarter. They want to re-amortize the loan for quarterly payments, which would not extend the loan beyond the due date of the original note. Would this change be considered a new loan (plan does not allow for new loans to terminated participants) and should the loan be current prior to re-amortization? Thanks for any advice.

Compensation Test

If a plan uses a definition of compensation that is not a safe harbor definition, does it need to run a comp test (average percentage of total comp included for the HCEs as a group does not exceed the average percentage of total comp for NHCEs by more than a de minimis amount - 1.414(s)-1(d)) if the plan only has deferrals and matching contributions? For example, a plan excludes bonuses and overtime from compensation for purposes of deferrals and match, but when testing the plan a 414(s) definition of compensation is used. If the testing comp is safe harbor is the comp test necessary?

I know a test is necessary if a profit sharing contribution is to be allocated on the basis of that compensation definition, but I am unsure if it is required in the absence of a p/s contribution.

If a plan with only deferrals and match fails the comp test, would the correction call for a QNEC in the amount of the deferral percentage on the excluded comp? and it's corresponding match?

I have been asked to work on an Employee Stock Purchase Plan and have a question about the possible tax issues surrounding the difference between participant purchase price and the fair market value. First, some key plan info:

--The plan is not intended to satisfy IRC sec. 423 although it has many similar provisions as a true 423 plan.

--Employee contributions are deducted on an after-tax basis

--This plan provides a 15% discount via imputed, taxable income at the payroll level. EX: Each payday ptpt has $100 deducted after-tax and employer increases pay by about $15. The $15 is also deducted after-tax and added to ptpt contribution so that a total of $115 worth of stock is actually purchased.

--The plan makes quarterly offerings to it's U.S. employees and sets the purchase price to be the NYSE closing price on the first or last market day of the calendar quarter - *whichever is less*. EX: Price is $50/sh on Apr 1 & $70/sh on Jun 30. Plan purchase price is set at $50/sh.

QUESTION: Is there any immediate taxable event at the time of purchase as a result of the actual market price being $20/sh greater than the plan participant's purchase price?

Cole Stevenson

Voluntary Life Insurance - can an employee drop or cancel coverage because they do not want to pay increased premium due to reaching birthday that carries increased premium 0- example, turns 50 and rate for 50 - 55 is greater than rate for 49.

Does the IRS maintain PDF versions of Form 5500 and the instructions for years BEFORE 1999? If it does, how do you find the 1998 Form 5500 instructions on the Web?

Well, I can see this is a popular forum! My TPA firm has grown from about 400 clients to 700 clients over the past 3 or 4 years, and I suspect there are those of your out there with similar stories. My question is- have you changed the structure of your business as a result of the growth? What I mean is, have you added levels of management or created "teams" or started creating task-oriented positions? When we had 400 clients, we had six administrators who did all of the work for their clients and two of us were the "checkers". As we grow and the ministerial garbage (withdrawal forms, loan forms, participant calls, etc.) increases, I find my adminstrators somewhat bogged down. Are there any steps you have taken to streamline your processes?

thanks.

We have acquired (thru a recent merger) a small legacy 401(k) plan with about 100 balances. Almost all are associated with terminated employees. For this reason we want to terminate the plan.

Under this plan's rules, the nonvested portion of participant balances are forfeited *only* at the time participant takes a distribution. So, we have a handful (maybe 20) of non- or partially-vested participants who terminated employment anywhere from one to seven years ago and have plan balances which still reflect employee and *all* employer money. (They voluntarily elected to leave their money in the plan.)

Question: Upon plan termination, are we required to fully vest the non-vested portion of these balances?

Thanks in advance for anyone's two cents worth.

Cole Stevenson

We have acquired (thru a recent merger) a small legacy 401(k) plan with about 100 balances. Almost all are associated with terminated employees. For this reason we want to terminate the plan.

Under this plan's rules, the nonvested portion of participant balances are forfeited *only* at the time participant takes a distribution. So, we have a handful (maybe 20) of non- or partially-vested participants who terminated employment anywhere from one to seven years ago and have plan balances which still reflect employee and *all* employer money. (They voluntarily elected to leave their money in the plan.)

Question: Upon plan termination, are we required to fully vest the non-vested portion of these balances?

Thanks in advance for anyone's two cents worth.

Cole Stevenson

Person was denied individual health coverage due to her excessive weight? HIPAA implications?

Has anyone set up a cross-tested MPPP? I have a client that wants to max contibutions at $30,000 for the two HCE's, but only has two NHCE's. Comp for each HCE is $120,000. The plan passes discrimination with a 25% contribution for each of the HCE's and 10% for the two NHCE's. Obviously, this won't work under a p/s plan due to section 404. What about MPPP requiring 25% for HCE's and 10% for NHCE's? Would the plan need to be amended if employee demographics change? Are there better ways to accomplish my client's goals? Am I being too aggressive? Thanks.

The company I work for is looking to expand into New York. Can anyone tell me where I can find information regarding New York laws on Short Term Disability?