I am looking for samples of retirement plan investment policy statements. We are creating one and wanted to see what other organizations are doing.

Individual on COBRA from prior employer starts a new corporation. He is the sole employee of this C Corp. He wants to establish a medical reimbursement account to "pick up" anything that his COBRA coverage does not pay as well as, once his COBRA coverage expires, anything that his new insurance does not cover. He also wants this Plan to be "retroactive" for four months (back to when he incorporated). This will be funded entirely "employer" contributions (no 125 Plan).

1) I assume the Plan cannot be retroactive because Prop. Reg. 1.125-1 Q&A 17 is applicable to all 105 Plans even those not funded through a 125 Plan. Do you agree?

2) If there is only 1 employee do I avoid any 105 discrimination issues?

3) Any problems in "coordinating" with COBRA coverage from a prior employer?

4) Any other problems that you see here?

[Edited by KJohnson on 07-20-2000 at 09:56 AM]

Can an LLC owner participate in a SIMPLE IRA? At this point the owner is not active and is not taking any salary from the LLC, only a draw (not compensation) but he would like to become active in the business, could he participate in the company's SIMPLE and get matching funds from the company?

Thanks.

Does anyone know the corrections/penalties involved when

a custodian allowed the earnings (after 12/31/1988) to be taken out from a salary deferral source for the purpose of a Hardship Distribution?

We have a frozen 403(B) plan. The investments are self directed by the participants in mutual funds via a group annuity insurance product. Presently we gather all the quarterly statements and produce an annual statement for the participant, an SAR, and a 5500. Because these particpants receive quarterly statements from the insurance co and the plan is now frozen, I am wondering if there is any need for us to prepare an annual participant statement. It is very time consuming and from what I have been reading, it appears to me it is not even required. What are the required participant disclosure requirements? Any info would be appreciated. Thanks.

A person retires at age 65 with a cash balance account of 100,000. His equivalent annuity is 1,000 per month. If he chose a lump sum, it would appear to me that the lump sum would be the greater of 100,000 or the pv of 1,000 per month using 417(e)(at a minimum). Any comments out there?

Does anybody out there have any experience with filing late returns under the DFVC program?

We have unearthed a couple of clients who have never filed Welfare and Flex plans for a period of 3 years or so. (Both plans are subject to filing standards, i.e. Welfare plan has greater than 100 participants) I called the DFVC helpline in Washington, and they gave me a procedure to follow which is pretty straightforward. I'm just curious as to whether anyone has tried this, and what the result was.

In addition, has anyone tried to file a bunch of late returns without paying the sanctions ($5,000 for a 5500 filer if greater than one year late, $2,500 for a 5500-C filer) and just submitting a reasonable cause letter? I used to do a bunch of these back in the late 1980's and get away with it, but did DFVC close this possibility?

Any comments would be appreciated. Thanks.

If an ER installs a Safe Harbor 401(k) with no match and makes a 3% Profit Sharing Contribution. Can that ER and his Spouse then salary defer $10,500 each even though the other EE's do not make a salary deferral contribution?

I am looking for a carrier that can provide a "medical umbrella" (for lack of a better term) that would supplement the $2,000,000 lifetime max. the health plan has. Policy would provide coverage above $2,000,000 to say $5,000,000. Any ideas??

It is my understanding the Treasury held a public hearing on June 27, 2000, to receive comments on the Proposed Regulations. Has Treasury given any indication as to when the regulations might be finalized?

Second question, I am confused about the relief provided for elective transfers between defined contribution plans. Specifically, an example of the qualification requirements that must be met to obtain the relief is compliance by the transferee plan with the 401(a)(11) and 417 survivor annuity requirements if the transferor plan was subject to those requirements. Does this mean that the transferee plan has to satisfy 401(a)(11)/417 only if it offers an annuity form of benefit following the transfer, or does this mean the transferee plan has to offer an annuity form of benefit if the transferor plan offered an annuity (to protect the rights of spouses)?

Thank you.

Company A sponsors a grandfathered SARSEP using the mutual fund company's prototype. It wants to move the the assets to another mutual fund company, but the new company does not maintain a prototype (understandably). Any suggestions? Could Company A switch to the government form? Thanks

Employer failed to make Top Heavy COntributins for 96-99 (Insurance Company Turnkey Arrangement). Adoption Agreement sates that Top Heavy Contribution must be made for all Participants (both key and non-key). As part of self correction could the employer only make the contribution for the non-key? Alternatively, could all of the owners (5% or more) make an election not to receive the TH contribution? Any guidance available?

Help!! There is a government contract that stipulates a minimum wage which may be paid either in the form of direct compensation or direct and deferred compensation. The deferred compensation can either be in the form of retirement or health benefits. Does anyone remember what this type of contract is called? It seems to me that there

are firms that do nothing other than administer this type of plan. Does anyone know where you might find a listing of those firms? I'm looking for one in the Central California area. Thanks!!!

We established a new 401(k) plan effective 1/1/99. According to the way our software counts (quantech), we had 131 participants at the beginning of the year. We were hoping to put -0- and avoid the audit because of the new plan status and no assets in the plan as of the first day of the year, has anyone seen any hard and fast rules on this? I have received differing opinions as to whether or not we can put -0-. I would appreciate any thoughts or guidance on this matter. Thanks.

If the employer failed to transmit participant contributions to the plan within the maximum time period, and Schedule H 4a and 4d are answered "yes", how should Schedule G be completed?

Schedule G, Part III

(a) Identity: "Name of employer"

(B) Relationship: "Employer"

© Description: "Participant contributions transmitted after maximum time period."

Should the time period, amount, and applicable interest rate be stated? Should any other items be answered?

Is the new owner of a company obligated to offer COBRA to old employees of company after merger or acquistion?

As I retire from contributing to a 457 deferred compensation plan, what tax liabilities do I face in cashing out?

Is the total withdrawal amount considered current income in this year?

Two thirds of the total amount is the result of investment capital gain - would that be taxed at the capital gains rate?

Are there advantages to taking, say, three years to withdraw the total funds ?

How does a Plan Sponsor enter into "John Doe" discussions about resolving Plan defects (self correction) in the southeast region? I have read that each region handles this differently.

We're married and file separate tax returns to save on our state taxes. Can we establish Roth IRAs for ourselves? We each have a defined benefit pension plan and a deferred compensation plan from our jobs. These would be new Roths, not IRA conversions. I've seen conflicting information.

I have an HCE terminating and requesting distribution. Plan typically has a testing problem (using current year method). Should I allow him to take 100% of his account balance? How do I handle a test failure if he has already taken his money and rolled it to an IRA?