I'm sure I know this one, but can't quickly find authority and need a quick answer. We've got a client that completed the distribution of all assets on January 31, 1999, but did not let us know until after the close of the plan year (12/31/99 PYE). Actually, they just told us. Even though I've got a 12/31/99 plan year end, don't I really have a short year return with a plan year end as of the date of the final transfer out of assets? In other words, when is/was their return due? Thanks.

I have just reviewed a 401(a) Governmental Plan that has only required employee contributions. They are, however, being picked-up under 414(h). The interesting thing is that both existing and new employees have a 90 day irrevocable election to participate and have the option to contribute 5%,10%,15%,20% or 25%. The irrevocable one-time option seems to be permitted based on recent PLRs, but the various percentages all the way to 25% seem to be extremely aggressive. I can't seem to find anything regarding multiple percentages or even anything over single digits.

What is your take on this?

A sponsor with a cross-tested P.S. plan wants to make a "one time" P.S. contribution of $1,000 per eligible employee (10). This would be in addition to a $50,000 annual contribution subject to the cross-tested formula. On the surface, I see no problem with this since it is not discriminatory. Anyone see it differently?

If an employer adopts a 401(k) plan mid-year, is the participant deferral limit of $10,500 pro-rated for the portion of the year the plan is available? It is my understanding that the $30,000 or 25% annual limit is pro-rated.

Does anyone know of a quick way to find out if someone is a licensed insurance agent in Ohio? Web site or phone number would be useful.

Thanks

Client currently maintains a salary deferal only 403(B) plan and a separate 401(a) profit sharing plan. Client is considering maintaining just a single program - either by providing for the employer contribution in the 403(B) plan or by adding 401(k) provisions to the profit sharing plan. The client is not considering an employer matching contribution under either scenario.

I am not familiar enough with the pros and cons of 403(B) plans to determine which might be the better approach.

Any input from "403(b)ies" would be most appreciated!

"Parent" is the owner of a company which sponsors a profit sharing plan. "Parent" wants to switch plan's investments to "Son", who is a broker. Doable - or a prohibited transaction?

Would appreciate any input and/or references to PTE exemption or prior threads where discussed. Thanks!

An insured (as opposed to self-insured) group health plan has negotiated a new, higher premium rate with its insurer. May the plan, as a result, pass the premium increase on to qualified beneficiaries who are already receiving COBRA continuation coverage? If so, what notification must be provided to the qualified beneficiaries?

May an employer amend his 401(a) plan 414(h)(2) designated employee contribution from a designated $ amount to a percent of compensation?

Are Employee Assistance Plans generally subject to ERISA? Are they considered to be Welfare Benefit Plans that are required to file Form 5500 if they cover 100 or more participants, Fringe Benefit plans that are required to file Form 5500 irrespective of the number of partipants, or neither of the above?

I need an example of a 103-12 investment entity. I know it is not a pooled SA, nor is it a common collective trust maintained by a bank, trust company, or similar institution. I have a copy of DOL reg 2520.103-12 and from that I understand that the 103-12 entity holds the assets of two or more plans which are not members of a related group.

Thanks

Can US employees of a US company who have been transfered to the UK continue to participate in the US 401(k) plan?

Does 404(k) allow a deduction for passing through dividends attributable to unallocated shares?

Corp has two divisions - each has its own 401k plan. Plans each satisfy 410b and are tested separately.

Can one of the Plans go safe harbor without the other?

I am looking for guidance regarding Governmental Welfare Benefit Plans. In particular I would appreciate any reference which define the term governmental plan. I am trying to determine whether my client qualifies for the exemptions afforded governmental plans.

This entity currently has a 457 plan as well as health, life, accidental death and disability insurance coverage. This entity participates in the Louisiana state parochial retirement program.

This entity is a Commission that was created under the authority of Louisiana Revised Statute (R.S.) 33:1324. The Commission is defined in its annual audit report as follows.

"The commission is considered a component unit of the State of Louisiana, because the state exercises oversight responsibility and has accountability for fiscal matters."

In short I want to determine whether this Commission is exempt from filing form 5500 for Welfare Benefit Plans.

The commission does file form 5500 for its Sec. 125(g) Flexible Benefits Plan. But has never filed a 5500 for its Welfare Benefit Plan(s).

Any help with this matter will be greatly appreciated by me.

Thanks

I am currently involved in looking for a new 401k plan administrator. If anyone has been involved in this process, I would appreciate any pointers you can give me.

Louis Gray

I am an investment advisor that has a 401k client that had a plan before we began working together. Because the number of employees had increased, they were required to have an audit back in 1997. They hired a big accounting firm that ended up telling my client to ask that the accounting firm not perform any audit procedures w/ respect to the information prepared and certifed by the plan custodian, a large mutual fund company. The accounting firm even drafted the letter for the client and refernced DOL reg 2520.103-5. As a result, the accounting firm did not express an opinion on the financial statements and schedules taken as a whole.

The client has now received a notice of rejection from the DOL for plan year 1997.

1. What should the company do?

2. What kind of trouble are they in?

3. Is there any liability issues I should be concerned about even though I was not involved with the plan at that time.

Thanks in advance for any and all help.

Company A and Company B own 51% and 49%, respectively, of Company C. Company C has an overfunded DB plan. Company A and Company B agree that Company A will assume the operations of Company C. As part of the agreement, all of Company C's employees will be transferred to Company A and will participate under Company A's benefit plans, leaving Company C with no employees. Assets of the Company C plan equal to the Company C participants' accrued benefits will be transferred to Company A's DB plan. After the transfer, the Company C plan will be left with assets equal to the overfunding, but no accrued benefits or participants.

Company A and Company B want the overfunding to be split between the two companies in proportion to their ownership interests. Under this scenario, 51% of the remaining assets of the Company C plan will be transferred to the Company A plan.

The question is---can the other 49% of the remaining assets of the Company C plan be transferred to Company B's DB plan if no participants or accrued benefit liabilities will be transferred to that plan?

An employer has a fully insured health plan funded through a 125 plan. The employer wants to increase the participant's share of the premiums mid-year although there has been no premium increase by the insurer.

The prior proposed 125 regs seem to state that the only time you can "automatically" increase salary reductions or allow the employee to elect out of coverage mid-year is when the insurer increase the rate. Is this an accurate view?

Do you think the new proposed regs change this rule for fully insured plans?

If not, is there a way to accomplish the employer's goal such as eliminating the "old" health insurance and offer new insurance with the participant picking up a larger share of the premiums?

What are the individual's tax implications when exericising stock options if the company doesn't take the deduction it's entitled to?