We are now starting to send out 5500s to Plan Sponsors who are not required to file SARs.I usually use one of two form letters, one for forms to be filed without 5558 extensions and one for forms with an extension. In the letter for froms with an extension, I warn the Plan Sponsor that failure to make the extended deadline can expose it to penalties back to the original filing deadline.

Under the automatic extension for 1999 5500s, would the penalty for failing to file by October 16, 2000 be computed from October 16, or from the original filing date, even though the forms were not available on that earlier date? The press release merely extended the deadline, not the filing date, therefore it would appear that the DOL or IRS could impose penalties back to the original filing date. Any comments?

I have memebers of a new LLC taxed as a partnership participate in 125 for 2000 and who got claims reimbursements under FSA accounts

What to do now?

How do they rectify the situation?

Thanks

Pat Insall, CPC

Can an employer pay 100% of the premiums for a fully insured health plan for highly compensated employees and only 50% for NHCEs but allow the NHCE's to pay their premiums on a pre-tax basis by setting up a 125 Plan that specfically excludes all HCEs from participation? Any regs or cites on this?

This insurer started to offer group health coverage in our area about a year ago. They come in with very attractive rates. It is an A rated company but I have not had any experience with them. Does somebody have insurance coverage with them? Any good or bad experiences? Any history on renewals? I am a benefits broker and on some younger, mainly male groups, I get premiums as low as $45 a month for a copay PPO. Everybody else is at least a $100 for such a group. I am not comfortable placing with them at this point. I'd appreciate any input.

does anyone know where I can get a sample investment policy for a 401(k) Profit Sharing Plan?

A client took an early distribution from his IRA but failed to pay the excise tax. He already filed his return for 1999 . he would like to pay the tax. what is the procedure for this? should he file an amended return and just pay the 10% . how does he calculate the late interest and penalties, if any?

[Edited by k man on 07-10-2000 at 08:49 AM]

A 401(k) plan had 114 participants at the end of 1998. At the beginning of 1999 the plan has 134 participants due to employees becoming eligible January 1, 1999. Since the plan has greater than 120 participants at the beginning of the 1999 plan year, is an audit required for 1999?

Do companies generally offer reimbursement for graduate courses? If so, do they generally do it on a taxable or non-taxable [only job related courses] basis?

Interested in hearing about any experiences.

Thanks

I have a client who is a C Corp and the ownerships percentages of their stores are as follows:

Company 1

Owner 1 100%

Company 2

Owner 1 50%

Owner 2 50%

Owner 1 has "right of first refusal" of shares from owner 2. I am under the impression that this implied ownership constitutes a controlled group situation and thus the plans can be viewed and tested as one. Does anyone know where I can get actual documentation to support this concept?

Please help.

The instructions to the 5500 say that no audit needs to be attached if the plan assets are invested in a CCT (common/collective trust) a PSA (pooled separate account) or a MTIA (master trust investment account). (Instructions for Schedule H, page 41). But I have heard differing opinions as to whether the plans are actually exempt from the audit requirement. The law itself is less clear. Does anyone know of a citation which would exempt such plans from the audit requirement?

Ok Company A bought Company B in a stock swap. B to be a subsidiary.... now A purchased all the assets of B and many of the employees are gone from B. What do i do with B's 401(k) plan? merge them? or terminate?

B's employees are all 100% vested under B's plan and i just found out that some of B's employees are still paying off loans that they received from their accounts.

figuring that there is no partial termination issue here and that i have the choice of to merge or terminate.... any suggestions?

Except for the ACP testing....can a plan allow or provide for a match that is greater than 100% of the deferral?

ex. 150% of the salary deferral is the match, etc.

thanks!

My husband is the primary shareholder of an S Corp, of which I am an employee, and the owner of an LLC, of which I am an officer. Is there any way to set up a 401(k) for either company so that I can take a loan on my account? I will be transferring a substantial amount in from a former employer's 401(k), and would like to have access to it. Are LLC's and S Corps treated differently regarding owner/employees taking loans? Thanks for your help.

My TPA employer has received a request for health claim copies (in relation to a member involved in an accident) from an attorney representing a state attorney general's office. Does the member's standard consent to release of information (for payment/treatment purposes) extend to

cover something like this?

I used to work for a large national insurer that would not even consider such a request without a subpoena for the info in question. We don't want to run afoul of any regs on privacy or confidentiality. Would it make any difference if this attorney was strictly in private practice vs working for an agency?

Please help! Thanks.

Can a shareholder/employee still receive a salary after selling to an ESOP and purchasing qrp under 1042.

Hi Everyone,

Has anyone seen anything substantiated regarding newly revised IRS life expectancy tables for use in RMD calc's?

A rumor started in these parts says that they have been released but I think not.

The usual sources reflected nothing as of this morning.

Hope I didn't miss something.

