Deceptive Sales Practices 401K

Does anyone know if it is a rule violation (erisa,Sec,Dept of Labor) for an insurance company to steer participants into their proprietary fixed annuity account where they make a higher fee ? The plan had several Mutual fund options but most of the plan assets went into the Insurance companys own fixed account.

A profit sharing plan with an 11/30 fiscal year-end is being merged into a 401(k) plan effective as of the close of business on December 31, 2000. The profit sharing plan will have a short plan year beginning December 1, 2000 and ending December 31, 2000. If the plan sponsor does not amend the profit sharing plan to provide for 100% vesting, do participants receive a vesting YOS if they work 1,000 hours in the period beginning December 1, 2000 through November 30, 2001 ans a vesting YOS if they work 1,000 hours for the period beginning January 1, 2001 and ending December 31, 2001? For all practical matters, doesn't this senario only require participants to be credited with an additional YOS for the one month plan year breginning January 1, 2000 and ending December 31, 2000. This could result in participants with profit sharing account balances having a greater vested percentae than they would have in their 401(k) amounts. Obviously, that would be the result if the plan were continuing as a stand-alone plan, but my case involves a merger.

Is it acceptable to have the following life scedule:

1X salary for all employees except, a flat $500,000 for law firm Partners which reduces automatically to a flat $300,000 for partners once they reach age 60, with further reductions at 65 and 70 if still actively at work.

DOES ANYONE HAVE AN IDEA OF WHEN WE MIGHT EXPECT THE FINALIZED REGULATION CHANGES AND IF THE EFFECTIVE DATE WILL REMAIN JAN 1, 2001. ANY INFORMATION YOU CAN GIVE ME ON THIS WILL BE GREATLY APPRECIATED.

THANKS!

What is the "fix" when a plan sponsor fails to report as a taxable distribution a plan loan that was in default in a prior plan year? For example, assume that in 1998 a participant failed to pay a plan loan for an entire calendar quarter and the sponsor should have reported the outstanding balance of the loan as a taxable distribution to the participant (ie, should have defaulted the loan)in 1998 via a 1099R. However, it is now 2000,no further payments have been made on the loan and the sponsor still has not defaulted the loan. Obviuosly, the sponsor needs to default the loan. Can this be done in the current plan year (2000) or must a 1099R for 1998 be done, causing the participant to amend his 1040 for 1998? Are there any consequences to the plan sponsor for failing to default the loan? Is this somehow a prohibited transaction? Any thoughts on these issues would be appreciated.

To Carol or anyone else:

Our city currently offers both a 457 deferred compensation plan and a 401(a) defined contribution plan. Our consultants have informed us that contributions to the 457 plan does not count towards the annual additions limit for Section 415. Based on this assumption, a highly compensated employee (let's say making $150,000) could contribute the maximum $8,000 towards the 457 plan and have an employer contribution of $30,000 made to a 401(a) defined contribution plan. However, our auditor seems to think that the 457 contributions count towards the $30,000 limit. Thus, they think that the maximum that could be contributed to the 401(a) plan would be $22,000.

What is your opinion on this subject? Thanks in advance!!

A defined benefit plan terminated in 1998 but didn't distribute assets until 1999. In conjunction with the distribution the sponsor had to make a supplemental contribution to make the plan sufficient. I plan to reflect this contribution on the Schedule I.

There will be no Schedule B with the 1999 Form 5500 since the termination date was in the prior year. How will the IRS/DOL know that there is not one required? They removed most of the questions about plan termination and no longer actually ask whether the plan is subject to 412. I am trying to head off any correspondence from IRS or DOL on this issue.

I'm confused about the need for my client's required aggregation of his two DC Plans. Here are the facts:

1. has "frozen" P/S Plan (client's definition)which is top heavy.(I still have never received a straight answer as to how you have a frozen P/S Plan-doesn't IRS require "substanial and recurring" contributions? In this case document does not specify contributions based on profits so, if client hasn't been making contributions isn't the Plan actually terminated? Can Board Resolution simply be created that says Plan is now frozen?)

2. has Standardized 401(k) Plan with no match that covers all employees i.e. all key and nonkeys are eligible to receive benefits (make deferrals) but only nonkeys are deferring.

3. 401(k) Plan is not top heavy.

My understanding is that both Plans must be aggregated for purpose of Top Heavy testing as Key Employees "participate" in both Plans. I realize the Keys are not deferring in the 401(k) Plan but I thought the definition of participating is are you eligible (whether you do or not actually defer)

or not. Am I correct?

Can the spouse employee and child employee of an LLC member participate in a 125 plan? LLC is taxed as a partnership?

Thanks

Pat Insall

Is it necessary to file Form 5500 for medical plans that are fully insured (and therefore regulated by the state)?

I was once informed that if plans were subject to state regulations, that would supercede ERISA.

All plans have over 100 participants each but no filings were ever done. When I inquired about it to our broker two years ago, I was told "no" to filing. Now our broker is telling us otherwise, based on what other clients are doing.

