Corp has two divisions - each has its own 401k plan. Plans each satisfy 410b and are tested separately.

Can one of the Plans go safe harbor without the other?

I am looking for guidance regarding Governmental Welfare Benefit Plans. In particular I would appreciate any reference which define the term governmental plan. I am trying to determine whether my client qualifies for the exemptions afforded governmental plans.

This entity currently has a 457 plan as well as health, life, accidental death and disability insurance coverage. This entity participates in the Louisiana state parochial retirement program.

This entity is a Commission that was created under the authority of Louisiana Revised Statute (R.S.) 33:1324. The Commission is defined in its annual audit report as follows.

"The commission is considered a component unit of the State of Louisiana, because the state exercises oversight responsibility and has accountability for fiscal matters."

In short I want to determine whether this Commission is exempt from filing form 5500 for Welfare Benefit Plans.

The commission does file form 5500 for its Sec. 125(g) Flexible Benefits Plan. But has never filed a 5500 for its Welfare Benefit Plan(s).

Any help with this matter will be greatly appreciated by me.

Thanks

I am currently involved in looking for a new 401k plan administrator. If anyone has been involved in this process, I would appreciate any pointers you can give me.

Louis Gray

I am an investment advisor that has a 401k client that had a plan before we began working together. Because the number of employees had increased, they were required to have an audit back in 1997. They hired a big accounting firm that ended up telling my client to ask that the accounting firm not perform any audit procedures w/ respect to the information prepared and certifed by the plan custodian, a large mutual fund company. The accounting firm even drafted the letter for the client and refernced DOL reg 2520.103-5. As a result, the accounting firm did not express an opinion on the financial statements and schedules taken as a whole.

The client has now received a notice of rejection from the DOL for plan year 1997.

1. What should the company do?

2. What kind of trouble are they in?

3. Is there any liability issues I should be concerned about even though I was not involved with the plan at that time.

Thanks in advance for any and all help.

Company A and Company B own 51% and 49%, respectively, of Company C. Company C has an overfunded DB plan. Company A and Company B agree that Company A will assume the operations of Company C. As part of the agreement, all of Company C's employees will be transferred to Company A and will participate under Company A's benefit plans, leaving Company C with no employees. Assets of the Company C plan equal to the Company C participants' accrued benefits will be transferred to Company A's DB plan. After the transfer, the Company C plan will be left with assets equal to the overfunding, but no accrued benefits or participants.

Company A and Company B want the overfunding to be split between the two companies in proportion to their ownership interests. Under this scenario, 51% of the remaining assets of the Company C plan will be transferred to the Company A plan.

The question is---can the other 49% of the remaining assets of the Company C plan be transferred to Company B's DB plan if no participants or accrued benefit liabilities will be transferred to that plan?

An employer has a fully insured health plan funded through a 125 plan. The employer wants to increase the participant's share of the premiums mid-year although there has been no premium increase by the insurer.

The prior proposed 125 regs seem to state that the only time you can "automatically" increase salary reductions or allow the employee to elect out of coverage mid-year is when the insurer increase the rate. Is this an accurate view?

Do you think the new proposed regs change this rule for fully insured plans?

If not, is there a way to accomplish the employer's goal such as eliminating the "old" health insurance and offer new insurance with the participant picking up a larger share of the premiums?

What are the individual's tax implications when exericising stock options if the company doesn't take the deduction it's entitled to?

my client has sold all of its assets to another company. the company that aquired the assets maintains its own 401(k) plan. the client would like to terminate the plan, vest all the participants and make a distribution to everyone. the plan is currently frozen. I believe they can do this based on the exception to the same desk rule. Is this the correct logic? How does the successor plan rules impact this issue?

they get better all the time. A client of mine has an employee who wants a hardship distribution in order to purchase raw land and then purchase a double wide trailer to put on the land. this will be his principal residence. the plan provides for hardship distributions based on the deemed immediate and heavy finacial need safe harbors. Of course one of which is purchase of a principal residece.

should I allow the distribution for this land purchase?