Regards,

David Hammond

Sentinel Retirement Services

Wakefield, Massachusetts

Can a person who reaches age 70-1/2 this year make a contribution to a traditional IRA? IRS Publication 590 says no. However, the only cite I have been able to find that has the 70-1/2 age restriction is under Section 219(d)(1) of the Code. And, that section deals with deductibility of contributions.

Cites would be appreciated.

Thanks.

Quantech Southern User Group

Summer Meeting

Friday August 11 – Saturday August 11, 2000

Orlando, Florida

Friday, August 11

12:00 – 12:30 pm Registration (Light Snacks Provided)

12:30 – 2:00 pm What’s New in Quantech 6.0 (Ken Simons, Corbel)

2:00 – 2:30 pm Break

2:30 – 4:00 pm What’s New (continued)

4:00 – 5:00 pm Roundtable Discussion: Converting from FDP to Quantech

6:00 until – Group Dinner at Bergamo’s (Italian restaurant with singing waiters)

Saturday, August 12

8:00 – 8:30 am Breakfast

8:30 – 9:15 am SUG Business Meeting

9:15 – 10:00 am Investment Downloads Using Quicken (Jason MacMorran, Faulk & Winkler)

10:00 – 10:15 am Break

10:15 – 11:45 am Tom's Quantech Tips II (Tom Poje, Lorraine Dorsa & Associates)

11:45 – 1:00 pm Lunch sponsored by Kemper Funds

1:00 – 2:45 pm Tom's Quantech Reports (Tom Poje, Lorraine Dorsa & Associates)

2:45 – 3:00 pm Break

3:00 – 4:30 pm DB Plans for DC Administrators (Lorraine Dorsa, Lorraine Dorsa & Associates)

Meeting Fee: $120 SUG members/ $170 non-members (incl. Friday dinner, Saturday breakfast & lunch)

Location: Sheraton Safari Hotel (800) 423-3297

12205 Apopka-Vineland Road, Orlando, Florida

Please call the Sheraton Safari Hotel directly to make your room reservations. Mention that you are attending the Quantech Southern User Group meeting. We have reserved a block of rooms at the special rates noted

below. These special rates apply to this block of rooms only, so make your reservations now.

Hotel Room Cost per night, excluding taxes: Single or Double $109; Junior Suites $139; Deluxe Suites $159

Name(s): _____________________________________________________________________________

Company: _____________________________________________ SUG Member?: 0 yes, dues prev. paid

0 yes, dues enclosed

Address: __________________________________________________________ 0 no, send application

Phone: ___________________ Fax: ___________________ Email: ____________________________

0 I would like to bring ___ guest(s) to dinner Friday and breakfast Saturday

[add $75 per guest to registration fee]

0 I plan to join the group for the optional Saturday night dinner at the Medieval Times dinner theater

(dinner, jousting exhibition, etc). My party will include ___ persons, including myself. (Cost to be

determined, estimate $40 per person. 14 day advance confirmation required.)

Return this form with your check payable to the “Quantech Southern User Group” to :

Maggi Heffernan phone: (770) 641-1429

Applied Financial Concepts fax: (770) 594-9631

1108 Hope Road, Atlanta, GA 30350

Does a document have to contain language about "legally separated" spouses for a participant to avoid the spousal consent requirements? Does a court order in effect for the "legally separated" status have to contain language about the retirement plan for a participant to avoid the spousal consent requirements?

IRS Reg 1.401(a)(20) Q&A 27 reads as follows:

§ 1.401(a)-20 Requirements of qualified joint and survivor annuity and qualified preretirement survivor annuity.

Q-27: Are there circumstances when spousal consent to a participant's election to waive the QJSA or the QPSA is not required?

Yes. If it is established to the satisfaction of a plan representative that there is no spouse or that the spouse cannot be located, spousal consent to waive the QJSA or the QPSA is not required. If the spouse is legally incompetnent to give consent, the spouse's legal guardian, even if the guardian is the participant, may give consent. Also, if the participant is legally separated or the participant has been abandoned (within the meaning of local law) and the participant has a court order to such effect, spousal consent is not required unless a QDRO provides otherwise. Similar rules apply to a plan subject to the requirements of section 401(a)(11)(B)(iii)(I).

-------------------------------------

I'm trying to interpret whether "a court order to such effect" means 1) a court order to the effect that the spouses are legally separated, or 2) a court order to the effect that the spouses are legally separated and the spousal consent will not be required in the plan.

My interpretation would be that the language does not need to be in the plan document, and there must be a court order that the spouses are legally separated. What is your interpretation?

Thank you.

Has anyone seen an education assistance program that reimburses employees for student loan payments? I'm envisioning a program much like a health FSA where the employee submits his/her proof of payment of each installment due on student loans and gets reimbursed by employer up to $5250 per year. It's possible that the employee took the courses several years ago and is still making loan payments. Would this work under section 127?