Can someone help set the record straight, and, if possible, point out the legal info on this?

Thanks a lot.

My question is in regards to the required 20% withholding on the employer contributions. I know that you can submit the federal withholding to the IRS using the form 8109-B for those of us who are not electronic filers. My question is how do we submit withholding for any State Tax that is withheld from a distribution. Is their a universal form or is this a state by state consideration??

Could someone point me in a direction to find out the policy and procedure for submitting State Withholding.

We have recently taken over a plan in which we cannot locate the 1998 5500-EZ. When we confront the company who should have prepared the 1998 5500-EZ, they think they filed it, but "may have forgotten to file it". I have checked on freeerisa.com and have come up empty handed. I am trying to determine what to do at this point. Since we don't know if a 98 form was filed, should we:

1. Create a new 98 form and file it late?

2. File the 99 form and hope the 98 form was already filed?

3. Try to request a copy of the form from the IRS (any suggestions)?

4. Something else?

Thanks for all feedback.

We have a 3121(w)church that has some independent contractors that receive income from selling books(1099 income). The church would like to set up some kind of retirement plan for these contractors where the contractors could defer money as well as receive a employer match from the church. I don't think I can use a 403(B) or 401(k) since they are not common law employees (maybe a 403(B)(9)?). I'm thinking that the contracors may have to set something up on their own. Does anybody have any ideas or suggestions.

DB Plan Terminates in 2000 also in 2000 the Employer Establishes a 401(k) Plan. Will distributions from DB Plan count toward TH status?

416(g)(2)(a)(i) States that Required Aggregation Group is each plan of the employer which Key Employee Participates AND ( not or)each other plan of the employer that enables any plan described above to pass 401(a)(4) or 410.

416(g)(3)(B) State that you need to include distributions from terminated plans which if it had not terminated be included in a Required Aggregation Group.

1.298 of the ERISA Book goes though an example that seems to disregrad the Required Agregation Group Issue and only looks at that the plan covered one key to determine if it is part of the Req Aggregation Group and does not look at the second prong of the test.

Any thoughts?

I would appreciate your thoughts on how to perform ADP and ACP testing for a plan that mid-year becomes a multiple employer plan. General scenario is a 401(k) plan with a matching contribution has 2 controlled group companies participating, parent and subsidiary. Mid-year the sub's stock is sold outside the controlled group but there is still a minority interest retained by the parent. The subsidiary's employees continue to participate in the plan for the rest of the year and likely for the next few plan years. This creates a multiple employer plan which is required to be disaggregated for 410(B) purposes (Question: as of when)?

Can the plan be ADP and ACP tested as a single plan for the rest of the plan year of the transaction or do the employees, their compensation and contributions have to be split of for recordkeeping and testing as of the date of the transaction? If they have to be split off, are they tested for the entire year as though they were a separate group or only from the date of the transaction on? Testing separately is a records nightmare. Does the fact that the 410(B)(6)© transition rule allows the parent plan to continue to satisfy 410(B) for the rest of the plan year (and the following year) provide an argument that you can continue to ADP/ACP test as a single plan during the transition period. Thanks for your comments.

Hello!

This is my first time posting a message on this or any other sight. Hopefully, it will prove to be an efficient way to find the answer to my question, which follows:

What do typical maternity leave plans look like? I work for a small start-up that doen't yet have a policy on maternity leave, but does have the resources to be as generous as a larger employer. Do women out on maternity leave generally only get paid the nominal amount that the insurance company pays them or is salary continuation also common? If so, for how long? 6 weeks, a week for every year of service, etc?

Any advice anyone can provide would be very, very much appreciated. I'd be very interested in hearing what the policy on maternity leave is at your company.......

Thanks so much!

We're considering start-up of a small engineering consultancy and specialty construction firm. Working on proforma financials, and would like to get an idea on costs per employee for an outsourced benefits package (medical, dental, life, 401k).

We're looking at 15 full time employees at the end of yr 1, and 50 by the end of yr 3.

What's a ballpark budgetary figure per employee on an annual basis?

What's a ballpark for worker's comp insurance?

Any help would be greatly appreciated.

I am curious about distributions to Alternate Payees under a QDRO. Do most 401(k) Plans allow Alternate Payees to withdraw money they have been assigned under a QDRO even if no "distributable event" has occurred? It has been our practice to NOT allow an Alternate Payee to withdraw their money until the participant they were assigned money from retires, dies, separates from service, etc. However, we hear that others routinely allow Alternate Payees to withdraw their money. If this is true, what is the regulatory basis for this? Does the Plan document have to be amended to specifically allow for this? Thank you.

Thanks in advance

hi all,

I am a graduate student in my final year of school looking to place the max amount possible in a ROTH IRA.

What I do not know are the criteria I should consider when selecting a "broker/bank" to help me set the IRA up. Are there differing service, setup, or account fees I need to consider, and what "broker/banks" generally offer the most competitive rates? Is there a website or information source you might have found helpful?

Thank you for any assistance you can offer and have a great day.