How does the 15% limitation affect a SARSEP? My reference material states that the 404 deduction limit applies to SEPs on an individual basis rather than on an aggregate basis as in a profit sharing plan. I have a SARSEP in which a participant deferred 15% and the employer SEP contribution is 4.5%. In aggregate the 404 15% limit is fine. What are the consequences to this participant?

What are people doing about updating cafeteria plan documents under the final regulations issued in March, 2000? Or are people waiting until the proposed regulations from March, 2000 are also in final form??

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I read that a "change in residence" qualifies as a change in status. If an employee moves, but insurance coverage does not change, does this qualify as a change of status such that his medical spending account election can be changed?

The "eligible employees" who would have joined the acquired plan have to be permitted to join the merged plan. See IRC 414(a)(1).

I am hoping that someone can clarify what I need to be aware of for the rest of this calendar year to ensure that I do not exceed my maximum AGI allowed for this year.

I am a single, 38 year old male and am under the impression that the maximum amount that one can earn during calendar year 2000 is $100,000 (AGI) in order to be able to transfer to a Roth IRA without having to recharictarize afterwards.

I converted approx. 17k from my 401k to a traditional IRA earlier this year and then from the traditional IRA converted the 17k (I requested 10% withheld for federal income tax purposes) to a Roth IRA. Therefore, approx. 15.3K was transferred to the Roth IRA.

Using this example / scenario, if my earnings from employment was 60K and I had short term capital gains income of 30k, would I qualify or would I need to recharitarize? I am under the impression that either the 17k or 15.3k that I transferred to the Roth would be added to my AGI and therefore I would go over. If either of these (17 or 15.3 are added) which one do I use for planning purposes?

Using the above scenario, if my earnings from employment was 30K and I had short term capital gains income of 60K, would there be any difference (90K in both examples) in determining eligibility for the Roth IRA conversion?

Are both earned income from employment and unearned income from short or long term capital gains included in determining AGI for Roth IRA eligibility purposes???

I want to do whatever I need to do to make sure I do not go over this limit as I truely believe the Roth IRA is the better long term retirement vechicle. I still have time to restrict my short term capital gains if necessary.

Thank you in advance for your assistance. If anyone has literature that you could forward or mention that uses some specific similar examples or lists all of the determinants in qualifying for the Roth IRA conversion, it would be greatly appreciated.

[This message has been edited by Kevin Martin (edited 06-25-2000).]

I'm looking for information on deferred accumulation plans in esops which I understand is a brand new area.

I'm looking for a discussion or explanation, preferably on a governmental web site, of the fiduciary responisilities of 457 plan administrators, e.g. that decisions have to be made solely in the interest of the employees. Thank you.

I am single 36yr old and the value of my Roth IRA has ballooned from the boom in technology stocks. I converted it 2 years ago at 176K to pay for the conversion I sold a principle residence at a gain and moved into a smaller place.

What is the maximum limitation to the value a Roth can be worth and will it be subject to excess distribution taxes and will my taxable 401 K be included in the calculation?

I am trying to determine what interest rate must be used when an employer is late contributing salary deferrals to a plan. It seems appropriate to look for DOL Reg 2510.3-102 for guidance. That reg seems to say that the rate used must be the highest rate of any plan investment over the applicable time (or the federal rate + 3 if greater).

Let’s say a plan has only 2 investments, and Fund A earns 100% over the applicable time, and Fund B earns 0% over the applicable time, and the federal rate + 3 = 7.5%. Further, there are only 3 participants in the plan. Participants X and Y are invested 50% in Fund A and 50% in Fund B. Participant Z is invested 100% in Fund A.

Participant X is deferring $100 per paycheck, Y $200 per paycheck, and Z $250 per paycheck.

The due date for the employer depositing the deferrals was June 10, 2000. The employer missed that date and is planning on making the plan whole, including interest, as of July 1, 2000. What amount of interest, in addition to the $550 in deferrals, should the employer contribute? How is the answer calculated?

Does the answer to a question like the above differ if the plan is a daily plan or a balance forward plan? How would a balance forward plan calculate interest from say, May 29, 2000 to June 15, 2000, if valuations are only done annually?

Is there any special considerations when paying a death benefit to a minor? Can the check be made out to them or does it need to be made out to their parent/guardian?

If an ESOP has been merged into a profit-sharing plan, must the ESOP continue to provide the IRC 409 voting rights pass-through to participants with an ESOP account? Would elimination of the voting rights pass through cause a 411(d)(6) problem? Thanks for any insight. Lesley

I have a participant who left her prior employer, rolled her qualified plan account(consisting solely of employer stock) in-kind into a conduit IRA. She would like to liquidate this employer stock, and roll the cash proceeds into our 401(k) Plan. Our document says nothing that would prohibit this. Is this permitted? If so, what tax consequences, if any, should she be made aware of? Thanks for any assistance.

If a plan operates in accordance with hair cut provisions on a case by case basis, must an employer turn over assets to a participant's bankruptcy estate?

An employer employs both union and non-union employees. It sponsors a 401(k) plan just for the non-union employees. The union now wants a 401(k) but the employer maintains they will not include them in their current plan nor will they be the sponsor of any new plan the union employees participate in. There will be no "company" contributions to the union plan and apparently this is not subject to the collective bargaining process. All the members of this union are employed at this particular company. The union maintains that they can sponsor a plan. Is this correct and do they just assume all the duties and responsibilities that an ordinary corporate plan sponsor would?

I have a beneficiary of a TSA plan that is 7 years old. Can the check me made out to her or should it be made out to her parents/guardian?

Has anyone seen any authority for (or against) the proposition that a plan may, by its terms, require distributions to be made via direct deposit, where the participant or beneficiary has a checking account to which the direct deposit may be made? The anti-alienation regs permit direct deposits, but are vague as to whether a direct deposit must be initiated by the participant. I'm guessing state laws probably require the employee's consent to direct deposit, but I'm also guessing these state laws would be preempted (I think the DOL opined several years ago that state laws concerning wage withholding were preempted to the extent they would frustrate an ERISA plan's recoupment of plan loan repayments). Any thoughts on the permissibility of requiring that distributions be effected through direct deposit?

[This message has been edited by Ed F (edited 06-23-2000).]

If a minister of a church wants to roll over his plan to another 403(B) TSA, may he do so? The organization holding this account has indicated that the plan is "not governed by federal laws" and that the plan's provisions do not allow for a lump sum settlement.

I have a plan which has a max deferral % of 10%. Two participants exceeded 10% , one an HCE, another an non-HCE. They are not over 25% 415 limit, however.

The k feature was added during 1999

Does anyone see a problem with retroactively amending max deferral % to max allowed by law effective with 1/1/99?

If you do see a problem one can certainly amend in the future but how do I correct current situation? Refund deferral in excess of 10% plus interest? How would this be classified on 1099 reporting?

This may be a ECPRS issue

Thanks

One of the employers from a controlled group of corporations wants to sponsor a health FSA for its employees only. What coverage and discrimination requirements apply?

Must an employer take salary deferrals from a bonus check in a 401(k)safe harbor plan and also can bonuses be excluded when calculating the 4% on the safe harbor match? I believe it depends on the definition of compensation in the plan document but what if the definition of compensation is silent on bonuses.