Is there any requirement that vesting be shown on a participant's annual benefit statement, or is it enough to show the total accrued benefit before vesting?

After Company B has merged into Company A (i.e., Company B no longer exists) and has "frozen" contributions to its 401(k) plan as of the corporate merger date, does former Company B's "frozen" 401(k) plan subsequently report under Company A's employer name, EIN, and next available Plan Number between the corporate merger and the ultimate plan merger (since Company B no longer exists)? Plan contributions continued seamlessly for the employees of Company B into the Company A 401(k) Plan.

The specific situation is that Company B's 401(k) Plan has some operational defects which must be corrected under EPCRS prior to a merger into Company A's 401(k) Plan, and so there will be a period of time when the 2 plan co-exist. Company A would like to shift the assets of Company B's "frozen" 401(k) Plan onto the same investment platform as its 401(k) Plan is on to allow the employees to have the same investment options. Unfortunately, this requires an amended Adoption Agreement (the Co. B Plan is currently on an insurance company Adoption Agreement, which must be changed if investments are shifted our of the ins. co.'s investments). On the amended Adoption Agreement, the "Employer," "EIN," and "Plan Number" must be identified. Do we use Company A's information, including assigning the next available Comapny A "Plan Number" to the "frozen" Company B 401(k) Plan?

Any suggestions or thoughts are appreciated.

Must employees on FMLA or Non-FMLA be given the same opportunity as active employees to make election changes during the normal annual enrollment period while on LOA? Normally, it is my understanding that employees on LOA must wait to make changes upon their return to work.

I recognize that the DOL has increased its audit activity and one of the issues it has been focusing on is whether employers are remitting contributions to the plan on a timely basis. If the DOL conducts an audit and uncovers such an issue, will this automatically trigger (or increase the chances of) an IRS audit. In particular, I am interested in whether such a DOL finding would trigger (or increase the chances of) an IRS audit of a not-for-profit located in the NYC area.

Assume a non-contributory DB plan. Plan provides for a pre-retirement lump-sum death benefit equal to 3 times annual salary. Is this benefit life insurance proceeds and, therefore, not eligible for rollover treatment or is it a taxable distribution and, therefore, eligible for rollover treatment?

After a total distribution from an ESOT to a participant of employer stock, followed by a put back to the company by the participant, and payment from the company for the stock over 5 years, is withholding due on the payment by the company? Is the payment after the put considered a distribution from the plan?

I have someone who has proposed to offer a benefit whereby employees will receive 1 month of paid "end of year" leave upon retirement (or separation from service) for every year of service they accrue. This arrangement will cover employees of a tax-exempt organization and is intended to fall outside of the strictures of 457 (and 457(f)) by being deemed a severance or vacation plan. In light of PLR 199903032, I do not believe this arrangement would be considered a severance plan because payments are made "when" an employee terminates versus "because" an employee terminates. However, could this be considered a bona fide vacation plan (that is, perhaps under an argument that a year of service gets you a month of "sabbatical leave" or reward vacation time once you terminate)? There does not appear to be much authority out there vis-a-vis bona fide vacation plans. Thanks for your help!!!!

Doctor has a frozen defined benefit plan in his corporation. Subsequent to the freezing of the plan, his wife starts a business. The two businesses are in a control group. Are the employees of wife's new busines taken into account in examining the frozen plan's "prior benefit structure" under the 401(a)(26) regs?

Thanks.

Can someone please explain the answer?

Based on the following information, what is the participant's annual top-heavy minimum accrued

benefit as of June 30, 1997?

The participant works over 1000 hours per year and only participates in this plan.

The plan has always been super top-heavy.

The top-heavy min benefit is based upon years of service.

The plan year is July 1 to June 30.

DOH = 7/1/90

Plan Effective = 7/1/86

Annual comp:

6/30/91 = $20K

6/30/92 = 25K

6/30/93 = 25K

6/30/94 = 15K

6/30/95 = 22K

6/30/96 = 23K

6/30/97 = 10K

ANSWER = $3080???

It is my understanding that the IRS has issued a workplan for 2001 that includes guidance on 403(B) isssues. Where can I obtain more information on this?

After Company B has merged into Company A (i.e., Company B no longer exists) and has "frozen" contributions to its 401(k) plan as of the corporate merger date, does former Company B's "frozen" 401(k) plan subsequently report under Company A's employer name, EIN, and next available Plan Number between the corporate merger and the ultimate plan merger (since Company B no longer exists)? Plan contributions continued seamlessly for the employees of Company B into the Company A 401(k) Plan.

