A C-corp has an ESOP plan that also includes a qualified cash or deferred arrangement under 401(k). Employees own stock of the employer in both the ESOP portion and 401(k) portion of the Plan. Do the voting requirements of Sec. 409(e) apply to the shares of stock that employees own under the 401(k) portion of the Plan?

I'm looking for feedback on discrimination testing for health and dependent care reimbursement accounts. I can't seem to locate any guidelines.

the plan accountant would like to know how to account for the accrued interest after there has been a deemed distribution in a post default situation. I read A19 of the Q&A in the proposed 72p Regulations to say that you disregard the accrued interest after a default except for the purpose of calculating availability of future loans. Thus, there is no interest that must be accounted for or assigned to the participants account as a receivable.

Anyone care to comment.

One is entitled, at age 60, to a DB of $50,000 per year for life.

The Retirement System establishes a Reserve of $500,000 in order to guarantee this lifetime benefit. In the event that a lump-sum option is permitted is the $500,000 the lump-sum?

The buyer in an asset sale is contemplating adopting a 401(k) plan maintained by the seller. The buyer will inherit all of the seller's employees (plan participants) in the transaction. The plan is a prototype sponsored by a payroll processing company and has only been in existence 3 years. Presuming that there were procedural errors during one or more of those years, what is the extent of the buyer's liability for the prior plan sponsor's errors? Other than correcting the procedural error and paying any applicable penalties and interest, would the buyer still have exposure if it did not take a tax deduction for the year in which the error took place? Are there any ramifications for the seller, if the seller still exists? Does it make a difference if the seller does not exist after the asset sale?

I am interested in learning how closely-held companies are meeting the timing requirements under the ESOP diversification rules, when the company's annual valuation is completed much later than the dates by which the diversification requirements should have been satisfied.

For example, is a prior year's valuation used? If so, is the diversified amount later modified to tie with the most recent valuation? Are companies tying the 90/90 day requirements to the date the valuation is completed, rather than the plan year end or considering the 90/90 day provisions as "safe harbor" provisions rather than a strict requirement? What other methods are companies using to comply? Thank you in advance for your input.

Can a beneficiary ever roll their money into an IRA?

Facts:

Non married Participant age 70 1/2 had already begun receiving 70 1/2 distributions. Participant died resulting in beneficiary continuing to receive required minimum distribution from the plan.

Plan is now terminating. All accounts must be liquidated.

Can bene rollover any dollars which are not required to be paid out this year as a required minimum distribution?

Husband and Wife have IRA accounts. Both are taking the reguired minimum distributions. Husband dies. What does Wife do with Husband's IRA. We know she can rollover the balance into her IRA but what happens to the minimum distributions that were being taken from the Husband's IRA. The PA Book says the deceased IRA's holder distributions must be at least as rapidly as they were before his death. However, what happens if the factor was being recalculated each year? And how is the amount calculated if the Husband's account is rolled over to the Wife's account? Does the minimum need to be made for the Husband's account in the year of his death?

Hello everybody:

I'm a new kid in the block trying to get some useful information about the best ROTHIRAS to pick one an invest my money. I don't know where to search for that information. Anything will be helful to me and highly appreciated.

Thanks,

EM

Please clarify for me the applicability of TRA'97 relating to governmental plans. It seems that some TRA'86 sections were superseded by TRA'97 but recent revenue procedure notifications indicate that these supposedly overruled sections have until 2001 to comply, which means that the sections have not been overruled after all. Any guidance on this issue would be much appreciated. Thank you.

We have a 403(B) client (a nursing association) that would like to exclude a group of employees from participating in voluntary salary deferrals under the 403(B) plan. These employees are called "temporary care-giver" employees and do "normally" work less than 20 hours per week (sometimes they don't work any hours for several weeks, then sometimes more than 20). They are nervous about the "universal availability rule," but it seems clear to me that they may be excluded as a class under 403(B)(12). How can I give them more comfort with their decision to exclude them? Can we "average" out their hours over the course of they year to support a "less than 20 hours per week" determination? I can't seem to find much guidance on this. Thanks.

In computing the $100,000 MAGI limit to convert an IRA to a Roth IRA is the passive activity losses that I had included or not. For example I have wages of $105,000 and Capital Gains of $60,000. Total income of $165,000. I also have passive activity losses of $70,000. Is my MAGI for the conversion limit $95,000? Therefore, I can convert.

If governmental defined benefit pension plans are exempt under IRC 411, would you agree that they are not required to meet the requirements under 411(a)(8)-Normal Retirement Age- for IRS qualification purposes? If true, would you also agree that the local statutes would govern the minimum definition of NRA? I checked ADEA section 623,Prohibition of Age Discrimination, Section(i)to see if there may be any overriding issue there. I think that section allows for the NRA definition under IRC411, but I'm unclear as to whether or not it is required.

We have a DRO that requires payment by check made out to the alternate payee and her attorney, with both signatures required for payment. While the order otherwise meets the qualification requirements, we will issue the check payable to the alternate payee only. The attorney is giving me grief. Anyone have a quick citation for our position? Thanks.

If a Company's year end (6/30) is different than the 401K plan year end (12/31):

How do you determine the deduction limit? Compensation, deferrals, and match for what period?

What plan year contributions are deductible for what Company's year end? As of 6/30/00 - do you look at the 12/31/99 contribution or the "estimated" 12/31/00 contribution? Does the contribution have to paid by a certain time?

I have a 501©(3) organization with no HCE's. The organization would like to install a plan weighted in favor of its executive director. Since there are no owners or HCE's, rate grouping won't work. Instead, I'm considering a super integrated formula, which will accomplish their objectives. Can this be done? Is it the best design? With no HCE's, I assume discrimination testing is not done. Any comments? Thanks.

What sort of documentation is needed for a disabled dependent to be qualified for the DCAP if any? Are special after school programs for this individual qualified expenses? How about when there is no school and they have all-day programs? Are these qualified expenses for the Dependent Care Assistance Program? (the disabled dependent is 11 yrs. old if that makes a difference)

A 66 year old man has a regular IRA. He would like to transfer a particular stock out of his regular IRA into a Roth to shelter the potential gain from the stock. Since his and his wife's only income is from his IRA and Social Security, is he eligable to establish a Roth?

Is there any source that can provide information on the details of certain companies pension plans? For example, does the company ENRON have a cash balance plan with a lump sum option for payout?

I have a client that is converting its DB plan to a Cash Balance Plan and a couple of issues have come up and I cannot seem to find guidance - perhaps the answer is so simple that there is no guidance out there - please help if you can:

1) if a participant terminates employment with the employer, but is not going to commence benefits until a later date, can the employer require the employee to make a choice as to whether he is going to keep his benefits under the old DB plan or whether he will elect the cash balance benefits at the time of termination -- instead of allowing the employee to defer the decision until he actually decides to retire?

2) my client will have two categories - group A has a choice between the DB plan and the cash balance plan, group B has to choose the cash balance plan. If an employee transfers from group A to group B what what is the consequence, since now the employee is a member of a group who does not have the option of participating in the DB plan?

Forgive me if these questions seem elementary, but I am a new attorney just getting started in the employee benefits area. Thanks for your help.