As I understand it, Section 4974 imposes on an IRA owner a 50% excise penalty on the difference between the amount that should have been distributed (as a required minimum distribution) by the RBD and the amount actually distributed. I have 2 questions:

1. Does the custodian have any responsibility to inform the owner of an impending penalty?

2. More generally, but in a related vein, how is the 4974 penalty assessed and collected in practice? Is the IRS somehow notified or "triggered" to assess the penalty retroactively when a distribution is finally taken by the owner after the RBD has passed? Is this disclosed by an audit?

Sorry if these questions seem somewhat pedantic - I'd just like some idea of how a tax against the IRA owner is properly assessed and collected, and what the role of the custodian (who is presumably better-informed than the owner about the excise penalty) is in that process.

Thanks.

Governmental retirement plans are currently generally exempt from nondiscrimination requirements for Code Sec 401(a), 401(k), 401(m), etc. purposes. However, if a governmental DB plan provides post-retirement medical benefits, is it subject to the nondiscrimination requirements of Reg. Sec. 1.401-14 which, if vioalated , would cause the plan to lose its qualification under Code Sec. 401(a)?

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I have a participant in a profit sharing plan who on termination of employment was paid 100% of their account balance when they were only 40% vested. Participant refuses to repay the difference. How should this be corrected?

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Is is possible for the trustee and lender to be the same bank? I have seen this arrangement before. Is this a prohibited transaction, or because the loan meets the exempt loan definition is it exempt?

I realize there are other reasons not to recommend this situation due to the potential conflict of interst issue should the loan go into default, but also wanted to know if it is otherwise prohibited for any other reason.

Question that arises has the following facts:

Person age 57 sets up a Qualified Plan Rollover IRA for $200,000 during 1999. Wants to takes substantially equal payments from the IRA, calculates the amount, using an IRS approved method, based on the 12/31/99 balance and receives an annual distribution. In February of 2000, the individual rolls an additional $180,000 into the IRA, which represented the balance of his qualified plan money.

The question is as follows:

Do the substantially equal payments have to be recalculated for 2001?

May the substantially equal payments have to be recalculated for 2001?

I believe I know the answer to each question, but would like to see if I am correct. Any help would be appreciated. Thanks.

Vermont State has passed a law authorizing same sex marriages, or unions as they are called. Excerpt: "After four months of rancorous debate that divided neighbors throughout this normally tranquil state, Vermont yesterday approved a first-in-the-nation law that grants nearly all of the benefits of marriage to same-sex partners." (Knight-Ridder / Tribune Business News)

Would this State regulation offer a same sex partner the same rights that pertain to the pre and post joint and survivor options?

We are exploring the possibility of offering adoption asssitance to our employees. I would love to hear what other companies offer their employees.

Thank you.

The prior year actuarial report for a takeover DB plan has the following cost method description: Frozen Entry Age Actuarial Cost Method(level % of salary)and for IRC Sec. 412 purposes, "In any year in which all amortization bases under IRC Sec. 412 are considered fully amortized, or in which the only amortization bases for 412 purposes are due to the 150%(or 155%) of Current Liability Full Funding Limitation Credit,the Unfunded Frozen Actuarial Liability will be set to zero and the Normal Cost will be determined as it is under the Aggregate Actuarial Cost Method(level % of salary)- I question the 2nd part of the criteria to set UFAL to 0 ; I thought if OBRA bases exist you need to maintain them?? If anyone has any insights I'd like to read them.

I was trying to find some leads on at least where to look for information pertaining to Section 125 plans for retirees. Especially if there is a focus as to state government sponsored 125 plans (medical and

dependent care only).

Need a little more information but generally a distribution from an unfunded deferred compensation plan is reported on a Form W-2 (assuming we are talking about an employee or former employee and not an independent contractor).

The payment to an employee is subject to the usual wage withholding rules and may have been subject to FICA tax in an earlier year.

My doctor reciently diagnosed me with chemical exposure thru my lenghly employment with the same company for 19 years. My 6 months of short term disability is going to run out but my doctor is going to release me to go back to work with perminant disabilities. Outwardly I appear to be normal but it has effected nerves and various other bodily functions. There for I CANNOT return to the same job area I used to work in, Does this company have to take me back? At the same rate of pay and create a position that I can return to work to. They employee approx. 1500-1800 persons and are a large Plastics plant in the area. They are located in the state of Texas. What are my rights? I can return to work but they are somwhat reluctant to bring me back. Where do I stand? The permenent dissability is not to be exposed to the same type of chemicals that caused to dissability to begin with.

Age 70 1/2 required minimum distribution calculations for a participant have been done based on his and his spouse’s ages, recalculating. The participant recently died and it has now been discovered that the spouse signed off for the daughter to be the beneficiary. How should distributions be calculated at this point?

Does anyone know who publishes a book entitled 'ERISA Outline Book'? A phone number would be appreciated as well, if available.

If Compensation is defined in a plan as comp from date of participation, can this definition be used when allocating the 401(k) safe harbor contribution, or do you use full year compensation regardless of the the plan definition?

Can employer who no longer wants to contribute a matching contribution to the plan and does not want to administer the 403(b)plan switch become exempt from ERISA coverage and switch to a Non-ERISA plan?

A participant was paid out his full account balance when the participant requested a hardship. From my understanding earnings on elective deferrals are not to be taken from the account. What are the ramifications for the participant and/or TPA?

We have a client who is dissolving its for-profit subsidiary. As a result, the 401(k) plan sponsored by the subsidiary will be terminated. The client would like to distribute the 401(k)'s assets upon termination. The client, however, sponsors a 403(B) plan, which all of the for-profit employees will be immediately eligible for once the for-profit subsidiary is dissolved. Will the 403(B) plan be considered a "successor plan" for 401(k)(10)(A)(i) purposes?

The company that I am currently working for is interested in implementing an Adoption Assistance program. Would love to hear what other companies are doing.

Thank you.

We have a client that terminated its plan in december of 1999. most of the plan has been paid out. however,we did not update it for GUST or submit it for a determination. We would like to do this however, the plan sponsor does not exist anymore. What can we do?

A controlled group exists with several companies and one company is sold, with original owner (sponsoring the plan) retaining less than 80% ownership. What must the Company that sponsors the plan need to do since the company sold is no longer a member of the controlled group? Also, what about the participants in the plan that worked for the company that was sold? The plan is on a prototype document. Any ideas?