In an article in the New York Times magazine on July 23, 2000, the author argues that genetic discrimination by employers and insurers is rational and shouldn't be illegal.

"Genetic testing is not a reversal of the principle behind insurance; it's just an elaboration of it," says Andrew Sullivan, in his Counterculture column.

Here's the link to the New York Times site (free registration required); not sure how long they'll keep the content online: http://www.benefitslink.com/links/20000724...24-006319.shtml

Your comments? Post 'em here!

We received a child support order that includes an order to enroll the children in the health plan.

If the employee did not sign up for health insurance for himself, do we just enroll the children, or enroll the employee, also?

Is anyone familiar with so-called "condition of employment" employee contributions to 403(B) plans? I'm seeing these for the first time. The proposed employee contribution is mandatory and is pre-tax. I found the following reference in the audit guidelines, which suggests they're permissible but I don't understand on what basis the contributions are pre-tax. ("Elective deferrals do not include elective contributions made pursuant to a one-time irrevocable election that is made at initial eligibility to participate in the salary reduction agreement, or pursuant to certain other one-time irrevocable elections to be specified in regulations, or pre-tax contributions made as a condition of employment.") It should be noted that this is NOT a governmental employer, so even if 414(h)(2) applies to 403(B) arrangements, it wouldn't apply to this employer.

Assuming we can get past state wage withholding statutes, what are the tax issues? I understand that these are not salary reduction contributions, but on what basis are they pre-tax? General constructive receipt principles (i.e., no opportunity to receive as cash)? If there are two different levels of employee contributions based on employment classification, how do you test for nondiscrimination? What if there is an employer "match"? Do you use Notice 89-23?

A participant retires with:

Cash Balance Account = 200,000

Final Salary = 125,000

Account Conversion factor = 10

He has option of receiving an annuity of 200,000/10 or 20,000 per year,

or

He can get 125,000 as a lump sum (can receive up to final salary as lump sum) and the remaining 75,000 as an annuity of 75,000/10 or 7,500 per year. This is the desired option, so analysis below is based on this option.

There seems to be issues w/r/t not addressing 417(e). It appears that 417(e) must be addressed in some way. The two ways I see are:

1. convert account balance to an annuity, compute 417(e) lump sum and if higher than account balance (say it's 250,000), let that be the basis to compute the annuity portion in addition to the lump sum of 125,000. i.e. an annuity based on additional 125,000 or 12,500 per year.

2. compute an equivalent annuity from the 125,000 lump sum received (using 417(e)) and offset it from the gross annuity (based on entire CBA). If this is greater than the annuity portion of 7,500, than this is what the participant should get.

Any comments on this?

I have a Roth IRA. Suppose all the taxes are paid and the 5 year period has been met. My wife is the primary beneficiary and my children are secondary. If, upon my death, my wife disclaims the Roth IRA can my children take distribution over a lifetime? I think I understand that the age of the oldest child sets the definition of a lifetime.

what is the rule for family attribution pertaining to son in law or daughter in laws over 20. is it that if the parent owns more than 50% of the voting stock, then they own the son in law or daughter in laws stock by attribution?

has anyone seen any cases where the plaintiff has tried to recover the $110 per day penalty under ERISA sec. 502©(1) based on the plan administrator's failure to supply information regarding the reason a claim was rejected?

I have a situation where the owner of a small company has decided he doesn't like my client and therefore, is not going to pay out his benefit under his 401(k) plan and won't even return phone calls. The owner/president/trustee is blatantly violating his fiduciary duties and I know we can take him to court and probably get attorney's fees. I would like to get more based on his behavior and I think a judge would agree.

502©(1) provides such a penalty where a plan administrator fails to provide information required under Title I of ERISA. ERISA 503 requires the plan to provide a written explanation setting forth the specific reasons why a claim is denied within 60 days of receiving the claim. That sounds like information required to be furnished under Title I of ERISA to me. I know that generally 502©(1) has been applied for failure to provide SPD, plan document, or annual report upon written request, but I think it could be interpreted more broadly. Does anyone know of any caselaw out there against me?

Kurt

Can a nonprofit (501©(3)) organization set-up and maintain a SIMPLE IRA plan? Can they do a SIMPLE 401(k) Plan? I am pretty sure than can set-up a Standard 401(k) Plan and a Safe-Harbor 401(k), but I am not positive? I appreciate the help!

