The Schedule SSA instructions indicate that if you need more space, you can either use additional copies of the Schedule SSA, or additional sheets containing all the information on the schedule can be attached. Schedule SSA only allows for reporting 4 participants. As an example, if you are required to report 9 participants, should you attach 3 SSAs including both pages 1 and 2, or only page 1 of SSA and 3 separate page 2s?

Has anyone had any experience with automatic enrollment with your 401(k) plan? I'm reading a lot about it, but haven't actually "met" anyone doing this? I'd be interested in your experiences...

Also...we are contemplating changing our waiting period from 12 months to 6 months. Any pointers or cautionary tales???

Thanks in advance!

Sheila K

602 683-1013

An employee quits his job and has the choice of rolling his vested Profit Sharing distriution into his personal IRA or rolling it over into his new employer's profit sharing plan. If he chooses to roll it into his IRA, then he can later roll that IRA over again into another IRA (after a one-year period has lapsed, according to the tax code)

HERE'S MY QUESTION:

If he had choosen to roll the Profit Sharing distribution into his "new employer's" profit sharing plan, then does the tax code allow him (withhot penalty) to re-roll it from his "new employer's" plan to an IRA (several years later) while still employed with the new employer ? (Assume the participant is UNDER age 59 1/2).

An employee who previously elected health coverage for his spouse contacted me recently regarding the company's decision not to extend benefits to his domestic partner. I explained to him that according to our policy (and hopefully the policies of most other companies), he could not cover both a spouse and a domestic partner under our health insurance plan. The employee then informed me that his spouse is in fact an ex-spouse, whom he divorced three years prior to beginning employment with us, and that he was ordered as part of his divorce decree to cover her under his employer's health insurance. When he elected benefits at his hire date, he simply wrote her information in the "spouse" section of the enrollment form.

Our health plan is self-insured and does not provide for coverage of ex-spouses - my understanding is that we are not obligated to comply with court ordered coverage if it provides benefits for someone who doesn't fit the plan's definition of a dependent.

This being the case, what the heck should I do? The employee has asked me to write a letter to his attorney explaining the situation and informing him that coverage on the ex would be dropped. I'm not inclined to cancel her coverage retroactively (she's been covered by us for 2 years), however I'm wondering if failing to do so would violate ERISA. I don't see how this could possibly be construed as a qualifying event under COBRA, and I feel terrible about abruptly terminating coverage for this woman who thought all along that she had secure health benefits (and apparently has some significant health concerns). Any suggestions on how to handle this would be greatly appreciated.

Pursuant to a sale of assets (no assumption of liabilities, etc.), buyer hires seller's employees and assumes sponsorship of seller's 401(k) plan, effective as of the first day of the last quarter of the calendar/plan year. Buyer maintains no other qualified plans and has no employees of its own, pre-sale. If the IRS audits that particular plan year, can both entities ultimately be responsible for responding to the audit?

In a 401(k) Profit Sharing Plan, is the plan sponsor required to have a Fidelity Bond? Or is it just strongly suggested?

For plan/fiscal 7/1/99 - 6/30/2000, our client sponsored a 20% money purchase and a profit sharing plan. By 12/31/99, they had already funded almost the whole 15% allowable profit sharing contribution. Now, in order to avoid 415 and possibly 404 problems, they want to fund the money purchase plan at only 10% instead of 20%. Does anyone know if, in the case of two DC plans, 412 takes precedence over 415? I am somewhat uncomfortable about funding less than the "required" amount for the money purchase plan, yet agree that they shouldn't fund over 415 limits. Of course, the plan documents are silent on this subject.

How can an employer whose employees are being enticed to join a union "discretely" determine the funding status of the union's DB pension plan?

Thanks!

Company A and Company B are owned by husband and wife (H&W). H&W are the only employees of Company A. Company B has only NHCE's. H&W establish a 25% MPPP for Company A, but have no separate plan Company B and exclude Company B in the plan for Company A. We've been retained to fix the problem. Is VCR required here, or may contributions for employees of Company B plus earnings be calculated and contributed? What about SVP? Seems like .05 of Appendix A to RevProc 98-22 might apply. Are there other options? Correction by making makeup contributions could be quite expensive.

In a tiered profit sharing plan can the contribtion allocation have the following three steps?

1. A flat dollar amount allocated to each eligible participant in the group that is descretionary (might be $300 one year, zero next year, $1,000 following year, ect.)

