(Refered from 403(B) Board:

With respect to an active minister (3yrs) contributing to a 403(b)plan. What would be "includible compensation" for purposes of calculating the MEA (Maximum Exclusion Allowance)?

- Base Pay

- SECA Reimbursement by Church (=7.65% including Housing)

- 403(B) Salary Reduction Contributions

- Housing Allowance

I have received conflicting opinions as to whether it should be 1) Base Pay only; 2)Taxable Income (Base + SECA), or; 3)Base Pay + SECA + Housing Allowance.

Thanks!

Also, the results of the MEA calculator we are using seem strange when comparing the MEA for 16500 v. 17500 income

($3,000 v. less than $1,500 allowed reduction/contribution)

I also see (IRS Pub 571) a Special Election for church employees in addition to the "any year limit" and "overall limit" which seems to be $10,000 each year to a lifetime max of $40,000. What counts in the $40,000 - the entire contribution in any year you choose to exceed the "general election" or the excess over the general election. I would assume the general election for a minister is never less than $3,000 (unless total comp for the year is less than $3,000). I also assume choosing this special election means the minister could NEVER choose the "any year limit" or "overall limit" - but could continue to use the general limit or "year of separation limit".

Finally, do you use fractional years of service in the calculation? e.g. 3.25 for 3 years, 3 mos service.

Thanks for your help and consideration!

[Edited by JThomas on 08-29-2000 at 09:50 PM]

I seem to remember a regulation or something that says that if an entity is a member of an affiliated service group at any point during the year, the entity is considered part of the group for that whole year. Can anyone confirm this for me with a cite? I can't seem to locate my source now.

Thanks.

An employee now age 65 went to work for a large corporation in Sept. 1962 and quit to take another job in December of 1975. The company had a defined benefit plan during this entire period. Under ERISA rules would this employee be eligible for any benefits?

I have a client whose attorney insists that mutual funds only recently became approved for use in 403(B) plans. I would appreciate any references to authority for their use in such plans. Thanks.

What legal, research and general advice do you recommend before entering into exclusive agreement with a lasik surgery provider that wants to market exclusively to your employees and offer them financial assistance? They've developed a waiver form for employees stating they will not sue the co., its officers, etc. or the provider. What fidicuary responsonibility does the employer have?

I recently left state employment to take a job with the federal government. I have a balance of about $15,000 in my section 457 deferred compensation plan with the state. I have been informed that I must now elect one of the following two distribution options: (a) immediate lump-sum distribution, less 28% withholding tax, or (B) I must state the year I wish to begin receiving annuity payments (the year selected can be changed only once in the future and the change must be to a later date). The problem I have with the annuity option is that I am only 32 years old and am unsure when in the future I would want to begin receiving annuity payments and I don't like the inflexibility about changing the date to begin annuity payments. For example, if I now choose to begin receiving the payments at age 65, but I become ill or disabled at age 60, I wouldn't be able to change the annuity payments to an earlier date. For that reason, I am leaning toward selecting a lump sum distribution, but would be interested in learning any strategies to reduce taxes on the distribution. I know that a 457 cannot be rolled over into any other type of retirement plan tax free. I would also like to put some of the distribution into a Roth IRA and would like to find out if there are any exceptions to the $2,000 yearly limit in this type of situation.

Need info on moving my electronic pension deposite to another finanical insitution. Started receiving my pension

in 1985 so all of my previous contacts and addresses may

not be correct. Need a start from some where to get the

proper forms to make the change. Thanks.

With respect to an active minister (3yrs) contributing to a 403(b)plan. What would be "includible compensation" for purposes of calculating the MEA (Maximum Exclusion Allowance)?

- Base Pay

- SECA Reimbursement by Church

- 403(B) Salary Reduction Contributions

- Housing Allowance

I have received conflicting opinions as to whether it should be 1) Base Pay only; 2)Taxable Income (Base + SECA), or; 3)Base Pay + SECA + Housing Allowance.

Thanks!

I am casting about for general input from TPA's and other self-funded players. Has anyone had to address the question of out-of-network providers rendering services at an in-network facility? This hardly ever seems to be fully addressed in the plan documents I read, amd I was wondering how other people were handling it.

How many visitors to this forum have seen the 8/21/00 issue of Pensions & Investments, p.49 "Fewer Express Confidence"?

The articles highlights several recent surveys that say that participant confidence in their investing skills is declining, that the addition of more fund options has not done anything to improve participant asset allocation, and that, in general, many participants are still clueless about appropriate asset allocation.

This is after almost two decades of advancements in "educational" efforts like interactive software, video, Internet, colorful workbooks, etc. This is one of the first articles that I have seen that shows what I have suspected for a long time - "educational" efforts have maxxed-out. It not only doesn't get any better than this, but things seem to be going backwards (according to Vanguard)!

This could have profound liability implications for plan sponsors in a few years. Consider the cover story on the most recent edition of Plan Sponsor mangazine warning plan sponsors to prepare for a rising trend in participant litigation. (What would a good plaintiff's attorney say is the opportunity cost to a worker who's made dumb or inappropriate (uninformed) investment choices for 20 years? Probably some six-figure number.)

And this is all happening at a time when the latest must-have items on the 401(k) wish list are more tech funds and brokerage windows!