The specific situation is that Company B's 401(k) Plan has some operational defects which must be corrected under EPCRS prior to a merger into Company A's 401(k) Plan, and so there will be a period of time when the 2 plan co-exist. Company A would like to shift the assets of Company B's "frozen" 401(k) Plan onto the same investment platform as its 401(k) Plan is on to allow the employees to have the same investment options. Unfortunately, this requires an amended Adoption Agreement (the Co. B Plan is currently on an insurance company Adoption Agreement, which must be changed if investments are shifted our of the ins. co.'s investments). On the amended Adoption Agreement, the "Employer," "EIN," and "Plan Number" must be identified. Do we use Company A's information, including assigning the next available Comapny A "Plan Number" to the "frozen" Company B 401(k) Plan?

Any suggestions or thoughts are appreciated.

I was not aware of the 2-year holding period on SIMPLEs and rolled my SIMPLE from my previous employer when I left. I thought it was like a 401k and I could roll as soon as I left my employer.

Merrill Lynch, holder of the SIMPLE, did not tell me about the 2-year hold - indeed, the broker was not aware of it even today when I called.

Neither did they withhold the 25% penalty when they released the funds. Should they have done so?

Do I have any recourse now?

Am I on the hook only for the 25% penalty or for income tax plus penalty? The money was rolled into an IRA at Vanguard.

Thank you.

I know the voluntary correction programs generally require full corrrection for all affected plan years. What if failure goes back at least 10 years and data simply isn't available to make reasonable estimates, let alone fully correct? Does anyone have experience with the IRS waiving the full correction requirement where data is lost/unavailable? If we correct for 6 years, is that enough?

Are lump sum /non-periodic paymnets made from a 403(B)(9) church retirement income plan which has been desiginated by the Synod as eligible for "Housing Allowance" subject to the "Mandatory Withholding" for eligible rollover distribution ?

Does anyone have any creative ideas for communicating the benefits of Flexible Spending Accounts (Section 125) to employees? I am looking for ideas other than payroll stuffers, newsletters, pamphlets, etc. I am looking for ways to attract and interest the employees....any ideas?

If a defined benefit plan has the standard language for payouts at NRA (60 days after close of plan year in which later occurs.....) and a participant does not elect to defer payment of the benefit is it the plan sponsor's responsibility to make payment? If the participant is missing for several years, should back payments be made to the NRD or actuarial increases to actual annuity starting date? The document is silent on what to do if you can't find a participant.

We have been to issuing a notice to participants when they terminat that states that it is their responsibility to apply for benefits when they attain NRD. Now I'm not so sure if that language is appropriate. Does the plan sponsor need to make an effort to find participants? We normally remind them with the annual val who is attaining age 65.

Am I correct in what I am about to say?

A Welfare Benefit Plan can never be a "separate legal entity", therefore a group medical Blue Cross insurance policy cannot be issued by Blue Cross to a Welfare Benefit Plan (as owner)..... it can only be issued to the Employer (as owner).

While this question may be academic by the time I retire (in about 35 years), I still would like to know the full tax consequences of Roth IRAs. I have heard it said that Roth IRAs distributions MAY be counted as income when figuring out tax on Social security benefits. I have been parsing through IRS Publications 554, 915, and 590, as well as the Social Security Website, trying to figure out if distributions from Roth IRAs are counted as "tax-exempt interest" towards calculating taxes on Social Security Benefits, but am frustrated. Anybody have a solid answer or a reference for this question?

Steve D.

I have recently attended a 401(k) seminar and was told that a participant was considered to be vested a year if she/he worked 1000 hours or more during his/her plan year. Does anyone know if this is the correct way of determining a participants vested percentage? Or is it determined by the hire date and term date-a year being 365 days employed at the business?

A Plan says that for payment of a lump sum the lump sum shall be determined as follows:

Section 5.1

"The equivalent lump sum value of an annuity shall be determined by applying the factors published by the PBGC for distributions in the calendar month preceding the Ret. date."

Section 1.2

The Plan def. of Act. Equiv. is 8% and 83GAM table.

A person retires on 5/1/99.

What assumptions (w/r/t interest and mortality) would you use to value the lump sum?

Gary