Is a SIMPLE IRA plan a "successor plan" under the 401(k) rules?

Has anyone in the metropolitan NYC area implemented a TransitChek program on a pre-tax basis? It is a program we are looking to implement in the near future so I am looking for feedback (problems, solutions, etc.) Thanks.

When an employer reimburses participants for deferred sales charges by making a contribution to their account, does the plan document have to include language that permits this type of contribution? What is the contribution typcially labeled, miscellaneous?

On the 1999 Form 5500 Schedule T, it allows for reporting of the ratio percentages for disaggregated parts of a plan on the Schedule T itself without attachments. What do you do if a plan has a discretionary profit sharing source, but did not make a contribution for 1999?

In previous years, we completed an attachment for such sources and indicated that "No HCE's benefited". However, there is no where on the Schedule T to indicate that, for a particular source, no HCE's benefited.

Should a separate Schedule T be prepared for such sources? Or should the disaggregated source be listed without a percentage? with a 100% percentage?

Thanks for your help!

Suppose that a 401(a) plan of a bank invests the plan's assets through the bank's trust department. The DoL will take the position that the bank may charge "direct expenses" to the trust but not its standard trust fees. (If a customer walked in off the street with a trust account identical in size to the 401(a) plan, the bank may not charge its standard asset based money management fee.)

Why is the result any different for mutual funds? I keep reading articles (For example, see the Reish & Luftman law firm article on the First Union litigation.) That bank's plans invest through the bank's mutual funds and the bank receives asset-based money mangement fees from the plan.

If a bank is not permitted to keep an asset based fee when its trust department manages the money, why is it able to keep the fee when its mutual fund operation manages the money? [Edited by Dave Baker on 08-06-2000 at 10:50 PM]

Ltd is offered as a core benefit unde ra 125 plan.

It is after-tax

Does the fat that it is offered thru a 125 plan change the tax treatment when disability benefits become payable?

Thansk

Pat Insall

In part, Rev. Proc. 2000-16 Part III, Section 6.02(4)(B)(ii) states the following:

"Excess Amounts (whether arising from a section 415 failure or a section 403(B)(2) failure), adjusted for earnings through the date of correction, must reduce the participants' exclusion allowances by being treated as amounts previously excludable under section 403(B)(2)(A)(ii) beginning with the year following the year of correction (or the year of correction if the employer so chooses)."

If the Excess Amounts themselves have been left on employer records as non-forfeitable contributions/annual additions during the years they were contributed and continue to be counted as amounts previously excludable under section 403(B)(2)(A)(ii), does the Rev. Proc. statement mean that these same Excess Amounts are to be counted again as amounts previously excludable (amounting to a double-whammy), or should only the earnings through the date of correction be treated as "new" previously excludable amounts?

What is current thinking about compensation systems based on point factor systems? Further, what are benefits professionals doing to eliminate the use of grades for certain benefits such as office size, parking spaces, and similar benefits/perqs.

Can dependent and spouses group term life be offered through a 125 plan?

Pat Insall

Can one design a 125 plan as such

Employer will pick up 75% of benefits selected

Benefits offered medical, medical FSA & dependent care FSA

If ok, does anyone see any problems with this design?

Much thanks

Pat Insall

My employer maintains and makes contributions to a Money Purchase Pension Plan and a Profit-Sharing Plan. I do not make any contributions to the plan nor take any deductions. I was wondering if I can open and make contributions to a Roth IRA? Or does my participation in my employer's plan prevent this? What issues do I need to investigate?

Hope this is not too basic, but I have looked and can't find the answer.

Is it true that the ability to switch adp/acp testing from current to prior and prior to current is unlimited until the end of the remedial amend. period? So year 2000 and 2001 are still flexible and only have to eventually be documented.

Thanks!

Hi´,

I just had a question.If I were to trade my companies services for use of a one week timeshare,what would be the tax implications?Any information would be greatly appreciated.My address is mocm14@hotmail.com

Thank You,

Matt McDonald

HI,

I just had a question.If I were to trade my services for use of a one week timeshare and then use that week as an incentive for my employees,what would be the tax implications?Any information would be greatly appreciated.

My address is mocm14@hotmail.com

Thank You,

Matt McDonald

I have a client who is interested in investing a portion of his IRA in a L.L.C. The investment would be in the form of a note, which would outline the principal amount, interest rate, payment schedule, and so forth. The note is highly speculative in nature.

My belief is that this note, which from a fiduciary standpoint is probably not the best investment in the world, is still allowable under the IRA investment rules. The L.L.C. is not a "disqualified person" under IRC Section 4975 (therefore, not falling under the prohibited transaction rules)so that is not a consideration. I do not feel that the IRA is being used as security or being pledged as a loan, so it does not become a distribution under IRC Section 408(e)(4).

Anybody with experience or an opinion? Thanks.

I am getting conflicting information on shareholders in a cafeteria plan. Can a 5%+ shareholder participate in dependent care reimbursement under a cafeteria plan? It appears that some of the information I read indicates the shareholder cannot participate if the amount contributed exceeds 25% of the total amount contributed to the child care portion of the plan. Any clarification will be appreciated!

I've been told that terminated employees of a church plan - in this case the plan is 403(B) - can contribute to the account for 5 years after termination. Does this mean that they can defer income from a "for profit" business into their existing 403(B) accounts? Or is something getting twisted in the translation?

I've had a few DB clients request the DB "cost" for purposes of comprehensive benefit statements covering everything from pay to Social Security to fringe benefits.

Each time we struggle with the best way to communicate the DB cost in dollar terms that can be added to other benefit costs.

I've used the 404 cost / eligible comp x employee comp as an average employee cost, the pv of the expected increase in the accrued benefit in the current year, and a couple of other methods. Each of these has it's problems.

I wondering whether others have run accross this, what method they typically use, and what experiences have resulted.

The plan size I'm talking about is 50-1,500 employees.

I realize that some companies present only the benefits, not the costs, but for those who present cost, what method is typical?

I have a brand new client. I serve as the investment advisor for the 401(k) Plan. They have asked my help with a compliance issue. The plan has been in existence since 1997. In the plan document, compensation is defined as salaries PLUS bonuses, commissions and overtime. The client was under the understanding when they originally set up the plan that bonuses, commissions and overtime were EXCLUDED from the definition of plan compensation. The client has been basing deferrals only on salary and not including bonuses, commissions or overtime since day one. (It is also important to note the plan has a $0.25 match on the 1st 5% of comp.)

One of their non-HCEs who is paid partially by commissions, read the document and determined that she was not receiving the correct deferral. The plan document was amended in June of 2000.

What must the employer do now to correct this compliance problem? Will they need to go through VCAP or some other program? Will the employer be required to make up the missing contributions PLUS match for all affected employees? What options do they have at this point since this has been going on since 1997? (Please note that the employer's original intend was to exclude bonuses, commissions and overtime but the broker who did the original documents did not check the correct boxes.)

If a participant in a health FSA terminates employment during a plan year and, at the time of the participant's termination, has received more from the health FSA than he/she contributed, may the employer recover the "overspent" amount by withholding the amount from the individual's final paycheck.

For example, C participates in a health FSA. C elects to defer $3,000 over the course of the plan year (to be contributed through equal payroll deferrals). In February, C submits a claim for $3,000 to the health FSA for recoverable medical expenses. In April, C terminates his employment. At the time C terminated his employment, he had only made contributions to the health FSA in the amount of $1,000. Unless his employer can withhold $2,000 from C's final paycheck (or require him to repay the plan in some other fashion), the employer has lost $2,000. What are the employer's options, if any, to recoup the $2,000?