Let's get a lively discussion going on this. Comments anyone? Certainly everyone must have some views on this...

Is it permissible to amend a profit sharing plan right now to add a year end employment requirement for the current plan year that ends on 12/31/00? The regs under Section 411(d) seem to refer to cutting back benefits that have already accrued. I thought I heard or read somewhere that this couldn't be done for a plan subject to Section 412 but it could be done for a PS plan. Any thoughts, cites, opinions are welcomed.

PBGC Regs state that the Form 500 must be filed "on or before the 180th day after the proposed termination date". This clearly sets the outside limit. Is their anything preventing a plan from filing the Form 500 prior to the proposed termination date (ex. simultaneous with the Notice of Intent to Terminate)?

Has anyone ran into the following situation? Using the receivable function (on a share basis) to cary forward a contribution into the next year. Upon working on the next years allocation you notice the client submitted the payments over a period of months so there are multiple share prices. How can this be easily settled? Thanks! JimP

a participant dies and his 4 kids are the beneficiaries. three of them elect to leave their money in the plan. question is- are these 3 considered participants? if so, they should complete beneficiary forms. if so, must they name their spouses as beneficiaries?

Employer changes group health insurance carrier in California - new carrier does not offer coverage in Illinois, where former employees enjoy COBRA coverage with affiliate of prior carrier. My understanding is that, under Cobel v. Bonita House, 789 F.Supp. 320 (N.D.Ca. 1992), the employer must find "meaningful coverage" in Illinois, comparable to the California coverage, but that under the final COBRA regs there is no such obligation if the only coverage made available to active employees is not extendable to the relocated COBRA recipients. It is relevant if the COBRA recipient relocates before or after the change in coverage? Do any of you have experience w/a comparable situation?

A PS plan currently states that forfeitures do not occur until the terminated participant has 5 consecutive 1-year breaks in service. Therefore, the plan is carrying forfeited balances for terminated people back to 1995 or so.

The plan sponsor wants to amend this provision to forfeit balances upon the earlier of 5 years or when the vested balance is distributed.

Once this amendment is adopted, are we able to forfeit all those old balances immediately? Forfeitures are reallocated at year-end (12/31). It just seems a little odd to me that all the forfeitures from the last 5 years will be reallocated in one plan year. Does the amendment have to be effective prospectively? Are there any 411(d)(6) or 401(a)(4) issues to worry about?

I was hoping to use a roth conversion of my ira to help extract my husband and myself from an annoying liquidity situation, but based on what I've read, it doesn't appear that this is going to work. Let me lay out the scenario and see if anyone can come up with a way to make a roth work for us, and or offer any other useful advice:

My husband and I are both 32 yrs old. He is an executive with a base salary of $150k, and I no longer work but have been toying with the idea of returning to work (financial professional.) We have 2 young kids. All of our savings is in retirement accounts and our home (I'll get to that in a minute.)We have no debt whatsoever other than a $200k mortgage at 7 1/4%/15 yr/12 1/2 yrs remaining. My IRA rollover has about $100k in it depending on the day; my husband's 401k has around $200k in it.

Recently, my husband has been considering a career move, and has already been offered 2 positions. The last deal crashed over the unwillingness of the employer to do a home buyout so we could go ahead and move, and carry two mortgages for a finite period of time. The position was nearly 2000 miles from where we currently reside in Dallas, and after having split the family for 6 months to come down here, we were not willing to go through that again. After the deal crashed, I had some regrets about not blowing up my IRA (penalties and all) so we could go. We're young and capable of earning plenty of $ over our lifetime via salary pension and stock options, so that account to me is just play $ that I can look at and not touch for another 29 yrs. We do not have enough $ outside our home to make the downpayment on a second house, and renting is not an option with 2 kids and 5 big dogs. We need to go straight into a house. Credit and the ability to make 2 mortgage payments are not an issue. The sticking point is making the 20%downpayment necessary for carrying 2 mortgages. It's equally impossible to try to show our existing home with us and the dogs in it. Where all fixed up and clean it might sell in a week, it probably won't sell in 6 months or stay fresh with us here. So we're back to how to tap my IRA funds with the least penalty so that we can take a new position should the perfect one arise.

I don't see any means of getting our AGI under the $100k threshold for a roth, but if somebody out there does, please enlighten me. We will probably take a loss on the house, but I know of no way to use this loss until we have a passive income capital gain. It might be possible that if we made this move in 2001 carrying 2 mortgages, the interest payments on both homes could get us under the $100k threshold if I put off going back to work until 2002, but what is the maximum allowable interest deduction?

I could use a brilliant revelation about now.

GG

A private school wants to start a 403(B) plan. As required, participation will be immediate for salary deferrals. Can the school require a YOS for the profit sharing contribution and 2 YOS for the match? Thanks.

A private school wants to set up a 403b) plan. As required, eligibility to defer will be immediate. Can there be a one year eligibility period for the profit sharing contribution and two years for the matching contributions?

ok, we're pretty sure about this one, but just want to be sure. a client hires an employee who is over age 70 1/2 and who wishes to roll his distribution into the new employer's plan. must the prior plan do a minimum distribution before rolling the balance to the new plan? what if the employee had waived the minimum with the prior plan? we think yes either way.