2. Any eligible participant in the group whose allocation in step one is less than 3% of compensation will receive an additional allocation such that the allocation for each eligible participant will be the greater of the amount from step one or 3% of compensation.

3. If any amount remains after step two, that amount will be allocated to each eligible participant in the group in the same proportion that each eligible participant's compensation for the year bears to the total compensation of all participants within the group for such year.

The main question I have relates to whether the flat dollar amount in step one can be discretionary, or must it be a fixed dollar amount specified in the document?

Does anyone have any experience with the IRS as to what is acceptable under the "significantly discriminatory" statement under 1.401(a)(4)-5. I have a client that fits Example 1 exactly. I realize that in order to increase benefits, I need to give something to the previous participants, but the question is how much. I would suspect that as long as the NHCEs get 70% of what I give the HCE, I would be fine, but since it says "significantly discriminate" and since 70% passes the standard discrimination test, could I use 50%? Any thoughts?

Do I recommend what I think is reasonble then defend it if the IRS asks, or should I ask for an opinion letter ahead of time?

Has anyone else dealt with this?

Assuming a "reasonable error", is there a deadline (similar to March 15 for excess contributions and April 15 for excess deferrals) for distributing deferrals to correct excess annual additions? If there is a deadline, what are the consequences of distributing after the deadline?

We just received census information on a 1999 calendar year plan in which one participant deferred 31%.

An internet venture (in the form of an L.L.C.) is interested in establishing a plan that would provide employees with an equity ownership interest in the entity. I am guessing that this plan would resemble a non-qualified stock option plan and might provide employees with "profits interest". Does anyone have a document that I might be able to review. Thanks. Ed

I recently gave a car dealer my 2 wek notice, but left 4 days early. They are now holding 2 paychecks from the previous month pay, one a commission check. The manager says he has to wait until all paperwork is cleared. I will owe them nothing because I have no outstanding debts with them. He said if he can't coolect customers bills, I will have to pay those bills, because it is my responsibilty as a service consultant to make sure bills are paid. I am still due a paycheck of commission for 9 days of work from them. Is this legal? Can he withhold a paycheck? He has had it about 8 days now. I am not sure what my rights are. All help is much appreciated. I don't even know where to look this information up at.

What options exist for an employee's 401k account if they are terminating employment before retirement age. It seems may people role their 401k into an IRA. However, I understand but am unclear on the specifics, that the tax rate for 401k assets held over 5 years may be as low as 10%. Is this true. If it makes more sense, is there any way of maintaining a 401k account if your employer throws you out on termination.

A company will offer an early retirement window as part of its qualified DB plan. Participants electing to retire will receive an unreduced pension. The company also wants to give the participants a lump sum severance payment equal to 6 months compensation and would like this benefit to be funded by the DB plan as well. The DB plan will be amended to provide for both of these benefits.

Can the severance payment under the DB plan be set forth as a lump sum amount (i.e., "Upon early retirement, a participant shall receive his accrued benefit plus a lump sum equal to 6 months compensation"), or, since benefits under DB plans are usually phrased in terms of monthly payments for life, must it be set forth as a monthly amount for life in an amount that would have a lump sum present value equal to 6 months compensation? In other words, since the normal form of benefit under a DB plan is a life annuity (or QJSA if married), must the employer determine actuarially a monthly payment for life with a present value equal to the lump sum severance amount and allow early retirees to elect to have the severance amount paid as an annuity?

A client terminated an existing profit-sharing plan and opened a new plan as a non-standardized plan, but with no exclusions. What are the rules about amending the plan, at some point in the future, to a standardized plan? Cites to IRS authority would also be helpful.

Is the Employee Stock Purchase Plan a protected benefit plan under FMLA. I was trying to locate certain language related to stock purchase plans under regulation: CFR825.209, but it is not addressed. I'm trying to determine if employees are still eligible to participate in the plan while on leave (FMLA) or can they enroll when the Initial Offering period occurs. Or, if an employee stops contributing while on leave (FMLA), will they receive the same stock price upon returning to work and starting contributions again? Lastly, is it a SEC requirement for employers to address Leave of Absence provisions in their Employee Stock Purchase Plan Questions and Answers Summary Booklet?

Do you think it is a problem if a financial institution charges individual participants a fee for transferring assets in kind that are held in a directed brokerage account (option) contained within a 401(k)? The reaon for the charge is that it takes alot more time to transfer these assets in kind as opposed to liquidation and then rollover. Is this more appropriately a plan expense?

Any word on whether or not there will be an extension beyond 10/15/2000?