Regarding the Schedule P's that are often receive directly from the trustee:

If a Schedule P was obviously created by changing the 1998 dates on the form to 1999, can this Schedule P be used?

If a Schedule P has the same layout as the 1998 form but has the 1999 dates printed correctly -- perhaps was produced on the trustee's own system or something -- can this Schedule P be filed? Does it make any difference if the Schedule P was created in March 2000 (before the final forms were issued?)?

Can 5500's be filed with these forms or will the filing be rejected?

Is the best course of action to print out a completed 1999 Schedule P and send that to the trustee to sign?

Has anyone else run into this?

Can a participant take the following loan over more than 5 years as a residential loan?

The participant had a residential loan in a prior plan of an unrelated employer. The participant borrowed money from a bank to repay the prior plan loan so that he could roll the money into the plan of his current employer. The participant would now like to take a loan from the plan of his current employer in order to repay the bank, and would like to classify the loan as a residential loan. Can he take the loan from the plan of his current employer as a residential loan if he used it to repay the bank?

I have a client that wants to have its SPD translated into Spanish. Does anyone have a company that they could recommend for this purpose? Ideally, the translator would be located in southern California.

P.S. I checked the prior message threads on this topic, and did not find any useful leads.

A few Qualified Replacement Plan questions:

1) It is clear that the initial transfer of the DB surplus to a DC plan that is a Qualified Replacement Plan is not deductible. If the surplus is allocated ratably over 7 years as matching and/or profit sharing contributions, it would seem to me that it would not become deductible in the year allocated, correct?

2) Since the amount must be allocated ratably over 7 years, am I correct that the amount to allocate in the 2nd year is:

(the initial amount plus all earnings minus the amount allocated in the first year) divided by 6 (absent any 415 limitations or other considerations)?

3) From a prior thread (answer from PAX), I take it that the surplus is allocated to all participants at the time of the ratable allocation from the suspense account, even if the participant never participated in the DB plan, correct?

4) For anyone that has worked with a DC plan that was a Qualified Replacement Plan and specified allocating the surplus ratably over 7 years, would you have any advice of things to be careful of, or issues that arose that you did not expect?

Thanks for any help.

Who is the settlor in a multiemployer plan?

Follow up to 8/7/00 posting on medical expense reimbursement account covering children of self employed individual. Sole proprietor's children are employees of business. Owner's spouse is not employed by business. Can children participate in employer funded medical expense reimbursement plan? That is, contributions would be made for them reimbursing their medical expenses for eye care, dental, etc.

Would the answer be different if funding is via salary reduction? Would either result in ownership attribution to children, resulting in them from being able to participate?

We agreed to take over a plan several months ago. Yesterday, during a final asset reconciliation for the Jan 2000 thru Jun 2000 period, we found several distributions that, when identified by employer, were returns of excess contributions (due to failure of ADP test) attributable to 1998!!(calendar year plan) Obviously this correction did not occur within the required 12 month period following plan year in which excesses occurred. This is a disqualifying event. Does anyone know of a way this can be voluntarily corrected, or any other method to avoid disqualification if uncovered by IRS? Although we have aleady committed to administer this plan, how might we reneg on that commitment?

Do investment committee minutes have to be disclosed to a plan participant appealing the calculation of his retirement benefit?

I have read the instructions for the new Schedule D quite a number of times and I am still not understanding in exactly what instances this schedule is necessary.

IS this something that needs filed with most of the forms?

For example, I have a few plans with invesments in Manulife. Manulife sends out a one page instruction sheet for completing the schedule D. I understand that they are an insurance company and the funds are in pooled separate accounts.

What about mutual funds such as those held by Fidelity, American Funds, Schwab, etc?

Are these pooled separate accounts or common collective trusts? The assets of many plans are held under one umbrella so to speak.

I would be so grateful if someone could clarify this confusion for me. If you could give examples of master trusts, common collective trusts, etc. that would be great.

I'm taking this 12/2000. Anybody take this 6/2000 or 12/99 that can offer suggestions on areas to study more or less? General comments on difficulty?

Anybody go to the review session in Denver that can offer any feedback?

Are elective deferrals in the form of balloon payments permitted?