Spouse of a deceased non-vested employee with contributions in DB Retirement Plan wants to roll those contributions to an IRA so that taxes will not have to be paid. However, our bank that sends out the pension payments automatically takes 20% in taxes on distributions. If the spouse receives the money minus 20% for taxes, can she put the money into her IRA anyway and take a tax credit on the 20% that was taken out for taxes?

My (very limited) understanding of 412(i) plans is that each year you purchase a piece of an annuity contract for a participant that will be used to provide projected benefits. At termination, the participant can withdraw the value of the annuity. Is the lump sum value of the annuity subject to 415 limits?

For example, the sole participant starts a plan at age 55. The plan provides for a benefit of $135,000 per year payable at age 65 (assume SSNRA = 65). The insurance company calculates the required contribution each year and provides the value of the annuity that has been purchased to date.

At age 65, the participant retires. The insurance company is willing to provide him with an annual benefit of $135,000, but the participant elects to take the lump sum equivalent. The insurance company pays him whatever they think the annuity is worth based on their rates and mortality tables. They disregard the 30-year treasury rate and the plan's definition of actuarial equivalent which would be required for a normal plan by Seciton 415.

Ignoring the fact that the participant probably is much worse off due to insurance commissions and fees, can a participant avoid 415 limits like this?

I have reviewed the heated thread on this board regarding Keysops (along with Brisendine's articles) and need to know if there is anything new on this topic.

Are the accountants/consultants still selling variations of this product?

Any hints from the IRS about what they are going to do?

Any real-life experiences with the issues and problems involved in using these programs?

I have a company who acquired another and we have mergedthe 2 401(k) plans. Do we need to file a 5500 for the plan that no longer exists?

TIA

Samantha Prince

Has anyone heard of exchanging an employee's restricted stock for an unfunded unsecured promise to pay the same number of shares on a date farther in the future?

Will it work to defer taxation?

Are there any timing or second election issues involved here?

I have a 401(k) plan doc that contains the usual boilerplate stuff about if there is a defined bene plan maintained by the employer, and all the necessary junk etc etc. I recall reading somewhere that maybe we can eliminate all that stuff? This employer has no defined bene plan and never has had one.

Anyone know if this language can be deleted? TIA

Samantha Prince

Is the choice of a distribution date in connecton with a plan termination a fiduciary decision, if the distribution date affects the interest rate used for single-sum distributions?

A client would like a source where one can obtain a list of every Form 5500 filer. Does anyone know where one can obtain this?

Employer A has a 401(k) plan that is terminating. Employer B purchased the business and will probably retain many of the employees with Employer A. Employer B has a profit sharing plan without a 401(k) feature.

Employer A will have many participants with outstanding loan balances upon plan termination and would like to help these employees avoid taxes on these loan balances. Many of them cannot afford to repay them before the plan terminates.

Any suggestions on how to avoid these tax consequences?

I am trying to find information about the deferred retirement option program (DROP) as it relates to divorce cases.

Required Beginning Date: A participant, who is a 5% owner and who has reached the age of 70 1/2, must begin a distribution of his benefits on April 1 of the following calendar year. Does a look-back rule apply for purposes of determining if the participant is a 5% owner? If it does, what is the specific authority?

I am planning a fair size estate, approximately 1/3 real estate and cash; 1/3 in Husband's IRA which he will begin drawing next year; and 1/3 in Wife IRA which she will begin drawing in 2004. They want to put their IRAs into credit shelter trusts. I am not sure of the best way to do this. Can there be an outright transfer of the IRA with the client retaining withdrawal rights? Should there be a bequest in their LW&T of their IRAs to these trusts? Or should I only have the beneficiary of the IRA changed with the Custodian? Further, how do you value the IRA to offset againt each person's unified tax credit? I have read articles in Lawyers Weekly USA dealing with the minimum distribution requirements and the stretch out election and feel like I have a handle on those issues. Can any one please help me on the transfers?

Joe is 100% vested. His balance is $30,000. His outstanding loan is $14,000. How much can Joe's wife's attorney get for her in the form of a QDRO ??

Any cites would be appreciated.

I need some guidance on a "wrap plan". I have never drafted one but have been given the SPDs for 3 welfare plans and have been asked to wrap the plans so that only 1 5500 needs to be filed. At this point my understanding is that I need only create a document which contains the ERISA reqd language and references the SPDs for each plan in the appendix. Any help or material on this matter would be appreciated.

Lets say you have a 401(k) plan and the document says the match is 25% of deferrals up to 4 percent of pay. Beginning 1-1-00, you decide to increase the match to 50%. You notify the participants of the increase, but fail to amend your document. It is now September. You've been matching at 50% each month since January. Is it too late to amend the plan now? You've failed to follow the rules of the plan, but clearly all participants have benefitted. Is there an alternative to VCR or CAP? How about forfeiting the extra match for the HCE's? Opinions welcomed.

Can a 401(k) plan accept a rollover from the government Thrift Savings Plan?

I have a client calling me regarding 404©. They want to know if section 404© is worth the additional work that they must complete. Since the plan trustee is ultimately responsible for the plan with or without 404© I'm not sure what to recommend. The issue that really concerns me is "What should I indicate on the 5500?" Either way the question is answered, it seems to me, it could come back to implicate the client. Any advise?

Current plan document for profit sharing. Added 401k feature. Trustees have not signed document. Even though enrollment meetings have been completed and they have submitted deferrals for investment. Must deferrals be returned. Or since the effective date is prior to receipt of deferrals, can they sign document now?

401(k) Plan has 140 participants as of 1/1/2000 and as of 9/30/2000. Client wishes to split plan into two plans (one plan for each of company's two divisions) as of 12/1/2000. Each plan would then have 70 participants.

Clearly a CPA audit of Form 5500 is still required for 2000 Plan Year. I believe that a CPA audit would not be required for the two new plans years beginning 1/1/2001, since each of the new plans would have less than 100 participants as of the first day of the plan years.

Plan participants have daily valued investments with a national insurance company's group annuity product. To obtain better expenses/prices the client would like to maintain the plans in one contract with the insurance company's records.

TPA receives electronic download from insurance company and can produce separate plan level and participant statements on a divisional basis. This is easy since the investments are valued daily.

New plans will be identical in provisions. Only difference will be plan name.

Question: Are there problems with having the two plans investments in one contract? Does this create a common collective trust and additional reporting requirements?

401(k) Plan has 140 participants as of 1/1/2000 and as of 9/30/2000. Client wishes to split plan into two plans (one plan for each of company's two divisions) as of 12/1/2000. Each plan would then have 70 participants.

Clearly a CPA audit of Form 5500 is still required for 2000 Plan Year. I believe that a CPA audit would not be required for the two new plans years beginning 1/1/2001, since each of the new plans would have less than 100 participants as of the first day of the plan years.

Plan participants have daily valued investments with a national insurance company's group annuity product. To obtain better expenses/prices the client would like to maintain the plans in one contract with the insurance company's records.

TPA receives electronic download from insurance company and can produce separate plan level and participant statements on a divisional basis. This is easy since the investments are valued daily.

New plans will be identical in provisions. Only difference will be plan name.

Question: Are there problems with having the two plans investments in one contract? Does this create a common collective trust and additional reporting requirements?