If no Schedule B is required for the defined benefit plan's 1999 final return, does it make sense to say that Schedule T is not required? Also for Schedule R, my understanding is that since the plan is not subject to IRC 412 w/r to the final return, then Schedule R would need to be filed only if benefit distributions were made in the final year.

Looking for comments.

Thanks

This is a follow up to my 7/21 question. I called the IRS and discussed Schedule T. The situation we discussed was a DB plan that terminated in 1998 and paid out benefits in 1999. The IRS response was that you can rely on an earlier test date (namely the 1998 information that was used for the 5310 filing) and note that on line 10 of Form 5500. In other words, in order for the plan to remain qualified,(up until the last benefit is distributed) the plan sponsor has to prove the plan met coverage.

[Edited by meggie on 07-25-2000 at 10:34 AM]

A client of ours was audited by the DOL. The result was the DOL cited them for not deposting employee contributions timely (most occurences were prior to the new 15 day reg). The DOL position was based on the fact that the employer does payroll weekly and that segregation of the assets could have been done in seven days. frankly, we are confused with this interpretation. does anyone have any insight?

Most 401(k) plans contain either percentage limitations or per hour, dollar limitations on employee elective deferrals. For example, hourly wage deferrals (in a multiemployer plan setting) may be limited to $1, $2, or $3 per hour. These are set for purposes of administraive convenience but may have the effect of limiting a specific employee's deferrals to less than the 402(g) limit ($10,500). Does anyone know of any authority to set these contribution limits, even if they have this effect?

I am 24, I am getting married in a month, she is 23. We want to start a Roth IRA to retire at 60 or 65. We collectively make about 55,000 to 60,000 a year. We are waiting until we get married to talk to a bank about starting a Roth. But can anyone give me any 'newboe' tips? How much I can expect to contribute, what is the minimum you can start a Roth with, etc.

thanks all

jamison

How should the insurance premiums be reported on schedule A? My service provider is reporting them as allocated. I think they should be unallocated. Is it different for DB vs DC plans? Thanks for the help. Any citations would also help.

(Jonathan P. Weiner, in the Baltimore Sun, 7/21/2000)

Excerpt: "And yet, in our attempt to regulate and litigate HMOs and other health insurance plans into submission, we have once again side-stepped the two real U.S. health-care issues: the more than 40 million Americans who have little or no access to services and--election promises and contingency fees aside--that health-care resources are finite. Neither of these two issues are the HMOs' fault. In fact, quite the opposite is true."

http://www.sunspot.net/content/archive/sto...d=1150370207105

Please take a look at this piece and post your comments here!

Does anyone have authority for the proposition that the February 1999 COBRA regulations apply to state and local governments subject to the PHSA? I know this question was asked last year and answered in the affirmative, but with no authority cited. Are the tax regs a binding interpretation of the PHSA or just persuasive? Thanks for any help.

Anyone know where I can get a copy of the 2000 Covered Compensation table and the plan limits for 2000 (eg. db limit, compensation limit, soc sec wage base, etc.)?

Where do the regulations allow an employee to join a health FSA during the middle of a year? Does that new participant get to defer the full amount allowed under the plan or is it prorated? Does new participant get reimbursements for the full plan year or only after participation?

Is this something allowed under the law or are people just doing it?

I have a merger situation, so the plans involved don't address this but appear to allow an employee into the plan during the year (silent re: proration of contributions)

If benefit at NRA is a flat % of compensation(i.e. 100%) are we oblige to reduce it by at least 1/25 for each year of service less than 25?

Thanks

I have a client who wants to terminate his SIMPLE plan and start a defined benefit plan. He has contributed some money to his SIMPLE FY 2000. My understanding is that once a contribution is made to the SIMPLE IRA, there is no workout so another plan such as a defined benefit plan can be started in the same year. The client must wait until Y2001. Is there a workaround for this issue or is the client stuck for 2000?

A CPA friend of mine (usually pretty reliable) recently told me that he heard about a court case where a designated beneficiary (not the spouse) was allowed to roll and IRA over into the designated benificiaries name. I have not seen anything on this, has anyone else?